Closing Bell - Closing Bell Overtime: Coinbase CEO From The White House; Samsara CEO on Earnings 03/07/25

Episode Date: March 7, 2025

Unlimited CEO Bob Elliott and Kestra Investment Management CIO Kara Murphy on the markets’ wild week, plus EMJ Capital Founder Eric Jackson and T. Rowe Price Portfolio Manager Tony Wang break down tech positioning. Samsara CEO Sanjit Biswas on earnings. Coinbase CEO Brian Armstrong from the White House after attending the crypto summit. Raymond James Washington Policy Analyst Ed Mills on the shutdown deadline, tariffs, and policy.

That bell marks the end of regulation for the week. Women in financial markets ringing the closing bell for the New York Stock Exchange. Dolphin doing the honors at the NASDAQ. Stocks turning higher midday after some soothing words from Fed Chair Powell, but still closing out a bumpy week for the bulls. A soft data and tariff uncertainty weigh heavily

on the major averages. That's a score card on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Well, head this hour. Tech's a terrible week. We're going to talk about the big drawdown for names like Tesla, NVIDIA, Netflix, and if it's time to start buying these dips.

Plus, the next wild card for investors, Raymond James, Washington policy analyst, Ed Mills, will join us to discuss next week's government shutdown deadline. And we will bring you the latest on the White House Digital Asset Summit that is taking place as we speak, as you can see right there on your screen. That's following the administration's move to create a strategic Bitcoin reserve. And now let's get straight to the market action as we wrap up a week, perhaps to forget for the bulls, joining us is unlimited CEO and CIO Bob Elliott and Kestra Investment Management CIO Kara Murphy.

Guys, happy Friday. Bob, stocks or gold? Well, I think stocks are facing a pretty tough circumstance right now. The incredibly elevated expectations that we had coming into the year have come down a little bit with this price action. But so far, the type of fiscal tightening activities that are being expected to be rolled out over the course of the next couple months

have yet to really at all be fully reflected in how weak we're likely to see nominal GDP play out. Look, there's some concern about a bit of the tariff volatility, a bit weaker employment conditions than was originally expected, but that's nothing compared to the type of tax policy pay-fors that are likely to be in place, the constriction from immigration, and the significant efforts to curtail federal spending. Kara, diversification is something we're hearing more about these days after quite a run for mega caps and tech. What does diversification really mean in this environment for so many people who are now

overweighted toward those things that have gone up so much? Where does international fit in for you and what about fixed income? I think it's such a great question because for two full years, diversification got a bad name, right? Like most of the returns were coming from a handful of stocks that just seemed to go up every day. Now, so far this year, we've seen bonds chugging along.

We see EFA having a really strong year, vastly outpacing US stocks. So I think it's just a good reminder that the market doesn't always stay with just a handful of names, and it makes sense to have exposure kind of around the world. So as we look at sort of like the winners so far this year, I really think it's the diversified portfolio that's coming out as the hero. Bob, I want to get your thoughts about the push poll I'd argue you were seeing in the

market between monetary policy and the officials associated with that look no further than Fed chair Powell this afternoon whose words were taken as soothing by investors in this market and Fiscal policy and yes a lot of uncertainty but keep in mind only four and a half days into this what I would call maybe a trade war Negotiation whatever we want to call it as well. But obviously calling causing a lot of volatility If there's a lot of volatility. If there's a lot of noise to use the term that Powell used, how do you cut through that to what's actually taking place and thus what it means for investors? Well I think the challenge in this sort of circumstance is there's an incredible amount

of volatility and so it's not a time to have high conviction in one direction or another because one day we have 25 percent tariffs on our three major trading partners and the next day they're all gone. And so that sort of volatility very, very hard to manage. What we're seeing is that that's forcing professional money managers to take risk off the table. And part of what we're seeing in terms of the cross market dynamic is that the long positions that a lot of those leverage investors had are being drawn down. That's some of the market action that we're seeing

in the tech names and some of the short interest positions are getting cut back. And that's, we're seeing outperformance there as well. And so that sort of environment is challenging because the question is who is gonna be the incremental buyer for risk assets in an environment where there's so much policy uncertainty and when you get those leverage players pulling back like we've seen across the hedge fund industry there's not a lot of incremental bid there

that isn't already all in on on equity so far. Kara I mean it's worth noting that we came into the year and really started the year arguably overvalued for the S&P 500 and quite a few of the stocks that have been outperforming over the last couple of years. A lot of conversations about the broadening out, about the rotation we're seeing in this market between sectors, but also a lot of talk particularly this week about the fact that we are seeing a pullback, maybe even depending on what you're watching a correction. At what point do you look at this market and you say okay we're right-sized expectations have gotten in line with this moment we're in and you buy into the into

