Closing Bell - Closing Bell Overtime: Apple’s Bad Week; Retail In Foocus; the Nuclear Comeback 5/23/25

Episode Date: May 23, 2025

Apple’s rough stretch continued as new political and regulatory headlines piled on. Eamon Javers reports on President Trump’s comments targeting Apple, while The Verge’s Nilay Patel and Evercore’s Amit Daryanani unpack what it all means for the investors. Jose Rasco of HSBC breaks down this week’s market action. Our Pippa Stevens reports on renewed interest in nuclear stocks after a White House executive order. Venture capitalist Bradley Tusk shared insights on Apple’s government battles and the state of IPOs. Joe Feldman of Telsey Group on what this week’s retail earnings mean for the consumer and clues on next week’s key reports. 

That Bell marks the end of regulation. U-Haul holding company, bringing the closing bell at the New York Stock Exchange. The Chilean finance minister doing the honors at the NASDAQ. Stocks closing in the red, but off the worst levels, Dow and S&P lower for the fourth straight day. For the week, the major indices all down about 2%. Treasuries were the story in the last few days. The 10-year yield ending below the 4.5% mark, the level

that sparked a sell-off earlier this week. Apple in the spotlight on the president's newest tariff threat, stock falling below $3 trillion in market cap, down 7% this week. More on that ahead. And a retail earnings wreck for Decker's and Ross stores. Ross withdrawing its guidance, Decker's not giving any. This week's IPOs though moving higher Mountain up about 2% hinge health up more than 6 and US Steel

Soaring into the close the president posting on truth social that the company had agreed to form a quote planned Partnership that US Steel would remain in the US that's the scorecard on Wall Street, but winter stay late Welcome to closing bell overtime. I'm Fort. Morgan Brennan is off today. Now let's begin with the latest tariff turmoil. President Trump threatening a 50% tariff on the European Union, 25% on iPhones, insisting Apple can make them in the US. Let's bring in Eamon Jabbers now for more. Eamon. Hey John, that's right. President Trump just talked to reporters in the Oval Office a short time ago, and he was asked by one of the reporters on this question of the EU, how is he confident that he can

get to a deal with the EU quickly? Here's what he said. I'm not looking for a deal. We've set the deal. It's at 50 percent. But, again, there is no tariff if they build their plant here. Now, if somebody comes in and wants to build a plant here, I can talk to them about a little bit of a delay.

But, you know, while they're building their plant, which is something I think that would be appropriate. We're going to see what happens. But right now it's going on on June 1st. And that's the way it is. And in that Oval Office session, I asked the president why he's confident that Apple can onshore iPhone production into the United States and still build the phones at a price that American consumers will pay. The president said he

is confident that they can do that and the reason is because of computers and technology. He said with the advanced technology that Apple has they should be able to make an affordable iPhone here in the U.S. You know, you've talked to analysts who disagree with that, John, but that's the President's strongly held belief. He reiterated that today, and so that's where we are with Apple, right? The President singling out Tim Cook and saying

he wants him to bring that production back to the U.S. A lot of the analysts and maybe Apple itself privately would say that's a very expensive proposition for the company. Indeed. I don't know anybody familiar with the technology industry and the manufacturing process who thinks that is actually possible. Well, Aiman, we also got some news out of the White House on US Steel here. I believe it has to do with Nippon Steel, a partnership, planned partnership.

They're investing. Not clear, technically maybe not ownership, but how much of a stake the Japanese would have. Well, we don't know what the details are of this deal. We don't know what the name will be of the ultimate company at the end of this deal. What we do know is that the president's declaring victory on social media, saying it's a big win.

He's going to have a rally at U.S. Steel in Pittsburgh. Look, the president has been out there courting foreign direct investment from all corners of the world, but in this case, he didn't want the foreign direct investment in U.S. Steel because he likes that brand. It's an iconic American brand. He likes the idea of an American company making steel. He didn't want to see that go away. He didn't want to see the jobs go away either. That's most important to him. And he's saying in the social media post that they're going to keep the jobs and they're

going to keep the company in the US. And that he says is a big win. He's ready to let that deal go through. We'll have to look at the fine print to see exactly what kind of ownership structure this is going to ultimately be. Indeed. Eamon Javers, thank you. You bet.

