Closing Bell - Closing Bell Overtime: Adobe CEO on AI Strategy; Market Volatility with Dan Niles; Intel Names New CEO 3/12/25

Episode Date: March 12, 2025

BD8 Capital Partners CEO Barbara Doran and Truist Wealth Co-CIO Keith Lerner break down the latest market moves. Adobe CEO Shantanu Narayen joins to discuss earnings and AI innovation. Intel names Lip-Bu Tan as its new CEO; industry analyst Patrick Moorhead breaks down what it means. Niles Investment Management Founder Dan Niles weighs in on market volatility and the tech sector. Box CEO Aaron Levie on AI developments and the future of enterprise software. Plus, Wellington Management Fixed Income Portfolio Manager Brij Khurana on market trends and fixed income opportunities. 

That bell marks the end of regulation. Cloudflare ringing the closing bell at the New York Stock Exchange. Just Capital doing the honors at the NASDAQ. And a mostly positive close today, as investors weigh a hopeful inflation print against policy uncertainty from Washington. The NASDAQ seeing a decent pop,

finishing higher by about 1.25%, led by Micron, Palantir, Tesla, and Nvidia. Let's see, the S&P might not have held on to 5600. We'll see where it settles. That's a score caught on Wall Street. But winners stay late. Welcome to Closing Bell Overtime. I'm John Fort.

Morgan Brennan is off today. Well coming up this hour, earnings from Adobe, which has outperformed other software names so far this year, and an exclusive interview with Adobe CEO, Shantanu Narayan, before he talks to analysts on the call. Plus, investor Dan Niles gonna share his latest thoughts on the market volatility, why he doesn't think we're at risk of a recession, and if the biggest pain for tech

is now in the rear view mirror. Now let's get straight to the market action. Joining us is BD8 Capital Partners CEO, Barbara Duran and Truist Wealth Co-CIO, Keith Lerner. Guys, happy overtime. Keith, CPI was good news? CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO,

CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, CBO, when we were closer to all-time highs because the weight of the evidence in our work had shifted. And then yesterday, as the market was down almost 10%, we put out a note that we think we were kind of getting to the ballpark of where we might see at least a bounce. Some of our indicators, whether it's technical indicators or just the contraction in PE that we've seen over the last two weeks

suggest that things are getting a bit stretched on the downside and we expected some reprieve. So today wasn't decisive per se, but at least you saw a bit more of a tug of war as opposed to the one sided down movement that we've seen over the past couple of weeks. Yeah, that's true. Barb, though this tariff shadow still looming, if you take the president at his word that these tariffs are not just a threat, a negotiating tactic, they're leveraged to force sort of a redesign of global trade norms.

Has the market even now priced that in? I mean, resetting trade norms could take a while now. Yeah, John, that is the key question we're all wrestling with because obviously the market does not like uncertainty. In fact, the default, as we've seen just to sell you know quickly and a lot until we know what that what the drill is but I think it is I think it's getting clear that he is serious about tariffs but it is a negotiating tactic and he just wants a quid pro quo but I think this uncertainty it will last we don't know

how long it will last but it will for a while but I think the market is already adjusting to that and I think you saw a little bit today, we had good inflation report, even though people know that we could have more inflation that kicks in in a month or two, given the tariffs, given Doge, you know, and the higher layoffs there. But I think that you can start to nibble here.

I think, you know, I don't know if the downsides have been put in, but I suspect it has been. But we don't, we're not going to know for a while. And particularly when the layoffs start coming in, but I think the Fed is saying, hmm, we can, we'll probably have to focus more on growth and jobs more than inflation going forward. Okay. Well, hold tight.

We've got a news alert out of Washington. Emily Wilkins has that. Emily. Hey, John. Well, as you know, we are keeping a close eye on that government shutdown less than three days away and Senate Minority Leader Chuck Schumer after a two-hour meeting with Democrats has come out and said that Republicans now do not have the votes to move the House bill. This means of course that Democrats will not be joining them in doing so. Instead Schumer has offered a 30-day

stop gap. It's for the bipartisan talks on funding the government for fiscal year 2025 to continue. Remember, the bill that the House passed would take current funding and bring it all the way to the end of the fiscal year, September 30th. Now Senate Democrats are instead asking for a bill that would only take that funding until April 11th to give them time to hash out a bipartisan deal.

