Closing Bell - Closing Bell Overtime: Home Depot CFO, Sequoia’s Shaun Maguire From Reagan National Economic Forum 5/30/25

Episode Date: May 30, 2025

Markets navigate fresh trade headlines and tech disruption: Unlimited’s Bob Elliott and G Squared Capital’s Victoria Greene weigh in on market sentiment and positioning. Our Kate Rooney reports on whether the Trump agenda could chill Silicon Valley’s startup pipeline through its attacks on higher education. Shaun Maguire of Sequoia Capital joins exclusively from the Reagan National Economic Forum to discuss venture capital and the tech ecosystem, including his firm’s exposure to Musk-led companies like SpaceX, xAI, and The Boring Company. Home Depot CFO Richard McPhail speaks exclusively on how tariffs are impacting retail and housing, and Tim Sloan of Fortress gives a read on the real estate market. 

On that bell marks the end of regulation. Tech NYC ringing the closing bell for New York Stock Exchange. Bridge 2 Technologies doing the honors at the Nasdaq. And it was a mixed day on Wall Street with the Dow leading after falling more than 300 points in earlier trading on escalating China trade tensions. Retail and focus again. Shares of Ulta soaring on an earnings beat. Costco also rallying on strong sales.

Then on the flip side,ap sinking on tariff concerns. While the chip stocks lagged today on reports the U.S. might be planning wider China tech sanctions, Nvidia giving up all its earnings gains, down more than 3%, Lamb Research, Intel, Arm lagging too. Tesla was in the spotlight as Elon Musk steps away from his formal role

as a special government employee. The stocks ending the day lower though. And Zscaler, the NASDAQ leader, hitting a three-year high after topping earnings estimates. steps away from his formal role as a special government employee. The stock ended the day lower though. And Zscaler, the Nasdaq leader, hitting a three year high after topping earnings estimates. That is the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan who's live at the Reagan National Economic Forum in California. Morgan, hey, what's ahead?

Hey, John. We have so much ahead. I'm right here in Simi Valley, California. I'm at the Reagan Library. Ahead, we've got a lineup of guests, including Sean McGuire of Sequoia Capital. He's a big investor in Elon Musk's companies and many others. I'm going to speak with the Home Depot CFO about the consumer tariff spending, and we're

going to get the outlook for real estate with Tim Sloan, Fortress Investment vice chairman as well But earlier today, I did speak with JP Morgan CEO and chairman Jamie diamond This was a 30-minute plus discussion diamond giving some very candid answers expanding a multitude of topics But here's what he said about China. He was just there last week. I Would engage with China, you know, I would I just got back from China last week. They're not scared folks There's notion they're gonna come bow to America. I don't I wouldn't count on that, you know I mean they have a problem. They put a hundred thousand engineers on it and they've been preparing for this for years

So but we should engage So those comments come as President Trump says today that China violated the preliminary trade deal. Eamon Javars is joining us from Washington with the latest details. Eamon. Hey there Morgan, that's right. You know, the President began the day today with a post on social media in which he blasted China, saying in part that the agreement that he felt that they had come to in Geneva between the US and Chinese sides Didn't come together. Here's what he said the president saying because of this deal everything quickly stabilized and China got back to business as usual

Everybody was happy. That's the good news The bad news is that China perhaps not surprisingly to some has totally violated its agreement with us so much for being Mr. Nice Guy. Now, Jameson Greer, the US trade representative, said on CNBC earlier today that what the administration is upset about with the Chinese specifically is that they did bring their tariff levels down but they didn't bring some of the non-tariff barriers down that the US had expected that they would do. That's the point of contention here.

That's what got the president's ire today. The president said today he is going to, he hopes, speak with Xi Jinping directly at some point. No schedule for that. No word, Morgan, on when that might happen or what they might say. Back over to you. Yeah, it's interesting, Eamon, because Diamond on stage today basically talking about the fact that there's an opportunity here for the U.S. to build even stronger alliances across the world, use all and any tools at

our disposal and maybe stand up some from an economic standpoint to continue to do that. But there is also this emerging theme here about the very real IP theft, particularly on the technology side, where China's concern that is still going on. You had, I believe, with Senator Mike Rounds, said something like $600 billion per year in IP theft. And I have to think that that is part of the discussion when we do talk about things like non-tariff trade barriers. It's absolutely part of the discussion.

