Closing Bell - Closing Bell Overtime: Commerce Secretary Lutnick On Trade Negotiations; Axon CEO On Strong Earnings 5/8/25

Episode Date: May 8, 2025

Malcolm Ethridge of Capital Area Planning joins to break down the market action and a wave of earnings across tech, fintech, and consumer names. Coinbase CFO Alesia Haas about the company’s outlook and regulatory landscape. Howard Lutnick, U.S. Commerce Secretary, joins to discuss global trade policy—including chip exports and the UK deal framework—while Jill Carey Hall, BofA’s Head of U.S. Small/Mid Cap Strategy, weighs in on broader market conditions. Axon CEO Rick Smith rounds out the hour with a conversation on tariffs, AI, and growth.

That's the end of regulation. Banco Bredesco ringing the closing bell at the New York Stock Exchange. Quartz C. Acquisition Corporation doing the honors of the Nasdaq. Well, stocks closing in the green again as the president announces a trade deal framework with the UK and signals optimism around China ahead of high level talks with Beijing this weekend. That is the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime.

I'm Morgan Brennan. John Fort is off today. We've got a big show coming your way this hour, really big, including a first on CNBC Interview with Commerce Secretary Howard Lutnick following today's Oval Office trade announcement. Plus, a number of key earnings are crossing this hour, including Coinbase, Expedia, Affirm,

Pinterest and Lyft. We will bring you the numbers and an exclusive interview with the CFO of Coinbase ahead of her call with Wall Street. But let's get straight to today's market action. Joining us now is Capital Area Planning Group Managing Partner, Malcolm Etheridge and CNBC Senior Markets Commentator, Mike Santoli. Great to have you both here on another update for the major averages. Malcolm, I will start with you. Trade talk optimism abounds here. Is this what is driving the market? And if so, does this rebound have legs?

Yeah, so I think it shows just how much of an appetite there is out there for some sort of positive news on trade investors will take whatever we can get. This announcement obviously is not the biggie that we've all been waiting for. Everything revolves around China and when we will reach an accord with China. But I guess because it shows that other countries are willing to come to the table, they are willing to come to Pennsylvania Avenue to have this conference directly with this president, the market is seeing that as optimism, but I have a feeling it probably will fade with the next headline coming out of Beijing, letting us know that they aren't yet ready to talk. Okay.

We've got our first earnings report to bring you. Lift results are out. Pippa Stevens has the numbers for us. Hi, Pippa. Hey, Morgan, the stock jumping here. Q1 lift EPS coming in at one cent. We are not comparing that to estimates. Revenue a slight miss here at 1.45 billion.

Now back in February, Lyft announced its inaugural buyback program of 500 million. Today, they said they are upsizing that to $750 million share repurchase program that comes after activist investor, Engine Capital, called on the company to raise its buyback pace and also called on them to explore strategic alternatives including a sale. Now, Lyft said this was the 16th consecutive quarter of double-digit year-on-year gross bookings growth and also said that in the

last week of March, rides reached the highest weekly levels in their history. You see there the stock up five percent. Morgan? Okay, Pippa Stevens, thank you. Mike Santoli, your reaction to Lyft, especially after what we've heard from Uber and Dorydash and some of these other consumer facing transportation names. Yeah, it seems largely on target. I mean, I think the revenue is what you'd want to base that on, but the buyback is clearly getting traction

in terms of the reflex trade right here. $750 million net buyback at this point, that's like 13, 14% of the current market cap of Lyft. So that's a real big return of capital, a shrinking of the company's capital base because they're not really earning a proper return on it. So I would say that's to me the thing to extrapolate from here without looking at the insides

of the bookings data and all the rest of it to get a read on Lyft's actual position with consumers. Okay. Malcolm, I want to get your thoughts on what we have heard from earnings season so far because so far it's been better than expected for the most part. We have seen some companies pull their guidance amid all this

macroeconomic uncertainty, but we've also seen the companies that have either held steady with their guidance or in cases of some cases, I think about Axon, who we're going gonna talk to later on in the show today raising their guidance those companies have been rewarded How does it position an investor for the rest of the year? Where would you be putting money to work? Yeah, so we have two separate stories at work at the same time, right? We have the better than feared I would even say Rather than expected coming from q1 earnings where we were concerned that we were going to see significant slowdown, we were going to get negative guidance, we were going to get revisions and possibly

earnings being pulled altogether, like you said. And we got a lot less of that than we expected. Tech, especially coming in and saving the day with the hyperscalers, you know, Meta, increasing its CapEx plan in the face of everything that we know is coming for us as far as the tariff war and everything else is concerned. So investors should be as enthused as they are right now, but I think we also have to curb that enthusiasm a little bit heading into Q2 earnings reports,

the quarter that we sit right now, because that's where we're more likely to see the damage that has been done by the tariffs that were put into place after Liberation Day because obviously that was at the very beginning of April which would start that quarter. Well, Lyft investors are enthusiastic. Those shares are now up 11 percent, but Expedia shares are under pressure right now. Those earnings are out. Contessa Brewer has the numbers for us.

