Closing Bell - Closing Bell Overtime: Former Defense Secretary Mark Esper On Middle East; Curious Move In Oil Markets 6/23/25

Episode Date: June 23, 2025

As tensions rise in the Middle East, former Defense Secretary Mark Esper and Council on Foreign Relations President Richard Haass assess the responses and global ramifications. Payne’s Courtney Garcia and Mike Santoli weigh the market's reaction, while Arjun Murti of Veriten breaks down curious reaction in the energy markets. Tim Seymour analyzes moves in the dollar, gold, and global positioning. Plus, our Phil LeBeau reports on Tesla’s strong stock move today after the weekend’s rollout of its Robotaxi in Austin, TX.

That bell marks the end of regulation. The International Swaps and Derivatives Association were going to close in bell at the New York Stock Exchange. SS&C Alps Advisors and Ledenberg-Falman Index during the honors at the NASDAQ, and quite a volatile day for the markets, with the latest geopolitical developments. The S&P and NASDAQ closing at session highs. Oil, the big story, plunging today.

Prices had jumped more than 4% overnight as the U.S. bombed Iranian nuclear sites. The energy sector was the worst performer with that drop. APA, Halliburton, SLB, and Liberty Energy were your biggest laggards. Yields moving lower today as another Fed governor floats the idea of a July rate cut today, this time Michelle Bowman. That move sending home builders higher. Some of your biggest movers today, Circle continuing its rally, now up 75% in the week.

This is the stock's 12th day of trading since going public and opening at 69 bucks, it's now above 250. Tesla leading the S&P following its robo taxi event this weekend, we'll have more on that ahead. And the cyber stocks all higher on concerns that Iran might potentially retaliate with cyber attacks against the U.S.

Well, that's the scorecard on Wall Street. Welcome to Closing Bell Overtime. I'm Morgan Brennan, along with John Fort. And as Iran retaliates for Saturday's U.S. attack on those nuclear facilities, we have a great lineup of guests to talk about it, including former Defense Secretary Mark Esper. Plus, a look at where negotiations with Iran could go from here with State Department veteran Richard Haas. And we will get insight into why oil tumbled 7% today.

But we begin with the very latest on Iran. Let's get to Megan Casella in Washington. Megan. Hey guys, a very busy afternoon in Washington as this was a very fast-paced story unfolding throughout the Middle Eastern region as the Iranians launched both short- and long-range missiles aimed specifically at the U.S.-run Al-Yudid air base in Qatar. We just in the last few moments heard from the president for the first time directly on this.

He posted on social media, he said, Iran has officially responded to our obliteration of their nuclear facilities with what he called a very weak response, which we expected and have very effectively countered. The president said there were 14 missiles fired, 13 were knocked down, one was set free, and the president says he's pleased to report that no Americans were harmed and hardly any damage was done.

Most importantly, he says they've gotten it all out of their system, and there will hopefully be no further hate. I want to thank Iran for giving us early notice, which made it possible for no lives to be lost and nobody to be injured. Perhaps Iran can now proceed to peace and harmony in the region and I will enthusiastically encourage Israel to do the same." So guys, a few things to pull out of that specifically.

One, of course, we had heard these reports already. No Americans, no Qataris, no deaths at all or casualties, and also no damage to the air base from these missiles, all of which appear to have been intercepted. The more notable part here, one of them at least, is saying that the U.S. did have a heads-up from the Iranians. The president is confirming that there,

and there had been some reporting around that this afternoon That the iranians gave both the u.s And the qatari's a heads up that this was coming the way that that has been framed in reporting Especially by the new york times and others is that the iranians needed a way to symbolically respond or retaliate to saturday's attacks But that they wanted to do it in some way that gave both sides an off ramp or an exit ramp. So with the president confirming that now and suggesting that he wants to now proceed to peace and harmony in the region, it does raise the question of whether all of these parties,

the US, Israel, and Iran might be able now to get to the negotiating table to work on some sort of diplomatic solution. The White House was saying earlier today that is still their goal. That's what we have to wait and see if that comes next. Okay. Guys. Meghan Kisela, thank you.

And of course that perhaps speaks to why we saw crude oil plunge today and we saw stocks closing here right at session high as this idea of an off-ramp. So let's get some perspective on this evolving situation from one of the few people who actually understand exactly what it's like to be in the room, the Situation Room, during these key discussions. Joining us now is Mark Esper, former Secretary of Defense. Secretary, it's great to have you back on the show and to get your insights here. Welcome. Yeah, good afternoon, Morgan. So that's where I want to start with you. Yes, we saw this strike, a very weak response as President Trump just indicated there and a response that apparently the U.S. as well as the Qataris, expected or got some sort of heads up on.