some of these more perhaps economically sensitive parts of the market. So you know it you mentioned valuation at the start of your question and we could have said all of those things a year ago, right? Valuations were looking fairly high in U.S. stocks, particularly among the MAG-7, and then we had another 12 months of those names continuing to do well. So I think having high valuations alone is not a great timing indicator for the market. What it tells us is that expectations are fairly high and that companies better continue to meet those expectations. So we've talked a lot about earnings momentum and how that's really an important driver

of the market going forward. And that's where we start to get a little cautious towards the second half of the year, because what we see is Mag-7 earnings continue to outpace the market, but the degree to which they outpace the rest of the U.S. stock market declines. And then we're also starting to see some non-US companies starting to see more earnings momentum relative to those MAG 7. So I do think earnings continue to matter, but where we're seeing that relative strength is going to shift a little bit to other parts of the market.

Okay. Kara Murphy, Bob Elliott, great to kick off the hour with you. Thank you. With all the major averages finishing the day higher, though still lower on the week. We'll take the green on the screen. Meantime, President Trump is speaking at the White House Digital Asset Summit right now. After moving to establish a strategic Bitcoin reserve, CNBC's Mackenzie Segalos joins us with the latest.

Mackenzie. Hey, Morgan. So the president just wrapped up comments at the White House crypto summit, laying out his plan for the strategic Bitcoin reserve and crypto stockpile that he just set into motion. Already, we're seeing crypto prices start to recover after what's been a rough 24 hours of trade in the wake of what should have been good news for the industry. The president saying that the federal government is already among one of the world's largest holders in the

world with its $17 billion worth of Bitcoin on the books. He also talked about the Biden administration prematurely selling billions of dollars worth of crypto. Now, Trump says that the Treasury and Commerce Secretaries will explore new pathways to accumulate new Bitcoin holdings at no cost to taxpayers. And he's looking at how to transfer those coins to the Treasury and deciding on a custody partner. Coinbase is among a larger group of crypto proxy stocks ending the day higher and really that's the big question here. Will the administration roll out a budget neutral buying strategy, which is the catalyst that the market really wants to see?

Also in the room our SEC Commissioner Hester Perce and the acting chair of the CFTC along with his cabinet what really is a show force in favor of the industry. And this is fascinating to me because budget neutral is a loaded word in Washington that has a lot of policy policy implications to it. And if you're going to start actually actively buying Bitcoin, it seems like you need to get lawmakers in Congress on board to be able to do so. I don't know how much insight you have into that. But one of the things that I find super fascinating,

and you and I were talking about this on Power Lunch, is if you're just talking about what the U.S. government already has potentially right now, if it's something like $17 billion, just to put it in context, the Strategic Petroleum Reserve, is it about $22, $23 billion in assets and where they're valued? Well, to your earlier point, the Trump team has been working with Senator Cynthia Lummis,

who last year bought forward a Bitcoin buying bill, an acquisition strategy of purchasing 1 million Bitcoin over the course of five years. There's certainly momentum in that direction that she might bring a similar bill forward. But in terms of looking at just the holdings that are already in place, I was speaking with Coinbase CEO Brian Armstrong, and it's his sense that we would see the G20, many of those members, follow suit because this is a very tremendous stockpile just by virtue of the tokens that have already been seized and are on the books of the government. All right. Mackenzie, thank you. Mackenzie Segalos. on the books of the government.

All right. Mackenzie, thank you. Mackenzie Sigalos. Well, stocks closing out their worst week of the year so far with the S&P 500, now off more than 6% from the record highs. Let's get to Mike Santoli for more on the damage. Mike? Yeah, John, so the last four days,

the market was trying to make a stand. The S&P 500 kept crisscrossing this 5 5700 level finally settling above it it was 1% above the intraday lows today so you can squint and say okay maybe the market is suggesting some of the selling pressure is easing off around these levels it might also be significant at least in the sort of a scorekeeping sense that the low from today was 5666 it was like within a point of this high from mid-july that I keep pointing to you know who knows if that meant that we finally just sort of like tagged it made a proper reset went back half a year and now it's time to to sort of see what might be able to break right as a

matter of relief take a look at the history of how five% plus pullbacks in the S&P 500 have gone on to either present further gains or not. Historically about 60% of those 5% plus pullbacks eventually do not get to a full 10% correction and so therefore they're buying opportunities. This is from Warren Pies at 314 research. So the overall pre-financial crisis average, it showed you that, you know, generally a good buying opportunity after the 5% level,

on average, you don't have too much more downside. This however, since 2022, there's only six instances, but it's been a little more likely that you're getting a full correction. The best time to be a dip buyer was right after the financial crisis with interest rates super low, no inflation to worry about, therefore any pullback in yields and stocks meant that the Fed could