Hi, Contessa. Hi there, Morgan. Yeah, they're out with earnings beat here. 40 cents per share adjusted against the street's expectations of 32 cents a share adjusted. Revenues coming in just shy of the street consensus. They were expecting 3.01 billion and Expedia is reporting for the quarter 2.99 billion. Booked room nights come in just a little light at 107.7 million. The street was expecting $108.45 million.

And the growth in booked room nights is much slower than expected at 6% versus the street's expectation of 10.7%. But look, in the group segments, you're looking at the B2C business, direct to consumers. That's pretty much in line. The B2B business, pretty much in line. The B2B business pretty much in line. But as you can see the stock under pressure now Morgan. All right shares down about 5%. Contessa Brewer, thank you.

Mike, we've heard about a lot. We've seen a lot of softness I should say in some of the travel, leisure and hospitality names. Not all of them. IHG I think case in point earlier today, but most of them. Expedia seems to be falling in line with that trend. Yeah, for sure. I mean, that is really the key kind of vector

along which Expedia operates and that's the measure of success is the room. Now there's a case out there. Well, first of all, the stock's at 50% on a 12 month basis. It's been pretty strong. It's a very cheap stock. It's been pretty strong. It's a very cheap stock It's always been the value option within the booking companies

And I do think that anything that says we're losing momentum on rubnights Even though Expedia has a reputation of sort of being counter cyclical In other words, they get more inventory when demand slows down and it might be better for them But at least initially markets not really too pleased with that immediate trend. Okay. Pinterest earnings are out as well. Julie Borsten has those numbers.

Hi, Julia. Hey, Morgan. Pinterest revenue is beating expectations $855 million ahead of estimates of $847 million. Earnings though falling short of expectations. 23 cents in adjusted earnings per share That's short of the 26 cents. That was estimated the company did add 17 million monthly active users in the quarter That's 5 million more than anticipated to end with 570 million monthly active users The company's second quarter revenue guidance is for a range of 960 to 980 million

The midpoint of that is ahead of the 966 million analyst consensus. The company is also giving EBITDA profit guidance in a slightly larger range than it gave last quarter, certainly reflecting some of that uncertainty many companies are seeing here. And they say they will be giving more guidance on the earnings call. Right after the call, we'll be talking to Pinterest CEO Bill Reddy in a first on CNBC interview that's coming up on Closing Bell Overtime. Back over to you. All right.

Julie Borson, thank you. We've got a firm earnings out too. Mackenzie Segalos has those numbers. Hi, Mackenzie. Hey, Morgan. So a firm shares down about 6.5% in extended trading, despite reporting a surprise profit of 1 cent per share and beating estimates for a 3 cent loss. Revenue was in line at 783 million,

up 36% from the year ago quarter. Now gross merchandise volume, a key metric, looking at the total value of transactions, hit $8.6 billion, also topping forecasts. One standout number here, 0% monthly installment loans grew 44%, a strong sign because these are merchant subsidized and attract higher quality borrowers.

Credit quality that held steady with pay in for losses below 1%. The company though issuing a weaker than expected forecast for the current quarter, it's guiding fourth quarter revenue in the range of $815 to to 845 million dollars which is just below that average estimate of 841 million those shares down more than 10 percent now Morgan. All right Mackenzie thank you Malcolm want to get your reaction to this since I know you were

watching this name in particular here after the bell. Yeah so a firm is interesting to me because it can be seen as a bit of a canary in the coal mine considering we have expectations that consumer spending is going to slow down, especially in the traditional ways. So maybe Visa, for example, MasterCard, we see transaction volume stay there, but a secondary lender such as a firm, you'd expect to pick up at a time when consumers are looking for ways to stretch out those payments. So I'm interested in digging into the guidance to understand why they see fourth quarter profits

dipping a little bit rather than increasing. I think that's gonna be a little bit telling as we try and figure out where we're heading as far as the consumer is concerned in the second half of this year. Mike, I mean, I'm looking at the chart here on the screen. I mean, a firm is down 10%. It sort of goes back to where we started this conversation

just a few moments ago, and that is, if you're putting a guide out that's not in line or better than expected, you're getting hit pretty hard by investors in this environment. Maybe perhaps speaking to how skittish investors are in this environment. Right, and absolutely a very volatile stock in itself as well.

