Closing Bell - Closing Bell Overtime: Alcoa CEO William Oplinger on Earnings; First Protected Bitcoin ETF 1/22/25

Episode Date: January 22, 2025

Jon Fortt and Morgan Brennan guide you through an action-packed hour focused on market insights and earnings reports. Vital Knowledge's Adam Crisafulli and Truist Wealth's Keith Lerner set the stage with a comprehensive market panel.Calamos Investments CEO John Koudounis on launching the first protected Bitcoin ETF. Alcoa CEO William Oplinger shares insights into the company’s latest earnings, and our Eunice Yoon has a special look at how Chinese sellers are getting ready for tariff uncertainty. Redwire stock is up 50% this week after announcing an acqusition; CEO Peter Cannito breaks down why investors are excited. 

That bell marks the end of regulation. Discover Boating New York Boat Show ringing the closing bell at the New York Stock Exchange. Council of Institutional Investors doing the honors at the NASDAQ and the S&P 500 hitting an intraday record. Flirting with a record close. Looks like we probably didn't get there, but we'll see where it settles after a big pop for tech and communication services led by Netflix and AI stocks. That's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Well, it's another big afternoon of earnings that's coming.

With reports ahead from Alcoa, Discover Financial, Night Swift, and more, we're going to bring you the numbers and an exclusive interview with Alcoa's CEO before he talks to Wall Street on the call. And there's a new Bitcoin ETF hitting the market today that offers 100% downside protection. There is a catch on the upside. We'll talk to the CEO of Calamos about his just launched product. But let's get to today's market action with Vital Knowledge founder Adam Christofouli and Truist Wealth CIO Keith Lerner. Guys, welcome guys welcome adam big tech rally here netflix at the top of the

stack up nearly 10 but a lot of other ai related names in here too including oracle we saw larry ellison with the president uh yesterday just after overtime talking about this big infrastructure announcement how much of that infrastructure ai excitement is what you think powered the market today? I think that was definitely a huge part of it. You did see, like you mentioned, a lot of the names that are very leveraged to AI infrastructure did particularly well today. But in addition to that, you also had some pretty healthy earnings, not just from Netflix, but some smaller names like Amphenol and TE Electronics and Seagate were all received very well. I think it was a combination of those two factors on the news front. Plus, just some year-to-date technicals, tech has been a big underperformer

for the last couple of weeks, so that reversed very sharply today. You know, you saw throughout the session today a lot of skepticism about Stargate, but that really didn't seem to impact the stocks. They still held their gains. Okay, Keith, you are still bullish. The market overall, particularly domestic, give me the justification for that. Because in an environment like this, a lot of people, you know, watching risk assets might be tempted to say, oh, maybe I should sell and wait

to buy some dips. Yeah, well, great to be with you. Our overall theme for this year is a bull in a China shop. So we think we want to stay aligned with that primary trend that we think is still higher. But we also certainly expect and are keen that we're going to see some disruptions along the way, which will provide some opportunities. But while we're still positive is one that the underlying trend is still positive to from a historical standpoint. Eight of the past 10 bull markets have been longer and stronger than the current one. Next, as far as the economy, we still see an economy that's fairly resilient. We're looking for about 2.5% growth. That should power earnings.

Forward earning estimates continue to make new highs. There's been a lot of discussion about the elections and then post-elections and the Fed. Is the economy growing too fast or too slow? One thing that's been remarkably resilient is forward earning estimates, and we're off to a good start as well. And then, you know, valuations are rich, but it's hard to make a call on the market, at least short term, on valuations. And we all finally still positive on tech, and we saw that rotation today that Adam spoke about. Yeah. And, Adam, I did want to get your thoughts, dig a little deeper here on the earnings picture and the season that we're getting so far, because you mentioned the fact that NASDAQ was the outperformer today, and that was in part

because of Netflix and also the AI stocks, but also because of names like Seagate. We are awaiting more results after the bell right now, right here on Overtime. But in general, how would you categorize the start we are off to, especially on a day where tech really drove the action and breath wasn't particularly great. Very Trump season so far. You know, we're still very early, but we've heard from pretty much most of the U.S. banks and they have a very good, very good insight into the macro landscape. And they were all they all spoke very positively. So, you know, based on all the banks and then a few industrials, a few health care and a

few, you know, a few other sectors. It's been very strong. The only negative is just the dollar. I think we're having some technical difficulties with Adam Schott right now. So, Keith, I'm going to go back to you because you did just mention valuations. I want to play a soundbite from Jamie Dimon of J.P. Morgan, who was on CNBC earlier today from Davos. Have a listen. I think asset prices are kind of inflated. And, you know, by any measure, they're top 10 or 15 percent. I'm talking about the U.S. stock market. But it's not true for stock markets around the world.