Now let's go back and dive into Apple. Analysts already putting an estimate of the pain of a blanket 25% tariff on iPhones. The main takeaway though, nothing Apple can't handle. Citi estimates an annual EPS drag of 2%. Evercore a 7% EPS hit. If analysts aren't worried though, maybe investors are, the stock having its longest

losing streak in nearly 35 years. Now given that streak and the other scary numbers we gave you, it's tempting to wonder if Apple stock is toast right now with tariffs and a stumble out of the AI blocks, but to kick off this next conversation, I'm gonna argue that's the wrong framing. For more than 25 years, Apple's superpower has been pulling hardware, software, and services together

to simplify experiences that change the culture. Think desktop publishing with the Mac, the web with the iMac, digital music with the iPod, mobile everything with the iPhone. The popular belief is that AI is gonna drive the next killer app, sure, but so far, no other company has come close to making the iPod of AI. We're still in the Napster stage.

Joining me now is Neelay Patel, he's editor in chief at The Verge, and Dharinani from Evercore ISI as well. Let's talk about it guys. I mean, Neelay, every major technology has a profitable consumer product that defined it. We don't have that yet for AI. Does Apple have a better than average chance still of figuring it out?

I would argue that every big profitable consumer technology has a distribution associated with it. And Apple still has that advantage. All of these apps run on the iPhone. ChatDBT is expressed to people through an app on the iPhone. So Apple has the big advantage right now. I think the long-term view is, well, Johnny Ive is gonna join OpenAI

and they're gonna build a new hardware device and maybe remove that distribution advantage. And if they get there first, if they can make the AI compelling enough for people to buy something other than an iPhone, well, Apple's got a race to make the AI built into the iPhone equally compelling. And I really don't know if they can do that at this moment in time. How much are these tariffs an issue when we're thinking longer term about the questions about

Apple's innovation viability? If they hit Apple and they hit Samsung, there's nobody who's building smartphones in the U.S. right now. And arguably, well, not just arguably, it's true, nobody as profitable as Apple. So does a sinking tide lower all boats? Yeah, that's a nice one. Sinking tide during all boats. Listen, tariffs are going to be a lot of headache. I think the biggest issue you have with Apple or anyone else that's making a hardware product

is the heightened uncertainty that you're causing to the whole ecosystem. Mathematically, it's fairly straightforward. It costs about $600 to make an iPhone, give or take. You put a 25% tariff, you might have to pay an extra $150. That is still cheaper, I think, to pay the 25% tariff than actually trying to do the human lift of shifting not just assembly to the US, which maybe by some process you could, but really moving the entire supply chain

is where you think I think you end up with a lot of bottlenecks over here, right? And if you're Apple, I think the math might still be favorable with saying, I'll just pay the 25% tariff, ideally nothing, but I'll pay the 25% tariff, versus trying to shift the entire production and supply chain base to the US.

Right. Neelay, Johnny Ive at Apple, and now at OpenAI. I guess there's the idea that that's potentially a game changer, that when you get the right person who used to be at Apple, you've got a challenger. But I remember when John Rubinstein went to Palm, you know, we've had numerous Apple veterans going other places and they didn't come up with exactly the same kind of magic, at least from an investor perspective, that Apple had.

Is this different? It is. But I just want to say, I spent the entire first Trump administration covering the promised Foxconn plant in my hometown of Mount Pleasant, Wisconsin. It's two minutes from the house I grew up in. It's not there. That land is a Microsoft data center now.

It's never going to happen. And the carriers will actually eat the 25% cost and pass that on to your wireless phone. So that's what's gonna happen to your iPhone. Johnny I have an open AI. You know, the really interesting thing is all of Ive's great products with Steve Jobs were built on core technical innovations

and often user interface innovations. The iPod was the click wheel and the little Toshiba hard drive that John Rubinstein must take credit for finding actually. The iPhone was the multi-touch screen. The iMac itself was the web, right? That was what made people buy an iMac instead of a Windows PC was the web browser existed.

And that core technological innovation was gonna drive all these products forward. AI might be that thing, right? The fact that you can just talk to a computer and it can talk back to you is a very powerful user interface idea. We've seen so much excitement be driven around it. I'm not sure at OpenAI that it works all the way to build a new product around it.

It feels like maybe Johnny I think so. He certainly got paid a lot to say he thinks so. Sam Albin has to think so. He's raised a lot of money and he's got to deliver a company as big as Apple to pay back that investment. But all of us can see right now that the technology is a little brittle, it's incomplete. So if you made an iPod that doesn't always play music, or an iPhone that sometimes lies to you,

like you would have a problem. And I don't know how I was gonna overcome that problem with design. Indeed, Amit, last word to you, what do you have to believe to think that Apple's dead money here? For you to believe Apple's dead money, I think the worry people have is Apple's simply rerated on three things in the last five years. Gross margins, services growing, and buybacks. If you're bearish, you could say gross margins may not improve with all the

tariff issues. Services could stagnate right now with all the losses between the Google has and Apple versus Epic. You undermine two of the three bullet points you had on a bull case. I think that's the worry people have right now. We think innovation is alive. We think the ecosystem is undervalued right now that Apple presents. All right. Amit, Neelay, thank you.