kind of be there, come to the rescue and it could actually be supportive on a fundamental basis. So, you know, you kind of use the probabilities here and say, usually this is not the worst time to start going in, but you have to be ready for a little bit more of a gut check along the way. Mike, one of the many things that the charts don't show us is sentiment, feel. It seemed to me like in early November, right after election day, so many people in the market in corporate America thought they knew exactly how it was going to feel for business

in a second Trump administration. The feel, I think it's fair to say, is very different now with the environment that we've been in. So given that, given the seasonality, spring's about to start in just a couple of weeks, what is all of that set up for the market? Well, I think now it's the time to ask

whether that sentiment, business sentiment, investor sentiment, has actually swung all the way to essentially have a full reckoning after that burst of optimism we got after the election. Because almost all the measures are showing that. All the market-based measures

that say, you know, are we pricing in an acceleration or not? Are we pricing in more deals or not? Have also rolled over. So it's almost as if the market is telling you, we round tripped

on this thing. And historically, I know I keep pointing this out, whenever you have high perceived policy uncertainty, and everyone's passing around those charts, where it's spiking to the moon right now, it is usually meant that it was more of a buy than a sell signal for stocks, because it meant all the uncertainty was kind of

at least getting recognized and probably priced in the market. So I know that sounds Pollyannaish, but that's somehow the way it can go from here. You Pollyannaish? I was literally just having the same thought. Mike Santoli was here again in just a little bit. After the break, is it safe to start looking at tech?

Well, we'll talk about the brutal stretch of trading for the NASDAQ 100, which name should be on your shopping list perhaps to buy on the dips? And speaking of tech, Palantir rebounding by five and a half percent today after falling more than 30 percent from its recent highs. We're going to tell you what's behind this bounce back next. Overtime is back in two. Welcome back. The tech sector getting slammed this week the Invesco QQQ ETF

touching its lowest level since October of last year. Is this pullback a buying opportunity or should you steer clear? Well let's discuss that. Let's bring in EMJ capital founder Eric Jackson and T-Row price portfolio manager Tony Wong. It's great to have you both. Eric I I'm going to start with you. Is this a buying opportunity? Do we have further to fall? Hey Morgan, I think you want to kind of see how the beginning of next week plays out. I think it's I think it's quite likely we're near a bottom. Certainly sentiment seems washed out, but we've gotten a few head fakes just in this past week. So I would love to see the QQQ's like hit 500 maybe like something like 498, 497 slightly higher than where we closed today as sort of like a sign of an all clear. But then you know, once we get that, you know, there's a lot of buying opportunities with this 10% correction under our belts here. Tony, I want to get your thoughts on, I mean, we're talking about a broader stock rotation looking across the sectors of the S&P, but I wonder if we're seeing one

within tech, within software, within the AI trade in general right now and maybe that that is shifting from the so-called picks and shovels or at least the original players like the NVIDIAs of the world to other players now. Maybe case in point Broadcom after the earnings we got after the bell yesterday. Your thoughts and if so, what's compelling? Yeah, I think that, you know, within tech there's always groups of stocks that are working and groups of stocks that are not. And so I think that you saw the Max 7 really dominate the last two years.

And I think going into this year, I think that there was a lot of concern over the CapEx that's being spent. I mean, they're kind of becoming fundamentally different businesses in some respect in terms of the capital intensity. And then on top of that, you had kind of more in-line reports. And so when you're spending a lot of CapEx

and you're coming in line, I think that tends to set up for a tougher stock reaction. And so, you know, I think there's other areas in tech that naturally things will broaden out to, like things that have more bottoming fundamentals that can have a little bit easier setup. So I think that, you know, we're looking for like more broadening.

And, you know, I think that these are still like very good companies and they're still like a core part of tech portfolios. But I think there's opportunity elsewhere as well. Eric at what point is it not really an issue of market timing so much as you look at a group of stocks and if you're looking to be in them for you know three five years it's just a decent time to buy and I look at MongoDB which really had a rough print based on the guidance of trading now about where it was part of the spring of 2020, May 2020, five years ago almost.

I look at Samsara reaction to that stock, which tends to guide conservatively anyway. We've got the CEO coming up soon. C3AI is similar, down near 20 bucks a share. I mean, these are the names that were high flying. They're certainly at low altitude now. Yeah, I think you're right, John. I would just say that rather than go for some of those names that you just mentioned, like Mongo, I like some smaller names that have had some recently really strong earnings,

but they're still kind of under the radar. So one of my favorites is Root Insurance right now swung from like a loss of 170 million you know, a year ago to like now being squarely in the black making 30 million this past year to really strong earnings reports back to back. They're one of these insure tech IPOs that came out in 2021. But they're like, you know, they're 130 today. They came out at 500. They probably deserve to be back at 500, at least by next year.