Does this in fact provide an off-ramp for retaliation by Iran? I think this is probably the end of the United States directly attacking Iran again. It provides enough of an off-ramp. The Iranians are going to message domestically that they fired 14 missiles. There is some reporting that they are already telling the Iranian people that six impacted and had effects. Meanwhile, of course, we know that it was calibrated to have no impact whatsoever. So right now, it seems we're in a position, and President Trump even said as much that this, as far as he's concerned, he thinks all parties need to move to a peaceful settlement.

And interestingly, in his final line there, he said he would encourage Israel to do the same, which I thought was interesting as well. Do you think Israel is close to finished with its own war on Iran or hard to tell? Well, they said that they are close to accomplishing the majority of their objectives which I assume was to was to dismantle obviously Iran's nuclear infrastructure but also its ballistic missiles its launchers its Air Force what the small small weak Air Force they had and then really the defense industrial complex that supported those elements. Now there may be some other things out there they're probably more they can go after but I

suspect we are days away. To me, the challenge is going to be how do they maintain the pressure on Iran while at the same time pushing hard terms, different terms of what Iran is probably expecting when it comes to some type of settlement on the way forward? Secretary, I see how a weakened Iran is certainly at the advantage of the United States and its allies on the face of it, but I also wonder if there's a power void left from Iran's point of view and its proxies point of view in the Middle East as they have been so significantly weakened over the past couple of years, and if something else to be concerned about potentially

fills that void. Look, it's a good question, but it's hard to see what that void would be because it has been for 40, what, six years now, Iran has been sponsoring all the terror groups throughout the region, Hezbollah, Hamas, the Houthis, most recently, Shia militia groups. And so the power void would be actually hopefully an absence of conflict and terrorism and threats coming out of one country that was intimidating its neighbors, particularly the Arab states, Israel and the United States. So look, we may end up in a, we could end up if this has played well in a far better

situation, but only time will tell. Again, to me, the negotiations coming up are going to be difficult. They're going to be tough because what we're going to need to have is some type of enduring presence in that country, surveillance of their nuclear infrastructure, and of course, immediately, we need to find out where those missing 900 pounds of highly enriched uranium is located and get that under control as well. You expect Iran to allow us to find that out? I don't know, honestly.

They've proven to be quite intransigent, even up until the bombing of Fordow, even today they are striking back at Israel. We'll see if they've come to the recognition that if they don't step back, if they don't swallow their pride a little bit, this could continue to get really bad for them and their country dismantled. We see today that Israel's now targeting what they call symbols of Iranian oppression, right? Evin Prison, places like that where pointing out to the Iranian people that they don't need to live under this terrorist regime, that there is a better life out there.

And I assume they're trying to provoke the Iranian people to rise up. We'll see. But look, this is where it's going to get tough, the negotiation, to see whether Iran will actually agree. And the first question will be, is will they agree to talk even while it retains a presence over their skies to put pressure on them? The current Secretary of Defense, Pete Hegseth, basically said over the weekend deterrence has been reestablished, U.S. deterrence, obviously a very secretive but also very complicated, complex and very successful by a number of metrics mission that was conducted here with Operation Midnight Hammer.

How does it speak to technological prowess of the U.S. military and how does it now set the stage for this NATO summit where member countries are expected to boost their spending to as much as 5% of GDP? Yeah, look, there are two principal components to deterrence. where member countries are expected to boost their spending to as much as 5% of GDP? Yeah, look, there are two principal components to deterrence. One is capability and the second is will. And I don't think anybody doubts our capability. And we once again proved that we have the capability to enter enemy airspace

and bomb them and leave them without being attacked or even known. And that shows our capability. But I think importantly, it shows that President Trump has the will to conduct such operations when America's interests are at stake. So I think it does improve deterrence in that regard. You know, with regard to NATO, we're already hearing out of NATO

that the Allies have agreed to 5%, although there seems to be some backsliding on countries like Spain. I am not happy by reports that they they are going to achieve 5% of GDP toward defense by 2035. That's just ridiculous. It's way too long. We need them to increase spending dramatically. We're already years behind and the Russian threat is going to continue to grow. In fact, we had the NATO secretary general say not long ago that they think Russia could rearm and be prepared to go after NATO partners by 2030.