I mean, we can keep in mind that a firm at one point was like $160 stock, and because it's kind of, you know, fast growing and not really earning a ton in the moment, it just sort of whips around when there's any slight change. So I think the revenue implicit guide down, or at least the guide in the range below the current forecast, does indicate that maybe April, some consumer companies have been saying April was a little bit of a hesitation month. range below the current forecast does indicate that maybe April some of these

come some consumer companies have been saying April was a little bit of a hesitation month so not terrible a lot of things feed into a firm it's kind of how they finance their their own loans to the capital markets have to be receptive if we get some rate cuts down the road probably would help sentiment toward the stock but right now it just looks like a bit of a stutter step fundamentally. Malcolm, tech, Xmag 7, is that compelling here or do you really wanna stick with the bigger names because they're more defensive?

Yeah, so I'm actually gonna make a separation between enterprise tech and consumer facing tech, right? So Apple, for example, relies on the consumer quite a bit. You could say Meta, maybe Alphabet also rely on the consumer because everything there is ad supported. But if we look at like a Microsoft, for example, and Nvidia, IBM as another example, those are companies that sell directly to enterprises

where it takes a lot longer for slowdowns and spending to actually hit them. And so I think if I really wanna be invested in tech, but I don't necessarily wanna have to own the entire MAG7, which is going to be relying on potentially a slowing down consumer, then I definitely want to be looking at enterprise as the way to go. Mike, we saw the first trade deal framework, I'll call it, announced today between the US and the UK.

We know there's an envoy headed to Switzerland to begin talks with China here, too. This is we're just a little over 24 hours out after a Fed Chair Powell's press conference where he basically used the word wait or a word similar to wait. I think something like 22 times according to one report I saw if you see more of these trade deals start to happen where you don't see that meaningful bump in inflation because maybe the tariff timelines in the midst of some of these deal frameworks gets pushed out, what does that mean

in terms of the Fed's ability to be more flexible? Well, I think it'll enhance their ability to do so, but I still think they're in a mode where they're gonna need to see something solid in terms of across the board policy, and they're going to need a couple of months of data to show them one way or the other whether they should be more attentive to growth risks or inflation risks. I think the market feels the way the market's basically feeling by July. They may have what they need to perhaps do another rate cut, but it is pretty contingent at this point. Also,

in the market reaction today, you know, for as much as the market celebrated this incremental progress on the UK trade deal, we did finish in the S&P 1% off the highs. There was a bit of a fade. It shows you the higher the market goes, the higher the threshold goes for what can please investors that that qualifies as trade progress. Okay, gentlemen, thanks for kicking off the hour with me. Malcolm Etheridge, thank you. Mike, we'll see you in a little bit. With all the major averages finishing the day higher,

the Russell 2000, those small caps, the biggest winner up 2.2%. After the break, the man who was at the president's side today during the Oval Office trade framework announcement, we will be joined in a first on CNBC interview by Commerce Secretary Howard Lutnick. That is coming up next. And the CFO of Coinbase joins us exclusively on the back of earnings as we await those

results after the company announced a nearly $3 billion deal earlier today and with Bitcoin back above $100K. Overtime is back in two. the market. The market is going to be moving up to the next level. The market is going to be moving up to the next level. The market is going to be moving up to the next level. The market is going to be moving up to the next level.

The market is going to be moving up to the next level. The market is going to be moving up to the next level. The market is going to be moving up to the next level. The market is going to be moving up to the next level.

The market is going to be moving up to the next level. The market is going to be moving up to the next level. The market is going to be moving up to the next level. The market is going to be moving up to the next level. The market is going to be moving up to the next level. The market is going to be and agricultural products among others while keeping in place the 10% blanket tariff on UK imports. Joining me now in a first on CNBC interview

is Commerce Secretary Howard Lutnick. Secretary Lutnick, it's great to have you back on overtime. Welcome. What a fun day to be on your show today. So last week you sat down with my colleague, Brian Sullivan, and you said there's a deal where we're on the precipice of announcing it. Was it this deal with the UK that you were referencing? It was but you know Donald Trump he made it better. That's the way it works. So I had the

deal done and then we showed it to the president and he said what's the next move you want to make and then he made the call to the Prime Minister of the UK and he made the deal better and And you just gotta let the best deal maker in the world make his deals. He really fights for America and he delivers for America and it's so much fun to work for. Do you have anything else that's close to the finish line here waiting in the wings?

