Closing Bell - Closing Bell Overtime: Market Trends, Tech in Q2, and Tariff Impact 4/1/25

Episode Date: April 1, 2025

Adam Crisafulli, Vital Knowledge Founder, and Bob Doll, Crossmark Global Investments CEO & CIO, break down the latest market developments. Meghan Cassella reports on the latest tariff updates, while Eric Jackson, EMJ Capital Founder, discusses the outlook for tech in Q2 and why he sold Nvidia. Freeport-McMoRan CEO Kathleen Quirk weighs in on gold, copper, and the impact of tariffs. Our Eunice Yoon has her latest on-the-ground reporting in China with a China Lens on auto parts. Former Ford CEO Mark Fields provides insight on auto tariffs, and Vanguard Global Chief Economist Joe Davis discusses the broader economic impact of tariffs.

That's the end of regulation. Diana Shipping ringing the closing bell. The New York Stock Exchange, Eagle Financial Services doing the honors at the NASDAQ. A new quarter bringing new market swings with a Dow trading in a more than 600 point range. The major averages ending mixed ahead of tomorrow's tariff announcements. That is the scorecard on Wall Street,

but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. And we are exactly 24 hours away from President Trump's tariff announcement in the Rose Garden. And we are getting you set for that news with a great lineup of experts,

including Vanguard's global chief economist, Joe Davis, former Ford CEO Mark Fields, and the CEO of Metals and M Freeport Mac Moran Kathleen Cork And also ahead tech investor Eric Jackson joins us with his playbook for technology stocks in the second quarter And why he just made a big move Around Nvidia. Well, let's get to today's market action with vital knowledge founder Adam Chris of fully and cross mark global investments CEO and CIO Bob Dahl. Great to have you both here Adam I'm gonna kick this off with you because it was another ping-pong day for the major averages. We did finish here mixed it looks like the S&P up

fractionally maybe 56 33 as we shake out here the Nasdaq higher but the Dow ever so slightly lower. What are you watching? Is everything just sort of hinging on tariffs and news we get out of the White House come 24 hours from now? Yes, obviously the tariff details are gonna be crucial. You know, but I think over the last several weeks and months as we've been debating tariffs and as we've seen some tariffs get put in place

and others get rescinded, you know, the economy is already responding to it. We saw that today in some of the data, specifically manufacturing ISM, where we definitely are noticing a pullback in growth. We're seeing a firming of inflation. And so I think while we should be focused on tariffs and tomorrow will be very important, the economy is already responding to it. And I think that's kind of the real disconnect.

In the immediate term, it could very well be the case that tomorrow afternoon is a relief for about 24 to 48 hours. Then the focus will shift immediately back to the economy. And then we're just a week away, a week and a half away from the start of running season. And it's likely companies are going to sound a little bit more cautious than they did a few months ago on the January Q4 call. So I think there's two important themes occurring in the market right now.

All right, I wanna get your thoughts on this, Bob, especially as we've seen treasury yields continue to move lower. We've had a big rally in the bond market in recent days, in recent weeks. You know, you had the Fed's Tom Barkin saying on CNBC yesterday and then making further comments this morning that he sees the bond market is pricing in a rising risk of recession after basically hinting

at a rising risk of stagflation in his comments on CNBC yesterday. How do you see what's happening there and how much are equities poised to take their cue from what we're seeing in treasuries? Well, I think the liquidity bazooka, as we've called it, has helped push rates down. I firmly agree with Adam. There are two things going on here. One is we are at maximum uncertainty. Hopefully tomorrow afternoon there's a little less uncertainty.

That's good news. But the problem is the uncertainty's caused people to pull their horns back in. That's part of why bond yields have moved uh... why equities have moved down and why people are concerned that earnings risk is in front of us uh... and therefore that's the other shoe that uh... gonna drop so let's hope we get less uncertainty after uh... twenty four hours from now so that we can uh... pick that against this uh... inevitably slowing economy

in the city of uncertainty, Adam, you've got three tariff scenarios. Your base case is 15 to 20% on nearly all imports, and then there's a slightly better and then a worse. But to what degree are you pricing in escalations after this announcement? And do you think the market is? Yeah, I mean, I think a lot will come down to the details. So are they all going to be implemented immediately?