I've talked to Secretary of State Marco Rubio about that directly. We've covered it over the years here on CNBC. And the question is, from the US side, what leverage does the US have to get the Chinese to agree to knock that behavior off? But also, what leverage does the US have to get the Chinese to the table? You would have to imagine, given the authoritarian political system in China, that Xi Jinping has a higher pain tolerance than Donald Trump does politically for suffering in his economy domestically. That would seem to give Xi Jinping a little bit more running room here than Trump might

have in terms of waiting out this whole trade war. And so the question is, can Trump get that call with Xi Jinping and what can he say on that call that will really bring Xi Jinping to the table? Those things are unknowns. I can tell you that the White House feels they're the ones who have the leverage because China has the factories, the factories are built, they're in the ground, they can't be moved, and they need to export stuff somewhere and they need access to the U.S. market. So that's the leverage that the U.S. side is counting on.

All right. Eamon Javers, thank you. So how should you invest through this uncertainty? Joining us now is unlimited CEO and CIO, Bob Elliott, and G Squared Private Wealth CIO, Victoria Green, happy Friday, guys. Bob, so the macro data inflation income still looks pretty good.

Anybody who panicked sold in April is feeling pretty bad at the end of May here. So what do you buy in June? Well, I think the key question is what does the forward looking picture look like? And when the market right now is sort of all in on the run at hot trade, and at the same time, when you look at the actual data around tariff collections,

that's throwing cold water on the overall economic expansion ahead. We got $40 billion of tariff collections over the course of just May. That's a $500 billion pace, the government is going to be able to make a significant overall economic expansion ahead. We have $40 billion of tariff collections over the course of just May. That's a $500 billion pace or essentially a 2% of GDP tax hike that's occurring across the economy. If that persists,

it could persist for maybe a short time frame, but if that persists for months, which it looks like it may have, given the court uncertainty, given the conflict here with China, and given the capacity of the administration to extend the tariffs even if they lose in court, every month that goes by, that increases the drip, the cold water being poured on the hot economy. And so that backward-looking data still looks good, but on a forward-looking basis,

markets priced to be all in on run-it-hot might be a bit surprised if this tariff conflict continues. Okay, so Victoria, one way of reading that is the idea that things are a bit toppy here, but we learned this week that the president is not a taco fan, at least when it comes to market lingo. Do you continue buying these policy-driven dips

or eventually does the macro catch up to you in a bad way? Hey, look, right now it's keep common rally on. Like I'd buy the tariff disc because he even said it himself. It's all a negotiation. All of this is posturing. It's maximum pressure. I mean, he did write a book about this. So he's kind of following his playbook. I agree we could have some headline risk. We could have some knee jerk moves down but for now the playbook remains intact by those dips you're seeing economic health I understand the concern on the GDP drag but the data is not rolling over look at PCE this morning again unemployment next week

it's expected to be very benign 4.2 percent we've had great earnings now June can be really choppy right we're through the heat of earnings we've got to wait till July for financials to kick us off. Could definitely get jerked around by moose. But I look at that and I say, I would buy this dip. It's been a great playbook the last 60 days. And if it ain't broke, don't worry about trying to fix it. Okay, so Bob, what do you do then with an asset like gold,

which has been a pretty safe place to hide at times? Yeah, well I think in this sort of environment, you want to look for assets that are maybe not overpricing a sanguine environment. And so there, when you look across the world and when we look at how hedge fund managers are positioned today, what they're seeing is things like foreign stocks,

high yield credit spreads, high quality small caps, positions like that, that haven't necessarily rallied nearly as much from the bottom as stocks have and aren't as sensitive to an extrapolation of extremely strong conditions. And buffering that is something like gold, which really benefits in an environment of a risk off situation

or an increasing conflict situation. Long gold positions really pair nicely with some of those other risk on positions that maybe haven't fully priced in a sanguine environment. Okay, on the flip side of that, Victoria's the AI trade, which, you know, looked decent post-NVIDIA earnings, but then NVIDIA sort of wobbled today, again, on these macro headlines.

Is that trade still alive and well? I think it is, absolutely. We'll see next week with Broadcom, but we saw Dell, we saw NVIDIA, we saw multiple reports this quarter saying that demand is intact. Your Mag-7 are still spending massive amounts on CapEx. You're seeing much more investment in this space. And we're starting to see people have to pick

it up and implement it across their companies. Look, it's still in the early innings. And I know that sounds weird because these stocks have run up tremendously. But if you look at who is actually implementing AI and how much work is still to be done across a company by company basis, the investment is there and IBM reiterated that. They said, look at how much we saved implementing AI. It was like 3.8 billion and they're going to help and consult companies to say, how do you continue to shift to your hybrid cloud?

