Closing Bell - Closing Bell Overtime: Markets Track Oil and Rates as Earnings Roll In and SpaceX Takes Center Stage 4/21/26

Episode Date: April 21, 2026

Stephanie Aliaga of JPMorgan Asset Management joins on set to assess the market backdrop and where opportunities remain. Interactive Brokers Chairman Thomas Peterffy reacts to earnings and discusses trading trends and investor activity. United Airlines and Capital One reports add further insight into travel demand and consumer health. Henry McVey of KKR steps back to frame the big picture for markets and global investing. Plus, SpaceX’s analyst day as it prepares for a monster IPO. Chad Anderson of Space Capital explains what it reveals about the future of the space economy and investment opportunities. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing an end to the trading day at the NYSC's suburban propane, ringing the bell and at the NASAC, Progeny, doing the honors. Welcome to closing bell overtime. We're a lot from studio be at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Sox lower for the second straight day on fears. Peace talks are breaking down. The Dow lower by nearly 300 points.

The S&P 500 and NASAC both down by 610% percent, more in the markets straight ahead. Our markets team is at the ready. Christina Parks and Nevelis on the markets. Pippa Stevens as oil prices rise. Rick Santelli on the bond. on market reaction, and we've got some after the bell earnings. Phil LeBoe waiting for United and Husson on Capital One. So you mentioned a second straight down day.

I think the question, broadly speaking, is, does this just digestion period turn into indigestion, right? So Friday, we talked about how after such a sprint higher, the direction of surprise might be to the downside. In other words, any variation from the resolution theme in Iran. And then really the Kevin Warsh stuff today, yields were up, oil was up. I don't think there was a lot of specific news in the warshearing, but the betting odds for him being approved by May 15th actually did fall from 32 to 25%. So not a major change, but it just sort of shows at the margins. There's a slight rethink going on in the background of what drove us to this point.

In meantime, the earnings so far that we've gotten in terms of the guidance, in terms of the beats, we've gotten a number of companies that have beat, but are not raising their full year guidance by as much as they beat. UNH, NOC, Northwark Rumen, as well as GE Airspace, 3M. They all fall into that category where they had substantial beats, but they are not willing to go out on a limb and raise the fullier guidance by as much as they beat. They're kind of keeping some powder dry there. Exactly. And, you know, we did talk about how obviously the month of March was when the conflict and the oil shock happened.

The final month of a quarter, you're fashioning your year-ahead guidance. And, you know, so some caution makes sense, but the fact that the stocks mostly backed off in reaction to that. in particular, it does show you we weren't fully prepared, I guess, for that little dose of uncertainty. Yeah. Meantime, United earnings are out. Let's get to Phil LeBow's got the numbers. Hey, Phil? It's a beat on the top and the bottom line for United Airlines.

But again, as I've been saying all day long, the estimates have come down dramatically, not just for United, but all the airlines because of the impact of jet fuel. United earning a buck 19 and share in the first quarter. The street was at a buck 07.7 revenue coming in at $14.61 billion, just above the estimate of $14.37 billion. The numbers within the numbers, with the exception of jet fuel, these are strong numbers. Revenue per seat mile, up 7.4% compared to the same quarter last year, cost per seat mile, up 5.9% compared to the first quarter of last year. Now you start to see the impact of jet fuel, especially when you look at jet fuel, the cost alone, up 12.6% year over year, pre-tax margin of 3.4%.

Domestic revenue, international revenue, premium, corporate, they're all up, Domestic up 10.2% year over year. International up 12.2% year over year. There's the demand that United has been talking about. It's still there. Premium revenue up 14%. Corporate revenue up 14%. And finally, main cabin revenue up 7%. Now for the guidance. For the second quarter, United expects to earn between $1 and $2 a share. Just for a point of reference, the street right now is at 208 for the second quarter. They are also going to be for the second half of this year, cutting their capacity, you're essentially adjusting their capacity. It will be flat to up 2% versus the previous plan as they adjust to the market that is out there right now. And for 2026, they are cutting their guidance.

Previously, we're expecting to earn between $12 and $14 a share. The company now says it expects to earn between $7 and $11 a share. For a point of reference, the street right now is at $9.58. But let's be clear here. there's very little visibility when it comes to jet fuel how high it will be and for how long. All of this we'll be talking with Scott Kirby tomorrow morning first on CNBC. You do not want to miss what he has to say, especially when it comes to the demand portfolio. We know that jet fuel is going to be high here at least for the second quarter.

