Closing Bell - Closing Bell Overtime: Nvidia Tops Apple By Market Cap; Billionaire Howard Lutnick On The Fed, The Rally & The 2024 Election 6/5/24

Episode Date: June 5, 2024

Nvidia hits a trifecta: closing above $3T market cap, closing above Apple’s market cap and closing at a record high. Bespoke’s Paul Hickey, Truist’s Keith Lerner and our Mike Santoli break down what it means for investors and the market. Billionaire Howard Lutnick talks the market rally, the Fed and more. Telsey Advisory Group CEO Dana Telsey on Lululemon earnings and the broader retail sector. Archer Aviation notched an important FAA win; founder Adam Goldstein on what’s next.  

Record highs, record closes for the S&P 500 and the NASDAQ as Nvidia hits a record of its own, passes $3 trillion in market cap. 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 Fort. And coming up this hour, key reads on retail and the consumer from activewear to underwear. When Lululemon, Five Below, and Victoria Seek It report results. We're gonna break down the numbers with long-time retail analyst Dana Telsey. Plus, billionaire, businessman, and investor, Cantor Fitzgerald CEO, Howard Letnick,

will join us exclusively with his latest read on the market and the Fed and more. Yeah, and we're gonna break down Nvidia's record-setting move and the one other place in the market where you could have seen similar returns over the past year, closed higher than Apple, number two behind Microsoft, just as of today. Major. Well, first, we begin with the market and the strong rally driven by NVIDIA,

by services data, ISM services data that might help quell some concerns about economic slowdown as well. Joining us is Bespoke Investment Group co-founder Paul Hickey and Truist Wealth co-CIO Keith Lerner. Keith, I'm going to kick it off with you because we just talked about NVIDIA, but mega cap tech in general has been driving this rally as of late. You have been longstanding biased toward U.S. and specifically large cap stocks here. Do you stick with it? Yeah, well, great to be with you all and as well as Paul. But yes, I mean, we still like tech. Tech's still the leadership.

The market has been somewhat more narrow underneath the surface. I certainly would like to see that burn out. But historically, tech tends to outperform when their earnings momentum is stronger than the overall market. And that's continuing. Part of that's driven by Nvidia. Overall, semiconductors obviously are also doing really well also. But as long as those earnings trends remain strong, we're going to stick with it.

And even if the economy is a bit more choppy, there's some more uncertainty, we still think investors will continue to gravitate towards tech and companies will continue to have to invest in tech, otherwise be left behind as this AI piece is moving very quickly. Paul, you could call it a Goldilocks reading in terms of the ISM services report we got this morning. The stuff that you wanted to see higher and better than expectations came in as such. The inflation piece, the prices paid piece came in softer.

You saw some of those inflation dynamics easing a little bit here. What does this do to the dynamics around the Fed? Yeah, so I think for the market we had coming into today, it was a perfect report. You couldn't have asked for more. It opens up the window for potentially the Fed to cut rates a little sooner. But we would prefer the Fed to not have to cut rates. So hopefully this report is a sign that the economy, you know, some of the weaker data that we've been worried about over the last couple of days, like the disastrous Chicago PMI and the weaker ISM manufacturing report, hopefully those are more of an anomaly and the services sector is rebounding.

So that's what we would like to see and prefer to see the Fed on the sidelines. And the window for the Fed is obviously starting to narrow here. You've only seen them cut rates this close to an election once, and that was in 2008 when all hell was breaking loose. And I don't think anyone wants to be in a situation like 2008 so we can justify. So, you know, yeah, no, no, no. Like today, we'd be very happy. Keith, I'm looking at the Russells. Sure, the S&P and Nasdaq closed at fresh highs, but the Russell, even though it was up about one and a third percent, is about flat with where it closed at the end of 2023. What does that tell us about how smaller stocks are behaving here and the impact of rates? Yeah, well, first of all, we talked about at the beginning of this show, these three trillion dollar stocks, three of them.

Each of those are bigger than the Russell 2000 as a whole. So just kind of keep that in mind, how big these stocks are. So they mean more. You know, I think, you know, the small caps are an interesting point because they're really cheap from a relative basis and historical basis. You know, last last November, December, they had a big rip as as we started to see yields come down and the economy was still strong. Now they're kind of caught between an economy that's, you know, normalizing or slowing down somewhat and rates are coming down. So the lower rates are helping them. But the economy kind of slowing down is a negative. So that's why we are sticking with the

large cap sector as a whole. We do think that small caps can participate, especially given how much they've underperformed. But at this point, it's premature to call them leadership. Paul, I'd be surprised if you were staying away from small caps entirely. So how are you playing them? You know, so you look, I mean, small caps is a very bifurcated area. There's plenty of companies that don't earn a lot of money, that don't earn any money for that matter. But there's plenty of other spaces, stocks in the area, in the sector that not necessarily in the very small cap, but small mid cap where you can find great value and you can find, you know, good returns so you know just writing off the whole index I think it would be you know just a little bit too you know coarse so to speak and you can find names in there that are certainly attractive but it's a tricky picture in there right now because all the focus is on these

large mega caps like Nvidia which you know rightly so, you know, it just doesn't stop going up lately. So, I mean, will that last forever? I don't think so. You know, Cisco had a certain place in 2000 where everyone thought their lead was insurmountable, but eventually other companies will get into that lead and other companies will benefit from AI, not just the hardware players.