How are you actually implementing AI? What programs, how do you train? There's a learning curve here that companies are still dealing with, especially the small, the mid-size companies, that opportunity is massive. And I look at this and I would buy any dip in the video that Blackwell product is phenomenal. I know there's some risk a little bit on, hey, could this get restricted?

Could we see? But they already took their China medicine. They've already warned what the hit is. They took an 8 billion hit in Q1. I think they can survive it. And they're going to have plenty of people that want to buy their chips if they can't sell to China. All right, Victoria, Bob, thank you.

Thanks, John. Well Elon Musk ending his tenure as a special government employee and getting a big sendoff from the president in the Oval Office today. He said he's ready to focus on his many companies. Up next, I'll be joined by Sean McGuire of Sequoia Capital, a Frontier Tech investor and an investor in a number of Musk's companies, including XAI and SpaceX. We're going to talk about the investing landscape. Overtime is back in two. Welcome back to Overtime. Stocks closing mixed today, but wrapping up a very strong May, the Nasdaq up nearly 9%, best month since November

2023. Nvidia helping to lead tech higher, up 24% in May, narrowly edging Tesla for the best mag seven stock, which was up 23%. One of the worst performing stocks in May was United Health down 26%. Its worst monthly drop since 2009. The stock now down 40% for the year. Well as President Trump's tax bill works its way through Congress, we are learning more about what's in it and the potential impact. The bill could raise taxes on university endowments.

Kate Rooney is looking at what that could mean to the Silicon Valley startup ecosystem. Kate? Hey there, John. Yeah, so universities really do play a crucial role for venture capital investors and the entire tech ecosystem. Endowments are a main source of funding for VC firms, which in turn go out and then invest in startups and pressure from Washington that we're seeing may throw a wrench in all of that.

So the House bill that's now heading to the Senate takes what was a 1.4% investment tax on income. That's going to go up to 21% at least for those with over two million dollars per student in terms of endowments that mostly targets the more elite universities think of Harvard and Yale for example. Historically endowments have plowed billions into this asset class look at Harvard's 53 billion dollar fund it allocates almost half to venture Yale is just below that Stanford of, it's some deep roots in Silicon Valley, puts almost 60% into venture. University of California has got a $179 billion fund.

It's about a third going to VC while Texas, it's around a quarter. That's all according to PitchBook. And the pressure does go beyond tax liabilities. They are at risk of losing their tax status, federal funding as well. So venture investors I'm talking to worry that the new financial pressure coming from all angles might change endowments, risk appetite and the ability to park money in less liquid private investments that tend to have a typical 10-year horizon guys. Alright Kate Rooney thank you. Well let's talk more about Silicon Valley and startups and the venture ecosystem.

Joining me now here, exclusively at the Reagan National Economic Forum, is Sean Maguire, partner at Sequoia Capital, focused on seed and early rounds. And it's so great to be speaking with you. Thank you. Thank you for having me, Morgan. Great to be here. Let's start right there with the report that Kate Rooney just put out. How are you, how closely are you tracking what we're seeing play out in terms of policy in higher education and what it means for taxes and future dollars that go

into investment funds? We're very lucky at Sequoia, you know, we're a 53-year-old firm. We have very long relationships with our LPs who we put ourselves on working with great causes, so many of which are, you which are institutions you're well familiar with. We've been a net liquidity source for LPs almost every year in the last decade, and so we are lucky to have slightly more favorable dynamics than some of our partners or some of our peers. Yeah, and you are an investor.

We just talked about it. We teased it before the break, but you are an investor in a number of Elon Musk's companies including XAI, SpaceX, as well. We know today was his last day as a special government employee. I want to get your thoughts on that and the fact that he's going to be setting his sights even more so back on his companies. First of all, we're very lucky to be in business with Elon. Sequoia led the Series A in PayPal a long time ago, so he's known Elon and Peter Teal and that whole community for a very long time. My partner Rulof Botha was the CFO at PayPal when they went public.