Nobody's expecting it to go lower. The question becomes further out. He has been very vocal in saying, expect high jet fuel prices for some time. We'll talk with him tomorrow morning on Squawk Box. And, of course, that gets to the concern out there in the markets that, you know, these inflationary forces will actually last much longer and, you know, more beyond the end of the war. In terms of beating guidance, what was interesting going into the quarter for all of the airline stocks is that consensus estimates were all over the map, basically. I mean, this dispersion was so wide.

It'll be interesting to get some color on how certain or, you know, what the spectrum of outcomes are from Scott Kirby in terms of this guidance and how confidence they are in the guidance. I think the reason you have such wide guidance, Melissa, gets to your point. Nobody's quite sure what jet fuel is going to do. They're basing their Q2 projections on the forward curve. But even as they're doing that, they're not entirely sure. Nobody's entirely sure. It depends on a lot of factors, including the jet fuel supply worldwide, because that certainly has an impact as well.

The bottom line is this, Melissa, in terms of what's important when you focus on United and the other airlines, yes, costs are important. I think what people really want to know is the demand profile that's out there. Spring and summer bookings. And we'll be talking with Scott Kirby about that because that's, that's really where if we start to see over an extended period of time higher jet fuel and higher airfares, that's when you would eventually expect some type of an impact. So far, we're not seeing that with any of the airlines. Yeah, absolutely. And I guess you mentioned they're curtailing their capacity, expectation for later in the air. We'll see if that can firm up pricing as we go along.

Phil, thanks very much. You bet. Let's now get to today's market moves. Christina Parks and Nevelas has those for us. Hi, Christina. Hi. Well, you have U.S. equities that finish lower, but off the worst levels, has invested really digested a mixed bag of earnings and corporate headlines.

Apple was a major driver of the day, slipping after Tim Cook announced that he would be stepping down a CEO on September 1st, with hardware cheap John Turnus set to take over. Intel, since we're talking about hardware, Intel got some support from Wall Street today ahead of Thursday's earnings with BNP Paribus and HSBC highlighting potential upside in CPU demand. The stock closing a little higher today, but up about 68% year-to-date. Amazon shares did move on news. It's going to invest another $25 billion in Anthropic, and that actually helped networking names like CRETO, Astera Labs,

and even chip designer Marvell, which climbed yesterday as well. And so to talk about the AI treat, it is expanding into these second-tier hardware names today, and you're seeing that in the move like Dell, HPE, and H. We'll throw that up in just a second as investors really look for the next beneficiaries of AI spending. Now, away from technology, you've got United Health that led the move higher, jumping after raising its full-year outlook, helping lift the managed care group, and then DR Horton, which is one of the days standout, jumping almost 6% after posting year-over-year growth and net sales orders that also gave a boost to peers like Lanar that you're seeing on your screen,

but not as much as DR. Guys? Christina, thanks, Christina Parts Nevelis. Oil, meantime, moving higher on those concerns about Iran peace talks, Pippa Stevens has got the details. Hey, Pippa. Hey, Melissa, Brent, topping $100 again ahead of tomorrow sees fire expiration. And after Iranian state media said that Iran's decision not to attend the talks in Pakistan is final. Meantime, traffic through the straight remains subdued with at least three vessels transiting today. That's according to data from LSEG.

Now, Halliburton posted results this morning with CEO Jeffrey Miller saying at the top of the call that he believes the situation in the Middle East will have meaningful and long-lasting implications for the global energy sector and that energy security will no long-rength. simply be a talking point. The company pointing to lost revenue in the region and also noting higher costs related to supply chain logistics and fuel, saying the impact will be between seven and nine cents for Q2. That's again street forecasts for Q2-EPS of 52 cents. WTI for May delivery settling at 92, 13 today with a June contract now, the front month currently trading here around 92. Meantime, Lufthansa announcing today that it will cut 20,000 flights

as jet fuel prices soar. Yeah, the impact keeps trickling out. Pippa, thank you. Well, those oil prices also having an impact on bond yields. As did some data, let's get to Rick Santelli in Chicago. Hey, Rick. Absolutely, Mike. You know, this morning we almost forgot. 8.30 Eastern we had our March look at retail sales. Up 1.7 percent, a very strong number. Matter of fact, it equals where we were in March of 25. To find a higher number, you're already back to Jan of 23. And why is that important? important, whether it was the president this morning or many, there's scratching the head why the equity market seem to be acting so well, considering all the news of the day, because I think