So clearly the timelines need to get aligned and adjusted. So we're talking about the possibility perhaps here for an off ramp for kinetic strikes and retaliation by Iran, but how to assess other risks where Iran is concerned, whether it's from a cyber threat standpoint or we've heard about sleeper cells, the possibility of hate crimes or domestic terrorism, or even Iran targeting individuals. And I ask this knowing that at least until recently you had a full security detail because of those issues. Yeah, look, I think those are all important considerations that I assume at some point

will be discussed. They are far more challenging to go after. We obviously have a great law enforcement presence here in the United States at the federal level, beginning with the FBI and heading all the way throughout the states. But those are factors we need to consider. And I know of concern to your viewers is Iran can continue to threaten the straight of hormones and cut off or inhibit oil supplies. That might be something to be adjusted. My priority would have been if Iran had hit us hard, hard enough for us to respond aggressively, would be to take out the Iranian Navy,

or at least those parts of it that could really inhibit the transit in the Strait of Hormuz. But right now that seems to not be the case. Mark Esper, former Secretary of Defense, it's great to have you on. Thank you for joining us. Thank you, Morgan. So a volatile session we had here on Wall Street today with the latest geopolitical developments,

but stocks did close at session highs. Treasuries were lower as three Fed officials have begun talking about lowering interest rates as soon as July, if inflation remains subdued. Let's bring in Payne Capital Management senior wealth advisor and CNBC contributor Courtney Garcia, along with CNBC senior markets commentator Mike Santoli. Guys, good to see you. Courtney, how can investors parse this given that we're still sort of in this tariff window where the

full tariffs aren't on? We're not sure what the tariffs are going to be and we won't really know the effects right in July? Yeah, well, I think the bigger thing that markets were worried about, at least the short term here, was everything that's going on in the Middle East. And I think the big concern was if you did see some sort of closure of the Strait of Hormuz or you saw any sort of damage to energy infrastructure, that is actually a much bigger risk that inflation is going higher from there. Because realistically, if you do see oil going above $100 a barrel, which people talk about if the straight were to be closed, you could easily see inflation going back above 5% and

you can see the gas prices above $5 a gallon at the gas pump. If that is no longer as much of a concern, I think that's what the markets are telling you after today. When we did see some sort of response and that was not the answer, you're seeing oil prices are coming down, which means the inflation story is actually more positive and more realistic that the Fed can lower interest rates. Because if energy prices have been coming down, which they have been over the last couple of months, that likely may offset some of the tariff impact of inflation.

So that's really what markets are weighing out here and they're more relieved to see what's going on in Iran than the upcoming tariffs at least at this at this point in time. Okay Mike how do you understand it some of the language here from from the fed speak given that we haven't yet seen what the full tariffs are going to be let alone felt the full impact of the tariffs. No we haven't and you know Chair Powell has been pretty resolute and withholding judgment and trying to preserve this wait and see type stance. And I do think the majority of the committee is largely there as well.

That's what the outlooks from just several days ago at the Fed decision suggested. But I think a case has built as the economic surprise indexes have weakened, as you've seen some deceleration in job growth and as you got a couple of friendly inflation prints I think internally the direction of travel in terms of which way to lean and would be maybe to try to get easier sooner and and fit in another rate cut I don't know that that means all of a sudden July is in play but I do recognize that there's some atmospherics around this, and it's fun because,

as you said, we don't know what the final tariff terms are, we don't know how they're gonna be implemented or when, and we don't know how much of that might be passed through and show up in inflation readings. I guess you have to have a theory of the case for all those things, or just say, it's the Fed's job to sort of look through all of that. So it creates a sort of live debate,

but from an investor's perspective, it's probably net bullish because at least the debate now includes more of a voice on the dover side. Courtney, do you think a peace premium is being priced into the market here? Well, I think after a day, that's really why you're starting to see the markets are recovering here,

energy prices are coming down. I think people are optimistic that there's really why you're starting to see the markets are recovering here, energy prices are coming down. I think people are optimistic that there's going to be either no further escalation or maybe some sort of resolution that comes to this. And if that does in fact happen, you will see oil prices come down like you saw today. I think that is ultimately a bullish thing for the markets. So, you know, we're still in the midst of this. I think we've got to watch the news day to day. But based on everything that's been happening, that's absolutely what the markets are pricing in. Mike, if we are finding ourselves in fact, and I realize this is a big if,

but if we are in fact moving past the worst of the geopolitical angst that we have seen playing out over the past call week and a half, what becomes the next big catalyst for this market, especially since the S&P has been very range bound? I think it's about Morgan filling in the blanks on the end of the tariff pause. You obviously are going to need to know the shape of the federal budget. All this stuff is really within the kind of next several weeks horizon, I would suppose,

from an investor's perspective. And then we're going to start getting second quarter earnings. And earnings have been the thing they've really kind of done their job mentioning earlier we've been at this level the S&P since let's call it early to mid-November at least that's when we first got here on this run and earnings are a good deal higher from there so it seems as if you know that kind of treadmill kind of has to keep keep turning and have us keep walking it. All right.