And yet they've they're still sort of flying under the radar. Chinese internet names are probably the part of tech that are still are working the best and everyone talks about Alibaba, but I own a VIP shop where 56% of its market cap is cash on the balance sheet. And I just think there are some other names like that. Regetti Computing has been sort of forgotten about after Jensen's comments in January, and yet the week after next, Nvidia is having its Quantum Day. So I guess Quantum is maybe not 30 years away. And so I like their, you know, their earnings

and their partnership that they announced a couple of days ago. Tony, at what point can you buy a, I know stock picking is fun and everything, but for investors who aren't looking to take on that fuller risk, I'm looking at the IGV at 93, it's just a bit above that peak from late 2021. And there are some other things that are way off,

that are whole baskets of stocks. Are the smaller software stocks just in general, closer to a buy? Yeah, it's really hard to talk generally, but I think that a lot of the software stocks that are down, like you mentioned, there's good reason for them. I mean, a lot of times the valuation

has been really expensive just because they're down from kind of a you know super peak doesn't mean that they're necessarily buys in my opinion. So I think like you want to wait until like there's stronger fundamentals and a lot of times you stop our stocks there was such a big pull forward kind of over the last few years that for them to reaccelerate and then start beating earnings can be difficult. All right. Tony and Eric, thank you both. Elsewhere in the tech universe, Palantir, marking a key milestone today, delivering the first two AI-enabled Titan vehicles to the US Army.

Now, Palantir doing this after being awarded $178 million for the program a year ago, they delivered on cost, on time. This phase of the program includes 10 vehicles across five delivery orders. So what is Titan? Well, you can see right there on your screen. This is the Tactical Intelligence Targeting Access Node. It's an AI defined and mobile intelligence ground station that integrates data. Titan is essentially an AI enabled supercomputer on wheels that doesn't need to plug into the cloud. Palantir president for US government business,

Akash Jain calling this a quote, leapfrog moment, telling you the software centric nature of the army's investment signals an important shift for the military and for the defense industry writ large. Now Palantir partnered with Andral Industries, Northrop Grumman, L3 Harris, among others on this program. You can see the stock is popping today. It finished up 5.5%.

It outperformed the broader market, and most of the broader growth and momentum names. But John, case in point here, when you talk about how the military is going to be fielding new technologies and new software, and doing it with an eye to costs and the defense budget more broadly. This might be an example, one of more coming of programs where new companies are doing

things differently. I know you'll keep an eye on it. And now we've got a news alert on Robin Hood. Kate Rooney has details. Kate. Hey there, John. So Robin Hood is settling with one of its financial regulators, FINRA, over some regulatory matters that date back to 2014.

This does appear to clear the decks pretty much for outstanding issues on the regulatory side for Robinhood. It did settle with the SEC recently, and then that agency also dropped its investigation into Robinhood's crypto business. This one is a $26 million settlement with FINRA plus $3.75 million in restitution to customers. A couple issues here with the FINRA disclosures. A big one was disclosure.

There was an issue about anti-money laundering programs, monitoring suspicious activity, and then another had to do with collared orders that tend to protect investors from volatility. It's how they disclose that to customers that was the issue. Robinhood does not offer collared equity market orders at this point. In a statement that Robinhood is saying they're pleased to resolve these historical matters, they say it does date back to 2014 and Robinhood securities and Robinhood have since remediated those issues. The stock has had a rough week as growth names have gotten hit. It's been down about 9% in the past five trading days or so, guys.

Back over to you. All right, Kate, thanks. Well, still ahead, we're going to talk more about the tech trade, or really specifically demand when we're joined by the CEO of Samsara, ticker symbol IOT, closing lower by 15% today on the back of earnings results. And we'll look at the one thing happening in Washington next week that could inject only one thing that could inject another dose of Volatility into this market one thing we know over time. We'll be right back. Yeah, that's that's good framing

Welcome back stocks wrapping up an ugly week of trading and this morning's job sprint adding adding to concerns about the health of the economy. So let's bring back Mike Santoli for his take on that report. Mike. Yeah, a little bit nuanced Morgan. I think on the headline, it was reassuring enough. You know, the job growth in total in the month was more or less in the zone of expectations. And this shows the what's called aggregate weekly payroll income measure, which adds in the net change in new jobs, the average work week and then average hourly wages to get some kind of a proxy for private sector payroll income growth on an annual basis.

See, it's kind of hanging in there on the year over year metric pretty well. And actually very close to the kind of pre pandemic typical 5% give or take average, but the three month annualized version, so the more recent data, shows a little bit of a dip here, and it's sort of the lower end of the post-pandemic range.

So it's one of the reasons why it feels as if the job market is steady, but definitely not strengthening, and perhaps kind of approaching some kind of a stall speed if we have an issue with labor supply or a little bit of a bulge in layoffs, Morgan. All right. Mike Santoli, thank you.