Well, what happens, and you've seen it in this deal, I mean, look at the depth, the rigor, and the intensity. So many products, so many details. This is not sort of a soft deal. This is a detailed, analytical model between two countries really getting it right for us both. So when you start doing bigger and bigger economies, remember Britain is the sixth largest in the world.

As you get to these bigger and bigger economies, there's just a huge amount of work, a huge amount. And you know, you talk about India, Japan, Korea. I mean, these are just huge. And the European Union, wow, there's so much work. And they just take time, but we're gonna get there. Can you get there by July 8th? I think we will get there by July 8th.

I think what the president's been saying is what we're gonna start to do is we're gonna start to have templates. You know, so we'll do a small country or two, then we'll have a template and we'll say, you know what, these 20 or 30 countries are economically similar. Let's go over their products, let's go get it right, and let's go give them the model of how they want to do it. And if they want to modify it a little bit, that's fine.

But you're going to see over the next month or so, we're gonna roll out dozens of deals, because we'll find categories of countries that it'll work out just fine. So despite broader deal details, is that 10% base tariff rate, the new baseline, is that the new normal? Does that stay no matter what country, what deal? I think that stays, but that is, as the president said, the low rate.

I mean, think about the UK. They had a balanced trade with the United States of America. Now think of all these other countries with the European Union, $235 billion trade deficit for us. I mean, they sell us more than we sell them, of $235 billion. That's a lot of work to fix. So the 10% baseline is for those countries that have balanced budget with us that are the best, and then those who had trade deficits are gonna have a higher tariff.

Now, if they really open their market, and they really go to town and say, look, we really wanna get to fair and balanced trade with America, then the best they can do is 10% most likely they'll be higher but the best they can be is 10%. Okay let's talk talk China I realize you're not part of the envoy that's going to those talks this weekend but the president did say that he expects a quote good weekend with China what, what would be defined as good? Well, de-escalation. Right now you have 145% and 125%. Those are decoupling numbers. Those

are numbers where you don't do business with each other. And obviously China, as the president says, has a huge trade deficit with us, both directly and through other people, you know They sell Vietnam 80 odd billion dollars worth of things in Vietnam Then marks them up and sells it to us for a hundred billion dollars a year So, you know huge trade deficits with China directly and indirectly they want to do business with us We want to work it out with them So deescalating bringing those rates down to where they could be or they should be, I think is Scott Vesson's goal. I think it's the Chinese delegation's goal as well.

And that's what the president hopes is a good outcome is a deescalating world where we go back to trading with each other. And then we work on a big deal together. You're negotiating the other, what is it? 17 deals with trading partners right now? How much is China factoring? Wait, wait, wait, how come I only got 17 deals? Oh, is it more? I got like 150 countries to deal with. Okay, so you're negotiating all of these other deals. How much is China factoring into those negotiations?

Less than you think. Our job is not to try to single out China, not to do this and that with respect to China. Our job is let's go get free and fair and open trade with all these different countries. We are not focused, we're focused on China with China, but with respect to other countries, we want fair trade. We want reasonable trade. If a country is doing enormous amounts of business with China, then that portion of their business should have the same tariff as China. But if they're doing business on their own and their own things, like Indonesia, right? I meet the trade minister of Indonesia and he says, we're the largest car manufacturer

in the world. And you'd say, really? Indonesia? He says, yes, we make matchbox cars. So that's funny. So what do we want? We want a low tariff on those kind of products, right? And a higher tariff on products that make a difference to us,

semiconductors, pharmaceuticals, things that matter that we want to reassure. We want to do that smart. I think you saw a lot of smart in today's deal. And I think what you're going to see is Donald Trump is going to deliver incredibly smart, thoughtful, and rigorous trade deals that are going to be great for America.

Remember, if we have a $1.2 trillion trade deficit and we cut that 25%, only 25%, that means we export another $300 billion. That's one point of GDP produced by the guy who sits behind me in that White House. One point of GDP just by him. And then if you start building those factories that he's talked about, that's another two points of GDP. That's three points a year driven by the guy in the Oval Office.

It's pretty cool. I want to stick with semiconductors because your agency confirmed plans to repeal the Biden-era AI diffusion rule. This places export curbs and bans on advanced AI chips. When does that happen? And is there a framework that's going to replace it? Yeah, so we are going to throw that in the trash bin where it belongs next week, okay? So next week, that's gonna go in the trash bin

and we're gonna come out with a new policy. Because remember when I went, I led a delegation to Auschwitz, right, for the anniversary, for the 80th anniversary of freeing that, freeing Auschwitz. And the Polish prime minister came up to me and said, what have I done that we would be tier three for semiconductor chips? And I was like, I couldn't think of anything that Poland had ever done to us that they would treat them that badly.