And they say sovereign debt's priced pretty well. Credit spreads are all all-time highs. So, yeah, they're elevated. They're elevated. And you need fairly good outcomes to justify those prices. And we're all hoping for that. And I think, you know, having pro-growth strategies helps make that happen. But there are negatives out there and they can tend to surprise you. Are you still Team USA all the way here?

We're still Team USA. It's getting a bit more crowded than it's been for a while. So I do think expectations, as Jamie Diamond alluded to, are higher. So that's one of the, you know, you look at the positive and negatives, I think expectations are higher. But I will say this, when you do the work on valuations and you say, what's today's valuations and what's the one year forward return? The correlation is basically zero. Valuations tend to matter much more on the long term. In the short term, the business cycle and earnings and sentiment tends to be more meaningful. And also, just when you think about the valuation, sometimes people say, hey, the long term valuation. Hold on just a moment. We've got a news alert on EA.

Our Steve Kovach has details. Steve. Hey there, John. Take a look at shares of Electronic Arts. It's down about, excuse me, 5 percent now. This is after EA just issuing, revising its guidance for the previous quarter down quite a bit here. They're warning this based on lackluster performance from its soccer game. That's FC24. Also, another title underperforming expectations called Dragon Age Inquisition. I'm going to give you the new guidance they're giving for the quarter and compare it to the estimates that were existing before this warning just came out. They're now expecting Q3 net bookings of $2.22 billion. Street was looking for $2.5 billion. We'll probably see these estimates get revised. And then full year net bookings, $7 to $7.15 billion. Street was

looking for $7.69 billion. The full earnings report is coming out on February 4th, but we just see this game that got off to a pretty good start after they rebranded off of the FIFA franchise into Football Club. It started off hot, and it seems like it kind of lost some of the momentum despite early promise early in the quarter. This is the December quarter. We see shares off 5.5% now, guys. Yeah, a lot of motion there for the stock here in overtime. It was down more than 8% just moments

ago. Steve Kovac, thank you. Adam Christofouli, I want to get back to you because your answer got cut off there. I had a few audio issues. Go ahead and finish, please, what it was that you were telling us. Yeah, so I was just going to say the only real negative that's occurred or surfaced this season so far on a broader level is's just dollar strength and that's impacting reported revenue it's impacting earnings and it's impacting guidance like you saw with johnson johnson today the dollar dollar rally is going to be about 25.25 cent headwind for earnings so that's really kind of the main obstacle and obviously have a few one-offs like with electronic arts but but in aggregate it's been a healthy season so far okay adam chris apulia keith learner thanks for kicking off the hour with us with the s&p kissing

an intraday record high today going above 6100 although it looks like we did not get that close we've got night swift transportation transportation earnings out and frank holland has the numbers for us hi frank hey there morgan i'll look at the shares of night swift right now up over five and a half percent after a miss on the top line but a beat on the bottom line also ford guidance that us. Hi, Frank. Hey there, Morgan. Looking at shares of Knight Swift right now, up over 5.5% after a miss on the top line, but a beat on the bottom line. Also, forward guidance that was above estimates. The estimate for next quarter, Q1, was $0.30 a share. The guidance was $0.29 a share to $0.33 a share. So again, strong forward guidance within the report. The company talked about the quarter a bit, saying in part, the fourth quarter largely played out as expected as the hurricane

and port strike disruptions at the beginning of the quarter gave way to a modest amount of seasonal strength, spot right improvement and the return of some project opportunities. Talking about their truckload segment that generates about 60 percent of revenue, Nineswift is the largest truckload carrier in the U.S. When it comes to their LTL segment or less than truckload segment that generates about 15 percent of revenue. They said in part, the LTL market saw slightly less supportive demand. We also saw improvements for the overall company on operating ratio year over year. That's an efficiency metric. Lower is better. It came in at 93.7 this year. Again, Knight Swift missing on the top line, but beating on the bottom line when it comes to profit. Strong forward guidance, seeing some improvement when it comes to its key efficiency ratio as well. Back over to you. All right. Frank Holland, thank you. Shares are up