Now it's time for a CNBC News Update with Bertha Coombs. Bertha. Hey, John. President Trump is expected to sign an executive order that would exclude some student loan borrowers from the public Service Loan Forgiveness program. The president today accused the program of including organizations that engaged in illegal behavior. The program allows non-profit and government workers to have their federal student loans forgiven after 10 years of repayment. Poland will require all adult men to undergo military training as the country readies itself

for threats from Russia. And the prime minister said the country is looking to gain access to nuclear weapons. The prime minister told parliament today he wanted to increase the size of the country's army to 500,000. Officials in Santa Fe, New Mexico are currently giving an update in the investigation into the deaths of Gene Hackman and his wife Betsy Arakawa, who were found last week in their home. Their medical examiner says Hackman's wife likely died first from a severe respiratory illness caused by the hantavirus, a rare disease spread by infected rodent droppings. And that 95

year old Hackman died of heart disease and showed severe signs of advanced Alzheimer's. Very very sad case John. Back over to you. Yeah, it really is. Bertha Coombs, thank you. Still ahead. Much more on the White House's plans for crypto following the digital asset summit and the establishment of a strategic Bitcoin reserve. But first, the CEO of Internet of Things company, Sam Saara, joins us as his stock falls post earnings and guidance.

We'll talk about what he's seeing in software and logistics demand when Overtime comes right back. Welcome back to Overtime. Shares of Samsara closing sharply lower after reporting earnings results last night. Here on Overtime, the company beat on the top and bottom lines, but investors, a little disappointed in the guidance, and joining us now is Samsara CEO, Sanjay Biswas.

Sanjay, good to see you. Now I've been talking to you long enough, since I guess before you went public, to know that you can tend to be a little conservative in the guidance. So 23, 24% growth I think is where you guided the bulls, we're excited for something closer to 30. Fundamentally,

is there anything shifting or slowing in the demand you're seeing? How much of your outlook is being safe based on all of the uncertainty and headwinds we see globally? Well, John, first, thanks for having me on. We do tend to be very conservative with our guidance. That's our philosophy and that's how we operate. In terms of demand, I think our Q4 results tell a pretty clear story. We saw a record number of 100k plus customers as a quarterly record for us. Momentum is really there in the business. We grew on an adjusted revenue basis 36% year over year, which is consistent with where we were in Q3, but at a greater scale. So we're still seeing a lot of great demand for the product.

We're in the early innings of digitization for our customers, but we do want to take into account all of the different factors that are going on in the macro economy. So we want to be conservative with the guide. When it comes to potential upside, I wonder how much of it you think comes from some growth areas that we've talked about about like equipment monitoring, expanding,

continuing to outside of logistics into areas like construction and the safety possibilities there. If you can give a little color on what you're seeing from that in the quarter and the growth and sort of attach rates of your various offerings within those spaces? Well, we have seen a tremendous amount of momentum outside of the traditional industries we've served. On the earnings call yesterday, we talked about a top three global telecommunications company who have been deploying us. We saw a very large do-it-yourself storage company deploy us,

and these are with products that are outside of the traditional portfolio. The asset tags that we talked about last time we were together, I've been selling really well, thousands of units going out the door. So the use cases I think are broadening for us. And we are all about really focusing on the long-term opportunity, which is again,

digitizing the world of physical operations. There's a tremendous appetite for data about what's going on in the field when it comes to safety, when it comes to efficiency, and even very practical areas like fuel consumption which I think spread across different industry verticals. Just to dig into that a little bit further, you know, it's interesting,

we've had multiple conversations with multiple people within the industrial space in different parts of the industrial space this week where they're talking about all of that digitization that's happening, whether it's in factory floors or warehouses or vehicles or things tied to the military, for example. And even just yesterday on CNBC, you had the Commerce Secretary Howard Lutnick talking about robots coming to factory floors.

It does seem like we're at this milestone moment where industrial policy, technology, and companies such as yourself are meeting and converging in a way to create productivity in a way we haven't seen in the past. I want to get your thoughts on that. It very much feels that way. It seems like we're at a tipping point. A lot of it is because this is a part of the world that hasn't been digitized yet. If you think about the commercial vehicles on the road, only about half of them have GPS tracking. Only about 10 percent of them have AI-based safety cameras, and that's a number that is poised to grow. So when we think about our customers, what we see is an

opportunity to really help them move forward very quickly on that digitization journey, and for us that's what we're hearing in the field is there's a real appetite to get this data, but there's a question of how do you do it? Sandra, finally, on the asset tags, frame for me how investors should model net revenue retention impact from that. Do you yet know, are customers maybe buying these for one reason and then the data that they get you think is gonna cause them to laterally move

into other or more products? Are they going to be churn reducers, loyalty increaseers? What's the impact? Well, for us, we focus on that kind of long-term customer partnership and that opportunity to really digitize their operations in mass. A lot of that starts with a single project, so they may be focused on safety or they may be focused on routing efficiency or fuel consumption. We will help with a project like that. But then, as you said, they may be interested in understanding where all their small assets are and helping improve their efficiency on that front. So for us, it's about planting seeds, building long-term relationships.