So what we're going to do is we're going to treat our allies incredibly well, they can buy our chips, but they have to do it in a data center that's operated by an approved American data center operator, someone we trust, and that is connected to a cloud of someone we trust. So trusted data center operator, trusted cloud provider, and that will allow us to really free all our allies to buy chips. And the key last part of that idea, and this is

what we're kicking around, and this is where we're leaning, is we want 50% of all of the greatest chips in the world domestic. 50% outside, 50% in America. So America always has the firepower to drive AI domestically. So we'll let all these countries buy if they do it correctly, but they got to also invest here to make sure we have the firepower always in America. That's the right thinking. That's the way we're thinking about it at the Department of Commerce. Interesting, especially since AI is not only an economic issue and a technological issue, but also a national security one increasingly.

Finally, Secretary Lutnick, I have to ask you about the reporting that has broken in the past hour so that the president is considering raising the tax rate on the highest earners. Are you in favor of that? I am. You know, if the president's cool with it, I am definitely cool with it. I think the idea of rolling back the discount

that he gave, remember in 2017 he cut the rate from 39.6 to 37, and if he wants to try to go back to 39.6 and take that money and redirect it to no tax on tips, no tax on overtime, and no tax on tips no tax on overtime and no tax on Social Security I am all on board for that remember the politics of all this is really in the president's hands he knows it better than anybody else but if you want to know what my support is I stand right behind them on that thought that sounds like an excellent thing for the for the country but again that politics is all about Donald Trump.

I'll leave that to him. Okay. Commerce Secretary Howard Lutnick, thank you for joining me. Appreciate the time and insights. Great to see you. Well, shifting gears, we have another earnings report to bring you, Coinbase earnings are out.

And Taneya McKeel has the numbers for us. Hi, Taneya. Hey, Morgan. Yeah, Coinbase reporting revenue of $2.03 billion for the quarter. That's a slight miss. The street was looking for $2.12 billion earnings per share coming in at $1.94 per share, but that is on an adjusted basis so we're not comparing those numbers.

Analysts usually use the gap figure. Adjusted EBITDA as well, $930 million, but no consensus available there. Looking at Q2 guidance, Morgan Coinbase is reporting more than $240 million in transaction revenue for April. Spot transaction volume down about 12% month over month in April, as obviously macro concerns and a lack of catalysts that were specific to crypto kind of dented sentiment for much of the quarter. And then in subscriptions and services, expecting revenue to be between $600 million and $680 million,

that'll be driven by nice growth in stablecoins, which should offset a decline in staking rewards. Morgan? OK, Tanaya, thank you. Those shares are down about 1% right now. Coming up, much more on Coinbase's results results as Bitcoin tops $100,000 for the first time since February. The CFO of Coinbase joins us next to break down the crypto comeback. And later we will talk to the CEO of Axon, which is topping the S&P 500 today after the taser and body cam maker topped earnings and revenue estimates also boosted its guidance. Stay with us. Welcome back. Let's get another check on Coinbase.

Those shares are down about 3% right now after posting results moments ago. The report comes after the company announced earlier today that is buying crypto options exchange company, Deribit. Joining us now before the earnings call is Coinbase CFO Alicia Haas. Alicia, it's great to have you back on overtime. Thanks for being here. Walk me through what you saw on the quarter because it looks like it was a miss for transaction revenues and for subscription and services, but monthly transacting users was a beat.

So what is that signal about what you're seeing in the crypto space and what that means in terms of engagement and activity on the platform? Thanks for having me today. Well, what we're seeing today is that we're gaining market share, we're gaining market share in spot and derivative trading. We had over $800 billion in global derivatives trading

in the quarter and our average perps market share increased 60%. We are scaling internationally and really leveraging our international playbook to grow in high-growth markets. We did have our second highest MTU quarter ever in Q1, and it looks so much different than it has in the past. For example, our peak in 2021 was all speculative trading,

and today we're seeing 80% of our MTUs doing something other than trading. So it really speaks to our revenue diversification. And that ties back to what you said about subscription and services revenue. Subscription and services revenue was up 9% quarter over quarter. We got almost nearly $700 million