the underlying economy is much better than many give it credit for. Now, if you look at crude oil, June contract, then you look at tens on a 12-hour chart, yeah, they're shadowing each other. But maybe the most important market that is being shadowed with crude oil is the VIX. This is a two-week chart. They're right on top of each other. Once again, I will say, oil is the information market, and all markets are pretty much looking at that. Back to you. Yes, the prime mover there. All right, Rick, thank you very much. We have some breaking news out of Washington. Let's head to Amon Jabbers at the White House. Amen. Yeah, Mike, that's right. We've got a report now from Iranian state media. Iranian state media are saying that there is no prospect of the Iranian

side participating in negotiations with the Americans in Islamabad. We've been talking all day about Vice President J.D. Vance staying here in Washington, not heading out to those negotiations. He had been reported yesterday to be ready to get on a plane to go to Islamabad. That never happened. The vice president, we are told, has been here in Washington here at the White House today, participating in meetings, but not traveling for these negotiations. Now, Iranian state media is saying that there is no prospect of those negotiations. The Iranian state media report here said that there are. a number of reasons why that is. Number one is that the Iranians say the Americans breached

their commitments during the ceasefire. They say the Americans initially, by completely violating their commitments, did not oppose the ceasefire in Lebanon on Israel, which caused serious obstacles to be to the negotiations for several days. They say the Americans made excessive demands that effectively violated the initial framework, causing the round of negotiations to reach a complete deadlock because despite their defeat on the ground, this is the Iranian argument, the U.S. thought it could compensate for the failure in the war through excessive demands in the negotiations. So the Iranians saying that they believe the United States has failed in its war effort and they will not be participating in negotiations. Where does this leave

us, guys? Well, that deadline for the ceasefire, the exact hour of it is unclear. But the president said on CNBC this morning that he expects to go back to. to bombing Iran. That was early this morning. That would seem to be still operative here. No word otherwise from the White House. So negotiations seem to have fallen apart here and the deadline looms. Back over to you. All right. Amen, thank you. Amin Javers from the White House with that latest development. Dow, S&P 500, NASDAQ posting back-to-back negative sessions. Investors are now turning their attention to earning season, which is expected to be robust, despite all the geopolitical headlines. Joining us now is JPMorgan Asset Management Global Market Strategist.

Stephanie Aliaga, Stephanie, great to have you with us. I want to first get your reaction to the news that we just received that the ceasefire talks are effectively dead for now and the uncertainty that it adds to this narrative that the end is closer than the beginning of the war at this point. We're clearly not in the coast as clear when it comes to this conflict in the Middle East, but markets are forward-looking.

And the reality is we are still on a de-escalatory path. We don't know the details and the timing exactly yet. And I think that remains a risk for markets, especially a market that had so swiftly moved to price in, essentially, coast is clear. So there is some choppiness. But ultimately, these are bumps along the road to a market that is on an upward trajectory. And the reason why we still have conviction in that is for a lot of the reasons that we're going to hear more of this earning season, right? The AI boom still really underway productivity on an up trend.

Stay right there, Stephanie. You want to go back to Aymond for some more details from the White House. Yeah, Melissa, just as I was talking to you a second ago, the president, putting out a statement on truth, social, his social media site, saying that he is extending the ceasefire deadline. So this coming from the President of the United States just a couple of minutes ago,

he says, based on the fact that the government of Iran is seriously fractured, not unexpectedly so, and upon the request of feared Marshall Assam Munir and Prime Minister Shabaz Sharif of Pakistan, we have been asked to hold our attack on the country of Iran until such time as their leaders and representatives can come up with a unified proposal

He says, I have therefore directed our military to continue the blockade and in all other respects remain ready and able and will therefore extend the ceasefire until such time as their proposal is submitted and discussions are concluded one way or the other. That's just a couple of moments ago from the president of the United States. So here we have now, Melissa, the U.S. side saying it is unilaterally extending the ceasefire. We have the Iranian side, as I just reported a couple of minutes ago, saying they're not going to participate in negotiations. The president's saying he's going to keep this blockade, naval blockade in place in the Strait of Hormuz indefinitely now. And so that leaves you at sort of a standoff.

The president is saying here, he's going to keep this blockade in place, until the proposal is submitted, that is, a proposal from the country of Iran. Iran just said they're not participating in negotiations. So it's not clear that any proposal is in the offing at all. here and what you might have is a more or less indefinite standoff until some kind of breakthrough behind the scenes happens. The president's saying he's now unilaterally going to extend the ceasefire. We don't have confirmation, of course, from the Iranian side that they're going to agree on their terms to extend the ceasefire.

We'll see if they make an equivalent announcement here in the next couple of minutes that they accept the continuation of this ceasefire. If they don't, of course, that could mean continued attacks against American targets or allied targets throughout the Gulf region. Melissa? I mean, this effectively means that the Strait of Hormuz is indefinitely closed as well, Amon, which is the biggest wildcard for global economies. Yeah, that's exactly what it means.