almost 7 percent right now. Let's get to Mike Santoli for a closer look at what drove the S&P 500 to its first intraday record in more than a month. Mike. Yeah, Morgan, it's been kind of trading off between that large mega cap tech leadership and then the average stock doing its part. It's been a much more balanced attack, I would say, over the last few months than it was in the first half of last year when you really did have mag seven dominant. So we have here since the very middle of last year, the S&P 500, the equal weighted version of it. It's trailing by one percentage point or so. And then, of course, the Nasdaq 100. But you see, they're all kind of converging in a similar spot. Only the S&P 500 market cap weighted actually did test its old highs today, which go back about six weeks. The others are still a little bit below that.

So it's sort of finding a way. Banks obviously not shown here, but a huge part of why the traditional S&P 500 has gotten to this point. They now are pulling back. So it's kind of this grind and this rotating type of rally. Take a look at two of the bigger, longer term contributors that I always find interesting have this interplay where they don't really stray from one another very much. Apple and Microsoft. This is a five year, so not super long term. But it shows you that they basically tend to come back together when they have had times apart. Now, they both outperformed the NASDAQ 100 and the S&P 500 by quite a bit over this period. So it's not as if all the huge stocks ape the indexes.

But you see here, Apple really did overshoot in that late 2024 rally, now correcting just as Microsoft bounces. So not suggesting causation, but it is always interesting, Morgan. It's definitely interesting. I want to go back to the fact that Equal Weighted S&P was testing highs. We've seen this consolidation. We've seen this pullback to start the new year. The fact that we're now at record intraday, where we hit a record intraday high for the SPX today,

and we have up until today seen better breadth. What does that tell us about those rotating leadership roles, despite the fact that AI really led the charge today? You know, it's a little bit nuanced, Morgan, because when you've had a great streak of positive breadth, as we did going into today, like five straight days when you had, I think, two thirds or so of all volume to the upside or various ways of measuring it, it's positive on an intermediate basis. But sometimes it means that in the short term, you need a little bit of a break. In other words, you've kind of emptied out all the change from the couch cushions and you've made use of all the buying power you can on the

average stock. So I don't know that it's necessarily one right or wrong way for the market to go higher. The ideal has been when breadth does get a little overextended and the average stock needs to pull back, you have had the more defensive secular growth stocks able to contribute and support the market in those periods. So hard to say if we're still going to benefit from that choreography from here, but so far it's worked. All right. Mike Santoli, see you again in just a little bit. Well, we got more earnings coming in. Kinder Morgan just out with Q4 results, missing on the top and bottom lines. Earnings coming in at 32 cents a share adjusted. That's a penny light.

Revenue was $3.99 billion versus estimates of $4.18 billion. Morgan. Well, we've got much more after hours action on the way, including earnings results from aluminum giant Alcoa. We have an exclusive conversation with that company's CEO before he talks to analysts on the earnings call. And after the break, what a piece of the Bitcoin portfolio diversification without the risk. Well, Colomose just launched a new ETF that offers 100 percent downside protection. Of course, there's a catch. The CEO of Colomose joins us next to explain overtime's back in two.

Welcome back to overtime. Alcoa earnings are out. The aluminum maker reporting a beat on the top and bottom lines, reporting EPS of a dollar four per share adjusted. That was versus estimates of $0.97 per share. Revenue of $3.49 billion. That was better than expectations. It was up 20% sequentially. Adjusted net income up 104% sequentially. Alcoa citing, quote, significant improvements in financial performance on continued strength in alumina and aluminum pricing and considerable advances in operational stability. Now, for 2025, Alcoa expecting total alumina segment production to decrease from 2024. That's due to the curtailment of a refinery.

Alumina shipments are going to be similar to 2024 aluminum production, expected to increase due to smelter restarts, and shipments are going to range between 2.6 and 2.8 million metric tons. Now, Alcoa's CEO, Bill Oplinger, will join us in just a few moments to break down the quarter and his expectations for 2025. But if we take a look at shares of Alcoa on the beat, well, we'll look at them in a few moments. In the meantime, there you go, up 3 percent. OK, shifting gears here to another recent winner, Bitcoin. That's been up more than 50% since the election. It hit a record high on President Trump's first full day back in office.