Of course, this comes as the house has already not only passed their bill, but also left DC Meaning that they are trying to jam the Senate to force them to pick up the house bill It's unclear of course exactly what will happen Senate Republicans do not want to vote for a shorter shorter stopgap at this point And this could mean that we have a rocky couple days ahead until the deadline of the end of day on Friday, at which point the government runs out of funding. Huh, well aside from that, it was looking smooth, right?

Emily, thank you. Keith, back to you on this one. I mean, more uncertainty, it sounds like, out of Washington. You're saying the market's due for a pop, perhaps, but can the market go back to its old thesis with mega caps and tech leading with this uncertainty continuing? Yeah, so John, and just to provide some context, we're expecting a bounce, and we're telling folks, for folks that didn't kind of line up somewhat, use that bounce to go more towards

a neutral posture. We're not saying this is the end of the world, but we just don't think the risk reward is that favorable. But again, we are recognizing we're oversold. And with uncertainty, there's always uncertainty in the market. The question really from an investor standpoint, are you being compensated for that uncertainty? And I would say as we look at the overall valuations

for the markets, we're seeing earnings, foreign earnings are on the move sideways. We're saying not particularly that you're being compensated. The government shutdown, though it can have real impact to people, from a market standpoint, that's to us a sideshow. We've looked at dozens of government shutdowns since 1977. Over that period, the market has been relatively flat. It's just one more thing to throw out there at a time where there's so many things

happening at the same time. So again, I think we'll see some stabilization, likely some type of bounce here in the near term. But again, we think we're going to be in somewhat of a choppy period over the next couple of months. And we're waiting before we would step up more aggressively to the upside. Okay, hold on. The earnings are coming out. Adobe and American Eagle.

Let's get American Eagle first. Courtney Reagan, have those. Court? Hi there, John. Yes, American Eagle Eagles earnings per share beating at 54 cents. The street was looking for 50 cents revenues coming in in line at 1.6 billion same store sales though, up 3%. That's a rounded number that compares to the street expecting that to grow a little more than 2%.

So that's a beat with strength from the area division. Those were up 6% comparable sales American Eagle brand of 1%. They are announcing a $50 million share buyback and they have an interesting quote here from the CEO, Jay Schottenstein, talking about how the first quarter is off to a slower start than expected,

reflecting less robust demand and colder weather, saying he does anticipate improvement as the spring selling season gets underway. And then if you look further on the release, there is some guidance here. They are looking for a smid single digit decline in first quarter revenues. That is below what the street has been looking for with an increase of 1.3%. Also looking for a low single digit decline in full year revenues. The street looking for that to actually have been up 3%.

So disappointing on both of those in the company. Noting the Outlook Reflex near-term headwinds in the consumer and macroeconomic operating environment, balance of proactive steps the company is taking to strengthen its top line and reduce expenses. I did not see the word tariff mentioned explicitly, however, in here. John, back over to you.

Might be on the call though, just guessing. Lost its initial pop, but now regaining some of that. Adobe earnings ready as well. That was another one that popped, but now lower. Seema Modi, how do the numbers look? Well, $5.7 billion on revenue versus the estimate of 5.6. So it's a beat for revenue and earnings. $5.08 adjusted versus the estimate of 4.97.

Shantanu Narayan, who I know will be joining you very soon, talks about how the company is well positioned to capitalize on the acceleration of the creative economy driven by artificial intelligence. The company is reaffirming their fiscal year 2025 financial targets. But when we look at the near term guidance for the second quarter in line for revenue, a slight miss on earnings perhaps that's what's contributing to shares falling here in overtime by as much as 3% John. Alright Seema thank you. Let's see we're going back to Barb and Keith here yes we

are Barb. Adobe has been it's had a rough several months the year-to-date versus some others it's done okay. several months, the year to date versus some others, it's done okay. How much does the response here matter? Alongside Oracle, these are two sizable software names reporting off the cycle of a lot of other bigger names. Yeah, well, in Adobe's case, Adobe has been down about 24, 25% in the last year. And it's really been a question, as we know, it's a great franchise, it's a well-run company, it's very experienced, it's got great brand recognition

and respect, but it's really been a question of how fast they can monetize the AI integration into all their various products. And there's been some promising uptake, but there's not a clear path to monetization. The company has not been really forthcoming on that, and that's been a little bit frustrating for investors. So we really want to see what that is but I think that's what's happened with a lot of these companies

where the AI integration into their existing products it may be getting traction but it's not showing up yet in any meaningful way. So I think it was very encouraging that they talked about that a year ahead looks promising that they reported better than expected. So this may be a temporary drawdown. People may be hoping for more, but it sounds like things are probably going pretty well. But we wanna hear more on the call. How fast are we?