The White House today suggested that you will see immediate implementation. Is there a period of negotiation? If Trump sounds very open, the holding of negotiations in the coming weeks and months, perhaps you see other countries withhold their immediate retaliatory actions. But definitely retaliation is gonna be

a huge risk to all this. So I do think in the immediate term, a lot of the press recently, the preview articles have been quite negative, and so you might see a brief relief, but the tariff agenda that's being pursued is very aggressive, and at the least, you're going to see a near and medium term hit to the economy, downside on growth

and then upside on inflation. That's gonna be a real risk for equities over the coming months and quarters. And then, Bob, in the longer term, investors seem to perhaps be assuming that demand in the U.S. remains strong post-tariff. But it's unclear to me how many manufacturers are going to be willing to make a decades-long manufacturing commitment in the U.S. if the U.S. consumer weakens? I mean, might they decide to just kind of wait out the Trump years and see if the next president has a change of heart? Hopefully it doesn't last that long. The consumer is definitely pulling in their horns already. You see that in the sentiment numbers

and the spending numbers and the jobs numbers. So we've got to get past this period. Look, the hope is that we're taking the pain now tariffs and the gain deregulation and tax cuts are next down the road. I wish it were that simple, but that's what the administration seems to be putting their hopes on. All right.

I mean, this is a resetting potentially of America's economic relationship with the rest of the world. We'll see how all of this shakes out tomorrow and beyond. Adam and Bob, thanks for kicking off the hour with us with a mixed picture for stocks. Now, as we mentioned, we are exactly 24 hours away from President Trump's Rose Garden announcement of the next round of tariffs, the reciprocal tariffs, aka liberation day. Let's get to Megan Casella at the White House with the latest. Megan. Morgan, that's right. aka liberation day. Let's get to Megan Kasella at the White House with the latest. Megan?

Morgan, that's right. 24 hours away and yet from something hugely consequential and yet I am told that everything remains fluid. The details are still under discussion and that all of these different options remain on the table. I'll tell you what we know which is that 4 p.m. tomorrow we're expecting the full cabinet in attendance at the Rose Garden for President Trump to announce these details. I'm also told some CEOs have been invited and will be in attendance at the Rose Garden for President Trump to announce these details. I'm also told some CEOs have been invited and will be in attendance as well. Though when I tried to ask who that would be, I was told that it was a surprise.

We are expecting these to be country-based tariffs rather than sectoral, but we are not likely to get any specific details until then. I'm told they are even thinking about potentially briefing reporters in advance, and yet it all depends on whether the details are hammered out in time to do that. So everything really in flux but I am still told that there are three main options on the table, all of these still being considered.

The main one being that 20% blanket tariff on all imports or nearly all imports coming into the country though I have been told that one appears to be slightly less likely than these next two options that would be the tiered tariff rates, meaning a few different buckets that countries could fall into, the third one being a customized tariff rate on a country by country basis. So all of those still on the table. I was told officials continue to meet on this today, that they will continue to meet on it tomorrow as well, and the decision could come down to the wire before that 4 p.m. event. I also was told today that there is one other piece under discussion and that's the possibility of revoking the de minimis trade loophole against China. Now this is something

remember that allows small packages to come in without paying a tariff. It's something President Trump tried to pause back in February, tried to revoke back in February. There were some administrative issues with it so it's been temporarily paused starting tomorrow. They could formally revoke that. I'm told that's one option that's under active discussion that'll have big big implications for companies like Xi'an and Taimu as well as small businesses and small business platforms like Etsy as well. And then just before I toss it back to you guys I also want to flag just in the last few minutes CBS News putting

out a headline on TikTok saying that the tariffs aren't the only story in town tomorrow, that President Trump is also considering a final proposal for TikTok tomorrow, that there will be a meeting in the Oval Office, including the Vice President, the Commerce Secretary, the National Security Advisor, and that they're finalizing plans for potential investors that could include Blackstone and Oracle, as well as a long list of potentially blue chip private equity firms and venture capital firms as well. So more to watch on that. We'll have to see how the timing lands with the tariff event. But for now, guys, a lot to watch between now and four p.m. tomorrow.

A lot to look forward to. Megan Kusala, thank you. The other thing to keep an eye on is you've got that two month investigation is due tonight from American officials into the phase one deal that committed China to buying an extra two billion dollars worth of U.S. goods. All of the official data that we've seen and has been tracked by investors so far has signaled that China did not meet those expectations. And those go back a number of years.