As crypto enthusiasts work to win over risk-averse investors, Calamos Investments just launched the first 100% downside-protected Bitcoin ETF. So joining us here on set is John Kadunas, president and CEO of Kalamos Investments. It's great to have you. Welcome. I'm glad to be here. Thank you very much. All right. So why launch this product? Why launch it now? Who are you gearing it towards? Well, Bitcoin is obviously very popular. It's been the highest returning asset class for a long time now, but not everybody's been involved. There's a lot of people that are scared. The volatility is huge. And so this is a product that people, we're risk managers. We've been doing that. It's in our

DNA for the last 47 years. And there's two things, people that haven't gotten involved that want to do it in a risk measured way. And people that are involved that are thinking, hmm, have we reached the top? It just like like you said, it hit 109 just a couple of days ago. Where is it going? So this is an opportunity for people to play in Bitcoin in a risk measured fashion. Now, I realize Bitcoin is very, very volatile and we'll get to the other crypto assets in just a moment, because that's to me, that's almost a whole different piece of the puzzle. But Bitcoin is very, very volatile. But if you look at a chart over the past eight years, it has been a march higher. So, yes, it's scary when it's volatile and it's falling. But also it when it's volatile to the upside, it can be very dramatically so.

So to have a Bitcoin that that limits the downside. What's the catch here? Is it the fact that it limits the upside as well? Absolutely. So today we've launched the first 100% protected on the downside. And we're going to set a cap rate right now as we speak. From what I heard, we thought the range would be anywhere between 10% to 11.5%. I think we're going to hit the 11.5% or maybe even higher, where you can get up to 11.5% of the upside if you keep the Bitcoin for a year. And if it falls 50% or whatnot, you don't lose anything. You get just your principal back and you can roll it year after year.

And we're also in two weeks launching other products depending on your risk parameters. So we're going to have a 90% protected ETF. So you can lose up to 10%, but the cap rate should fall around 30%. We're also going to launch an 80%. So you can lose maybe up to 20%, but the cap rate goes all the way up to north of 50%. so depending on your risk parameter whether it be no you know loss versus just taking a little bit of risk rather than being completely long bitcoin where it's extremely volatile i think there's a huge we're seeing a lot of appetite for this type of product and you got to hold for a year you can sell it and buy it at any time you want. But you're guaranteed 100% protected

if you do hold it because the way we strike the options and buy them for the year. So this is, in a way, it sounds to me like insurance, right? So really the risk for you is calculating how Bitcoin has moved in the past. And if it were to just go straight down, right, for a year plus, well, that wouldn't be good. But based on how you've seen it move, you can make the adjustments during that time that, you know, make sure that you're able to make good on the promise to those who need it. No, we make good from day one. OK.

So the way the product works is we'll buy today. We're going to buy, you you know zero coupon treasuries right and then we buy options on the CBOE Bitcoin index right so we buy call options at the money and we sell call options as well out of the money to generate income to make up for the coupon for the zero. So we lock in, you're locked in guaranteed rate of the upside of 11.5% for the year if you keep it. Which of these do you expect to be the most popular? It depends on people's risks. I think maybe some of the people that are retired will go into this type of product. It's 100% protected. But I think, you know, other people want a little bit of risk.

Look, if you're going 80%, you know, downside protected, only 20% off, but could get up to 55% of the upside, that's pretty good. And I think even not just the retail is going to be looking at that, but I think institutions are going to look at that as well.

So if we just step back for a moment here, I mean, we played a soundbite from Jamie Diamond at JP Morgan earlier today. He was talking about valuations, particularly in the U.S. markets. You've got this new product in Bitcoin, but obviously you have many other products too, billions in assets under management. What is your take on the markets and assets more broadly right now? Well, I think it's all about growth and the optimism and where the markets are going right now. And I think this new administration has been very, very promising and optimistic as we're seeing it through the, I'm not saying anything out of school, you're seeing it with

where the markets are going in the last couple of days, right? And so when you have less regulations, you're taking some of the handcuffs off for people to do business. And I think that's having an administration that's a lot more pro-business, creates pro-growth. And I think the word at Davos, if you listen to Jamie this morning, everybody's talking about growth in the United States and how we're going to lead the world. And everybody's the envy of the United States because of the future and the growth that we're going to see here. All right. John Kadunas of Calamos Investments. Thank you

for joining us here. Great to have you. Appreciate it. Well, still ahead, the CEO of Alcoa joins us to break down his company's results and how he's thinking about tariffs and global trade in the second Trump administration. And after the break, the age of investing will tell you why the current demographic makeup of America could be a major tailwind for the market. History's a guy. We'll be right back. Welcome back to Overtime. Discover financial earnings are out. Hugh Sun has the numbers. Hugh? Hey, John. Yeah, Discover looking like a strong beat on the bottom line with EPS of $5.11 per share versus the $3.25 estimate.