Mike, see you in a bit. Courtney, thank you. Now, KB Home earnings are out. That stock was up. Now it's down. Diana Olek has the numbers. Diana? Yeah, it's mixed.

It's a slight beat, John, for KB and Q2. EPS came in at $1.50, a share versus estimates of $1.46. Revenue of $1.53 billion versus estimates of $1.5 billion, but guidance on revenue for the full year did come in lower than estimates. In the release, CEO Jeff Metzger said, our team is producing improvements in two key areas, lowering our build times and reducing direct construction costs, helping to strengthen our business. Average selling price interestingly increased slightly to $488,700. You'll remember

last week, Lennar reported lowering prices. Home deliveries for KB increased 11%. The company's housing gross profit margin was 19.3% compared to 21.1% the year before, but that was in line with expectations. So kind of mixed, Morgan. All right, Diana Olek, thank you. And shares of KB Home down about 3% right now. Well, coming up, Iran fires back, attacking a US air base in Qatar. But markets rise and oil tumbles.

Up next, we'll ask State Department veteran Richard Haas if this is the extent of Iran's retaliation and what could be the next steps diplomatically when overtime's right back back into. Welcome back. Now that Iran attacked the US military base in Qatar, what comes next for the Middle East? Well joining us now is Richard Haas, President Emeritus at the Council on Foreign Relations. He's also Senior Counselor with Centerview Partners. Richard, it's great to have you back on the show. Welcome. I'm gonna ask you the same question I just asked Mark

Esper and that is this attack, which seems to be pretty limited and pretty well intercepted on Al-Yudhid in Qatar, does this now provide an off-ramp rather than an escalation in this dynamic between the U.S. and Iran? Absolutely. It was designed to do just that, to de-escalate. The word that comes to mind is performative. This check the box of saving face, Iran retaliated or responded. But this was designed to avoid casualties, to avoid grounds for American response or escalation.

So I actually take this as a good sign and in some ways reflects the reality that Iran has other priorities right now other than, quote-unquote, getting even, which it's not in a position to do. What would those priorities be? And how much hinges on how much

of Fordow and these other nuclear sites were effectively destroyed? They have two priorities. The most important is to consolidate the regime. It's been attacked heavily by Israel, to a lesser extent by the United States. It's been somewhat humiliating for Iran,

because it shows that the government cannot protect Iranian sovereign airspace. So my sense is, for the foreseeable future, Iran wants to calm things down, stop attacks on it, and essentially probably look for ways to improve the Iranian economy, thinking that will placate the people. I think over the longer run, and it gets to your second question there, I think what Iran wants to do is reconstitute its nuclear weapons program.

My guess is one of the lessons they will draw from the last two weeks is this never would have happened had they had a serious nuclear weapons capability that would have deterred Israel in the United States. I'm not saying that's right, but my guess is that's their lesson. So even if the attacks, say, on Fordo and Esfahan and the Tons were, quote-unquote, successful, that doesn't mean the United States has made all sorts of significant progress towards denuclearizing Iran. What we don't know, in addition to any bomb damage assessment, we don't know what percentage

of Iranian-enriched uranium or advanced centrifuges or anything else are located in warehouses and basements we have no idea about. Richard, Israel kind of tipped its hand, Netanyahu, to wanting regime change several days ago, and President Trump has kind of implied the same. So should we believe that they're willing to put all that aside for the sake of peace and inspections now? No, but the problem with regime change is one, it's a lot easier talked about than implemented. It's a wish, not a strategy. Not a lot of history on the side of those who want to bring it about. If it's going to come, you really need, I think, it to come internally for the most part.

I don't see the kind of broad-based opposition you would need that's organized. I don't see the regime crumbling. The opposition you would need that's organized. I don't see the regime crumbling. The last time we brought regime change to a country in some ways was, what, Iraq or Libya. And Libya turned out to be a fiasco. It's chaos. And in Iraq, you saw what it took. It took massive, prolonged intervention.

And even then it didn't work out that well. Israel's not going to be in a position to do that. Obviously neither are we. So again, I don't take regime change all that seriously as an option for either country. So if you start to see actions that imply that that's happening, what would those be? I'm sorry, what happening? That Israel and the U.S US are pushing for regime change. Well, again, I don't think we should.

I think it increases the idea that you have all sorts of fighting with Iran. No, I think what you'll see is Israel potentially going after symbolic political targets in Iran, conceivably some economic targets, but we're not going to want them to go after economic targets. The last I checked, we don't want to necessarily drive up world oil prices.