And you think about what the impact of that is. The president said on CNBC this morning that the Strait of Hormuz is under direct American control. You know, that's clearly not the case, because if it was under control, oil would be flowing through the Strait of Hormuz, and it's not. So at this point, you have a stander Muz. off in the straight one of the global lynch pins and it's not clear how that's going to be resolved. What the president is saying here is that he's directed the military to continue the blockade and remain ready and able, that is to relaunch attacks on Iran and is going

to extend the ceasefire until such time as their proposal is submitted. But not clear that we're going to see a unified proposal from the Iranians. The president's saying here that the Pakistanis have suggested that the Iranians might come. come up with a unified proposal. And so maybe that's something that will happen in the coming hours and days. But, you know, it is an indefinite closure and an indefinite standoff until we hear otherwise. Right. With the Iranians suggesting that the existence of the blockade violates whatever ceasefire terms we have.

So clearly more groundwork needs to be laid. Amon, thank you very much. We did happen to, we're showing the major index ETFs, Stephanie, actually tick higher on this news. Clearly, I think there was a little bit of anticipation building up. the close, you might get a very immediate resumption of hostility. So maybe that we put that off. But it shows the market, as you suggest, eager to move on. Do we have what it takes to move on? In other words, is the earnings growth that you mentioned, are those projections going up broadly enough? Because it really is very tech-heavy. It's energy in semis that is driving

the upside. And we've seen some somewhat soft reactions to the earnings we've gotten. There are some real challenges here. And I think the reality is, like the data that we're looking at right now is mostly a backward-looking measure, and the backward-looking measure was pretty good, right? A pretty constructive economy. And moving forward, I mean, we don't know what real pinch we're going to feel just yet in consumer wallets and also for corporate margins when it comes to higher energy prices, at least in terms of what we heard from these companies so far in the earnings reports and from financials last week, right? It seems like so far, not too much to be concerned about. But there is a real risk here is, you know, the two sides

remained very far apart. The last time we had a U.S. Iran peace agreement, it took 20 months to negotiate. So there is this potential that it could take a lot longer before we actually get the de-escalation, the kind that would actually help move markets and resume traffic through the strait. So there is this headwin, I think, for markets right now, which maybe wasn't reflected in prices as of two days ago. So what is, like when you do this scenario analysis and you run through higher crude oil prices, higher energy prices, what does that get you in terms of the impact on S&P earnings? And how does that, how does that inform you on how you, on how you, view the markets for the rest of the year. Yeah. What's interesting is, you know, outside of a

really extreme scenario, we're looking at a few percentage points, trim on headline earnings growth this year from oil staying elevated anywhere from $80 to $90 a barrel. Now, if we were elevated $100 a barrel, that would be a pretty much more meaningful hit, which could really come in pressure markets. I think outside of that, and we've seen since December, earnings expectations have moved higher on the back of this AI theme. And the reality is, look, the market composition-wise is heavily leaning towards this AI theme too. And in the back half of this year, second quarter onwards, energy companies too are expected to see some pretty significant earnings growth because they're also benefiting from these

higher prices they're selling. Yeah. I mean, the market absolutely has rushed for those parts of the market, it feels, is insulated from all of that, including certainly the AI trade. Stephanie, thank you. Thank you. Good to see you. Stephanie Alia got.

Let's get another check on interactive brokers. Those shares are lower after reporting. first quarter results, earnings of 60 cents a share matched the estimate revenue. Slight missed, they are also saying customer accounts grew by 31%. And trading volume in stocks, features and options, all rows. Joining us now for an exclusive interview as Thomas Petterfee, Interactive Brokers, Chairman. Thomas, great to have you with us. So it's great to get your read on what retail traders, professional traders, are doing here.

And what did you notice as the war went on in the month of March? So our customers reacted proactively to the crisis. They turn to commodities, oil and gas, agricultural products, and related equities. Of course, the feeling is that while the headlines may soon subside, the after effects will linger. So fertilizer is going to be very hard to come by, especially in Europe. And the Gulf states are most likely to have, most likely we'll have to, resort to selling U.S. equities, which are their most liquid assets, and they have to make up for their cash shortfalls some way or one way or another. So that's what we think.

And, you know, Thomas, sometimes you sort of look at the way your customers are positioned and feel as if either it's leaning a bit too far one way or another. How is the risk posture right now relative to what you view as market and economic conditions that look appropriate? Well, as I said, you know, many, many customers have turned to commodities. And they cut their equity holdings, not by much, but to buy a few percentage points. And they put more money into commodities and oil-related stocks. Did your customers participate in that V-shape bottom that we saw recently, Thomas? Were they in?