Have a good weekend. Coming up, much more on DC's influence on your money two big examples this week Solar stocks getting hammered as the tax bill takes away credits nuclear However soaring on the president's support for that industry and for the broader markets today president Trump threatens tariffs stocks Sink the White House tries to smooth it over and we bounce off the lows So how should investors handle the news flow from D.C.? That's next on Overtime. Welcome back to Overtime.

Shares of Booz Allen posting their worst day in eight years, down 16.5%. The company missed on revenue, its outlook came in short of estimates, and the company saying it will cut 2,500 jobs due to Doge's federal government spending cuts, 98% of Booz Allen's revenue comes from government-related work. As that closes lower, so did the major averages, which posted their worst weekly performance since April. Senior markets commentator Mike Santoli joins me now with a look at how these choppy moves are affecting positioning.

Mike? All the way back in early April when we were doing nothing but going to the downside, right John? Well, we've had some dramatic market headlines this week, obviously, 30-year yield making new highs, people worried about the solvency of the United States, people talking about potential for more tariffs as the president threatened this morning. But on the broad scheme of things, it looks like for now a relatively routine and maybe even necessary pullback. The market, the S&P 500 bounced this morning right off of its 200 day average.

That is now going higher. That means the trend is up there. I think a lot of folks who are looking for an even deeper pullback make some sense into at least the 5,700 area. And I also want to point out the current level, boy, this is familiar, right? That goes all the way back to the day after the presidential election. Actually, we got up here in mid-October. It's also where we jumped through on that celebration of the China de-escalation news.

And it's not that far above that high from last July. So it sort of wants to hold on to this upper range, if at all possible, without losing, let's say, more than 5% from the recent highs. I did want to point out a couple of sectors that have been leaders. You want to watch to see if they're actually rolling over. Kind of surprising that communication services, that's communications and internet stocks, and the financial sector have moved really in sync recently. And that's obviously way outperforming the S&P 500.

So sometimes you get one of these formations that has a lower high and maybe it's going to roll. Just watch it. It's not so much that it says, oh, big flashing red light, but it is something to keep an eye on when some of the leaders start to get a little tired, John. All right. Interesting. Well, Mike, stay right there.

Let's expand the conversation into this week's volatile activity in stocks and bonds. With us now is HSBC global private banking and wealth chief investment officer, Jose Rasco. Good to have you. Jose, you say that the budget is the wild card for the markets here. Once we know what's happening there, we reprice. But don't we still have these tariff windows, these 90-day tariff windows looming? Oh, yeah, no.

It's one of, remember, the Trump economic, financial policy is three-legged stool. Tariffs are number one. And not only do we need deals on tariffs, we need signed agreements. Then we need to make sure that people are going to enforce those agreements, right? So this is not a short process, number one. Number two, I think the market will get some respite from finding out the deals are better than not. Number two is the budget process, the debt ceiling.

That's going to play out over the next 60, 30, maybe 90 days if it doesn't go well. So that's another part of the process. And last but not least is deregulation. We're counting on deregulation to help not only financials, which would help free up some capital for financials, but for the energy sector. We can increase exploration and production. That along with the OPEC agreement we saw a week or two ago would help keep energy prices

in check, which would help the Fed in their disinflation policies. Hosea, what about those deals? I mean, we got sort of the outlines of a UK deal a week or so back, and then nothing, when I thought we had heard that all of these deals were sort of in the offing. Now, we were hearing this noise about the EU today. Is the market not caring about that as much as it seemed like we were a couple weeks back? No, I think it is. But right now, the budget has become a front burner issue, right?

And clearly, we need to see some closure in terms of the budget has become a front burner issue right and and clearly we need to see some closure in terms of the budget and the debt ceiling and markets are you know in terms of term premium making the point that if the deficit is going to expand from here there is some risk of further volatility here in the short term and that's what we've been calling for because we think look the policy change is fine but you're going to have to reprice as we go along here. And that's what we see in the short term. Longer term, we still like some fundamentals, assuming they don't change, right? We still like them, but we have to get through this period first, John, and the budget's

front and center right now. Mike Santoli, you recall a time when policy and policy shifts were as much of a driver of markets? Only in the depths of a global crisis, like in 2008, when basically circumstance dictated that the markets only cared about the policy response. But in terms of, you know, just sort of a new administration implementing its chosen policy priorities,