We don't want to give Iran an excuse to attack Saudi Arabia oil facilities or to do something in the straits of Hormuz. So I actually think we're going to keep Israel pretty restrained when it comes to hurting Iran economically. So again, I don't think it's a very useful conversation to focus on regime change. If it happens, if I'm wrong, and it somehow bubbles up from within,

okay, then we'll deal with it. But the idea that you could call in your generals and say, hey, I want to have regime change by Tuesday morning at 10 o'clock, there's no way they can take that order and translate it into policy. I was speaking to Roger Zachheim from the Reagan Foundation Institute earlier today, and he raised an interesting point to me.

He pointed to this emerging President Trump doctrine that basically started in Riyadh a couple of weeks ago, when the President said, my preference will always be for peace and partnership whenever those outcomes can be achieved always. And sort of set like, pointing out the fact that the international community perhaps took

that as President Trump being pacifist or isolationist, but given the events of the weekend and with the NATO summit coming up this week and of course the read through to other countries across the world, that maybe the way to see this is that the U.S. will use strength but only after an ally does its part and basically pays its fair share or contributes as well. Do you see it the same way? And if so, does that mean that the way the U.S. is approaching alliances is changing and maybe changing in a different way than everybody's been expecting them to? I'm not sure I'm prepared to generalize. And what we've seen in the last few days seems to be pretty particular circumstances. No, I think what you're seeing is an American foreign policy

that's much more unilateral and less alliance based. We see that in Europe. We see that in Asia. You just had the cancellation of important meetings with Japan, arguably our most important ally in the world. Obviously, there's a distancing from our allies in Asia. You just had the cancellation of important meetings with Japan, arguably our most important ally in the world. Obviously there's a distancing from our allies in Europe, be it over Ukraine policy or over Europe more broadly. No, I think you're seeing again, not an isolationist America,

but a more unilateral America, and probably still very careful about the use of military force. Richard Haas, great to have you on and get your insights. Thank you. Thank you. Well, coming up today's market reaction might not have been what people expected following Saturday's U.S. attack on Iranian nuclear facilities. Stocks up, oil way down, bond yields falling as some Fed governors talk about cuts and gold only modestly higher.

We're going to get more into those moves when Overtime comes right back. Welcome back to Overtime. Stocks ending the day with gains. All three major averages finishing near the highs. Big intraday dip though for shares of Amgen. The company released a data on its obesity drug candidate and while patients did lose up to 20% of their body weight

in a year, in some cases, side effects led trial participants to stop taking the drug. Hymz and Hers having the worst day ever after Novo Nordisk ended the company's partnership, Novo accusing Hymz and Hers of illegally compounding its drug, Wegovi. Hymz and Hers CEO responding on X, implying Novos policies are anti-competitive. And Chewy announcing a major shareholder is selling a billion dollars worth of the stock. And at the same time, the company announcing it will buy 10% of that stock,

and that's on top of its existing buyback program. Well, it's time now for a CNBC News Update with Kate Rogers. Hi Kate. Hi Morgan. Pro-Russian hackers today targeted several municipalities and organizations linked to the NATO summit this week in the Netherlands. The Dutch National Cyber Security Center said the hackers launched a series of attacks to flood sites with data

in order to overwhelm it and knock it offline. A spokesperson in The Hague said services are operating normally for now. Harvard University's AAA credit rating should be able to withstand President Trump's endowment fund and tax threats for now. S&P Global said today Harvard's strong finances and its ability to boost its other revenue streams should allow it to keep its top tier rating, adding that it would take a mix of tax, endowment,

and enrollment issues to impact that rating. And the first ever images from the world's largest digital camera released today reveal millions of stars and galaxies, including two nebulas located a few thousand light years away from Earth. Scientists say the images and video from the Vera C. Rubin Observatory could help solve some of the universe's most enduring mysteries. Back over to you, Morgan. I love it. That was part of the news update.

Kate Rogers, thank you. Thank you. You know me. Coming up, a big drop in oil prices even as Iran retaliates with an attack on a U.S. Air Base in Qatar. We'll look at the reaction and what it would take for oil to rally here. Plus Tesla jumps on the launch of the Robo taxi, but did the event live up to the hype? We're gonna look at that coming up on Overtime.

Welcome back to Overtime. Oil falling more than 8% despite many market watchers expecting the opposite today after the weekend's events in the Middle East. Some analysts pointing to Iran's response just hours ago to the US strikes as a potential beginning to a diplomatic off-ramp and the reason for the big negative move.