You mentioned they cut back. Did they participate in those gains? No, no. Well, to some extent they have, but not, of course, not completely. I mean, nobody can really tell when the market is going to turn exactly. Yeah. What's your key message is going to be to investors here in terms of growth for the firm looking ahead? I know you're excited about prediction markets. There's a bit of pushback coming from various states.

So where does all that stand? And where does that fit into your growth strategy? Well, the prediction markets are very, very important to us because trying to visualize the future never been more important than it is today. and the rate of adoption of AI models, potential reduction in the labor force, in anticipation of AI, universal basic income, GDP rates, taxation, energy consumption, global warming. These are all evolving over the coming decades, and it's extremely important that we have a good grasp on how it's going to unfold. So our best tool for navigating what's next is monitoring the live collective intelligence of prediction markets, capturing the global consensus in real time to prepare for the future as it happens, right? Thomas, great to get your take. Thanks for joining us. Thank you very much for having me.

Interactive brokers. Stock is down 1.8% on the back of earnings. Busy hour of earnings, in fact, Capital One, falling after results. We'll get the details next on overtime. Capital One chairs lower after its earnings results. Hugh Sons got the numbers. Hey, Hugh. Hey, Melissa. That's right. So it looks like a miss for Capital One on both the top and the bottom lines as loan loss provisions came in worse than expected. EPS of $4.42 adjusted is under the $4.55 estimate. Revenue of $15.23 billion also compares poorly with the $15.36 billion dollar estimate. The loan loss provisions, as we said, came in at 4.07 billion, which is higher

than the $3.73 billion estimate. Making matters worse, you saw that net interest income came in a little bit light at $12.15 billion versus the $12.32 billion estimate. So in terms of the readout on the U.S. consumer, obviously Capital One is known for their non-prime, their near prime credit card customer. The charge of rate here, those are loans the bank has given up on attempting to collect. That was 5.1% in the quarter, which is up from 4.93% in the linked quarter. And the reason why that's a little bit surprising, Melissa, is that the first quarter is usually a good one as people start to get those tax refunds and start repaying those loans. So at least some signs here that the Capital One consumer is wobbling a little bit at the start of the year, Melissa. Back to you.

Great, Reid. Hugh, thank you, Hugh Sun, and this is why we wanted to pay attention to Capital One Financial, because it gives us a look. You know, we heard from the big banks, Mike, last week in terms of the healthy consumer. They have a portfolio of customers completely different from Capital One Financial. So the consumer, as we know, the higher income consumer doing well, the lower income consumer dependent on those tax refunds to offset higher energy prices. They are struggling here.

Yes, and even the retail sales number from today, it was actually stronger than expected. But if you got rid of gasoline and cars, It was a modest beat and also still negative on a real basis, right? So in other words, not necessarily keeping pace with the rate of inflation. So another reminder there, of course, Capital One Absorbed Discover Financial. That's kind of in those numbers as well. A lot of focus on inflation at today's confirmation hearing for Kevin Warsh.

Up next, we'll show you what he said when pressed on the impact of Fed rate cuts on prices. And we'll take a trip to the grocery store to see which food items are getting more expensive, which are getting cheaper and the impact on companies involved. Over time, we'll be right back. Welcome back to closing bell overtime. The consumer and inflation has been in focus today. We heard from Fed chair nominee Kevin Warsh for the first time in months at his confirmation hearing. Prices there a central theme. Here is Worse responding to a question on whether lowering interest rates by up to 250 basis points would lead to higher prices. Monetary Policy Center works with long and variable lags quite famously.

If the Fed were to make a decision today about the conduct of policy, It's likely to find its way to the real economy six, nine or 12 months later. So it's difficult to judge policy today for an immediate result. Meantime retail sales jumped nearly 2% in March to the fastest one month rise in over three years. The biggest driver, though, higher gas prices. The question we've been asking for weeks, though, is inflation going to start eating into the wallet of the consumer? Bank of America Global Research out with a new report today in packaged food companies, calculating the impact of these volatile commodity food prices.

For instance, tomatoes, more than doubling versus last year. That hurts, of course, Kraft Heinz. Turkey up 85 percent, a hit to Hormel. Milk up 67 percent, which is bad for Hershey. But overall, B of A says Hershey could be a winner, as cocoa prices have been down sharply. Other prices which have fallen, eggs, potatoes, and sugar. Pointed deflationary baskets for companies like J.M. Smucker,

Lamb Weston, and Mondalise, according to this report. and a lot of the costs are not even directly related to food. It's things like transportation or refrigerated goods. That's up 31%. That hits meat supplier, Smithfield Foods, and Tyson. The report also flags the rising costs of diesel and heating fuel and aluminum. That could be troubled for beverage companies like Coca-Cola, Pepsi, Monster, Mulsin, Cores, as well as Celsius. So this is an interesting read.