So that could be another piece that's not getting talked about ahead of these tariffs tomorrow. Interesting. We will see. Well, we've got a news alert on Apple. Steve Kovac has the details. Steve? Hey there, John. This one's an Apple card. The Wall Street Journal just reported a few minutes ago that Visa has offered Apple $100 million to take over the payment

structure for the Apple card. Right now they use MasterCard. And we've been talking about this for at least two years now. Goldman Sachs is the consumer bank behind this. As we know, Goldman Sachs is trying to get out of the consumer banking business and Apple is now looking for another banking partner to take over that business from them. But they also need a payments partner, whether that be Amex, which has been rumored to be in talks,

sticking with MasterCard or Visa. I reached out to my contact on Apple on this, haven't heard back yet, and we're also out to Visa and MasterCard. But this is gonna take another couple years to kind of shake out who eventually wins that Apple Card business from Goldman, and potentially now it sounds like MasterCard

is in the mix as well. Well, we'll see who's everywhere that Apple wants to be. Steve Kovach, thanks. Well, let's turn now to senior markets commentator Mike Santoli for a look at the bond market as yields fall through a key threshold. Mike? Yeah, John, the 10-year treasury yield briefly today went below 415, and that's a level that has over the last couple of years acted as a little bit of a threshold, let's say. I'll just

kind of show you where we have come from here. The couple of times that we went appreciably below that in the last couple of years, this was in last December, that's when the Fed rhetorically pivoted, said we're probably gonna be cutting soon, the market got overexcited about it, and they drove rates down. Then you see we popped back up. The other time, starting in late summer,

we had that severe economic growth scare, along with the Fed essentially capitulating and saying we're gonna cut rates. So what the takeaway for me is, I'm not sure if you were an optimist on stocks or wanting to be bullish about the economy if you'd want to see 10 year treasury yields rush much lower from here in the absence of let's say the Fed signaling they're going to cut or anything like that because it seems as if right now it's mostly responding to fears that growth is going to slow further than anything else. Now take a look here at the picture of the one year ahead inflation projection embedded

in the bond market. This is from the Swaps Market Bank of America showed this today. So we're talking about pricing in as the tariff talk has heated up three and a quarter percent one year forward CPI thereabouts let's say. Now what's interesting is that the bond market beyond the year is not suggesting we're going to have this kind of inflation spiral, self-sustaining high inflation from there. It's a little bit more moderate. So that would imply we're kind of bracing for a price reset higher if we get a lot of tariffs soon. And then after that, maybe we have the growth effects

drag down inflation and we're concerned with other things. So at least that's how the market is positioned at the outset here, John. Mike, spell it out for me. What happens mechanically, pressure wise, in the market if yields fall further but the Fed doesn't cut? Well, what it essentially does is, well, flattens out the yield curve and when the yield curve is flat or inverted, it usually means the market is saying that the Fed's too late. The Fed is keeping short-term rates more elevated than the economy demands at the moment.

And obviously it creates pressures on the banking system. And usually that's a slow growth environment. Now, that being said, we just came out of a couple of years when we had a persistently flat or inverted yield curve, we did not get a recession. There were other factors that were really supporting it we had high nominal growth so maybe the signal is not so fine-tuned anymore but that would be the general message of the market here that it basically saying we're pricing in rough times or at least pressure on the economy and inflation

not worried too much about higher inflation in the moment. Maybe the ice the market's skating on stays thick. Mike, thanks. When we come back, investor Eric Jackson tells us why he decided to sell NVIDIA and buy a new name in the Chinese internet space. And we're counting down to tomorrow's tariff announcement by President Trump in the Rose Garden. We talked to Vanguard's chief economist

along with former Ford CEO Mark Fields and the CEO of Freeport MacMoran. This is the largest copper producer in the world and in the US about the tariff impact on their industries. Overtime is back in two. Welcome back to overtime. The Nasdaq bouncing today but getting slammed in the first quarter. Our next guest says a number of areas of tech got washed out in Q1 and should outperform the rest of the year.

Eric Jackson, EMJ Capital founder and president joins us now. Eric, good to see you. Before we talk about what you're buying, you sold NVIDIA Bold. So how are you valuing it now? And where would you buy back in to make sure that doesn't become a big mistake? Hey, John.

Well, it was the last of the Mag 7 names that I held long. I kind of steered clear out of a lot of them. But it just obviously hasn't been acting well since earnings. I still think it's a great company, great products. The roadmap that they just recently presented just a week or two ago was fantastic. It's just I don't like the charts here and what would cause me to want to buy in more. I think it's just like a general recovery. A lot of the Meg-7 names look like they've stabilized. The Nasdaq looks like it's stabilized here and I do think it's just like a general recovery a lot of the mag seven names look like they've stabilized the Nasdaq's looks like it's stabilized

Here and I do think it's poised to rally But I think as you mentioned off the top that there's there's probably better gains to be made in the near term in q2 From some sectors of smaller cap stocks rather than the big mag seven including in video One of the smaller caps that you like is Peloton. Those bikes are manufactured overseas and we got tariffs coming, why do you like it? It's just the valuation story with them. They really have been assumed to be kind of dead. They have this sort of steady state,

two million subscribers though, that just love the service and are sticking with it. And any growth that they see, tariff or not, is sort of a bonus. They have a new CEO just started at the beginning of January. There's a lot of fact that they could potentially still cut out of this company.