Well, joining us now is Arjun Murthy. He is partner for Energy Macro and Policy at Energy Consultancy, Veriton, and former equity analyst at Goldman Sachs. Arjun, welcome. So does lower oil today just reflect that investors believe Iran has been defanged? I think that's right. I mean, keep in mind, we probably built as much as a $15 to $20 per barrel premium in oil

over the last week versus where we were trading pre-Israel Iran. And we're now in the process of eliminating that. And I think the market is saying, hey, it looks like the worst of this turmoil is behind us. Let me say, if we are on track to avoid a bigger war, that is unquestionably good news. So given where we are in the year, just about halfway through, what are the remaining,

I guess, possibilities that would cause a spike or firming up in the price from here? I mean, prior to this conflict having arisen, there was a lot of debate about whether tariffs were gonna drive recession, and that was then leading to those $50 type oil calls that some had had. But we were already seeing some sort of better

than expected oil demand data, that the so-called hard data across the economy had been outperforming the soft data, and that was true for oil. We're seeing OPEC announced quota increases, but that the actual production wasn't quite following through. And we've seen shale oil drilling come down quite a bit, which was leading people to think

shale may roll over. So the question was, would we weaken in the second half of this year, or does this kind of turmoil help us get through that? But beyond beyond 2025, the balances were starting to look a bit better already. It's not just the price of oil either, though, is it? It's also the price to transport that oil, the shipping piece of this. We know those costs have been surging here

in the past week and a half, and particularly in the last couple of days, given this risk premium tied to Middle East. How closely to watch that and factor that into the cost to get all of these barrels where they need to go around the globe? It's a variable. I will say the two things we're most watching is,

do those signs of demand hanging in better at around a million barrels a day of growth come true? And the second would be, let's just say oil does stay above $70 or firm back up there. Will we see a resumption in shale oil growth or have some of the messages coming from the producer sector that tier one shale, the lowest cost shale, was starting to mature, and

therefore we were going to need a bit higher price. Does that come true? I think those would be the top two variables we're looking at. How are US producers gaming out the dynamics right now and what it means for drilling here stateside? You know, our message over the past week to our clients at Veridin, and it is a longer term view than than a short-term trader, has been underlying oil fundamentals are what you should focus most on.

You can look at past disruptions. Some have led to actually a structural bear market, one a structural bull market, and everything in between. And I think we were signifying, let's look at global oil demand. It's kind of sluggish, but maybe it's doing a little bit better than we thought. And then what is the fate of drilling? And through all that, I think companies aren't going to overreact to what had been a rebound. Now is a pullback.

I think they're going to see where the dust settles out. Arjun, did China factor into this Iran situation the way you expected? For everyone who was saying the Strait of Hormuz might close, I think, number one, there's been nothing about the Israel-Iran conflict that leads you to believe, at least up till now, and I do not hope to be proven wrong on this, that Iran somehow has a strong military. I think number two, I think most people now know most of Iran's sales of oil go to China. And so the idea that they were going to shut the strait, even if they could, never made a lot of sense. And I think lastly, if it were to close somehow, and there's a lot of questions. And I think lastly, if it were to close somehow,

and there's a lot of questions on what that how is, how long would practically speaking be close? I think all of that, and this is where China plays in, played a role in that action not being taken. All right, Arjun Murthy, great to have you on. Thank you. Thank you. Up next, Fast Money's Tim Seymour on the gold trade

and why we're not seeing a flight to safety right now Despite the conflict plus Tesla shares driving to the top of the S&P 500 after launching its robo taxi in Austin The outlook for the service and the stock coming up on overtime Welcome back to overtime gold has had a breakout 2025 but more than 28 percent But over the past few days despite the geopolitical turmoil the typical safe haven trade has been flat. Is the gold trade done glittering for now? Let's bring in Tim Seymour, Seymour Asset Management Chief Investment Officer and a CNBC contributor. Tim, you don't think so?

First of all, John, great to be here with you guys. And I guess my view on gold is one where I think gold has proven to be an all-weather investment for the last, you know, this is a 20-year chart. But even during periods of volatility, the gold market has been flat. And I guess my view on gold is one where I think gold has proven to be an all-weather investment for the last, you know, this is a 20-year chart, but even during periods of volatility, during periods where people have actually been reaching for growth, gold has been a fundamental story around both dollar dynamics, central bank dynamics, GDP differential dynamics, and I think there's more to go. So why not Bitcoin instead though?