I think Elon's doing exactly what he said he would do, which is he's a special government employee. It's 130 days in. That time is up. He had a great interview with JD Vance and a good conversation with the president today. Personally, obviously, I think it would be great to have him back in the building with a bunch of his companies even more time than he had the last 130 days. But I think it's easy to miss the big picture here. In my opinion, Elon just did an incredible service

for our country and I wish more people had gratitude for him for that. We talk a lot about his companies, particularly Tesla on CNBC because it's public, but SpaceX had another major moment this week too with another Starship test flight. You've been invested in that company for a while. It's one of the most highly valued private companies in the world.

How do you think about the valuation of SpaceX? How does Starship fit in? We first invested in SpaceX in 2019. Starlink first dollar of revenue came in end of 2020. Starship is unbelievable. It's going to be the vehicle that takes us to Mars and beyond, makes us multi-planetary. But even if you didn't have Starship, just the Starlink financial profile alone, I think more than justifies, in my opinion, the current valuation. And so I am unbelievably optimistic about Starship, and I think we'll see... I think that Starship will have a big impact faster than people realize.

And what we've been seeing is a testing phase. SpaceX is... And Elon is willing to test in public, which I find pretty amazing. But if anything, I think the valuation of SpaceX right now is maybe even conservative. Wow. Okay. So you are a frontier technology investor. What's exciting to you right now? What are the technologies or capabilities? How does AI play into all of these different areas? I think every investor is excited about AI, so I'll talk about something else.

That sounds great. I mean, and don't want to underestimate, AI is very important, but other people are saying what everyone needs to hear. One of the things that, for me, has really become clear in the last six months as President Trump has focused on reshoring our supply chain.

I've been thinking a lot about how do you reshore the supply chain? I think the two best examples, in my opinion, of American companies that have really vertically integrated supply chains are SpaceX and Tesla. I actually, earlier today, was talking to a SpaceX employee who's head of supply chain and I asked how they've been affected by the tariffs and he said that they've barely been affected by any of the tariffs because they're so vertically integrated. And I think that that should be an aspiration for many more American companies.

And when I think about how you actually reshore the supply chain, I think it's really hard to do it where you go try to intersect technologies that are already very mature. Like I think it's really hard to go intersect traditional silicon fabrication at the absolute leading edge. You know, going and trying to catch up to TSMC because it's a moving target and each individual, you know, facility at the leading edge is close to a hundred billion dollars or more of CapEx. I think what we have to do, like if you look at the way SpaceX became so successful or Tesla, Elon identified new areas that were emerging and was able to kind of be at the forefront

of development of those areas and kind of build the supply chain as he went. And so for me, I'm thinking a lot about what are the other areas where we need to kind of intersect the future right now? And I'd say the two areas that I'm really focused on are one drones. So I'm an investor in an FPV drone company called Neuros and a couple other drone companies. I think there's an opportunity there to really build like a vertically integrated

supply chain all the way down to just raw ingredients. It will take a decade to do that but I think it's essential for America and the West. And the other area is silicon Photonics. So everyone knows about silicon. Almost everything we do with silicon today is electronics, where it's electrons moving around in the silicon. Something that's, we're finally starting to hit a new era where we're going from electronics to photonics. This has applications to everything from how you move data from GPU to GPU,

or how you move data in data centers to sensors, how you have lidars for drones, all sorts of things. But I think when we look back on the next 50 years, Silicon Photonics will be one of the things that we view as a real revolution. Wow. Sean Maguire, it's great to speak to you. Thank you for having me. Sounds like more of a focus on supply chain, more of a focus on hardware, the convergence of hardware and software.

Yeah, it did. Alright, appreciate it. Sean McGuire of Sequoia. John? Good stuff, more to come. Well, May was a big bounce back month for the markets, especially big tech. Six of the Magnificent Seven names higher for the month. Only Apple was lower.

Nvidia and Tesla both up more than 20 percent. So will this tech comeback continue in June? We'll look at it next on Overtime. Welcome back to Overtime. May brought a comeback, not just for the major averages, also for the Mag-7. Senior Markets commentator Mike Santoli is with me now for a look at whether this might stick, Mike.

It's pretty pronounced. I mean, and there's been obviously, John, this ebb and flow to leadership from the mega cap growth sector that the mag seven represents. Take a look here at mag seven relative to the broad market in the form of the equal weighted S&P 500. Now the peak was in the first quarter that earlier peak is from July of last year. We raced ahead when we kind of had that year end rally. And then if you remember of course those growth stocks actually started to roll over before the broad market did and before we got the tariff scare.