no, I don't really think we've been in a situation where it's quite this tethered to what the market does you know day to day month to month- again I think Wall Street in general investors are trying to look back past this period to where you might have some details settled and

right now it's interesting this rebound we've had in the markets since early April. I think a lot of it has been about the lowering of stakes in terms of near term economic data because we are all looking ahead. We're halfway through the 90-day period

from April 9th, just about, right? So, you know, at some point that patience is gonna go out and the stakes are gonna rise again. I think the big question too is, how much can we expect the market's valuation to rebuild toward the old highs, which would be like 22 plus times forward earnings in the absence of knowing what we're working with in terms of the policy mix for the rest of the year.

Okay. Finally, Jose, what do markets care more about? Tax cuts or deficits? I would think the deficit is affecting the fixed income markets, and the other side of that is the Fed, right? So I think a lot of people are looking, you know, and the market is taking down expectations of a June cut, which makes sense given that we don't know

what's happening with tariffs, right? But that may be pushed out further than people think. And in terms of the deficit, the market wants to see some meaningful deficit reduction. We're clearly not going to get that. I think the market just has to reprice to that reality. And I think that's really the big issue right now. Taxes will be a second order effect.

And I think if you look at that, if we get lower taxes, especially at the corporate level, which Trump talked about going to 15%, puts us lowest 20 countries in the world. If that happens, that should be a positive and should be very accretive to earnings as we go forward. Hmm. Unless you care about the deficit. It's tough. Exactly.

First things first. Yeah. Thank you for joining us. Mike, we'll see you again in just a little bit. Well, coming up on Overtime, as investors get ready for results from Nvidia next week, chip stocks are selling off the SMH ETF down for the seventh straight session. What's behind the selling? And we're seeing buying in nuclear names

as President Trump tries to make it easier to build new reactors. Those details are coming up. Welcome back to Overtime NVIDIA. Down 1% today as everyone looks forward to its results due out on Wednesday. But ahead of that report, chips have gotten hit hard. The SMH down seven days in a row.

Let's bring in Christina Parzanovelis for more on the Semi Slide. John, while President Trump's new tariff threats on Apple and the EU do put regulatory risk back in focus for semi stocks, contributing to some of today's sell-off among Apple suppliers like Skyworks, Microchip, On Semi, all at least 5% lower on the week. EU chip name ASML also lower. But to your point, the Semi sell-off really started before today's headlines. The SMH was already down earlier this week after five weeks of gains on easing US-China tensions. Mizuho warned this morning that near-term risk reward looks unfavorable into mid-year

with looming tariffs still a risk come late summer and retail sentiment confirms this shift. Look at JP Morgan data showing two weeks of Nvidia net selling which is the longest streak since March 2022 where you had the largest outflow since 2015. So Nvidia closing the week 3% lower ahead of earnings like you mentioned which is coming out next Wednesday. TSMC I wanted to focus on down about 2% today. They've based on different headwinds, Goldman Sachs trimming estimates due to Taiwanese dollar strength against the US dollar. Since TSMC revenues are dollar denominated, we could expect margin erosion as well.

But the overall chip sell off really appears to be structural, not necessarily headline driven. Beyond the tariff noise, we're seeing some profit taking after some massive gains just over the last few weeks and then possibly this cooling AI infrastructure narrative too that's weighing on the sector. John? We're still seeing this difference in reaction and stock movement between the AI connected chip names and everybody else? Yeah and I think we saw most with ADI so analog devices just yesterday it's supposed to be an analog name. You had TSMC you had all other names say hey the bottoms in and then all of a sudden analog said hey we're seeing a lot of

pull forward demand so that's a concern for a lot of the cyclical names that maybe they did decently this past quarter because customers are really worried about upcoming tariffs so they're bringing all that demand forward at the cost of future quarters. All right, Christina Parts-Nevelis, thank you. President Trump this afternoon signing an executive order to ease regulations in order to increase nuclear energy production, nuclear related stocks soaring in today's session. Pippa Stevens joining me now with more, quite a move. Yeah, John. So basically what happened was President Trump signed four executive orders aimed

at boosting the nuclear industry with the overarching goal to speed up deployment and create domestic fuel supply chains in order to quadruple the U.S.'s nuclear power by 2050. The four EOs are as follows. The first aims to speed up reactor testing at national labs to expedite applications. The second clears a path for reactors testing at national labs to expedite applications. The second clears a path for reactors to be built on DOE and DOD lands. The third overhauls the Nuclear Regulatory Commission, lowering regulatory burdens for the industry. And the