We've heard already from a lot of these package food companies, consumers have had enough of the price increases. They have run the limit in terms of how far they can. hike and they've actually been having to roll those back. So the ability to impose another price hike is probably pretty slim. And typically, I mean, the argument around these companies is that, well, these prices are kind of random and sometimes offsetting. And so it's not as if it creates a big burden all at once. But right now, it does seem like the direction of travel because of the fuel and transportation costs is going to be an extra challenge. That said, market seems to have gotten there, absolutely hates these companies. I mean, even within a weak group,

like consumer staples, the Package Food Group is definitely on the outs. Time now for CNBC News Update with Kate Rudy. Hey, Kate. Hey there, Melissa. The state of Florida on Tuesday now says it's opening a criminal investigation into ChatGPT and parent company. OpenAI, the investigation centers on messages between the chatbot and a man accused of killing two people at Florida State University last year. The state's Republican Attorney General argues that ChatGPT offered significant advice to that shooter before he opened fire. Open AI has yet to comment on the criminal probe. Meanwhile, voters in Virginia today are deciding whether to redraw the state's congressional

districts temporarily to favor Democrats by a 10 to one margin in the upcoming midterms. It is the latest state in a nationwide battle between Republicans and Democrats to redraw maps mid-decade in order to gain an advantage in November. And finally, the Gates Foundation is reportedly cutting 20% of its staff and opening an external review of the organization's engagement with Jeffrey Epstein. That is according to the Wall Street Journal, which reports that roughly 500 job cuts are coming as that philanthropy continues to deal with some of the disclosures about the Gates Association's ties with Epstein. Mel, back over to you. Kate Rooney, thank you.

Sox's lower today, but still right near record highs with the S&B 500 holding 7,100. It seems U.S. socks are shaking off the impact. the Iran War. How is the situation playing out around the world? KKR's Henry McVeigh will join us on the other side of this break. Stay with us. Welcome back to closing bell overtime, live from the NASDAQ market site. Stocks down for the second straight day. The Dow losing 300 points, losses more than half a percent for both the Dow as well as the S&P 500. But things already looking up tomorrow, the SPY and QQQQETF's higher after hours following the president's social media post saying he will extend the ceasefire. Shares of Adobe meantime gaining in the after-hour session,

the company authorizing a new $25 billion share buyback program. Well, moving to the macro environment, investors, as we mentioned earlier, closely watching growth signals to see if the impact from the Iran war will lead to a global slowdown or even recession. Joining us now on set is Henry McVeigh. He is KKR, head of global macro and asset allocation, CIO of the firm's balance sheet. Henry, good to see you. Thank you for having. We last spoke to you, I guess, maybe right as things were getting started before the real oil shock. You've been around the world. I mean, is this absorbable by the global economy? How do you feel like it's going to filter through?

So I'm actually just back from China, so maybe I'll start with Asia. I think Asia continues to grow, but they're probably feeling the pinch the most, particularly in some of the supply chains in Southeast Asia. What did I learn on the ground in China? The economy is actually pretty steady. AI is up into the right, and that's going to create essentially the supply chain was tight even before the war broke. So memory chips, other stuff like that. So I think it's going to manifest itself more through inflation than it is through growth. If you think about, let's look at the U.S. growth economy right now, high-end consumers continuing to spend.

AI is probably a percent of GDP growth. And then you've got the fiscal stimulus, which essentially offsets oil at about $100. So we lowered, we tweaked our GDP down from kind of high twos to low twos. Typically, you don't have a backwards market when growth is. forward leaning. And so that's our base view. I do think the market's giving you certain opportunities and certain things to watch out for. I think your last segment just on prices paid, that is reality. Inflation is kind of more pervasive, I think, around the global economy, and I think oil will add to that. At the same time, a lot of companies, we're going to have some big mega IPOs.

At the same time, we see a lot of companies that don't actually want to go issue equity, and they're coming and talking to us about either convertible bond or some type of preff. We just did a recent transaction in Korea with Samsung. That's really interesting. I think you're going to see more of those type of corporate carve-outs or kind of, I would say, off-market, structured equity issuance. How do you think about inflation around the world and the impact of the energy prices? Last time you liked XUS.