Powered by loan loss provisions coming in better than expected, revenue of $4.76 billion, also better than the $4.46 billion estimate. So those loan loss provisions we talked about, about $1.2 billion versus the $1.58 billion estimate. Last I checked, the stock is more or less unchanged. It's up a tick, but to be fair, it did jump 4.4% earlier today to an all time high. Back to you guys. All right. Hussan, thank you. Well, speaking of moves on earnings, Alcoa shares are higher after reporting a Q4 earnings beat. Shares are currently up about 1 percent. Joining us now on a CNBC exclusive is Alcoa CEO William Opplinger. Bill, it's great to have you on. Welcome back to Overtime.

Thanks, Morgan. It's great to be back. Appreciate you having me on. So you had a beat on the top and bottom lines. You put out your shipment and production guidance for 2025, but in general, a really strong end to 2024. How much of that do you attribute to the broader market and the fact that aluminum prices have been strong? How much of that is reflection of the operations and steps you've taken at Alcoa specifically? Thanks for the acknowledgement. The fourth quarter was a really, really strong quarter for us. We delivered on our operational targets. We delivered, over-delivered on our shipments. We dropped a lot of the good prices to the bottom line in the fourth quarter. But it was really the capstone of a really productive 2024.

And so we've had stronger markets as we've gone through 2024. But we've made a lot of good things happen within the company. First of all, in 2024, we did a major acquisition. It was the biggest acquisition we've ever done. We've made some other portfolio moves and operationally we're stronger today than where we were a year ago so really good fourth quarter great 2024 and i do want to get a sense of what you're seeing in your end markets but before we go there i know we talk about this every time you come on but your outlook for tariffs as we do have trump back in office now and we have had talk in the last 24, 48 hours about potentially tariffs on Canada, Mexico, China. I know you have U.S. smelters, but you also have a global business. So still a lot of uncertainty on where the tariff structure will end up. It's important to keep in

mind that in the U.S., roughly two-thirds of the aluminum that we consume and make into downstream products is brought in from Canada, specifically Quebec. We've heard in the past from the administration that there's a potential for a 25 percent tariff for products coming from Canada and Mexico. We think that if that's the case, that there could be significant negative impacts on our consumers. We put the value of that at around one and a half to two billion dollars. But it's important to keep in mind that it appears that the administration is taking their time to get this right. And we're pleased that they're actually spending some time to think through it. Bill, good to see you. How do you see the fluctuation in China's economy affecting you in 2025? China's always a big issue for the aluminum market. And it's important to remember

that the Chinese have capped their aluminum production at 45 million metric tons. To give you a little bit of background, the Chinese have grown from roughly 10 percent of the global market to 60 percent of the global market. So when they cap at 45 million metric tons, that sends a signal to the rest of the world that prices could be stronger in 2025 because of that supply cap. As far as the economy goes, we look at the global demand for aluminum and we see it being strong. But the big driver is in the rest of the world. We're not banking on the Chinese economy to drive a lot of consumption of aluminum. We see that probably at around 1%, but we see the rest of the world at 3%, averages out to about a 2% global demand growth.

It's important to remember that's the highest demand for aluminum that we've ever seen in history. So overall, the demand for aluminum is strong. So what does that mean in terms of how that demand is translating across your end markets? So remember, we have aluminum, alumina, and bauxite. I'll address aluminum. We're seeing strength in packaging. We're seeing strength in electrical conductors. On the automotive side, we're seeing a mixed picture, strength in North America, a little bit of

weakness in Europe, and building construction is not back. Building construction is the biggest market for aluminum. It's not back to where we want it to be. But if interest rates were to go lower, we think that could be a potential tailwind for the marketplace. Okay. Bill Oplinger of Alcoa, thanks for joining us. Thank you. Shares of Alcoa about two and a half percent right now. Well, it's time for a CNBC News update with Bertha Coombs. Bertha. Hey, Morgan. Residents are under mandatory evacuation orders this afternoon in northern Los Angeles County after a blaze erupted earlier today. Cal Fire says the Hughes fire has already burned more than 5000 acres in a couple of hours. Large plumes of smoke can be seen in near Lake Kostak, which is about a 40 minute drive north of Santa Clarita.