fourth aims to increase domestic uranium mining alongside conversion and enrichment. Now that's according to a White House official since the EOs have not yet been posted. A huge response today for the nuclear stocks, the URA and URNM, jumping more than 11%. Mining stocks, including Cameco, Denison, and NextGen all up double digits. There's also reactor developers. Take a look at Oklo and New Scale,

as well as fuel suppliers like Centris. Finally, those independent power producers, Vista and Constellation, they've been big movers, they own nuclear generation, so they're also, John, seeing a lift today. How much is the lead time between the policy shift and any of the expected benefits here? I mean, I imagine there are some companies

that are already trying to get stuff done where an ease in regulation could have a more immediate benefit. Yeah, so there's a lot of questions because people I spoke to ahead of this, looking at that NRC one specifically, the NRC is considered the gold standard worldwide. And so while you're trying to speed up

all of this deployment, at the same time, we've seen Doge making a lot of cuts. And if this EO does try to kind of overhaul the sentiment at the NRC, will that ultimately then slow down the permitting process? And there are some concerns that if they put this timeline in place of 18 months, that's going to lead to ultimate rejections and reactor designs because the agency just won't have enough time to actually review it.

So that's really the interesting one there. But I think the other thing here is that we have yet to see this harnessing of private capital and that's kind of what the industry really wants. I think the other thing here is that we have yet to see this harnessing a private capital, and that's kind of what the industry really wants. So while these EOs go a long way in terms of signaling support at the federal level and trying to speed up some of the red tape and the permitting restrictions, you also need to have that financing portion. And if that's not in place, then none of these projects are going to get built.

Some very important caveats you put on the table there, Pippa. Thank you. Well, time for a CNBC News Update now with Bertha Coombs. Bertha. John, Ukraine and Russia released nearly 400 prisoners each today setting in motion what is expected to be the biggest prisoner swap of the war so far. Both sides said more prisoners will be swapped this weekend. Russia and Ukraine last week agreed to the exchange in their first direct talks in more than three years, but still have not set terms for a ceasefire.

In a letter to victims' family members seen by CNBC, the Justice Department today said it had reached a deal with Boeing to avoid criminal prosecution over two fatal crashes involving its 737 Max jet. The deal will allow the plane maker from being labeled a felon, and it means Boeing will not face trial as scheduled next month. But families of the victims have called for the company's executives to stand trial. Boeing and the DOJ have yet to respond. And Billy Joel has canceled his upcoming concerts

after sharing a diagnosis of a brain disorder called normal pressure hydrocephalus. The piano man's singer is currently receiving treatment for the condition. His team says it has been exacerbated by recent performances and caused problems with hearing, vision and balance. We hope that treatment goes well for him and that he is better.

Absolutely. Bertha Coombs, thank you. Well, Hinge Health and Mountain going public yesterday, both hired today. At an eToro last week and several more companies announcing plans to go public, are we finally seeing the IPO market open up again? We will ask a VC who knows Bradley Tusk was involved early with Coinbase and Uber, among others. We'll also get his take on how companies can manage in this current complicated

political environment. Stay with us. Welcome back to Overtime. Markets lower today. All three major averages down more than 2% this week. But we did see stocks rebound throughout today's session as the White House tried to walk back President Trump's tough tariff talk. Apple however down 3% as the president says it should make iPhones in the US or pay a 25% tariff later expanding that threat to include Samsung. Shares of Informatica meanwhile soaring 17% late in the session on reports.

Salesforce is back in talks to acquire that company. There were reports of talks around this time last year when Informatica stock was 25% higher. Salesforce down 3% on that. Bond yields pulling back from their recent highs on the trade threats and gold ending higher by 2%. It's best week and more than a month. Another part of the market we're watching is IPOs. We saw several high profile names debut in May, including Hinge Health and Mountain this week,

as well as trading platform eToro. And a number of companies have filed to go public in the last two weeks, including Klarna, Circle and Chime. So are these indicators that the IPO floodgates have opened and who could be next on the list? Joining me now is Bradley Tusk, co-founder and managing partner of Tusk Venture Partners, So are these indicators that the IPO floodgates have opened and who could be next on the list? Joining me now is Bradley Tusk, co-founder and managing partner of Tusk Venture Partners.