And so they were farther along. So we've picked up again from here. One of the reasons, the facts that says that the mag seven earnings first quarter, 27% growth as a group, it was expected to be 16. So as much as we're talking about a broadening out of earnings growth, they're still dominating by that score. And I do think it's also significant though, that within the mag seven, massive divergences. You know, we talked about Apple's weakness,

Alphabet has also been a laggard for a while, and that contrasts with some of the other winners, as you see here, that really have been carrying things. That's probably more healthy than just people buying these things as a block, at least for now. Well, it's weird having you standing, sitting here instead of standing in front of the television. I like it though, it's like we're talking to real people.

So, one of the things I notice about this fear around the Mag-7 is that there's no external, sort of outside the US force yet, that is threatening to compete with them. In the AI conversation, it's, well, maybe Amazon's gonna move in on Google or Microsoft, with the help of OpenAI is gonna, so in a way, it isn't that bullish, perhaps,

for the group of large stocks, because it's not like, aside from maybe a little bit of Huawei, around, you know, Nvidia having access to China on the edges, right? That's a big part of the explanation is that they are perceived rationally as being insulated from a lot of what's bothering the rest of the market in terms of trade flows. Now, maybe you'd want to put a little bit of a note in there and say, we have a massive services trade surplus because of these companies, because of financial companies.

You saw this talk in Germany about maybe they're going to tax some of the U.S. social media companies for their earnings. So it seems like maybe those non-U.S. earnings streams are not perfectly protected from everything. But yeah, in terms of what we know right now, it feels like they do have much more predictability and they're getting the benefit of the doubt. All right, Mike, good to have you here. Well, time now for a CNBC News update with Pippa Stevens. Pippa?

Hey, John, COVID vaccines are still recommended for healthy children if their doctors approve. That's according to updated immunization schedules published Thursday by the CDC. And it contradicts Health Secretary Robert F. Kennedy Jr.'s announcement earlier this week in which he said healthy children and pregnant women didn't need the vaccine. The IRS collected a record-breaking $5.1 trillion in tax revenue for 2024, according to the tax agency's annual data book. That's a nearly 10 percent jump from the $4.7 trillion collected the year before. The IRS says it also closed half a million tax return audits,

resulting in $29 billion in additional tax. And PBS and one of its local affiliates today sued the Trump administration over the president's executive order looking to stop all funding to PBS and NPR, which filed a similar complaint earlier in the week. The suit argues that that order violates PBS's First Amendment rights and that the president doesn't have control over funding decisions made by the Corporation for Public Broadcasting, which is a non-government entity. Morgan, back to you. Pippa Stevens, thank you. Well, coming up, we've gotten earnings reports from a lot of

retailers over the past two weeks, many different views on the impact of tariffs. Up next, we're going to talk to the CFO of Home Depot about that and housing and much, much more as Closing Bell Overtime continues from the Reagan National Economic Forum. Stay with us. Welcome to Closing Bell Overtime. Home Depot shares are down about 3% since reporting earnings on May 20th, but the company said then it does not plan to raise prices for tariffs. It's a different stance, it's a different strategy from some of the other retailers we've heard from in this earnings season.

So how is the company diversifying its supply chain and what is it seeing from the consumer right now? Well, joining me now and in a CNBC exclusive is Home Depot CFO. He is a CNBC CFO council member, Richard McPhail. Richard, it's great to speak with you. Great to speak with you. Thanks for having me, Morgan. Let's start right there because it did get a lot of attention when you released earnings

a week and a half ago. The tariff strategy or I should say the strategy to not react to tariffs and instead take market share. Well, it's important to know that over 50% of the products that we sell, we source in the United States. And over the last decade, we've had a strategy of diversifying our supply base. You know, we have exceptional relationships

with our suppliers, and they've worked hand in hand with our merchants over that period of time to truly diversify the footprint. And so we're in a position now where within 12 months we expect that no single country outside the United States will represent more than 10% of the products that we purchase. Which is a pretty incredible stat. Are you also investing more into the U.S. in terms of the supply chain as well simultaneously? Look, that's coming and coming gradually.

We are seeing certain categories that have migrated back to the US that might surprise you. Power tools manufactured in the United States, luxury vinyl tile manufactured in the United States. Look, diversification is good business and we'll keep pushing there, but we feel like we're in a great spot and we have to credit our merchandising team

and our amazing supplier partners who we want them to win with us. And we've done that for over a decade and we feel like they put us in a great position. So what are you seeing across the home improvement landscape? Cause you cater to homeowners and renters, but you also cater to pros as well.