of subscription and services revenue, our all time high. And we're seeing growth in stable coins, growth in Coinbase one. $700 million of subscription and services revenue are all time high. And we're seeing growth in stable coins, growth in Coinbase One. So lots of bright spots within our earnings despite navigating a very choppy market driven by macro trends this quarter. I want to go back to what you just said about the difference in monthly transacting users between now and 2021 and the fact that back then it was speculative and you're not seeing that now. Does that speak to the maturity of this asset class? Does it speak to the

sophistication of the traders and investors that are engaging it now? Or does it speak to the products and what you're offering out to the marketplace? Great question. I think this speaks to the maturation of the space and the birth of utility in crypto. So when we look at our MTUs, the number of MTUs holding USDC has doubled over the last two years. And the average balance of USDC that those MTUs are holding has tripled over the last two years. And so we're really seeing stablecoins have product market fit and drive to a new era of crypto utility. As well as we've had staking opportunities to earn yield in crypto, we've introduced a debit card, we've introduced

new products and services that we're finding users are engaging in new transaction types and this is what's driving the mix and the change in behavior within our MTU base. The Deribit acquisition that was announced $2.9 billion earlier today, what does that enable? Does that expand you internationally? Is that the way to think about how that fits into the portfolio? It expands us internationally, but also builds out the product suite of assets that we can trade. So it brings options to the platform. We'll become the largest option trader in crypto. We add this to our spot trading. We add this to our derivatives trading, which is futures and listed futures and perpetual futures.

And so it really brings all of this under one roof for our traders. As you mentioned, it will increase our international expansion efforts as the majority of this revenue is non-U.S. and really will add customers that we can then add to our other products and services in the international market. This is going to be providing us profitable, durable, diversified revenue within the transaction revenue line item. I'm going to ask you a twofer here. The first is Bitcoin back above 100K. What is its signal? And the second question is how are you navigating the stablecoin ecosystem, especially given the fact that the Senate failed to advance that stable coin bill just earlier today. All right.

Two great questions. Yep. We saw Bitcoin hit back over 100,000 again. And what we see is investors are approaching this in a different and positive way. The diversification of investors in Bitcoin now, where you see the U.S. setting up a Bitcoin strategic reserve fund, where you see international countries, sovereign entities, thinking about holding Bitcoin as a store of value asset. More institutional investors are holding Bitcoin.

Corporates are holding it on their balance sheet. So it's looking different than it had from a speculative asset in the past. Now it is looking like gold. It is looking like a countercyclical asset that we saw in the recent drawdown. It's up over 1,000% over the last five years. And we just think this trend of people holding it

as a store of value will continue. And you'll see more and more investor types holding Bitcoin in their portfolios. Switching over to stable coins. Stable coin legislation and all legislation is a non-linear journey. So we are making progress. We have bipartisan support to bring stable coin legislation.

It just wasn't today. But we think that this will continue to move forward over the coming days and weeks. And we see the stable coin market evolving quickly. I mentioned earlier our own users. We can see growth over the last two years of the number of users holding USDC, the amount of USDC they're holding.

And we saw USDC hit a new all-time high of $60 billion. So these assets have product market fit. We're seeing increasing utility behavior, growth in the overall ecosystem and payments. And I think we'll see that continue. Okay. Alicia Haas, thanks for joining me ahead of your call with investors. Appreciate it. Thank you for having me. With shares of Coinbase down 2% right now in overtime. Well, it's time now for a CNBC news update with Kate Rooney. Hi, Kate. Hi there, Morgan.

FEMA's acting administrator Cameron Hamilton has been fired. It comes a day after Hamilton said at a House hearing that the nation needed that agency. The Department of Homeland Security said today his removal was not in response to his testimony, and Hamilton will be replaced by senior DHS official David Richardson. Meanwhile, an appellate court has denied former Theranos CEO Elizabeth Holmes' request to rehear an appeal of her 2022 fraud conviction. With today's decision, she will have to ask the Supreme Court to hear her case as a last chance.

Holmes was sentenced in 2023 to 11 years in prison after being found guilty on wire fraud charges for deceiving investors about her blood testing company's capabilities. And finally, a federal judge today ordered Alex Mashinsky, the founder of cryptocurrency lender Celsius Network, to serve 12 years in prison for defrauding customers enticed by the firm's high interest rates. As part of his plea, Mischinsky admitted to making misleading statements about that firm's financial health and manipulating trading to inflate the price of his Celsius token from which he made $42 million.