Early investments include FanDuel, Coinbase, and Uber. Bradley, good to see you. This market is volatile. I'm good, better than the market, though sometimes feeling almost as volatile. Normally that's not good for the IPO pipeline, right? Yeah, I mean, I don't think it's great right now either. I mean, it feels like we've been in this sort of crazy

period for the last year now of expecting the market to open up, expecting IPOs to start happening regularly, expecting M&A to really start flowing, and then something happens to pull it back. When Trump won in November, the Broadway sentiment, at least within the VC community, was two things are going to happen. We're going to have less regulation, less of an FTC, putting negative pressure on the

M&A market, and we're going to have lower interest rates, and the combination will finally allow companies to start having liquidity and VCs start having exits. And we haven't really seen that because of all of the chaos and all the uncertainty and the terrorists and Doge and everything else. And so right now, for a brief period, it feels like things might be OK again. But when there's this much chaos, markets usually don't like that. And I have to say, I'm also worried that when you look at Trump's big, beautiful tax bill, you're going to take on that much debt, and you combine that with consumer price increases and tariffs, it really makes it hard for the Fed to cut rates. And the combination of the instability and higher rates is not great for the IPO fund.

But for the companies that do come out, is this environment maybe decent? It's certainly not as heady as an environment that we saw three or four years ago when arguably things spiked so much that the comps have been tough ever since. Yeah, I mean, so I've got, of the companies that you just showed on the graphic, one of those is RR Circle, two more that make stuff, HubHats wild than S1, though we don't know exactly where IPA would be yet, probably Q3. Kodiak is going public, the DSPAC, that's supposed to be in August. So look, if you're someone like me or really any venture capitalist, where there's been

effectively no liquidity whatsoever for four years, you'd rather just have the IPOs move forward and see what happens. Also keep in mind, for the inside investors like us, we usually have a six to 12 month lockup as well. So it's really effectively what the share price is upon expiration of a lockup, not upon day three of trading or whatever it might be. So yeah, I would rather see it all happen than not.

But if you said to me, you're gonna have a year of predictability, stability in the markets and lower interest rates or another year of chaos, clearly every investor would pick the form. How are you advising company leaders to navigate relationships with this administration, with government during this period? More transactional than I can recall seeing it. And things are changing pretty quickly.

I mean, we thought a few months ago that Tim Cook was really good at dealing with President Trump and now I guess that's in question. Yeah. I mean, I think it really depends a lot on who you are, right? There are parts of this administration, by being so iconoclastic, that that might create opportunity. I was talking to a super early stage startup in the health space yesterday, and they had this kind of weird idea.

And I was like, you know what? With this HHS and this CMS, you might have a shot you probably wouldn't have had under Biden. So you should move forward and try to figure out some ways to get to them and work with them. On the flip side, if you're Apple, I'm not sure that they should really just take this all lying down. A 25% tariff on the iPhone if that were to happen, and Trump said that today it would

be Samsung as well, effectively means that every American, because keep in mind a phone now is a utility. It's not a luxury, something like 90 plus percent of adults have them, means that we're all paying an extra couple hundred bucks a year because of this tax, because of this tax. And if I were Apple, I would say, okay, I'm going to buy $300 million in TV ads going after Trump on this and anywhere else where he might be vulnerable, going after Republican candidates, going after Republicans whose votes you need on the budget, and everything else, and use your wealth and use your might to push back for two reasons.

One, because I think, like a lot of politicians, when all of a sudden they see their numbers start to fall, their positions quickly change. And two, you know, Apple is a company that wants to be around and successful for a very long time, and it needs some of the basic tenets that make the American economy strong. Investment in R&D, investment in education, independent markets, independent institutions, you know, bringing the best talent from all over the world. And if all those things are being undermined, even if you manage to fight off something

short term, you're still going to suffer long term. So I think Apple and a lot of companies spoke their immediate needs and their long term needs. If they are trillion dollar companies with true wealth, I'm not sure that I would just go and bend the knee to Trump. I think I'd flex some muscles. Maybe we'll call that the Harvard strategy. We'll see if they do it.

Well exactly, look, right now, you could be Harvard or Columbia, you'd be Harvard. Yeah, well, maybe. Bradley Tusk, thank you. Thank you for having now, John, if you could be Harvard or Columbia, you'd be Harvard. Yeah, well, maybe. Bradley Tuss, thank you. Thank you for having me, John. Ahead, we're going to break down the consumer spending clues we got from retail earnings and what they could mean for the retail results next week.