And perhaps that business has been a little more sluggish. Well, start with the consumer. So our consumer is the homeowner and they're in really solid financial position. You think about it, they're employed, they've enjoyed strong income growth over the last few years and they've seen their home prices increased by over 50% since 2019. That means they're sitting on 11 trillion in tappable equity and so the means to spend is there,

and they're engaged in home improvement. At the same time, when you think about housing more broadly, look, we know there are challenges in housing. Affordability is an all-time low. And at the root of that is this deficit in housing. We're facing one of the largest deficits we ever have as a nation. We think that we're somewhere between

three and four million homes short of where we need to be. And so we're here to talk to people about what we can do to encourage home building and close that gap. So that is part of your message here at the Reagan Economic Forum. What can people do? And how much of this hinges on rates coming down? Right.

Well, so again, we listen to our customers. Half of our business is generated by sales to the professional contractor. We sell to over nine million pros across the nation. These are nine million small businesses that we help support. And so when we talk to them about the barriers out there, they say the number one barrier is the skilled

labor gap in the United States. And so simply put, we don't have enough people to get the job done. 95% of our pro customers tell us they can't find enough labor to do the job. And so we've stepped in and just to try to do our part, created a program called Path to Pro. It's a training program, it's a networking program between construction firms and job seekers. And we've trained and certified and placed over 300,000 pros into the construction industry. We can't do it all ourselves.

Look, there's reform that's necessary in permitting, in zoning. Those barriers are only becoming more tough. But as a nation, if we're gonna keep the cost of housing low, which is important to us and always has been, we're gonna have to build more homes. We're gonna have to support those home builders. Permitting, zoning, we've been talking about that. That's come up here in terms of policy

and this notion of deregulation here at this forum. Are you seeing, are you tracking immigration as well and some of the shifts we've seen there too, as you do look to get more workers out into the workforce who can become Home Depot customers? Look, we just think there is an untapped source of labor in the U.S. that is waiting to be told, this is a great job.

Working on the housing stock in the United States, think about this, the housing stock of the US is worth $50 trillion. Over 50% of it is over 40 years old. That demand for home improvement, for people maintaining, improving, and building our homes is never gonna go away. And so just think about that source of jobs

for folks across the nation. That's what we're excited about supporting. All right. Richard McPhail, CFO of Home Depot. It's great to speak with you here. Thank you. Great. Great to be here. Thanks, Morgan. All right. John? Yeah, and more ahead.

Well, Netflix shares have had a blockbuster run this year, and now its bet on live content like tomorrow's big fan event might help drive the next leg of growth. We've got details straight ahead. And later, Fortress Vice Chairman and former Wells Fargo CEO Tim Sloan on what high bond yields are doing to real estate investments. We'll be right back.

Welcome back to Overtime. Check out shares of Netflix up more than 30% this year and a standing six-fold over the last three. And Wall Street's getting even more bullish. Bank of America hiking its price target from $1,175 a share to $1,490. That comes on the heels of Thursday's price target increases from Citi and from Evercore ISI.

Now the growth of Netflix's live events business is one of the big reasons analysts are so optimistic, something Netflix is doubling down on with its highly anticipated live fan fest tomorrow. Julia Borson here now. Julia, are these things moneymakers? Well, I think it's all about promoting and getting those fans engaged with what Netflix is putting on its platform. And that engagement means subscribers and it also means ad dollars. So the big fan event, which is happening tomorrow is called to dumb. It's going to be hosted here in Los Angeles at the Kia forum.

It's going to showcase some big names, Lady Gaga, the Dallas Cowboy cheerleaders and WWE wrestlers, along with stars from hits, including squid game and stranger things. Now for the first time to dumb will be live streamed on Netflix. Now, in the past, they've hosted To Dumb events, but they've been more like a fan convention with clips shared on YouTube and social. But after the 2023 To Dumb drew more than 78 million views

across Netflix's social channels, the company decided to turn it into its own live entertainment event. Now, this plays into Netflix's increasing focus on live, both for viewers and for advertisers. It also shows its focus on building franchises, franchises such as Stranger Things now having a Broadway show. Bridgerton has related events and products.