We're gonna hear more, yeah, before the call. Cause Shantanu's gonna join us right here in just a bit. Barb, Keith, thank you. But for now, let's turn to our Mike Santoli for a look at some key levels to watch in the S&P 500, the 10-year treasury yield, and the VIX. Mike? Yeah, John, the interplay of all these things is always interesting once we get down into correction zone. You see the S&P 500, this is a one-year chart. It has spent some time here in the last week below that 200-day average. Now, that average is still going solidly higher, so it means the broader trend is up. Back in 2023, we did spend some time underneath

that 200 day average, like two weeks. So it doesn't mean that the whole trend is sunk, but it is a hurdle and a sort of a psychological level that says, do you really have the buying power to get back on the beam? 56.25 was a number today, 57 and change is where the 200 day average is. I also see folks pointing to like 54 as the September low

as maybe something more south. That'd be like a 12% drop from the record highs a few weeks ago. Stocks versus bonds, interesting back and forth here between the 10-year treasury yield and the S&P 500. It's a six-month chart. Obviously different scales just here to show the direction of relationship.

And you see for the most part coming out of that growth scare in the fall both yields higher and stocks higher. That made sense until we got to a certain threshold of yields and then stocks didn't really take too well to it.

What I do want to point out though is how yields have been flat here for the last little while last like week plus and you still seen stocks on this very linear path lower until today's and yesterday's little bounce. That's a little bit of a

mismatch in terms of what you might come to expect if we were pricing in a recession maybe bond yields are being held up by global yields going higher or inflation expectations are the what if factor when it comes to tariffs so that's just something

to keep an eye on we got some relief from yields but not yet and if I if there really was macro panic I would expect yields to actually compress a lot more from here the VIX- it did come in pretty well today a couple of you know almost three

points- I know some market timing systems is that whenever the VIX spikes has a three point close below the highs that usually makes it favorable for a bounce here. I also think it was interesting. We just never got the 30. The market has been withholding its panic in some ways.

A lot of folks say, hey, why are we more freaked out? Well, maybe because a 10% drop off all time highs when maybe it was a lot of just momentum stocks reversing is not necessarily despite despite all the crazy headlines, is not necessarily something to really reposition in a strategic way and sort of assume there's a lot more downside from here, John. Yeah, Mike, I wanna go back to something that you were saying just before the closing bell rang that today the trading was very technical

within certain ranges. As you just mentioned, the VIX did not get to 30. 29 and a half seemed to be a bit of a ceiling. It also seems. Yeah, the last two days, yeah. Yeah, the last two days. It also seems, if I recall, like we're maybe at the bottom of a range that we've been trading in for a while

and maybe just a little bit below that. Given, you know, the technical trading, given where we are relative to the range where we've been over the last several months, is this waiting for some new catalyst? How does this relate to that big post-election bounce that we've been timing back to for so long? It's definitely waiting for something

that's gonna move the needle on the macro narrative. In other words, are we gonna get relief that maybe that we were too worried about the economy in the short term? Or is it gonna have confirmation that in fact, the economy and earnings have to go lower. But bigger picture when it comes to these episodes you're down 10% in three weeks

it means price has moved a lot faster than earnings estimates than the macro data than investor expectations and when that happens it's much more about what we don't really know we don't have high conviction every any price level we got to

test it and test it and test it and I always say the market goes into the into the kind of post concussion protocol where it's like you have to micro test every little level and every little move for relevance and whether in fact the perceptions are going to be correct really what we're waiting for is actual buyers to step in and say we think we've discounted what we can expect in the near term in terms of the economy and we're going to buy this dip hasn't really happened in a forceful way yet. Okay.

Well, I guess we'll continue to wait then and see what we get. Mike Santoli, see you again in just a bit. More earnings rolling in meantime from Sentinel One and UiPass. Seema Modi back with those numbers. Seema? Both stocks moving lower. Let me get you the full story here. Starting with Sentinel-1, this is the cybersecurity player reporting a three cent beat on its

bottom line. John, revenue coming in ahead of consensus, but its fourth quarter revenue and non-operating margin guidance lighter than expected. And it does follow disappointing results from CrowdStrike just a couple of weeks ago. So interesting read that we're getting from the cybersecurity sector. What Sentinel-1 is saying about their growth trajectory in their press release. They say, we're pioneering fully autonomous, agentic AI workflows, and we're solidifying singularity as a preeminent AI security platform of the future. We'll look for more comments on the call, which shares down 14% here in overtime. But let's pivot the conversation to UiPath.