A potential warning sign that consumers are coming under financial stress. According to a report from the Philadelphia Federal Reserve, the number of consumers making just the minimum payment on their credit cards rose more than 10 percent through the third quarter of last year. That's a 12-year high. And the New York Jets reportedly have a new coach. According to ESPN, the Jets have hired the defensive coordinator for the Detroit Lions, Aaron Glenn, to lead the team. Glenn, a former cornerback for the Jets, fills a role left vacant after the Jets fired Robert Sala after a disastrous start back in October. So I guess it'll be Aaron and Aaron leading the team. We'll see about that. Bertha, thank you. Well, still ahead, shares of C3 AI getting a boost today,

along with others in the AI ecosystem on news of Project Stargate. We're going to talk to C3 AI CEO Tom Siebel about a new partnership of his own to bring AI solutions to major enterprise players. Check out shares of M&T Bank ticking higher in overtime on news of a $4 billion stock buyback. We'll be right back. Welcome back to Overtime. The S&P 500 hitting an intraday record. And if history is any guide, there's one factor that could prove to be another tailwind for this market, the demographic makeup of the country. Mike Santoli, how so? Well, John, this is very big picture, kind of high concept. I'm tempted to say mostly for

entertainment purposes. But the interplay of overall demographic trends and the performance of equity markets does seem to have some linkage if you go all the way back. Now, this is back to 1900. What are we looking at here in this blue line? It's the ratio of people between 35 and 49 to those in their 20s and up to 34. So in other words, kind of, you know, older, getting toward middle age versus the younger entrance to the workforce. So 30 to 40, I'm sorry, 20 to 34, you're still kind of like lower income. 35 to 49, peak earnings, peak savings, peak investment. And when those people outnumber, it seems to benefit the financial markets as opposed to the real economy. So what we see here is this is when the baby boomers started turning 20 and just swapping the ratio.

And this is when the millennials started turning 20 and actually began to outnumber people older than them. And you've seen that we have into the early 2030s that that blue line there is going to continue rising. So in theory, that's a demographic tailwind until the millennials kind of reach that point of aging out of this of this cohort. And then it looks like maybe the stock market is front-run that or overshot it in the short term. So maybe don't bet on this as your single factor for predicting the market, but it's kind of an interesting look. I like how you said getting toward middle age. I'll take it. But we got another, what, 10 years of runway on millennials getting to 49?

Close to that. Yeah, exactly. And until this ratio at least starts to turn at that point. So, I mean, among the many reasons to say maybe that returns are going to be reduced to 10 years forward. By the way, this is from Ned Davis Research. We did produce its 10 year forward asset market projections today. And they said, don't expect as much as the last 10 years have gotten you, but still have room for some positive outcomes in the next half decade or so. Well, I like those odds. Mike Santoli, thank you. Up next, the China lens. Get an inside look at how Chinese factories are preparing for the potential fallout from President Trump's latest tariff threat against that country's imports. Plus, shares of Redwire blasting off yesterday after announcing plans to buy drone maker Edge Autonomy for more than $900 million.

But the stock giving back some gains today, finishing down about 3%. We're going to hear from the CEO of Redwire when Overtime. President Trump says he's considering a 10% tariff on Chinese imports beginning in 10 days. CNBC's Eunice Yoon is on the ground in China, giving us an up-close look at how manufacturers there are trying to prepare. I'm in the manufacturing hub of Guangdong, and I'm heading now to some factories to see how they're preparing for potential Trump tariffs. A lot of products at your local Walmart, Target or Home Depot are made here. What you buy on Amazon, Shuyin, Temu and TikTok too. I met furniture seller Harry Lee.

Four out of five of his tables and other large furnishings are sold to American consumers. Hoping to beat Trump's tariffs, Lee is doubling the number of products he ships to the U.S. and stockpiling them in warehouses there. He expects that will force him to raise prices as much as 10 percent, even before the tariffs. LEE, President of the United States of America, I have to ship them in advance and take on more risk, he says. In a nearby industrial city, water purifier maker Zhongyu is scouring the globe to supply the U.S. by creating a new production base outside of China. The plan is to set up assembly lines like these in a third country.