I think they're gonna surprise people with profits as we go through this year. Eric, do you still like Chinese tech, especially given the rally we've seen in some of these names recently? I do, and I recently bought Alibaba. I think actually Alibaba is a better AI play than Nvidia for at least Q2 and perhaps the rest of the year.

I think Joe Tsai's comments where he put his old CFO hat on, talking about more reasonable CapEx spend was smart. I mean, there are a lot of things things that it's still very undervalued, like a lot of these Chinese internet names. I think they can surprise people with deep seek type announcements of their own and maybe an Alipay or a financial kind of announcement as we go throughout the year too. There's other great sectors as well.

I think crypto has been battered. Ethereum was down 43% in Q1. I recently bought ETH, the ETF there for Ethereum. Bitcoin is still down 10% year to date. I bought some iBit recently. I like a name like DeFi Technologies, which is a small cap, low, kind of multiple crypto ETF player in Europe. There's that, there's quantum names are I think still interesting after the quantum day last week. Howard Lutnick, you know, a couple weeks ago made some extensive comments about the threat of quantum computing and investing in post quantum cryptography and that's why I went on a small cap named BTQ technologies in that area. Interesting.

Tesla, I know you were talking about Mag 7 and Steering Clear before, but is there something that would make that name compelling, especially as we are talking about things like auto tariffs and we know Tesla is an AI play in its own right, but also a vertically integrated supply chain here in the US? I mean, I think the good news is it's decelerated and it's come down almost as quick as it went up after the election.

I think I am more interested in just sort of seeing that the bottom truly is in. We've gotten a few fake outs with, I think, all the market and the Mag-7 names in the first quarter, Morgan. So I think if there is signs of stabilization, obviously today was a great day for the stock, but you wanna see two or three more days like today. I think that then it would start to become more attractive, you know, and we'll get past these headlines

and, you know, the latest of whatever Elon's doing and all that hanging over the stock. Okay, Eric Jackson, you just covered a lot of names. Appreciate it. Thank you. When we come back, gold just posted its best quarter since 1986 and copper prices are surging as well. We will talk to the CEO of Mining Giant, Freeport MacMoran

about what's driving the price action and how tariffs and other potential policies could factor in. And later we'll ask former Ford CEO Mark Fields if automakers will have to raise prices given the latest round of tariffs coming. Be right back. Yeah. Yeah.

Yeah. Welcome back. Gold's coming off its best quarter since 1986. Copper notched its best quarter in nearly five years. That's helped stocks like Freeport, Mac, and Rand outperform the broader market ahead of tomorrow's tariffs announcement. Joining us now in an exclusive interview is Kathleen Quirk, Freeport-McMoran CEO. Kathleen, it's great to have you on the show. Welcome.

Thank you, Morgan. Great to be here. A lot to cover with you, but I am going to start with copper specifically because if you look at a chart of CME of Comex copper futures that trade here in the US versus LME, there's been a dramatic divergence in the last call at month, month and a half, with US copper prices outperforming their British counterparts. What is driving this? How much of this is speculation that we could see tariffs placed on domestic copper? How much of this is the possibility of a critical mineral designation? And how does all of it speak to the role that Freeport-MacMoran could play

as the largest producer here in the U.S.? Historically, the LME and the COMEX prices have traded pretty close to each other. And as you say, it's blown out over the last several weeks. And it's currently about 60 cents per pound premium in the US over the international price. And for the most part, that reflects a lot of product coming to the US, demand in the US, into these exchanges

because people are trying to get in front of potential tariffs. Of course, no one knows what the actual tariff would be, but currently it's trading at a premium somewhere on the order of 13%. And Freeport benefits from that right now because we are a major seller of copper in the U.S. We produce a significant amount of copper in the U.S. that stays in the U.S. We have, we're fully integrated. We have smelters, refinery, rod plants, and so Freeport is benefiting at current levels to the tune of about $800 million per annum extra as a result of this premium.

It sounds like you would be, and I guess the devil's in the details, but you would potentially be in support of tariffs to bolster domestic production. Would you invest in further production here in the U.S. if we were to see something like that implemented? Well, in terms of the tariffs themselves, we'll just have to wait and see, and we're watching like everyone else, how they'll manifest themselves. But in terms of the focus on copper, we're very excited about the fact that copper is a critical mineral and has been for some time in our minds and around the world.