Morgan, back over to you. All right, Kate Rooney, thank you. Up next, small caps. Seeing big gains today after trade headlines, we're gonna talk to Bank of America's small cap expert, Jill Kerry Hall, about whether this is the start of a bigger comeback for the group and why she's turning bullish on one surprising part of the market. Stay tuned. Welcome back. The major averages closing in the green after President Trump announced a trade deal framework

with the UK. Commerce Secretary Howard Lutnick telling us just moments ago, quote, we're going to roll out dozens of trade deals over the next month, but that the 10% rate is the best a country can hope to get. So joining us now is B of A global research head of US small mid cap strategy Jill Kerry Hall Jill It's great to have you back on the show. Let's start right there with how trade is affecting the market and Giving lift to stocks particularly some of those stocks that have been most exposed or are believed to be most exposed like for example the small caps

Right, thanks for having me. Yeah, I mean, I think, you know, while it's an incremental positive, I think the more deals that we get that can help remove some of the uncertainty overhang, but it's still just one step. I think China will be very key as well. And for small caps, we've been cautious in the Russell 2000 in part because these stocks would be more at risk from an earnings perspective, given how thin their margins are from tariffs. But we also have had other headwinds to small caps,

you know, the Fed remaining on hold. This is the segment that has the most refinancing risk, is very sensitive to interest rates. And, you know, as we've seen this this earnings season this is a segment that has struggled to to get out of its earnings recession that it's been in for for a few years now. We still saw negative earnings growth for for small caps this quarter and you know sentiment when you look at how corporates were were speaking on earnings calls analyze some of the positive versus negative words it plummeted a lot for corporates overall, but it plummeted more for small caps. So I still think it's a bit early

for that size segment and I think it's not as easy as just buying or selling the Russell 2000 anymore. I think you need to be more selective. Something that got my attention is the fact that you've enacted a recent sector change. You upgraded S&P 500 energy to overweight, which to me is pretty interesting given what we've seen happen with crude oil prices in the last couple of weeks and all of these concerns about trade dynamics and what it'll mean for economic growth. Right, yes, so within our large cap work in the S&P 500 we did upgrade energy. I think that, you know that this is a sector where oil prices

are certainly important, and we have risks given supply and given where oil prices are, but the sector's sensitivity to oil prices has actually declined a lot when you look at relative to say 2016, 2017, the sensitivity to oil has gone down substantially. And we think that this is a sector where you have a 6% free cash flow yield, dividends for the sector, this has become an important theme there. And positioning, this is a sector that is extremely neglected. Active managers have reduced their exposure,edge funds are net short. We've seen a bigger

decrease in exposure and positioning for this sector than others. And with recent underperformance, we think it looks like a coiled spring. OK. And finally, your takeaway from earnings season so far and how it positions us for the rest of the year more broadly looking across stocks. Right. I mean, earnings have come in better than consensus and even we expected for the quarter, S&P 500 is seeing double digit earnings growth in one queue. And I think the things to watch for are that,

guidance has certainly been weak, it's also been a bit sparser than usual. That did improve a bit as we moved through earnings season, but you've seen fewer companies issuing annual guidance been a bit sparser than usual. That did improve a bit as we moved through earnings season, but you know you've seen fewer companies issuing annual guidance at this point in the year than you did a year ago, so that still speaks to the uncertainty around you know policy and trade. And you know as mentioned we have seen you know mentions of weak demand, corporate sentiment earnings calls have gotten worse, particularly for smaller companies.

And capex spending, I mean, it has held up for the hyperscalers and the Magnificent 7 versus decreased elsewhere. CAPEX guidance has started to deteriorate a bit. So we haven't seen a significant tick up in project delays and cancellations, but certainly seeing some increase there. So I think those are some of the things we're watching going forward. But overall, you know, corporates have been resilient and, you know, within the SMID-sized segment we've seen more resiliency to to mid-caps. So we'd focus on stocks that have positive revisions in this backdrop where revisions have been coming down. We'd focus on mid over small and on sectors that are seeing more positive trends. Great.

Jill Carey-Hall, appreciate it. Thank you. Thank you. Well, Axon, the big winner in the S&P 500 today on strong earnings and guidance. Coming up, the CEO on what's driving growth and how the global trade war is impacting his company. It's a stealth AI player too. Welcome back as stocks have recovered from the tariff rollout lows has investor sentiment

followed suit. Well, Mike Santoli is back with the data. Mike. Yes. Well, it depends how you measure sentiment Morgan. There's actually a little bit of a split between the soft survey-based data and then the hard, more quantitative positioning numbers. Here's the survey-based data. This is the Investors Intelligence Investment Advisor Poll. It's been done weekly for many, many years. The percentage saying they're bullish, it was plunging to historic lows right near the early April lows in the stock markets, barely bounced from there. That's supportive.