This is the software name that specializes in robotic automation, mixed results for the quarter, a beat on the bottom line, revenue missing, gross margins 87%, slightly better than what the street was looking for. But this is once again about guidance. It's first quarter guidance, much weaker than expected. We are looking at the stock down about 18% here, John. So guidance, that's the story for these two names. Yeah, rough reaction there.

Makes Adobe's reaction look pretty tame by comparison. Seema, thanks. Yes. Well, speaking of, after the break, Adobe CEO is going to join me exclusively for his first comments on the quarter, the outlook and more. That's before he talks to analysts on the earnings call. And investor Dan Niles later is gonna join us, give us his take on today's Bounce for Tech.

And if he thinks it's safe to buy again, Overtime's back in two. Welcome back to Overtime. Getting some news on Intel. There is a new CEO who's been named Lip Bhutan, who will be well known to investors in the semiconductor space. We'll get some more news on that in a moment.

Meantime, let's get another look at Adobe. Those shares are falling now by just about 1%, well off the lows after reporting first quarter results. Joining me now is Adobe CEO, Shantanu Narayan. Shantanu, good to see you. So I know you wanna talk about quarter results. Joining me now is Adobe CEO, Shantanu Narayan. Shantanu, good to see you. So I know you want to talk about the results, set those into context for us, but then I want to hear about the new way

that you're reporting subscriptions and the significance of that. Well, John, it's always great to be back on your show. And as you point out, we had a great start of the year, you know, a beat on every metric that we talk about in terms of financials. But I think to your point, what's even more exciting is the fact that, you know, as we have embraced AI and agents and re-imagine what our product portfolio is, an even more emphasis on ensuring that we delight customers.

And thinking about it in terms of the business professionals and consumers, everybody who wants to be more creative and productive, and how the combination of Acrobat and Express is really the perfect solution to address the billions of that particular category. And then on the other side, thinking about creative professionals and marketing and how they want power and precision and how we're gonna be reorienting our product portfolio to address both of these different customer groups in really exciting ways.

So tell me about that. So business professionals and consumers group was up 15% year over year, creative and marketing professionals group was up 10%. When I think about Firefly and a lot of the innovations AI related that you've been working on that I expect to hear more about very shortly next week at Adobe Summit, I think about creative and marketing professionals

and perhaps unlocking more creativity there, more productivity there. Do you expect, should investors expect that growth rate in creative and marketing professionals to reflect that AI growth? Well, we're really looking forward to having you at Summit, John. But the way I would describe it is,

for Adobe, again, creativity has always been at our core. But with AI upon us, we've really embraced it and said, how do we target each of these different customer groups? What creative professionals want is power and precision. They want web and mobile applications. They want the ability to have support for multiple AI models that are out there in the industry. They want a web-based new ideation product. And Firefly really represents all of that for the creative community.

We have new products like Photoshop Web and Mobile also that we've delivered. So thinking about our core customer constituency, which is creative professionals, we just continue to innovate at a rapid pace. The usage that we're seeing for AI within our constituency, which is creative professionals, we just continue to innovate at a rapid pace, the usage that we're seeing for AI within our products. That's why we've said, we believe that, you know, we've already infused AI and created billions of dollars

of revenue as it relates to acquisition and retention and new customer acquisition. Give me an update. Give me an update, if you will, on the monetization of AI and Firefly, those credits. How is that going? Is there momentum behind that? I know that's been a question, John,

and I heard before I came on air how a number of the investors are wanting a little bit more transparency on how we're doing there. And so I think the way we think about AI and its monetization, by infusing it in our products, we have millions of people using our products and we're delivering value. But the new AI products, Acrobat AI Assistant, which allows you to have a conversational interface with every single PDF file that's out there. To your point, Firefly Services

and what we are doing with Firefly Services, GenStudio, which is for every enterprise in the world, the ability to create this content, deliver that content. We have said that just that new AI standalone book of business exiting Q1 fiscal 25 was $125 million and we expect to double that during this year. So not only are we infusing AI in our existing products

and delivering value, but it's clear that the innovation that we've delivered is creating new revenue streams. In addition to that, the one other thing I'd probably highlight is Firefly application that we've delivered. We have our new video model in there. It allows people to create videos, adding to what we had done with imaging and vector. And that's a different subscription tier. So, you know, all of the innovation that we've done, our first goal was to make sure that we innovate. And now we're demonstrating how through all of these different subscription models, we're going to start monetizing it.