Copper's so essential when it comes to all the things dealing with electrification. And this country needs a lot more copper as we go forward. And today, Freeport supplies, we're America's copper champion, even though you hear us talking a lot about our operations internationally. We supply, we produced last year,

about 70% of the copper that was mined in the US. So we're a big producer in the US. And as we look forward, a lot of our growth plans involve investing in the US. We've got a variety of projects right in our backyard here in Arizona, where we're making investments. We're also leaning heavily into technology. And even though copper is a big beneficiary

of the increased demand from AI data centers, we're actually using AI in a lot of our operations now to recover more copper. So we plan to invest significantly in the US. We also have growth elsewhere, both in South America and of course in Indonesia, but we've got a significant pipeline of growth projects right in front of us here in the U.S. And we can do it more quickly than some others might be because a lot of our projects are

brownfield in nature. Okay. The critical mineral designation and this executive order that recently came out from President Trump that gave an honor roll mention to copper, what are the policy implications of that? Is it a permitting dynamic and a regulatory cut dynamic that enables you to be able to supply more quickly? I've read numbers as high as 29 years to bring a mine from start to finish online. Is that true? It's gotten more and more challenging to develop new mines. It takes a very long time. First of all, there haven't been any discoveries globally of significance in recent

years. And so when you do have drilling, that takes over many years to actually prove out the discovery, and then it takes a lot of time to develop the plans and the engineering to be able to actually move forward with construction. So your numbers, I mean, they can span a very long time, much longer than a decade, and that timeframe has gone out further and further.

So that's why at Freeport, we're so focused on these brownfield expansions because we're expanding existing mines. Kathleen, I see the upside to tariffs potentially for you given your large role in copper but what's your exposure to a potential construction slowdown if rates remain high and construction materials overall get more expensive? Well copper if you go back in history and look at copper's trading patterns its prices have tended

to track GDP growth. And so one of the things that we'll be watching in terms of these tariffs is, do they impact GDP growth, not just in the U.S. but globally? And so that'll be something that we'll monitor. We'll also be monitoring an effect that'll have on inflation. We as an industry have been, like many others others dealing with a lot of inflationary pressures, particularly here in the U.S. in recent years. We're just now coming out of that.

And so the last thing we want to see is a lot of inflation in our business. So we're watching both global growth impact, as you said, potential slowdown of growth coming from tariffs and how that will work out. But the thing that we're excited about in all of this is that the recognition more and more that copper is so important to our economy, so important to everyday lives. What we produce as a product is really needed

as we go forward for the economy. And it's got more of a secular demand push with copper than maybe historically it's been more cyclical. Yeah, infrastructure, electrification, we could go on down the list. Dr. Copper, Kathleen, it's great to have you on the show. Kathleen Quirk of Freeport-McMoran, please come back. Thank you.

Well, for another C-suite view on tariffs, I spoke with Braze co-founder and CEO Bill Magnuson, talking about the marketing and engagement company's plans to amp up its AI focus with the $325 million acquisition of offer fit. I also asked about the impact of tariffs on customer operations. Obviously, tariffs are more than just higher cost. They also can lead to a lot of processing delays at customs,

a lot of supply chains that get stretched out and start to become unpredictable. One of the things that we've definitely seen over the years is that that ability to both understand in real time, like what people matter, like what people care about the most, but also have agility in your program so that as the world is changing around you more quickly, you know, you're able to really respond and get the right information to people. You have tariffs coming in, might not be running as many discounts anytime soon because your cost of goods is going up and you know you got to be able to navigate through that. But it doesn't mean that that opportunity and that responsibility to communicate with

your customers isn't always on because ultimately you're building strong long-term relationships. You got to make sure that you're delivering in those moments that are you know in particular the ones that are most anxiety inducing for your customers. A lot of businesses getting ready to pivot, maybe tech can help. Well, it's time for a CNBC News Update with Courtney Rake. Courtney. Hi, John.

White House National Security Advisor Michael Walz and members of the National Security Council have used personal Gmail accounts for government business. That's according to a report from the Washington Post. It's the latest example of questionable security protocols following the Signal Group chat about military operations in Yemen that included the Atlantic editor Jeffrey Goldberg. NBC News has reached out to the White House for comment.

Senator Cory Booker is still delivering a speech on the Senate floor more than 20 hours after the New Jersey Democrat first took the podium at 7 p.m. Eastern time last night protesting the Trump administration's policies. The record for the longest Senate speech, Strom Thurmond of South Carolina, who spoke for over 24 hours against the Civil Rights Act in 1957. Tell health company Hims and Hers is planning to sell Eli Lilly's diabetes and weight loss drug ZipBound on its platform. The move comes ahead of restrictions on selling compounded drugs.