It's all about keeping consumers engaged after they're done binging their favorite show. That engagement reduced the risk of turn. Now, Netflix shares are up about 82% in the past year, but 70% of analysts still have a buy rating on the stock. 28% have a hold. They are bullish on Netflix's content, driving subscriber engagement and value for Netflix's new ad business. Now, that ad tier enables more subscribers to watch at a lower price. All those additional viewers give Netflix more reason to invest in content.

Back over to you. Julia, are we seeing a new phenomenon in live events that are actually meant to drive social media sharing, kind of like what awards ceremonies used to be? I mean, Miley Cyrus had this album release TikTok thing where everybody had their phones out and it seemed like the whole purpose was for people to have their phones out,

making TikToks to drive interest in the album. Is this Netflix live thing similar? Well, look, I think the original to them was definitely part of that. What they did is they hosted these big events, including a couple of them, which were in Brazil, and they saw such massive in-person engagement. And that in-person engagement drove huge social awareness. What they saw is not only should they use this as a marketing

event for people in person and then on social, they should use this to additionally create content that people can sit on their couch and watch in real time. I think it's also really important to show to advertisers that it's not just their couch and watch in real time. I think it's also really important to show to advertisers that it's not just that they're investing in these football games or WWE or other live events, that they're finding lots of different opportunities to create live content, which of course, drives very valuable engagement for advertisers.

All right, Julia Borsten, thank you. Well, up next,, Fortress Vice Chairman and former Wells Fargo CEO, Timothy Sloan, on where he's finding the biggest opportunities to invest in real estate right now. And as we head to break, here's a look at the big sector winners this month. Overtime, we'll be right back. Welcome back to Overtime. Regeneron, the worst performer in the S&P 500 today,

after a late stage trial of an experimental respiratory drug Welcome back to overtime. Regeneron, the worst performer in the S&P 500 today, after a late stage trial of an experimental respiratory drug, it was developing with Sanofi, failed to meet all of its goals. The treatment had been touted as a potential blockbuster drug. The companies will determine next steps for that drug after discussing the data with regulators. after discussing the data with regulators.

Alright, well I'm still here at the Reagan National Economic Forum and joining me now is Timothy Sloan of Fortress Investment Group. And Tim, it's great to speak with you because not only are you the vice chair of the investment firm, but you also run all things real estate. So I want to start there with you. Because Fortress, $50 billion AUM and 18 billion, specifically in real estate. Walk me through the real estate portfolio and what's compelling, what's attractive right now?

Yeah, so one of the real strengths of Fortress is even within that $50 billion, we're a very diversified asset manager and real estate is a big part of what we do. We have funds in Japan that invest in real estate equity. We've got a non-performing loan fund in Europe. And then in the US, we focus on both debt and equity. And then we also have some REITs and we also have some sale lease back,

net lease vehicles. So we've got a really, really broad portfolio and see kind of across the landscape, which makes it really interesting. Yeah. Multifamily and housing, other areas of commercial real estate. What's exciting right now and why?

Everything's exciting. I've been around real estate for most of my career. I've been through four real estate cycles. Every time I go through a cycle, I say, oh my gosh, this is the greatest opportunity that I've ever seen. And that's what we're going through right now. The cycles are caused by different factors. This one was primarily caused by the fact

that rates were next to zero for a number of years. And that meant that any property that was purchased during that period, or a loan that was made, is probably in a bit of trouble. Now the backdrop for that is that from an investing side today, or a lending side today, the values are down to more reasonable levels. They're down 10 to 30% for well performing properties.

Again, just because of rates. Office is absolutely different. We can talk about that. That's a lot of carnage going on there. But what's also really interesting is that because this cycle is not caused by an economic downturn or massive overbuilding, the underlying property performance

is actually pretty good. So you've got lower values, better operating performance. And then I think the other factor that we talked about a little bit earlier was that there is a $4 trillion maturity wall that's occurring over the next few years, and that creates opportunity from a lending standpoint. So we are very focused across the real estate landscape. We like debt and we like equity. It's interesting to hear you say that because so many of the conversations we have is that you know we're in a high or we'll say elevated versus recent years

rate environment and that puts pressure on real estate but for a firm such as Fortress that means an opportunity specifically on the distressed side. That's right. Well, and sometimes not even distress. I mean, most of the banks in this country have said loud and clear, we want to reduce our real estate exposure. So that creates an opportunity for us to make very high quality, first mortgage, senior loans to properties that are performing well by asking the customer, the borrower,

to bring in a little bit of equity and we've got a very well performing loan and that's an exciting part of our business. So you said carnage in office. Where's the carnage? Where are you seeing it? Well, clearly there's been a lot of cross-currency that have created the carnage in office.