We've seen our net revenue retention rates continue to be very strong, and we've seen our multi-product detach rates continue to tick up. So in the last quarter, we're seeing about 60% of our 100K plus customers adopt three or more products from us. So not just safety, not just the vehicle tracking, but also things like the asset trackers and the workflows and the training.

So for us, it again is about this multi-year, decades long kind of partnership, as opposed to landing large. And the asset tags, I think, fit into that philosophy of, well, let's digitize more of your operations over time. All right, Sanjay Biswas, putting the guide and the momentum into perspective. Thank you.

Thanks, John. Well, we have a news alert on Boeing, and Philip Bo has the details for us. Hi, Phil. Hi, Morgan. Boeing has filed its proxy statement, which includes executive compensation for 2024. Kelly Ortberg made $18.4 million last year. That was his compensation.

Keep in mind the vast majority of that compensation is in the form of stock options as well as RSUs that vest over the next four years. In terms of actual take-home pay in 2024, Kelly Ortberg made $1.8 million. He did not receive a performance bonus for last year. One other note, former CEO Dave Calhoun, his compensation in 2024, $15 million, and he also did not receive a performance bonus. Guys, back to you.

All right, Phillipo, thank you. Shares are basically flat right now here in overtime, but still ahead, bringing you a performance bonus. Guys, back to you. All right, Phil LeBeau, thank you. Shares are basically flat right now here in overtime, but still ahead, bringing you a big interview. Coinbase CEO, Brian Armstrong, is going to join us exclusively after just attending President Trump's digital asset summit at the White House. Overtime we'll be right back. Welcome back. President Trump just wrapping up a digital asset summit at the White House after signing an executive order yesterday establishing a strategic Bitcoin reserve.

Coinbase founder and CEO Brian Armstrong was part of today's summit and he joins us now exclusively from the White House. Brian, it's great to have you back on. Thank you for having me. So you literally just got out of the room and that's exactly where I want to start with you because this is very much 180 degree pivot from what we saw with the last administration and in terms of the policy that's beginning to roll out your analysis of this moment we're in and how the administration plans to move forward. of this moment we're in and how the administration plans to move forward. Yeah well this is really a sea change for our industry and President Trump has really breathed life back into this industry. It's already having a positive

effect in America. For instance Coinbase is planning to hire over a thousand people right here in the United States due to the resurgence of this industry and so it's already leading to American prosperity. Now he announced last night that there's an executive order to create a strategic Bitcoin reserve. This is incredibly exciting because the US leading on this front I think is going to cause the rest of the G20 to take notice and think about Bitcoin as a successor to gold. It is a it's a new gold standard, it's more efficient. Government should hold a strategic reserve of Bitcoin in my opinion and so the US is now on offense. It's leading and I The government should hold a strategic reserve of Bitcoin, in my opinion. And so the U.S. is now on offense.

It's leading, and I think the rest of the world is going to follow. And the details we're starting to get are that maybe it's $17 billion worth of Bitcoin that have been seized or being held by the U.S. government currently. And yet Bitcoin is under pressure today. Why? Yeah, well, it's true. In the past, you know, the U. the US government has ended up holding Bitcoin and other crypto assets due to various agencies and law enforcements that have a reason for it. But in this new strategic Bitcoin reserve, they're actually

planning to buy new Bitcoin in a tax neutral way or a budget neutral way so that it doesn't affect the taxpayer. That's a really big deal. Now, I was surprised as you were, if the United States government came out and said, it's going to be a holder of Bitcoin indefinitely, and actually a buyer of Bitcoin in a budget neutral way, I would have expected the price to rally even further. But whatever's happening in the short term, I'm confident that in the long term,

this is gonna be an upward trend for Bitcoin. What are the details around how this reserve is stood up? For example, the custodian of choice, there had been some speculation going into this possible policy announcement that Coinbase could be in the running for that position. Well that wasn't discussed today and I think that there should be a fair and transparent process for various companies to bid on that but Coinbase has been a provider of crypto custody and trading services to the US government proudly

for many, many years, various agencies within the government. And so I hope that we get to throw our hat in the ring there as well. Brian, what do you say to people who are disappointed that the government isn't committing to buying Bitcoin beyond a tax neutral way? Well, I wouldn't really agree with that as a criticism. I think that it's smart the way that they did it

in a budget neutral way. Otherwise, I think it would just raise questions about where that's coming from. But I thought they were very smart the way they landed it. And in addition to that, the crypto strategic stockpile, they said, we're not going to be going out and buying these, but if the US government comes into possession of those through some other mechanism, they're we're not going to be going out and buying these. But if the U.S. Government comes into possession of those through some other mechanism, they're going

to hold on to it. And so I think they're just reinforcing that this is a neutral process. It's Bitcoin focused and it's going to be fair and orderly and not cost the U.S. taxpayer anything. Brian, hold tight. We've got some news that we want to react to with you from the Office of the Comptroller of the Currency. Mackenzie Segal is back with that. Mackenzie. Hey, John. We've got some news that we want to react to with you from the Office of the Comptroller of the Currency.