Shares of Hims and Hers closed up more than 5%. John, back over to you. Courtney, thank you. I want to know the secret to staying awake and talking for that long. Is it coffee? I think it's being a politician. Still to come, Vanguard's global chief economist joins us with a look at how tariffs could impact the macro picture and why he says some data points are showing signs of encouragement. And check out how two recent IPO movers finished up the day. Newsmax piling on more gains after yesterday's blockbuster debut. And CoreWeave getting a big lift today, finishing above its $40 IPO price.

We'll be right back. Welcome back. Mike Santelli returns for a look at the U.S. trade deficit. Mike. Yeah, Morgan, and some of the implications of the fact that the U.S. has been running such a big trade deficit for so long. So the bottom number here, that's the US current account deficit. This is like a four quarter rolling average.

This goes all the way back to the mid 60s. So you see as global trade proliferated, we were running big trade deficits. That's most of what goes into the current account balance. Now there's an offset, right? We buy more from the rest of the world. We save less than the rest of the world. The rest of the world saves more, exports to us.

They get a lot of our money They recycle it back into financial assets principally in the u.s. Finance things like treasury debt and all the rest of it the point here is simply that if tariff Policies are intended to radically reduce the trade deficit. You got to make up the difference somewhere You got to save more domestically or you're gonna deal with with less inflow into us financial assets maybe that means interest rates go higher it's not obviously necessarily all bad outcomes but there probably is an adjustment period in here and there's going to have to be some some offsets along the way that's of course if in fact our tariff policy and other things

do manage to narrow our trade deficit over time I love that you use this chart today Mike and I'll tell you why I was speaking to narrow our trade deficit over time. I love that you use this chart today, Mike. And I'll tell you why. I was speaking to a former trade official earlier today, and the point was made in that conversation that when you look at the trade deficit for the U.S., you're talking about selling assets to pay for your consumption, and that there has been no coincidence

that in countries like ours, where you've seen these ballooning and sustained trade deficits, you've also more recently seen this rise in populist movements. So it's gonna be very interesting to me to see how all of this shakes out tomorrow and beyond when we talk about the so-called dirty 15.

And as Kevin Hassett put it recently, the 10 to 15 countries that account for America's entire trillion dollar trade deficit and what happens? Right, no, obviously this has been building up for a very long period of time. For a lot of years, you know, essentially we had the strongest economy in the world with the greatest appetite to consume and the greatest openness to global trade. So therefore we ended up being kind of the consumer engine of the world.

Everybody wants to sell to us. If tariffs are just charging a toll for that, that's fine. If you really, really wanna move these curves erratically in a rapid way, okay, maybe there are good reasons to do that, but it also means that some of our deficits gonna be harder to finance, and maybe you have some other things you're gonna have to kind of adjust to along the way.

All right, Mike Santoli, thank you. Well, coming up next, we will head to Beijing for a look at how Chinese auto parts manufacturers are dealing with the latest round of tariffs coming and why so far they might not be doing what President Trump hoped would happen. And later, former Ford CEO Mark Fields on why American customers could expect

to see higher prices on the car lot. We'll be right back. We'll be right back. Welcome back to overtime. President Trump's 25% tariffs on foreign-made autos and auto parts set to take effect this week. And despite promises from the administration that overseas companies will eat the profit cut, some Chinese manufacturers say they're passing costs on to U.S. customers.

Our Eunice Yoon talked to suppliers in Beijing at an auto parts trade show. I'm going to a trade show here in Beijing focusing on auto parts. Car components are being targeted by President Trump in his latest round of tariffs. Let's see what the companies here have to say about that. I found Trump's tariffs on the minds of many of the 1,200 Chinese suppliers here, including Judy Zhang. Zhang's company supplies brake hoses for thousands of car models. After rounds of President Trump's tariffs, the duty on her product is 45 percent, but

she's pushed the whole amount onto her American customers. Very few manufacturers can do what we do, she says, or make as many types. A few feet away, Gao Zwenzuo makes engine mounts for, among others, Ford and GM cars. He's only paying five of the 45 percent. We don't have much room to compromise, he says. We don't have high margins. A lot of the spare parts you buy to fix your own car are made by Chinese manufacturers. The Chinese play an immensely important role in supplying auto parts retailers in the U.S.

Yet the higher the tariffs go, the harder it gets to push off the cost. For some customers, Zhang has agreed to split the next one half-half. Zuo is looking for other markets. It's depressing. We used to feel optimistic about the U.S. market, he says. We can't take orders that make us lose money. President Trump wants his tariffs to drive manufacturing from countries like China back to the U.S.