Yeah. And you liked the areas that you just outlined, you know, are feeling basically higher inflation pressures. China specifically, they've been living off a strategic reserve, and they're going to come to an end at some point in terms of being able to buy some of the oil off of floating ships from Tehran and Russia, et cetera. I mean, that's not going to last forever. So I think there are two big mega themes in Asia. I don't think you can just go broadly by the market. Where we're focused, certainly on private equity, is around what I would say is the corporate reform. If you look at Japan and now Korea, these are cheap markets, where

you're getting real corporate reform, it's driven by the government. That is an excellent environment for private equity. That would be theme one, and that's bleeding into the public markets. The markets have actually done incredibly well. Korea is trading it seven times earnings, and it's going to grow over 100 percent this year, so you can play at private or public. The second is the consumption upgrade, India, China, other markets. That's probably going to be a little more challenge. India is probably the most exposed to higher commodity prices, but you still have GDP per capita rising. So I think our view is not, don't lunge in one market, just U.S., Europe, or Asia, but I would say what we're seeing on the ground in Asia from both the consumption upgrade as well as the corporate

reform. Those are secular themes. Most of the stuff we're doing is five to ten years. You should buy it and tuck it away. You mentioned tight supply chains as well as, of course, AI investment, just kind of continuing a pace. Both those things seem to reinforce this notion of we want to own physical assets. It's sort of this capex cycle that's kind of supercharged by a lot of different dynamics.

Is that already reflected in markets right now, or is there still more to go in that direction? So I would say of all, I mean, one is we're bullish on infrastructure globally. I think you probably have more money flowing into the AI area. But what I think it's probably underappreciated is what we call this theme, the security of everything. Every CEO is watching your show right now is talking to their board about supply chain resiliency. And what we call, you know, what do they want? They want security water, power, you know, data, and all that is leading to a boom and infrastructure. That's why the economy hasn't slowed down as much.

This is not a consumption economy. This is a CAPEX economy. It's very different than, you know, when I first mentioned 20 years ago, I said you've got to change your investment lens through that. And I think that's where you've seen our infrastructure really, business really flex up. And so I think that's going to continue. You do have to pick your spots. What's been interesting, my 15 years at KKR,

is that those things cyclically come in and out of favor. But I would tell you things, my personal view is that the power grid is underinvested in. The energy pipeline is still going to demand a lot of capital. And the whole idea of kind of this regionalization of the global economy, that's going to lead to CAPEX staying stronger than what we're used to, even despite lower oil, even despite higher oil prices. Is there so a lot of demand for AI data center-related investment debt,

all of that, given how much supply has hit the market? I mean, how do you sort of view this? Yeah, I think it's a great question. So I think we had talked maybe two times ago when I was here. It felt like it was getting a little crazy around the time that Meta came to market. I think that's gotten more balanced and you've got a more natural market between buyers and sellers. I also think we're trying to play at the high end in the market where you're really customizing the type of data centers. So I don't think given, I think right now AI spending is like 5% of GDP, the housing bubble,

with seven. So this is definitely a time to pick your partner and really know, you know who your counterparty is. But I still think the spending will continue. As I mentioned, what did we learn in China? It's not just the data centers. I mean, the car companies, everybody is their short memory. And that's probably going to continue. And that's not a 26 event. That's a 26 into 27. And so I think you have to think longer term about where you're investing. And my gut is, is that the power side of that and the grid side is that is where it's probably still underappreciated. Andrew, great to see you. Thank you, as always for having me.

Thank you, as always for having me. Bay of KKR. SpaceX holding investors day today ahead of its highly anticipated IPO. Up next, the man who runs the world's largest space-focused venture fund and an early SpaceX investor on what that IPO means for the space economy. Closing bill overtime. Be right back. Welcome back to overtime.

SpaceX is holding an investor day today ahead of its highly anticipated IPO as it looks to raise 75. billion dollars at a $1.7 trillion valuation in what would be the biggest ever IPO unlocking a new investment category in the space economy. Your next guest runs the world's largest space-focused venture fund and was an early SpaceX investor. Let's bring in Space Capital founder and CEO Chad Anderson. Chad, great to have you with us. Good to be here. You're already sold on the SpaceX story. I mean, you invested early on and you invested 14 times after that. So you're on board. But in terms of the sale to Wall Street,

What are the most important sort of drivers of the SpaceX story? Is it, you know, space data centers? Is it direct-to-sell? I mean, what's the most important part of the story? All the above. I think, you know, the narrative is 10 million starling subscribers for satellite broadband and growing significantly. A direct-to-sell roadmap that's intersecting teleco revenue, which is a much larger pie.