I think what you're seeing is somewhat similar to what we went through with large malls when the impact of online buying occurred, where B and C quality malls were just worth a lot less. Sometimes they were actually worthless and they were really only worth the land that was under them. What we're seeing right now in office is a bifurcation based upon sub markets. So for example, in New York, the office markets in and around the transportation hubs of Penn station or Grand Central station are actually performing well. Now values are down, but leases are being made, properties are being sold at relatively reasonable prices.

Another great example is in Los Angeles, where downtown Los Angeles, the traditional downtown, is under a lot of stress. If you go 10 miles to the west in Century City or Culver City, the market's fine. In fact, they're building a new office building, so it's become much, much more localized. Because we are sitting an hour outside of LA. I know the Pacific Coast Highway has been opened back up, but you're still seeing all of the cleanup, all of the rebuilding. I do want to get your thoughts on how you assess risk when it comes to natural disasters, when it comes to fires and being based in LA, what that rebuilding effort actually looks like.

Well, I think it's slow, right? And it's slow because it's complicated. There are a lot of folks involved. There are state laws, there are local laws. They've got to deal with, what are you gonna do with this contaminated soil? And then homeowners have to decide whether or not they want to rebuild

based upon where they are in their lives or whether they have insurance. And so it's gonna take a number of years to really rebuild. But your point about taking into consideration the risk of fires or hurricanes if you're in Florida or floods if you're on other parts of the country is a really, really important part of our underlying credit analysis. We absolutely take that into consideration. In some cases, there are areas where we're just not as active because we're concerned

about the underlying risk of weather. Tim Sloan, of Fortress Investment Group. It's great to speak with you. Thank you. Thank you, Morgan. See you. Well, up next, much more of my interview with JP Morgan, CEO Jamie Dimon, including what the government needs to fix to get back to 3% annual growth.

Stay with us. China is a potential adversary. They're doing a lot of things well. They have a lot of problems. What I really worry about is us. Can we get our own act together, our own values, our own capability, our own management? What you heard today on stage was the amount of mismanagement is extraordinary, by state, by city,

for pensions, for, and that stuff is gonna kill us. We need to be more efficient, and the government has to demonstrate its competency. If government doesn't demonstrate its competency, the underpinning of being a civil citizen doesn't work. They think we're stealing their money. We've got to fix our permitting, our regulations, our immigration, our taxation, which I think they're on their way. We have to fix our inner city schools, our health care system. If we fix those things, we can grow 3% a year and all these

problems will disappear. Well that was JP Morgan CEO Jamie Dimon on stage with me here at the Reagan National Economic Forum earlier today to boil it down his main message the U.S. has problems right now this time is different he said but none of it is insurmountable he was critical of the government but also hopeful in the ability to fix what's wrong and And John, 30-minute-plus conversation, we covered it all. Tax policy, bond vigilantes. He's issued a stark warning about the bond market, given the national debt load. We talked about Glass Lewis and ISS. He called them a cancer.

About the public markets. About dollar as reserve currency. And basically issued a warning there, too, saying if we don't fix some of these issues, that's gonna go away, but a lot of ground covered. Also AI, talked about how JP Morgan has been adopting and using AI, but said he doesn't expect that to be deflationary, at least in the next couple of years. What a great interview.

I had people sending me messages about it. Stepping back, one of the things I found most fascinating is how loose Jamie Dimon was with you at a time when Americans are highly distrustful of institutions. But that doesn't mean banks primarily this time, or billionaires. Yeah, and I think that's sort of the takeaway here as well, is when you're talking about Jamie Dimon, you're talking about one of the most successful CEOs in corporate America over the course of almost two decades, a four trillion dollar bank, the largest in America.

He is on the front lines in terms of economic trends, policy trends, money flows. So when he speaks, people tend to listen and tend to listen very closely. I'd also just note John I did ask him at the end what it would take for him to consider Public service and he basically said if I could win but then he also said but he doesn't think he can win But that got some attention here, too

All right Well, I think a lot of people would run for president if they knew they could win that would be I'm making a lot more fun Morgan great stuff. I'll be great to see you back here. It was a wild week, a wild month. More coming up on the other side. That'll do it for overtime.