Overtime's back in two. FinTech stocks have been on a bumpy ride lately, depending on what kinds of customers they cater to. Today, let's take time out with a CEO whose software helps small and medium businesses handle income and expenses. Renee Lassert is founder and CEO of Bill, a $4.5 billion market cap company

that helps other companies connect to credit, manage expenses, pay bills, and more. After working as a manager at Intuit 30 years ago, Lassert co-founded Paycycle, a payroll company that sold to Intuit for $170 million. LeCert grew up around small business entrepreneurs, including a father who was a jazz musician on the side. That was an important detail because his father

was born with four fingers on his left hand, two on his right. A piano teacher told him he wouldn't be able to do much more than play Twinkle Twinkle Little Star. LeCert's father took up trumpet trumpet but didn't give up on piano. And he said, look, I want to learn piano. I like the trumpet, but I don't get to be enough of the band. So he asked his parents to buy piano. So they had a piano and he taught himself in one summer. And that taught me something. It's just about passion and dedication and persistence. I mean, and when you listen to him play,

he took his left hand and used the pedal on the piano to fill in what his right hand can do. It's just beautiful. And that's maybe reminiscent of the resilience and versatility small and medium businesses owners are having to employ in a tariff environment that makes planning a challenge. And this week, Lacerte told me that while customers are being cautious with their spending,

Bill is working to gain share by expanding its capabilities in areas like procurement software. They're not going to collapse. SMBs are resilient. You don't start your business without having a high capacity to handle stress and to handle all the different frustrations that come with doing something. So I'm not worried about them, and I think that we see that in our data.

That's the consistency, just slightly less volume. Our platform enables businesses to really manage their entire expense cash flow situation and to be able to do it across AP, spend and expense, AR, and now procurement. These are things that really matter to businesses to be able to control their cash flow. That was the other thing we obviously announced at earnings was just the ability for us to continue to support our customers with more features

around procurement, around mid-market capabilities, multi-entity, mass payments. These are things customers have been asking for and it's great to be able to support them. So the timeout takeaway, share grab in SMB. Some smaller businesses are having a tough time navigating this economy while also managing their cash flow. Lassert told me he's seeing SMBs

temporarily doing fewer transactions. Now Intuit's CEO this week also said he's continuing to push up market to serve midsize enterprises. Lassert at Bill is expanding into procurement. As these expansion efforts continue, companies like Bill will try to use AI features to differentiate from incumbents and establish a foothold. Well, the old saying goes, sell in May and go away,

but history says you're likely making a mistake following that strategy. We've got the data next. Plus Mike Santoli tells us whether history says stocks can keep significantly outperforming bonds. We'll be right back. Welcome back to Overtime. As we head into the Memorial Day weekend,

we wanted to take a look at the old market saw sell in May and go away. The data says you want to rethink that. According to Bespoke, since 1975, the median S&P performance between Memorial Day and Labor Day has been a gain of 3.7% and higher returns 72% of the time. When the S&P is positive year to date

heading into the unofficial start of summer, the median gain is around 4% with gains 74% of the time. When the S&P is negative for the year, as it is right now, investors have seen gains of around 1.4% with positive returns 67% of the time. So, well, how should we expect stocks to perform after outperforming bonds so dramatically?

Let's bring back Mike Santoli for a look back in time again. Mike? Yeah, John, it sort of depends how fervently you believe in long-term kind of reversion to the mean. First, let's look at long-term bond returns here. This is the 10-year rolling returns, annualized returns for long-term treasuries,

going back 90 years. It's never been worse. So slightly negative rolling trailing 10-year annualized returns for long term treasury. So if you think that the pendulum swings, it's not the worst entry point. You really have to be a contrarian. You have a lot of people saying, you know, government bonds no longer are going to hold their value in the future. But this is what history says. Now let's take a look at stocks. Same calculation, 10 year trailing annualized returns. This

is how it looks for the same 90 years. We're up around 13%, 12.5%. It's been higher at the end of mega bull markets and that was a bad time to really bet heavily on stocks. We're in the middle. It seems like stocks don't owe you anything on a longer-term basis, but it wouldn't be surprising to see them perform okay from here, John. Is the argument against a reversion to the mean that nobody cares about deficits in Washington, it seems? Yeah, the argument against it, honestly, is that structurally the deficits are such

in the supply of bonds in the future is gonna be so heavy that you're not going to actually get better returns on bonds, even though history would suggest you would. Now, you do have a good starting yield, relatively good starting yield, you know, 4.5%, 5% on 10 to 30 year bonds on treasuries, but that's only so much of a cushion because, you know, you also had a pretty good cushion 10 years ago, 3 to 5%. Okay. Mike Santoli, thanks.