Yet neither Chinese manufacturer plans to build factories in America to avoid the tariffs. I have dozens of suppliers. It's not realistic to move them all to the U.S., he says. We aren't a big company, she says. We can't afford setting up an American factory. Younes joins us now from Beijing. Fascinating, Younes. One of your first China Lens packages for us looked at some manufacturers there who were looking at the prospect of having to make

these tradeoffs. Did you get the sense that their attitudes toward the U.S. market in general are shifting at all? Shifting slightly, but most of the people we spoke to said that they still very much wanted to sell into the United States. But I was really struck myself at how many of the suppliers said that they were pushing the costs onto the US consumers. We spoke to about eight to 10 of them, and they said that part of it is industry specific

because they're looking at auto parts. But I think another reason is because the supply chains have been entrenched here for so long that a lot of them have a specialty in a certain product. So like the lady with the brake hoses, when I was talking to her, she was really nerding out. She had this encyclopedic knowledge of brake hoses

and that gives them some leverage over pricing. Eunice Yoon, great reporting. Breaking news in the IPO world meantime, Steve Kovec has the details for us. Hi Steve. Hey there Morgan, Circle is filing to go public. This is a cryptocurrency company that works with a stable coin called the USDC. It's gonna file on the New York Stock Exchange

under the ticker CRCL. Let me just give you a little bit of the financials here in this S1. They're calling this reserve income for 2024, the full year, of $1.6 billion, $1.67 billion. That's largely tied to the USDC coin, that stable coin that it has in reserve, and some other revenue here, pretty small here, about $15 million in revenue for other products. It looks like also the company's profitable. They're showing a net income here of 155 million dollars for the full calendar year of 2024. But we got another IPO coming up after core weave last week. We'll be

following this one Morgan. What a difference 10 weeks makes for stable coins. Steve Kovac, thank you. After the break, much more on the impact of tariffs on the auto complex when we are joined by former Ford CEO, Mark Fields. ["The Daily Show"] ["The Daily Show"] Welcome back to Overtime Auto Sales. So a big spike in March as buyers rushed to secure deals ahead of President Trump's auto tariffs.

Joining us now is Mark Field, former Ford CEO and a CNBC contributor. He's currently a senior advisor at TPG Capital. Mark, it's great to have you on. We're expecting these 25% tariffs on all imported vehicles to go into effect, I guess, by Thursday morning. Have we seen a pull forward in demand from consumers? And how much does that speak to the anticipation that we could see higher prices? Yeah, Morgan, I think we absolutely saw a pull forward

in March. You saw it literally in some of the commentary from the automakers where in the case of a couple of automakers like Ford and others, they were up double digits in terms of retail sales in March, whereas previously in January and February, they may have been up a couple of percentage points. So I think you're absolutely seeing

consumers trying to lock in prices and also beat the tariffs. And also I think another thing they're trying to do, and nobody's really talking about this, is also it's about the residual value of the vehicle when it comes time for them to sell it in a couple of years. Because if you wait and you're buying a vehicle that is tariffed, that has a higher price, what happens if that tariff is reduced while you own the vehicle?

Then you're going to get a real shock when it comes time for trade in time. So I absolutely believe you've seen customers pull forward. I think you're going to see it in April, given the inventory levels that the automakers have. But getting into May and June, which is the prime selling season, spring selling season, that's going to make it a little more difficult for the automakers. And ultimately, I think in the back of' minds is prices are going up and they will go up. Your segment before that showed some of the price increases that are being forwarded to

the automakers. And I think a lot of customers are just trying to beat that. Okay. So as we watch that, and with the latest union contract, U.S. auto workers have already gotten more expensive. We also have the FICO score effect of student loan defaults and delinquencies making the borrowing power of some future car buyers perhaps in question. How does all of that affect the wiggle room that if you were in the CEO seat of an automaker right now, you would feel you have?

Well not a lot of automakers. Here's the things I would be thinking about. First off, everybody's talking about, well will vehicles go up $3,000, $6,000, $12,000. Consumers don't really think that way. They think in terms of monthly payment. And John, right now the average monthly payment in the U.S. is right around $750. If you take some of these kind of estimates of the price that will go up, your car payment can go up on average, I think about $300.

And so just think about that. A car payment above $1,000 and pre-COVID, it was a very small percentage of the population that paid that. And to your point around other things to think about if you're an auto CEO, you also have to be thinking about your credit of the population that paid that. And to your point around other things to think about,

if you're an auto CEO, you also have to be thinking about your credit subsidiary and how much risk you wanna take on the residual values. As I mentioned before, you're making bets on what those residual values will be based on the price. And if tariffs come down later on, all of a sudden you're gonna have a big hole

in your balance sheet and a big risk for vehicles that you have leased to consumers. And also, as I said, for consumers that have financed retail, they're going to have a shock when they come back to trade that in. So what we're talking about right now is short-term and medium-term pain. Is there long-term gain? And what I mean by that is the chicken tax. And we saw what happened with the chicken tax, we had 25 percent tariff on light trucks.