That means buying similar equipment and some components from China before putting the appliances together elsewhere. Jung's company, Tesron, is considering Vietnam, Malaysia and Mexico, but at the moment is leaning towards Dubai, even though it will increase its costs by 30 percent compared to China. The domestic market is too competitive. We've been waiting to jump out of it for some time, he says. Trump's tariffs gave us the final push. What happens if Trump hits Dubai with the tariff? Then the U.S. is out, he says.

Across town, Long Rong, who makes skincare products, is worried he might have to stop exporting to the U.S. completely. His goods got hit with tariffs north of 20 percent during President Trump's first term, and it caused his company, Kuni, big losses. With his thin margins, Leng is hoping he can pass on the cost of any tariff to his customers. In the past, we all felt the U.S. market was the greatest market that everyone wanted to sell to. But with all the uncertainties and unfriendly decisions, the U.S. is less attractive now, he says. It's a real pity. It's great to see Eunice with us now from Beijing.

So in all of that reporting, great on-the-ground reporting, what was your sense of the mood of these entrepreneurs and whether they feel like tariffs are an existential threat to their business versus just an adjustment that they have to make in markets? There's a lot of uncertainty because people don't know how high the tariff is going to be. People have heard 10 to 20 percent universal tariffs or maybe 60 percent. And so because of that, these factories are not quite sure what to do.

And this is usually a time when they price now for the year. So it's really left a lot of people guessing as to what the tariff is going to be. Eunice, it's great reporting from you, as always. I'm just curious, if these entrepreneurs are not selling into the U.S. market anymore, not selling as much, where would they be selling their goods to? How much of it is going to domestic consumers, for example, or other parts of the world that maybe look more attractive in light of potential tariffs? Well, most of the factories that we spoke to didn't actually mention selling into the domestic market because the domestic market isn't doing very well. But they are looking at alternative markets because they are concerned that if the tariffs end up reaching what they

consider their own breaking point, that they wouldn't be able to sell to the U.S. And I think that that is a really important point that we see that, you know, in the United States, a lot of the conversation is about how, you know, any changes with tariffs could potentially push up prices for consumers. But I think what's also interesting is the fact that American consumers might not have as much choice if these factories decide it's really not worth it. And some products units might get hit with different levels of tariffs, depending on whether they're considered essential or not. Yeah, definitely. And also because the for these from this factory perspective, you know, they have their own margins. There are some that have razor-thin

margins. Others have a healthier margin. They also are wondering about their industry, because right now, they don't know what tariff is going to hit which industry harder. So people aren't quite sure. And I think what's also interesting is what this might mean for supply chains, because right now the belief is that a lot of American companies are trying to de-risk. They want to move away from China. But if these tariffs are set lower for China than they are for, say, Mexico, which right now President Trump has said that maybe a 10% tariff for China, maybe a 25% chance for Mexico,

then for these factories it really makes more sense to just stay here. It was what they've told us. And so, you know, in that way, China would actually be more incentivized to or that they would be more incentivized to keep the supply chains here. Yeah. A lot of factors that are going to play into all of this, including, by the way, currency fluctuations as well. Eunice Yoon all over it for us from China. Thank you for getting up early and bringing us this report. Up next, playing defense. The CEO of space company Redwire and why he just made a more than $900 million deal to expand further into the defense tech market. And Netflix, the big winner in the S&P 500 today after beating earnings estimates yesterday in overtime, thanks to a record 18.9 million new subscribers and announcing plans to raise prices. We'll be right back.

Welcome back. We have a news alert on AST Space Mobile. This is a space-based cellular broadband company that has partnerships with AT&T and Verizon and others and whose stock has exploded over the past year. Shares moving lower right now, down about 13 percent, though, on news of a private offering of $400 million of convertible senior notes. The company also giving preliminary estimated fourth quarter results, including cash and cash equivalents and operating expenses. But you can see right there, shares are under pressure on that filing. Well, another space stock that's on the move this week,