And they're going directly after that. And then orbital data centers, which allow them to tap into the mother of all narrative. which is AI. How at a $1.7 trillion valuation, assuming that's where it comes, is that not a kind of mission accomplished moment? Just in terms of what you're already giving SpaceX credit for, it'd be like 50, 60 times sales, it has to build in all those expectations you mentioned. And if I'm an investor, and I assume 10 to 15 percent return annually for something I want

to buy, it's adding 175 to 200 billion in value a year. So what's the path? When you step back and think about what makes Elon Musk such a successful entrepreneur, I think it is his ability to imagine bigger than us, think bigger than us, come up with ideas and schemes and grand ambition and a scale that none of us can really comprehend. So I think that investors that are looking to invest at the IPO at this price, you know, they're not investing in today's business. They are investing in the next 50 years of owning orbital infrastructure,

owning the rails to get to space, owning the way in which you get broadband, telco, orbital data centers into orbit. We're in this period where space infrastructure and terrestrial infrastructure is converging in a way in which no one's going to care in the future where your data is processed or where your communications come from, as long as you have it and it's fast and it's cheap and affordable. You mentioned Elon Musk, and obviously he is a very key part of this story, but he's also over at Tesla. And there had been rumors for so long that eventually the two companies would combine.

And so would you like the SpaceX investment better if it were combined with the Tesla? And what is that vision in your view? Well, so it certainly fits into his vision, I think. So people have been talking about this for at least since 2017. It's come up again earlier this year. You know, the All-In podcast was talking about it, and Bloomberg's done some reporting on it since then. I think the operational coordination is already happening.

They are converging on the same technology stack from two opposite ends of the spectrum. So Tesla owns the robotics, the humanoid robotics, and the manufacturing, and that will allow Starship scale production and SpaceX owns the rails and the access to orbit, the orbital data centers. So combined, this will be the only company that owns the entire physical AI stack from the production of the chips to the orbital data centers.

I don't think that there's another analog, like there's no good comp to look at for what could be here. I think you really like the most appropriate sort of historical precedent, you'd have to go back to the vertically integrated industrial giant. of the early 1900s, you know, Singer, Carnegie and Steel, Standard Oil, Ford. You mentioned orbital data centers like it's kind of, you know, foregone conclusion. I mean, you know, one of the interpretations of what Elon Musk does is he kind of puts a sort of unattainable thing out there and gets people to pay him today for giving him credit for getting there. The challenges are significant, are they not, in terms of cooling and all the rest?

Unobtainable for most. So that's what SpaceX is really good at. I forget exactly how they say it, but they do the impossible. They just do it late, right? And they have proven their ability to do that time and time again. So there are real engineering challenges to orbital data centers. I think most of those are solvable. It's really a question of, you know, can you do it at a scale that makes sense?

When you own the launch vehicle and you're reusing vehicles and like the only, cost to you is the marginal cost of fuel, that's the big chunk of the cost that makes it economically viable. You can solve these engineering challenges. We will get there. The real thing that makes orbital data centers attractive, I think, is the fact that on Earth, it is very difficult to build these out currently. And it's the human factor. It's the permitting issues. It's getting approval. It's getting the communities to be okay with it, right? They don't want it in their backyard. water constraints and things like that. So there are a lot of challenges to doing it here on Earth

that then make alternatives attractive as well. Right. Changes what the break-even is, I guess. All right, Chad, good to talk to you. Chad Anderson. Appreciate it. One of the world's largest companies is jumping into the weight loss drug market.

Details and the impact it is having on drug makers when closing bell overtime live from the NASDAQ market site returns. Welcome back to overtime. Amazon is entering the fast-growing weight loss drug market. The company will begin offering. Wagovi and Zepbound for as little as $25 per month for people with insurance and $299 per month for those without insurance. Prices that are roughly in line with the current market, Eli Lilly and Novo Nordisk falling sharply on that news over concerns that it could hurt their direct-to-consumer weight loss programs. Well, let's get to you set up with tomorrow's trade today.

There is no economic debt on the calendar, but there are a lot of key earnings to watch for Boeing, AT&T, G.E. Vernova, Boston Scientific, and Homebuilder Taylor. Morrison will report before the bell. And after the close of trading, we will get results from Tesla, IBM, Texas Instruments, Las Vegas Sands, and Southwest Airlines. So a full roster reads just the beginning because it's only going to ramp even more on Thursday and into next week. Absolutely. Earning season, you get a lot of push-pull within the indexes, maybe not a lot of net movement.

But, of course, we also have to track ceasefire and everything else negotiations and all the rest of it. All right. That's going to do it for overtime today. Fast money begins right after this quick break. You know,