Mackenzie Sagal is back with that. Mackenzie. Hey, John. So President Donald Trump's newly appointed leadership at the OCC has just released a memo that could significantly reshape the relationship between U.S. banks and the crypto sector. Now, in this letter, the regulator clarifies that national banks and federal savings associations are permitted to engage in a range of cryptocurrency related

activities, including crypto asset custody, stable coin transactions, and participate in distributed ledger networks. Now, this is a notable shift in the letter. It removes the requirement for OCC supervised institutions to obtain prior approval before engaging in these activities, eliminating a key regulatory hurdle. In essence, this gives federally regulated banks the green light to handle stablecoins and other on-chain assets. Now, while the OCC wasn't necessarily the primary regulatory roadblock here, this clarification

provides important reassurance to the industry. That said, the Federal Reserve may still need to issue further guidance, and it's worth noting that not all banks fall under OCC jurisdiction, only those that are federally charted. However, for the institutions affected, this is a major step forward in integrating crypto into the traditional banking system. Guys? Mackenzie, thank you. So, Brian, does this mean more competition for you? Does it just mean more official embrace of Bitcoin?

Yeah, I think this means more official embrace of Bitcoin. We saw a big issue in this prior administration. Some people refer to it as Operation Chokepoint 2.0, where the agencies unlawfully, in my view, pressured many of the banks to not work with crypto companies. Everyone deserves equal treatment under the law. And there's now hearings happening to hold those folks accountable. And so to me, this is a very positive development. It's encouraging the OCC chartered banks to work with crypto companies as they should,

like any legal business in the United States. And so we want everyone in the world to integrate into crypto. That means every bank, every fintech company, every payment company. And of course, of course, Coinbase can be the most trusted leader as the industry grows ten or a hundred fold. Now a couple of weeks ago we had David Sachs, the AI and Crypto SAR for the White House, and he was talking about stablecoins and how policy there crafted the right way could actually help to ensure dollar dominance. And then today it looks like out of this event that you were, the summit that you were in, the Treasury Secretary, Secretary Besson made similar comments

about putting a lot of thought into the stablecoin regime and that the US will be the dominant reserve currency and that stablecoins will be used to do that. What is the case for that? And what is the policy that ensures the dominance of the dollar moving forward on the geopolitical stage? Yeah, well, stable coins are an incredible innovation

that are going to help preserve the dollar's reserve currency status. We need a digital dollar to be able to move money faster, cheaper. There's many people around the world who have high demand for the dollar as a refuge for inflation. Maybe in their country, they're experiencing 50 or 100% inflation a year.

They really want to hold the dollar, but many people in the world don't have easy access to it. And so a digital dollar, digitized dollar like USDC for instance, would be an amazing solution to drive more demand for the dollar and ultimately holding more US treasuries as well. The stable coins have now become one of the largest holders of US treasuries. So we want to see a level playing field where various stablecoin issuers around the world can put these out, but we want to see a safe and trusted framework for how it can be done in the US and we hope that USDC can be

the dominant player there. We saw what I thought was an interesting reaction from the crypto community to the initial word about this crypto reserve, including more than Bitcoin. There's some people who are very in favor of Bitcoin and think that the U.S. holding on to other cryptos wouldn't be a good thing. Is your sense that that, now that we have details, is cooling off? What was that about? Well, I think that that was a result of the president just having a very transparent process

about what they were imagining and different ideas. And he's very open to feedback, it seems, from the market. Anyway, I think that they landed it in a very good place, which is that the strategic reserve is Bitcoin only. That would have been my suggestion as well, so I was very happy to see that. Then if they're going to hold other crypto assets, not buy them, but actually just they came into possession through other means,

I think it's fine to hold those as a stockpile. That feels to me like a very unbiased, a very fair way to run it. So I think it's very impressive where they landed it. I would be remiss if I didn't ask you about the comments you made earlier this week, because it's not just the cryptocurrencies, but the underlying technology and tokenization process

itself that's associated with some of these cryptocurrencies. And you were at a conference and you renewed that push for tokenized securities. What does that bring to the market? And what would that mean for Coinbase to see that move forward? Yeah, well crypto is a powerful technology to update the financial system writ large, so it can make payments more efficient.

It can be a new gold standard. It can also be a way for people to tokenize securities and actually make capital formation more efficient. So today, when people want to go raise money for an apartment to build an apartment complex or to make a movie or to start a new company, they often have to pay high fees to various firms out there that'll help them package this money. They have to go register a security with the SEC. And it's a relatively inefficient process.