To me, first of all, I don't necessarily buy the parallels that they're interchangeable. I think gold, first of all, if you listen to the ECB last week, they pointed out that bullion was the number two reserve in their reserves ahead of the euro. I think central bank buying is not where we are with Bitcoin right now. I think the reality around the scarcity value, I think there's also a case where gold miners and those plays that are levered to gold, especially in a world where inflation is under control,

the GDX has outperformed over the last year, probably by almost two to one, or at least year to date. So I like that trade. Bitcoin's fine. I'm not necessarily a seller of Bitcoin here, but I am a buyer of gold, and I think we're not necessarily long in the tooth. Maybe some rotation out of Bitcoin into things like stable coins, too, which are obviously having a torrid rally here.

Curious about the dollar, because we've seen it firm here in the last couple of days in the midst of everything that's happening in the Middle East, at least last night, a little bit of a flight to safety. But obviously, we're still weaker than we were when all the trade stuff began. Morgan, I think first of all, if you listen to the Fed, and I think we quietly heard the Fed almost restate the Powell dynamics of last week, in other words, Vice Chair Bowman today, I think the Fed is closer to a cut than people may think, but I think central bank differentials are such that they favor a weaker dollar, meaning the ECB I think is done cutting for the foreseeable. I think GDP differentials between the US and Europe are about as tight as they've been.

We actually got PMIs in Germany today that are better than expected, especially on manufacturing. So I think the fundamentals warranted. I think the current account dynamics with the euro versus the dollar, again, the euro is 65% of that Dixie trading basket. So dollars had a big move lower. But if you look at where the Dixie is now relative to COVID, we're kind of in line. And I think the dollar can continue to move lower. Do you like international stocks, for example, stocks in Europe then here?

I mean, Tel Aviv stock market's trading at a record high right now. I think Europe's had a great run. Germany, I think we're all aware, has had a big outperformance to the U.S. I think if you look at a handful of sectors across Europe, certainly the defense sector has been given new life by the fiscal spending and the Rearm Euro-Europe dynamic. I think that's an interesting place to be.

I like EU pharma. I think EU banks, which trade at one half the price-to-tangible book of U.S. money center banks. If you like that trade, I think you like Barclays, I think you like HSBC, I think you like Santander, who pay almost double that dividend, and the same dynamics for global Money Center banks that have great balance sheets

and have a tailwind on deregulation. So it's been a big move, but again, even after 30% outperformance of the DAX to the S&P from Thanksgiving, that trade is still underperformed dramatically over the last 15 years. And I think some of this is just mean reversion. Some of this is just getting back into waiting for foreign investors coming back to equal weight their markets means they're pulling out of the U.S. a little bit.

And that's going to support those markets. Yeah, that's a key part of the story. I'm glad you highlighted that. I don't think we've been talking about it enough. Tim Seymour. Anytime, I'm here. Let's do it. Great to see you.

You can catch much more from Tim and the rest of the Fast Money trading team coming up at 5 p.m. Eastern. Check it out. Yeah, and up next, the latest on the outlook for Tesla's Robo taxi, which rolled out yesterday and what it means for the stock. But before we head to break, here what CEOs and business leaders are saying about how

AI is giving them an edge and disrupting their competition. It's not so much about disrupting competition. We are all trying to grow this pie together. We think this is the biggest transformative force that we have seen in the history of humankind in terms of AI. We acquired a company for nearly a billion dollars last year. The market's preeminent library of expert interview transcripts, almost a quarter million transcripts that really go deep into every company, every industry.

You might have a hundred interviews on a single company where no human can normally read all that, but O.D. Presearch will read everything and it can answer questions based on all of that. And so we can really give you perspectives from multiple perspectives in a way that no other product can. So there are some existing companies in this space. I think what's made us different is not the hardware,

but the software and AI that we built on top of that hardware. And so we are believers in objective evidence that is the best way to solve crime. And AI has enabled us to do so. Welcome back to Overtime. Tesla, the big winner in the S&P 500 today after its robo taxi launch in Austin, Texas. Let's bring in Phil LeBeau for more. Phil, we learn anything? We learned that it was a clean launch. I mean, we didn't see any incidents. And that in itself is one reason why Tesla shares were higher today. Keep in mind, this was a very limited

launch. 10 to 20 modified Model Ys. They have the full self-driving RoboTaxi software inside of them. There was a safety monitor in the front seat, not behind the wheel, but in the front seat. And this is also important. Tesla has sent a note, remember, NHTSA is investigating the full self-driving technology. It is telling Tesla and NHTSA, do not release that full self-driving data. Companies, automakers are allowed to withhold what data is released to the public as part of an ongoing investigation. In terms of the RoboTaxi launch, this is the response that we heard from many of the analysts today. Dan Levy at Barclay saying, this further reinforces that RoboTaxi slash AV remains front and center for the stock with fundamentals seemingly pushed aside for now. Well, here's some fundamentals