Finally, Shantanu, are you seeing any impact from the macro uncertainty on your customer buying patterns? Are they, you know, renewing less often? Are they less likely to try AI or to otherwise experiment with your software? I think AI is going to actually enable more people to be in the platform, John, and so I think based on our strong Q1, we have reaffirmed our targets for the rest of the year. And I think it's incumbent on us to just keep innovating and attracting new people to the platform.

All right. Shantanu Rai, and I'll let you get ready for that analyst call. Thanks for joining us first on Overtime. Thanks for having me, John. Well, I mentioned that breaking news on Intel a moment ago around a new CEO. Let's get to Christina Parts-Nevelis for more. Christina? Well, thank you, John. Intel shares right now are jumping 11% after naming Litboop Tan as its new CEO. This is effective as of March 18th, Tan. He's well known in the tech world

as an investor. He also has extensive, about 20 years, semiconductor industry experience, and he will succeed interim co-CEOs David Zissner and Michelle Holt House. I should say Tan will also rejoin Intel's board of directors after stepping down in August 2024. Reuters reported back in August that Tan had resigned over differences with former CEO Pat Gelsinger and other directors, but he's back now. David Zinsner will remain CFO.

Michelle will continue as CEO of Holthaus, I should say, of CEO of Intel products. And then Frank Yeary will return to his role as independent board chair. The market likes it. CEO finally stock up 12%. All right. We'll see what that means for the strategy.

Christina, thanks. Well, still to come, Box CEO Aaron Levy is going to join us to talk about how Silicon Valley is viewing this market volatility and policy uncertainty in Washington. And after the break, Niles Investment Management founder Dan Niles on today's bounce back for tech after a brutal stretch of trading for the bulls. We'll be right back. Niles Investment Management founder Dan Niles on today's Bounce Back for Tech after a brutal stretch of trading for the bulls. We'll be right back. Welcome back to Overtime.

A soft inflation report sparking a bit of a relief rally with the Nasdaq leading the way, but the major averages are still down significantly from their highs as big uncertainties remain on tariffs, the economy, the Fed's path. Well, joining me now is Niles Investment Management founder, Dan Niles. Dan, welcome. So the real impact of tariffs, you say, is going to be seen in future months. So this benign inflation read maybe doesn't mean much?

Yeah, it really doesn't mean anything, John. I mean, this reading is for prior months. Obviously, this tariff uncertainty started to kick in in mid-February. And so we're going to have to see how much of that feeds through into CPI and PCE in coming months. The one positive is don't forget oil prices, which go into pretty much all goods, whether it's through transporting them or making them. They've come down from about 80 bucks in mid-January into the mid-60s.

So that's a big positive. And 10-year treasuries have come down from 4.8 to 4.3. And so that helps as well. And then let's not forget the dollar, down from about 110 to, let's say, 104, and that's also helpful. So the funny thing is a lot of the things that I was worried about coming into this year, those have retreated, which is great, but that's why I was negative coming into the year and had cash as one of my top five picks entering the year, and none of the magnificent sevens is a top five pick either.

So there's puts and takes on both sides. Now I think in recent days you've been saying that with stocks dropping you might have to hold your nose and buy some of those tech names that you were I guess rightfully bad mouthing as being overvalued not too long ago. Did the the tariff turbulence over the last couple days stop you from picking those names up or are you doing it? No, I did it and I did some more today. And let's be clear, it's not the tariffs

knocking these tech stocks down. It is the fact that revenue estimates were six out of the seven biggest in the mag seven all went down for Q1 after reporting q4 So there's this common misperception that oh my god, it's tariffs hurting these stocks. That's not it It's earnings hurting these stocks and that's why the magnificent seven are down 13 percent year to date But if you look overseas at k-web, which is the China internet ETF That's up 22 percent year to date and even if you look overseas at K-Web, which is the China internet ETF, that's up 22% here

today. And even if you look at some of the people we're having tariff spats with, Mexico. If you look at EWW, which is the Mexico ETF, that's up 9% here today. The Europe ETF up 15%. I hear what you're saying, Dan, but let me, I know you argue the tariffs themselves aren't doing it, but isn't it kind of like turning up the lights at the party? I mean, sure, the music hasn't stopped,

but when the lights come on, it feels a little less fun. The tariffs, do they make the markets for retail investors and maybe some of those that were leaning into risk? Does it make it feel a little less fun? Well, it should, because you shouldn't be investing just based on the fact that stock prices are going up. And that means you're going to have an unhealthy market.