Well, NVIDIA, once again, and a ton of retailers set to report next week, up next, what investors are learning about the state of the consumer following this week's big batch of retail results. And because you love overtime and you want even more, we got a QR code for you. You can scan that on your screen. Follow us on LinkedIn, where we'll post exclusive content. Be right back. It was a big week for the retail sector

with Walmart, Home Depot, Lowe's and Target reporting mixed quarter results. Some of those earnings pointed to growing concerns over the future, all thanks to tariffs. Target cut its full year outlook. Walmart didn't give guidance, citing concerns about keeping prices as low as possible. Ross stores and Deckers Outdoor are both pulling guidance. Lastly, Home Depot and Lowe's are keeping their forecast unchanged.

Earlier today, ELF Cosmetics announced it's raising prices because of tariffs. Then next week we'll get a better picture on the consumer when Macy's, Best Buy, Costco, Gap, and more report earnings. So joining me now is Joe Feldman of Telsey Advisory Group. Joe, is this next batch gonna be more like Walmart or more like Target?

Well, we're hoping it's gonna be more like Walmart, you know, where they have solid report. And then, you know, we'll see how things trend. But the consumer's hanging in, the first quarter's been okay. I just think that, you know, the go-forward, there's a lot of uncertainty related to tariffs. And so a lot of the companies are just really reticent to give out too much detailed information

about what they're thinking because it changes day to day. Just this morning, President Trump talked about 50% tariffs on Europe and 25% on Apple. So you just don't know what you're going to get day to day. So I think like Walmart's approach where you maintain your guide for the full year, Home Depot Target, Home Depot and Lowe's did the same, that makes a good question. I think that's a good question. I think that's a good question. I think that's a good question. I think that's a good question. I think that's a good question.

I think that's a good question. I think that's very clear listening to the conference calls this past week that the retailers were very careful to not put the words together, price increase. They did not go side by side on any of the calls. And speaking with the management teams, I mean, a couple of them told me offline that, yeah, we saw what happened at Walmart. President Trump went after them pretty aggressively, and they did not want to come out that way. But every retailer talked about mitigation strategies for tariffs, being able to absorb the tariffs. Part of that absorption is price increases.

It's very clear these companies are going to raise price in some of the goods. So you're saying it's not changing what they're actually going to do, it's changing the way investors have to parse what they're saying about what they're gonna do. That's right, I think they're being very careful the way they describe it to just make sure not to draw some ire from President Trump.

How much of an inventory buildup situation are we facing now heading into the holiday season as some folks try to get ahead of potential tariffs outside of that 90-day window? Yeah, I do think we're starting to see some of the flow of goods coming in while we're still in this window where there's the reduced tariff rates relative to what the original reciprocal rates were given. So we're assuming there is this going to be a little bit of a pull forward coming in.

We've heard at some of the ports, they've talked about increases in containers coming in, but not to a level where there's going to be too much of a log jam. So that's kind of interesting. We're really watching this closely. It does change week to week, but we think that there is a pull forward. We're going to start to see back to school in stores June, July. Some are already starting it in June, and I know kids in the Northeast aren't even out of school yet here. So they're trying to accelerate and to try to clear through some of the goods. But there will be stock shelves for the holiday season, but they would be thin.

I think like we've seen during the pandemic. Well, I know you like Walmart and Costco also still Home Depot and Lowe's in this environment. What about the discounters given the pull forward and the fact that, I mean, some retailers are gonna be caught flat-footed with this inventory buildup, right? Yeah, I do think there are some, you know, for example, Target, you know, talked about that, right?

That they had brought in a lot of inventory and sales had been soft, you know, for multiple reasons, but with those soft sales, they found themselves in a position where they're needing to clear through some of the goods. Talking to Walmart, Costco, some of the others, they're all being very careful to not get into a situation where they're too overbought in a particular category.

So I do think that we will see inventories within categories run lean, as they do try to maintain better sell through on the goods that they do have and get that pricing. the retail market. And so, you know, we have a lot of people that are going to be looking at the retail market. And so, we have a lot of people that are going to be looking at the retail market. And so, we have a lot of people

that are going to be looking at the retail market. And so, we have a lot of people that are going to be looking at the retail market. And so thank you. A lot of numbers to look through next week. Well, it's not just retail earnings on next week's calendar. We're also gonna get results from NVIDIA and Salesforce on Wednesday right here on overtime.

And the market will be closed Monday for Memorial Day, but there's a wave of economic data on the calendar. Durable goods, the S&P, Case-Shiller Home Price Index, and consumer confidence all out on Tuesday. Wednesday brings the latest Fed minutes. Thursday's highlights are weekly jobless claims, first quarter GDP, and pending home sales. And the week closes out with a key inflation reading,

that's the PCE price index that the Fed watches so closely. And in the midst of all that, as I've mentioned several times this our Nvidia of course and it's not just about that stock the entire AI trade tends to react to it well for now that'll do it for overtime