Redwire. Shares sliding today after the space company stock shot up 50 percent yesterday on deal news. Redwire, which bioprints organs in space and supplies parts to satellites, announcing it will acquire aerial drone maker Edge Autonomy for $925 million in cash and stock. Now, Redwire's CEO Pete Canedo says national security work is already Redwire's fastest growing business, but Edge Autonomy expands the company's role as a defense tech company beyond just space. This is Redwire leaning into that idea of being a multi-domain company of both space and autonomous airborne platforms. And if you think about what we did with our last acquisition of Hera, where we brought in these additional autonomous space-based

platform, now we're adding the autonomous aerial platforms. And the goal would be longer term for us to build systems where these autonomous spacecraft collaborate with autonomous airborne platforms in order to realize that vision of an all-domain warfighting concept. So Redwire won a Pentagon contract last year to build what is essentially an orbital drone. And that really helped spur the strategy to create a one-stop shop for, quote, platform coverage. So think enabling those unmanned systems to collaborate and share data from the surface of the Earth to the surface of the moon and beyond. Now, edge autonomy, which has drones deployed in places like Ukraine, that adds the Earth part for Redwire. At a time when space stocks have been soaring, though, and startups like Voyager Technologies may now go public,

I asked Conito what navigating Wall Street has entailed. Elon Musk kind of helps us out with that. Obviously, he's very visible in the community. And so I think there's a lot of people in space right now. And that public knowledge is certainly a tailwind for Redwire, because I think the public at large is more aware of what's going on in space than ever before. But yeah, I mean, I think it's just a consistently going out there quarter after quarter and educating people on what you're doing and then delivering on the things that you say you're going to do. And we believe that if we continue to do that, that people understand it over time.

With edge autonomy, which the deal expected to close in Q2, Redwire will realize stronger top line and EBITDA growth and become cash flow positive. But Canedo is also not ruling out more acquisitions in the future. So check out the full interview on CNBC.com. You can also check out my podcast, Manifest Space. John, Redwire shares up almost 640% over the past 12 months. Yeah. Well, up next, in the wake of President Trump's Stargate AI investment announcement, C3 AI CEO Tom Siebel discusses his own new AI partnership.

Welcome back. Let's get a check on today's after hours movers. Alcoa is higher after topping earnings and revenue estimates. Knight Swift is also higher, beating on EPS, but missing on revenues. It had strong guidance, though. Discover financial beating on earnings and revenue on SL Green, missing revenue estimates at $140 million versus $146 million. Those shares, as you can see right there, are higher here in overtime. And another check here on EA as well, because that's down sharply after the company lowered guidance due to weakness in its soccer franchise and other games. Those shares are down 8 percent. Well, C3 AI popping today, along with some other enterprise AI connected names.

The company announced expanded work with McKinsey to bring AI solutions to market for large customers. And I spoke with C3 AI CEO Tom Siebel, who is in Davos. We decided to bring those efforts together into a strategic alliance where we will be serving customers globally, okay, with Microsoft and Azure and other partners to basically provide very high levels of assurance on these kind of very large digital transformation projects. I think that you will see this play out financials in like, you know, next quarter and next year and the year after that. I mean, imagine going into the CEO of name the company. OK. And the people, you know, making the call are Satya and Rodney and Tom. I mean, I mean, it's a pretty safe bet. OK. We're going to go in and we're going to bring this application live. OK. In six months. And we're going to guarantee it. I also asked McKinsey's

Rodney Zemel about McKinsey's reputation for helping organizations with efficiency. Some would say job cuts and where AI fits into that. He says it's less about replacing people. What can humans do? How can the AI do it faster, better, cheaper, right? Productivity. The reality is it has much more application or more application and growth than it has in productivity. And we're seeing more companies lean into what it can do really for that, for how to help grow their businesses, how to create new businesses, and not only for productivity. As Sibel told me, there are AI ads plastered on windows and walls all over Davos. He takes a position that what a lot of other companies out there are doing is hype and won't pan out.

But we'll see how that tracks with the earnings and guidance coming up. Yeah, Stargate certainly helped the publicly traded AI players today. Arm in particular up something like 8 percent and Oracle having another strong day. I'm confused about that 500 billion, though, over four years. There's a lot of hundreds of billions still to be accounted for in that number. We'll see how and whether it materializes. Yes, we will be watching that. In the meantime, we get more earnings tomorrow, including quite a few transports.

You get more airlines with American CSX here after the bell and Texas Instruments. Speaking of semiconductors in the tech trade. And, you know, that great piece from Eunice paints a picture of just how still globally interconnected everything is, even if globalization isn't so much a thing as it used to be. And we know tariffs and anything that President Trump has to say about them has been helping to move the markets. That does it for us here at Overtime. Fast money starts now.