that we're going to hear about next week. The quarterly deliveries, Q2 numbers, we should get those probably late next week, just after the 1st of July, and when that comes out, that's when we will have a sense of just how much deliveries have slowed down around the world in the second quarter. As you take a look at shares of Tesla, remember, it's the Q2

deliveries that are going to have the biggest influence on the stock and then Q2 results which we should get guys sometime in the third or fourth week of July. I want to go back to the data piece of this Phil because obviously with full self-driving and with how technologically advanced Tesla's are to begin with. I mean this is a company that's collected a ton of data even though it's only just now starting to implement this robotaxi pilot. How important is that to the equation here

and just how quickly, with a smooth launch, can Tesla now move into this next era? I guess how much is the data being discounted by the market? Well, the market, if you look at the Tesla bulls, they are counting on that data being the key to Tesla being able to ramp very quickly. Elon Musk says they will have hundreds of thousands

of robo-taxis either in designated cities or out on the streets of the US in various areas over the next couple of years. If you believe him, you believe that that data is front and center in terms of them working with that data and AI in order to advance full self-driving and the RoboTaxi network. But there are more than a few skeptics out there who question whether or not this will happen as quickly as Tesla has said. Remember, if Tesla can ramp this

quickly, if the technology works, Morgan, the fact that they have the advantage of scale in terms of manufacturing would work to Tesla's advantage. But you've got to first prove that the technology works. That's what we've got to watch, Phil LeBeau. Thank you. Well, up next, Mike Santoli looks at why the market has been so resilient lately and how much credit an ongoing short squeeze should get. Be right back. Welcome back. Despite news coming out of the Middle East,

markets stayed resilient today, closing in the green, actually closing at session highs. Mike Santoli is back with a look at where the resilience is coming from. Yeah, I mean, Morgan, first of all, the relief that some worst case scenarios, either geopolitically or on tariffs, have not come to pass is part of the story. But also positioning has been a steady feature of this rebound rally since early April. This is Deutsche Bank's composite investor positioning gauge.

And it shows that we've come up off those lows from extremely negative positioning, very light exposures, to stocks to really middling levels, in fact, below the median. So it's below neutral. That means less selling on pullbacks for risk management and perhaps more buying as the market holds up a little bit. Then we take a look at the behavior of heavily shorted stocks.

Now it's always a feature of big rallies that heavily shorted stocks get some relief. You get some short squeezes. This is the performance relative to the overall market of the 10% of all rallies that heavily shorted stocks get some relief. You get some short squeezes. This is the performance relative to the overall market of the 10% of all stocks that have the highest short positions. It's also out of Deutsche Bank. And so you see this little upturn here shows you that short squeeze has been a part of the story. There's been some hunting for low float short names, things

like that, but nothing as wild as we saw in early 2021. The meme stock, unprofitable tech, nuttiness out there. Final point, this does underscore that over time, heavily shorted stocks tend to underperform the shorts, ultimately in aggregate, kind of get it right, Morgan. How much does all of this speak to that divergence that we've been talking about for weeks, if not months, between retail investor flows and institutional ones. Yeah it's right at the center of this story.

You know retail traders they're kind of slow to realize their losses they're willing to allow stocks to come in because they'd rather just look for the next lottery ticket to buy or just the belief in the story long term in things like the AI

technologies. Whereas you know these investor position engages from professionals, a lot of the lagging exposures are from these systematic strategies where they need the market to trade above certain technical levels, show certain kinds of momentum, or have volatility subside to a certain degree

before they get those triggers that say, okay, now get back in, in a big way. And that just hasn't happened. It's been one of these deals where we had a strong rebound, but not every box got checked off that list for some of these strategies. All right, Mike Santoli, thank you. Well, let's get you set up for tomorrow's trade.

There's no data on the economic calendar, but we will get results from Carnival before the bell, and then FedEx and Defense Contractor AeroVironment right here during overtime. And it was an interesting trade on a number of individual stocks today we didn't talk about. Raymond James upgraded DoorDash.

That was up 4.5%. And then IBM, new all-time high for IBM, just shy of 2.90 a share. It's up 68% over the last 12 months. Big blue has been going big in general. It's been quite a rally. We've certainly been covering it here at overtime. I'll be watching FedEx, obviously trade, but also geopolitics and in general, state of the consumer and state of businesses tomorrow. And also the FedSpeak continues. We've got 15 Fed speakers this week, plus Powell, who's on the Hill tomorrow.

That does it for us here at overtime.