Now, following all the clear rules that are out there, and we hope that in this new SEC, they're actually gonna publish even more clarity about how crypto securities could be registered and tokenized. I think it'll make capital formation more efficient. So this is just one more area that crypto can actually update the financial system globally.

And we're very excited to try to play a role in that with our Coinbase hat on. All right, Brian Armstrong of Coinbase. Thank you so much for the time joining us. Thank you. From just outside the White House. Well up next, Raymond James, Washington policy analyst, Ed Mills on what the looming government shutdown deadline, it's a week from today, could mean for Wall Street and your money. Welcome back. As Marcus tried to navigate a wave of uncertainty out of Washington,

there could be more coming. We are a week from a potential government shutdown. House Speaker Mike Johnson aims to hold a vote Tuesday on a funding bill. This would be a continuing resolution, another continuing resolution that keeps the budget at current levels through September 30th. So that would mean a full year of continuing resolutions. Joining us now is Ed Mills, Washington policy analyst at Raymond James and a CNBC contributor.

And Ed, it's great to have you on. That in of itself is a wild stat to put out there because of the implications to government contracting and other aspects of building out new policies to be talking about a continuing resolution. But I guess just walk me through this moment we're in and what this looks like if you're trying to talk about tax policy and some of the other things

that lawmakers are going to look to get to over the longer term. Yeah, Morgan, we're in the upside down right now in DC because normally when we're thinking about a possible government shutdown, it's usually the Republicans who are pushing for it. This time it might be where the Democrats are the ones that lead us to a government shutdown.

And the reason for that is usually when you get a hard fought one on a appropriations bill, the president has to follow that. And with Doge and the executive actions of the president since he's taken office, trying to not release funds and change appropriations bills, Democrats are asking why do they give their votes for that? And you do need 60 votes in the Senate. You need at least seven Democrats to vote in favor of this. So it's going to be a bit of a game of chicken here. If the House is able to get their resolution through, it's going to be only on Republican votes.

And then if it goes to the Senate, can they pressure those Democrats to come along? I think Democrats are hoping that this all falls apart and the House Republicans aren't able to do that and then are forced to come to the table and strike a deal with Democrats. But yeah, pretty high probability next week, we could be in a shutdown.

Okay, so depending on how all this plays out here over the next week, what does that mean for the broader reconciliation process and what does it also mean because I've heard this from a number of folks this week when I was down in Washington in the middle of the week that something like Doge cuts becoming permanent is not even a possibility on the table until at least 2026. Yeah, for the Doge cuts, I think it's creating this environment in DC that Donald Trump's trying to cut government spending. And so in the reconciliation aspect there, Morgan, we are seeing that they could be making permanent the 2017 TCJA.

That's at least $5 trillion when you add on some of the other things that they want to do to that. So if they're able to say, we kept the budget exactly where it is, Doge is cutting money, and then we're going to pivot to reconciliation, that's what they're trying to kind of navigate here. And the thing I would watch here is that, Morgan, we always need a crisis or a deadline, and Republicans are trying to do reconciliation in those tax cuts being permanent

at the same time as lifting the debt limit. The debt limit comes due. We're already under it, but the ex-state is sometime later this spring, early summer, and so they're trying to have that as the catalyst that gets everyone to the table on the Republican side and get their votes for this before they go home for Memorial Day.

Ed, I want to make sure I understand you correctly. Are you saying that if the Democrats take action that leads to a government shutdown, it will be over doge and appropriations and sort of this question out there about the constitutional power of the purse that Congress is supposed to have? John, you're right. So one of the signature fights that we've been telling folks at Raymond James this year is who controls the power of the purse. Now, under our constitution, it is clearly Congress. However, there is a role for the executive. Congress in 1974 passed the bill to restrict the role of the executive, and that's the

impounding control act. Donald Trump has not been following that law and has been seeking to do cuts outside of that, not release funds outside of that. I do think that leads to a fight at the Supreme Court. But near term, Democrats are saying, why do I give myself a vote to some of these things if those cuts are not going to be followed or if the law is not going to be followed? Is an appropriation bill a ceiling or a floor?

Congress usually says it's both. The executive branch are saying, well, it's a ceiling. It's not necessarily the floor of what I can have to send out. If it doesn't match administrative priorities, they say they can impound those funds and not release them. Very big issue for the function of our government. Ed Mills, thank you. Thank you.

Also news just crossing on cognizant technology. Activist investor Mantle Ridge has reportedly built a $1 billion stake in the IT consulting company according to the Wall Street Journal. Those shares moving higher in overtime, Morgan. In the meantime, we did have a jobs report this morning was a little bit softer than expected, but also not terrible. Um, we did see the pop in markets after Powell spoke midday and we will continue to fasten our seatbelts looking to next week and whatever Washington brings forward that does it for us here at overtime. Fast money starts now.