So this kind of uncertainty where people have to actually sit down and go, well, should I be buying Tesla when they had deliveries down for the first time in over a decade, maybe I shouldn't. And so I think that, though, goes through to all tech stocks. And I think this year, you're going to get out of talking about the Magnificent 7 as a group and start to talk about them as individual companies, because each one of them has very different drivers. And even today, you saw that, with some of the names down and others up, most of them up actually. So you're going to start to see some differentiation, which I think is good

and you're also having people finally starting to talk maybe about valuations and what risk are you taking buying different names when some are not growing trading at 30 multiples and others are that are trading in the low 20s and so all of those things got to come into play and so to some you're 100% right does it make it tougher if all you're doing is looking at a stock chart absolutely but I think when you start to focus in on fundamentals it actually makes it a lot better because then risk and reward are both getting worked into the equation versus just, well, the chart looks good so I'm going to buy it.

Well, maybe that will eventually give you something else to do with that cash. Dan Niles, thank you. Thank you. Well, we've got breaking news out of the FTC. Eamon Javers with the details. Eamon. Hey, John, that's right. The FTC just filing a motion here in court saying that an earlier statement that they

made was actually inaccurate. An attorney filing a notice here in federal court saying actually the FTC in the Amazon case is not resource constrained. This is from an attorney named Jonathan Cohen over at the FTC who says following today's telephonic status conference I write to clarify comments I made today. I was wrong. The commission does not have resource constraints and we are fully prepared to litigate this case. This comes after the FTC said earlier in the day that in fact they had resource constraints

and they were prepared to ask for a delay in an ongoing Amazon case. Now they're saying they don't need a delay after all and they don't have a resource constraint. We have a statement here from Andrew Ferguson, the chairman of the FTC, who says, The attorney was wrong. I have made it clear since day one that we will commit the resources necessary for this case. The Trump-Vance FTC will never back down from taking on Big Tech. So a clear reversal here by the chairman of a lower level attorney inside the FTC who

had said there was this resource constraint issue that Apparently has gone away and the FTC is now prepared to move forward with the Amazon case John back over to you. Okay, amen Javers, thank you you bet well now it's time for a CNBC news update with Bertha Coombs Bertha John Russian President Vladimir Putin visited the Kursk region in Western Russia for the first time since Ukrainian forces seized territory there. Russian news agencies reported that during the visit, the head of the Russian general staff told Putin that Ukrainian forces in the region were now surrounded. Republicans on the House Ways and Means Committee today blocked two Democrat-led bills that would have compelled the president and treasury secretary to submit information about Doge's

access to treasury payment systems and the Social Security Administration. And EPA Administrator Lee Zeldin is calling today, quote, the most consequential day of deregulation in American history, unquote. After he announced rollbacks of 31 environmental rules, including in today's action, is the rollback of a 2009 finding on the dangers of greenhouse gases, which has long been the basis for action against climate change, as well as rules on coal-powered plant pollution and electric vehicles. John?

Bertha, thank you. Well, up next, much more on the breaking news out of Intel this hour as that stock pops. It's up 11-plus percent on the appointment of a new CEO. I'm going to talk to Intel expert and longtime industry analyst Pat Moorhead about this news. We come right back. Welcome back to overtime. Investors getting some relief today after lower than expected inflation data. Meantime, the yield on the 10-year treasury is back above 4.3% after dipping below 4.2%

earlier in the week. So how should you be investing during this market volatility? Well, joining me now with some ideas is Bridge Karana, fixed income portfolio manager at Wellington Management. Bridge, I love talking fixed income and we don't allow. So in the US, what's the right way to think about its role in portfolios right now with tariff worries and uncertainties over whether rates are

going significantly lower anytime soon. Yeah, you know, the way I like to think about bond yields is actually actually look at the stock market in a lot of ways. So if you look at some of this performance of cyclical stocks relative to defensive stocks, to me that's a really good leading indicator for the way bonds are going to trade. And what's been interesting to me in this market volatility we've seen is cyclical stocks have underperformed defensive stocks by almost 35%. And usually when you see that type of move, bond yields are actually moves a lot lower

than we've seen thus far. Since the peak, bond yields have fallen about 40 basis points. But I do think if the stock market is right and telling us that there's these worries about the cycle, that's an environment where bond yields can continue to fall. And to your question, really be a ballast in portfolios. What about fixed income from other countries, given that there are the possibility now that they're going to have to spend more on defense,

perhaps more supporting industries that are facing tariff stress from the US. What's that going to do to fixed income there? So I mean, I think that that's a really good point. So why is there this disconnect between where bond yields are and what the stock market is telling you? I think it is largely what you're referring to this idea that in Europe and other countries, they have to spend a lot more on defense.