It's a somewhat contrarian signal at extremes that suggests a lot more people bear to be convinced of things that things are okay in the markets. Maybe they can buy in. However, when it comes to positioning, take a look at this indicator. The National Association of Active Investment Managers keeps a weekly equity exposure gauge and you see it really did plunge as well. That was a pretty good buy signal. Often that's a good market low,

but we're back not too far from the highs, you know, like 80% equity exposure. It sometimes goes a little bit above 100. So people have chased it to some degree. There's still maybe some more room to buy in, but at this point I would say a mixed signal, not necessarily as washed out and sentiment as we were a month ago. All right. Some good context there, per usual. Mike Santoli, thank you.

Talk about electric results. Shares of Taser Maker acts on surging after reporting strong earnings and guidance. Coming up, CEO Rick Smith on rising demand for its AI tools and how federal budget cuts could impact the bottom line going forward. Welcome back. Axon closing sharply higher as the top performer in the S&P 500 today at 14% on the back of strong earnings. Joining me now on a first on CNBC interview, Axon founder and CEO Rick Smith. Rick, great to have you back on the program. And let's start right there because you saw strong growth, looks like double digit growth across all of your business segments,

but really investors seeing the star of the show here is software and services. How does that speak to the uptake on your AI offerings as you rolled them out in this marketplace to police agencies and other types of public safety and security entities? Yeah, software and services up almost 40 percent year over year. So it's really going great.

We're in this amazing position to take advantage of the AI era because we have over a million users out there that are using our body cameras, in-car cameras. We have eyes and ears out in the field and we can listen and see what's happening and then apply AI to it. It's, the business is really on fire. Yeah, you also make tasers, you make body cameras, you have sensors, you also have a counter drone business that you're building out now too.

What gave you the confidence to raise your guidance, especially as we keep hearing from so many companies about all this macro uncertainty and question marks around trade and tariffs? Well, there's two things. One, we're solving really important problems for our customers, things like defending our officers from lawsuits or stopping drones.

Like when we started investing in counter drone years ago, it was before the war in Ukraine and before the incident in New Jersey, being the market leader in counter drone is an awesome place to be. So I would say it's a combination of the importance of the problem we're solving, and then the sheer breadth. We have so many different parts of the business growing,

that we could absorb some losses if one of them had a bad quarter, because it typically gets made up somewhere else. Supply chain and manufacturing. How do you think about that? How are you navigating that? Especially as you do sit at this intersection of hardware and software. Made in the USA, like Bruce Springsteen said. So we're already in pretty good shape there now. Look, we have a global supply chain.

We are going to have some impacts, but I think we're in a better position than most because, again, we manufacture our stuff here. So we're much less effective than folks that are bringing everything in. And we pretty much de-China'd our supply chain a few years ago, largely because our government customers were signaling that was bringing everything in. And we pretty much de-Chin-ed our supply chain a few years ago, largely because our government customers were signaling that was important to them. In terms of government, we obviously just got a skinny budget proposal

from the White House last week. It proposes increases, potentially, depending on how you splice it, to defense and other areas of security. Where do you see the greatest opportunity to keep growing? Is it on the government side, federally? Is it locally? Is it commercial customers increasingly needing more security needs? Yeah, that's like asking me, which is my favorite child. Like literally, we have so many great

opportunities for growth. Enterprises on fire, every business that wants to connect to a police department and deal with the retail crime that exploded over the pandemic. We're the mechanism to do that. The military, you know, dealing with small drones that wasn't on anybody's radar a few years ago is now the biggest problem they're dealing with. So just across the board. And then, of course, AI into our core state

and local law enforcement. We just are launching now a real-time translator where your body camera can translate to over 50 languages, and customers are going nuts for that because it's so valuable. Think about how crippling it is when a police officer is talking to somebody and they don't even know what language that person is speaking. We have about 40 seconds left. So just in terms of the AI,

how is the technology and the accuracy of that technology working right now? AI is growing at like a 100X improvement per year against different benchmarks. And so we are not in a position where we have to go do the expensive heavy lift to develop the core AI. We work with all the leading companies. AI is our premier partner, I'm sorry, OpenAI is our premier partner.

So they're doing the heavy lifting and we can apply it to a million body cameras and all the police evidence on the back end. All right. Axon's Rick Smith. Thank you so much for joining me. Appreciate it. Thanks. All right. See you. All right. With Axon shares at 14 percent in the session today. All the major averages finishing higher. The Nasdaq up 1 percent. The S&P up half a percent. 56, 63. That does it for us here at Overtime. Fast Money begins right now.