It was implemented back in what, the 1960s. And we know the US dominates, particularly here in the US, where pickup trucks are one of the most profitable vehicles that the automakers make. It's a good point, Morgan, but I think the difference there is when you look at the pickup trucks, that's kind of native to the US the U. S. in terms of

consumer demand and consumer usage. You don't see big pickup trucks in Europe you don't see them in Asia. So those automakers that were subject to the chicken tax. You know building and designing to consumer tastes for big pickup trucks it's just not in their DNA. When you look at vehicles like small sedans, small crossover vehicles, things of that nature, these companies are making that all over the world

and being very cost conscious around that. So I think in the end, ultimately the good news is that these tariffs will bring back manufacturing jobs to the United States, which is good for the economy The bad news is that the costs are going to go up for consumers and when you look at, you know The pricing at that time point We're also gonna have to think about labor and who's gonna build it and at what price because these are hard jobs in these plants Well, hopefully the workers get to keep those jobs

Mark fields. Thank you. You bet Policy uncertainty and your portfolio Vanguard's global head of investment strategy gives us his playbook next Welcome back to overtime the S&P closed higher today as markets kick off a new quarter, but investors are bracing for President Trump's tariff announcement tomorrow. Joining us now is Joe Davis. He is Vanguard's global chief economist and global head of the investment strategy group. Joe, great day to talk to you. So looking forward longer term, even beyond this tariff issue, what do you think happens to the overall market? What happens to mega cap tech stocks, for example,

in this global economic shift? Does the market revert back to historical balance or does AI keep it moving toward tech? Well, again, I think a lot of our research over the past several years, we focused a lot on AI, as well as market dynamics. I think we see of our research over the past several years, we focused a lot on AI as well as market dynamics. I think we see some positive transformative ability from AI, but you have to separate that diagnosis

from what market returns could offer all of us. And the diagnosis is pretty clear that the equity market, particularly the tech sector is overvalued by any metric. And so that was a theme of our outlook this year, that there was gonna be an opportunity for consolidation and yes, correction. And I don't think we're through it. I didn't know what the catalyst would be,

certainly tariffs are in front of mind of everyone. But valuations made the US equity market in tech stocks particularly exposed. So Joe, do you like other markets better than the US right now? We've been having these conversations given the outperformance of some of the international markets since the start of the year. Sure.

And again, the U.S. exceptionalism from an equity perspective, it's just been really just amazing. But they've always had a time stamp on it. I think for the non-U.S., you're always waiting for a catalyst. Valuations would say that the non-US markets had upside opportunity, but what was gonna be that catalyst? I think we saw some of that in Germany

coming out, some of the defense spending. I think we'll see some positive surprises at the margin out of China. And then you also have to think about fixed income, more to guard against the downside risk of height and volatility equity market. There's no getting around the fact that valuations just make in the equity market. There's no getting around the fact that valuations

just make the U.S. equity market vulnerable. So the 60-40 portfolio was dead. U.S. exceptionalism had people out of the habit of rebalancing portfolios toward international global markets. To what extent should investors go back to some of those more staid rules? Well, I think, you know, again, if you have the 64 days, just like your benchmark or where you're trying to achieve, there's still opportunities here. Again, you know, just six months ago,

it was all AI, all tech, all the time, Mag-7. But the market always underestimates new entrants and, you know, different headlines. And so I think there's opportunities in the large cap, in the value space, the historical underperformance past five years, there's still a great catch up to be had. Outside the US being selective as well. And then again, fixed income has a much higher income cushion than it has had for some time.

So if you're more really concerned about what we could see being modestly defensive, but staying invested is not the worst idea. All right, Joe Davis, thanks for joining us. Thanks for having me. Tomorrow, 4 p.m., right here on overtime. Don't miss our live coverage of President Trump's tariff announcement in the Rose Garden.

It's going to be a busy hour, I suspect, John. Ahead of that, a mixed picture for the major averages today. And Jonathan Krinsky over at BTIG pointed out yesterday actually that when March has been down 3% or more for the S&P 500, which it was as of yesterday, April has not been lower ever in any of the times we've seen that happen since 1942.

So there is a seasonality component to it on top of the macro that we'll be watching tomorrow. What about in years when the U.S. has announced major retaliatory tariffs? That's going to be a new data point. That's going to do it for us here at Overtime for now. Fast Money starts now.