Those cycles have been very weak. And if they're improving economic cycles, that does speak to global yields moving higher in those countries. That being said, I do think there's a number of countries, small markets, countries like Australia, New Zealand, where bond yields are actually even higher than they are in the U.S. and if you hedge them back into dollars you get even more incremental yield and those economies are largely in recession or close to recessions already. And so once again I think if you're more global in your orientation when it comes to thinking about your bond allocation,

that can really help drive returns and once again, be a more of a balance to the portfolio. Muniz makes sense here for the tax equivalent yield. I mean, I think there's a lot of changes going on. I know there's a question of whether or not that tax exemption is gonna be in place given the spending priorities of the Trump administration. So, it's more of a question mark

in that field. I think that speaks to U.S. fixed income more broadly, right? You know, another reason that bond yields haven't reacted to what we're seeing in the cycle is we don't know the fiscal plans that are gonna be out of Washington in the next six months. And so, you know, is it gonna be more spending? That's obviously not a good environment for bonds.

If we continue to run 7%, 8% fiscal deficits, that's not a great environment. But if we are really talking about an environment where we're spending cuts materialized, that should be a good environment for bonds. It's a lot we don't know out of Washington for sure. Bridge Karana from Wellington Management, thank you. Thanks for having me.

Well, coming up, Box CEO Aaron Levy on how his company's using OpenAI's latest tools to create artificial intelligence agents. And much more on the breaking news out of Intel, appointing a new CEO, sending that stock higher right now in overtime. Be right back. Welcome back to overtime.

OpenAI releasing a slate of new tools for developers and enterprises this week that should make building and developing AI agents easier. Box is one of the first companies to use these new tools and joining me now is Aaron Levy, CEO and co-founder of Box. Aaron, good to see you. So how does this work? Hey, good to see you.

Good to see you, John, thanks. So OpenAI released a set of tools yesterday to help developers build agents on top of their core set of APIs. And so what we're seeing is the next generation of AI is moving from just chatting back and forth with an AI model to get answers to really agents that can go and perform actions and tasks for you in the background. And so OpenAI has made this a lot easier to build.

So we released an agent that lets customers and their developers be able to go and talk to an AI model, pull data from Box from their content repository, and even connect it with things like web search so it can call information from the internet and then combine all of that information together to be able to answer any kind of question in an enterprise. And so when we talk to most of our customers, there's a lot of companies that are building

their own internal agents to help them pull out data from Box and other enterprise systems, combine it with web information, and be able to respond to the employees in that organization. And so we've created a set of code that helps our customers go and do that even faster and more easily with the new OpenAI agents.

So putting this into context, I mean, Box, you've got customers who are storing huge amounts of documents over years and years, marketing materials, logos, all this sorts of stuff that defines the enterprise is being stored in Box. And now that intelligence, right, this agent can answer questions off of that and use what it's searching the web with to bring context around it? What gets done faster because of that?

Yeah, so we've had a BoxAI platform now for a couple of years. It connects to any AI model that our customers choose. And so then you can already talk to your data. You can answer questions. You can reason over your information. What really takes us to the next level is when you combine that to other systems. Those could be other applications. That could be other systems. Those could be other applications, that could be web search,

that could be other open AI features. And so our support for this agent architecture is to let you begin to have agents that really work together to be able to deliver on the answer that a customer is looking for. So you can imagine in financial services, you have a bunch of proprietary research documents on a particular company you're looking at, but then there's a lot of data from the web or other systems that you want to be able to connect

to. And so you might build an overall agent that would let you take data from those different repositories and the internet box, Salesforce, other technologies, and then combine that into a single answer. And so that's the technology that OpenAI released. And so we imagine use cases in life sciences and healthcare and financial services, really across the board. How much is the macro uncertainty driven by policy questions out of Washington affecting your business right now?

Well, I mean, we're clearly in a little bit of a wait and see mode, you know, given where the trade negotiations are headed. It's clearly very dynamic from a macro standpoint. You know, we're always there for our customers to help them drive more efficiency, more automation, be able to streamline how they operate their businesses. So, you know, we remain in, I think, a good spot

relative to what's going on, but obviously we want our customers to be able to, you know, work through this trade environment with some degree of kind of comfort and calmness. And so, we're a little bit in wait and see mode on that front. All right, well, if you can sell comfort and calmness, I think people will pay quite a bit for that right now. Aaron Levy, CEO of Box, thanks for joining us.

Well, still to come, Intel shares surging on news of a new CEO. Analyst Pat Moorhead, for more insights and strategy, is going to join us to discuss. Plus, much more on all of today's after hours action when overtime comes right back. Welcome back to overtime. Plenty of red on the screen here. Adobe falling now at session lows down 4% despite beating on earnings and revenue as the lower end of guidance comes in light.

American Eagle is lower after a mixed quarter with earnings beating but revenues matching estimates and Sentinel One sharply lower on soft guidance. UiPath sinking as well on a revenue miss and weak guidance. Well one name that is higher in overtime didn't report earnings. That's Intel on news of a new CEO, Lip Boothan, effective March 18th. We're going to talk to tech analyst and longtime industry watcher Patrick Morehead for his first take on this choice. Next. Welcome back. Intel shares sharply higher in overtime. The company naming former board member

Lip Boothan as the new CEO starting next week. Well, joining me now is Patrick Morehead, more insights and strategy CEO. Pat, Lip Booth Tan left Intel's board about three quarters ago after some disagreements reportedly with Pat Gelsinger. What does this mean for the size of Intel's workforce and for the future of that Foundry strategy?

So, I think we need to take a wait and see on this. I mean, the first thing that Libu needs to do when he comes in is determine split or not to split, foundry or no foundry. And then I think everything else will flow off of that. I do believe that we will see some expense reductions. I do believe that we will see some expense reductions. Not too sure where exactly those would be, but quite frankly, if you decide to exit the foundry business, that's where most of the new hires came from under the Pat Gelsinger regime. So we really have to hear what his strategy is and 100% he likely has the strategy it was how he got the job in front of the board of directors. I don't think this is going

to be a hey let's wait and see and have a 90 120 day plan here. What's the theory of Intel without the Foundry strategy? Pat Gelsinger made the case that just making its own chips wasn't enough volume-wise, model-wise, cost-wise going forward that they were gonna have to make chips for others. What do they do with all of those fabs that they've got, not just in the US, but around the world? Well, there's a couple scenarios here.

I mean, getting out of Foundry means they sell everything to, I mean, there's really only one bidder here and it's going to be a TSMC. You can imagine the antitrust that this would cause. And then there's the spinoff where you have, you know, Intel, the Foundry company, or it's some other name. But in that case, it has to have capitalization and Intel Design Company is, it's some other name, but in that case, it has to have capitalization, and Intel Design Company is, it's going to be its largest customer. Very similarly, when we saw AMD and Global Foundries split.

Now I'm not a huge fan of the instant split. I think it causes a lot of issues for the Intel product company. And from a cost perspective, I think we've seen what happens when Intel outsources their products. Intel's lowest margin products are leveraging wafers out of TSMC.

And I'm sure if there's not a competing Intel foundry, TSMC might cut a better deal, but we will just have to see. Quickly, how does President Trump's hate for the CHIPS Act factor in for this new CEO? So it's all gonna be determined by the strategy. I can't imagine a 51% investment from TSMC. I could see a 49% with a bunch of potential customers

as part of that and some of the latest rumors that are completely crazy. But I can't imagine there would be a positive thing if Intel just decides to get out of the foundry business and sell it to a Taiwanese company. I think that would be a no-go. And then what you get into is some sort of consortium that's U.S.-based to maintain U.S. national security.

Right. A lot of questions. We hope to get some answers quickly. Patrick Morehead, for more insights and strategy, thank you. Now a programming note, tomorrow on Squawk Box, don't miss Eamon Javer's exclusive interview with FTC chair, Andrew Ferguson. It's after a flurry of headlines from the FTC today,

asking a judge to delay its trial against Amazon because of a resource shortfall, before reversing that statement just this hour, that's one that you don't wanna miss. Well, that's gonna do it for overtime.