Yeah, you've seen that dynamic playing out, that narrative playing out in retail with Lululemon, which has earnings out. We also have five below. Both of those retail results, Steve Kovac is bringing them to us. Hey there, Morgan. Yeah, let's start with Lululemon. Shares are up 11.5% or so here on beats on the top and bottom lines. I'll read them off to you. On EPS, we have $2.54. Street was looking for $2.38. Revenue is beating slightly as well, $2.21 billion, looking for $2.19 billion. Also adding a billion dollars to the stock buyback program, that is. And same-store sales, missing street account estimates here. Same-store sales were up 6%. Street was hoping for up 7%, despite that we're seeing shares well over 11% now, guys.

And then let me move over to five below here. Going the other way, it looks like misses on the top and bottom lines. We're not comparing this EPS number to estimates, but we're showing 57 cents on EPS. That's including some impacts from some pending litigation. Also on the revenue side was in this, $812 million. Street was looking for $833.9 million. And then revenue guidance for Q2 and the full year, pretty weak here as well. We see shares taking a hit here, down 14%, guys. I'm kind of surprised that Lululemon is up so strongly because it looks like the guide for Q2 is a little below.

And the full year guide, revenue-wise, is just in line. But what do I know? I'm not sure. Well, Paul, let's get your thoughts on this because I do know for both of these names, we had very weak results in the last round of earnings, and the bar was arguably very low going into this. Yeah, so, I mean, I think both companies, they traded similar multiples. But, you know, Five Below is geared towards a much different consumer than Lululemon. Lululemon, I think, it trades at just under 22 times earnings, which is half its historical multiple over the last 10

years. And Sentiment, like you said, has been real weak for the stock and they be on competition from Viore and other players. But they're also still taking share from companies like Nike and Under Armour. They have plenty of room for growth in the men's sector and as well as footwear. And I didn't hear, I haven't seen the release, but it would be interesting to see how their sales in China did as that could be a potential bright spot as well. So, you know, I don't seen the release, but it would be interesting to see how their sales in China did, as that could be a potential bright spot as well. So, you know, I don't have those numbers in front of me, but, you know, it'll be interesting to see how that plays out. Five below shrinkage was an issue. And they said it's going to take over a year to get that alleviated because they're going to have to hire more staff to run the registers and check receipts.

And that that only increases. You know, those are labor costs that will only hurt margins. Keith, what are you watching for? Granted, services is a big part of what affects the consumer these days versus just the goods. But are the results, particularly perhaps from the discounters,

like Five Below, Dollar Tree as well. Are they telling you anything about the strength of the mainstream consumer right now? Yeah, well, I think it's bifurcated. We're certainly seeing consumers push back a bit. We're seeing some of that excess savings pulled out. But all in all, I still think the economy, from an aggregate perspective, is doing fine. But it is normalizing or cooling. I think the one thing you really want to pay attention to are these weekly jobless claims to see if they stay stable. Obviously, we have the employment report, which can be volatile as well. But as we look at other things, as far as debt service payments, those are still relatively low in aggregate.

So we think the consumer is doing fine, but it's certainly slowing down from the really brisk pace that we've seen of the past few years. And by the way, we are actually in our portfolios, while we're overweight tech, we are underweight discretionary because of this kind of transition that we're seeing. All right. Keith, Paul, thank you. Thank you. It's interesting. I'm just going through the five below release here. And one of the things our CEO, Joel Anderson, says is that need-based items such as those in candy, food and beauty departments outperformed expectations, drove positive sales results and that it was positive comparable sales from higher income customers, that the macro environment disproportionately has impacted their core lower income customers.

So perhaps not surprising, but definitely fits into the narrative we've been hearing and seeing and discussing for weeks, if not months now. Needs over wants. It certainly has been benefiting Walmart. Meantime, NVIDIA, some companies need AI, hitting $3 trillion market cap today, briefly surpassing Apple's market cap. No other major stock has matched NVIDIA's massive run over the last year, except for one part of the market. What could it be? Let's bring in senior markets commentator Mike Santoli to tell us. Mike. Yeah, John. Broadly defined. Look, everyone defines their own needs versus wants. I like how Five Below says candy and beauty are needs. All right. So, you know, candy and beauty may be in the eye of the beholder here in the markets, too. Nvidia relative to Bitcoin one year basis.

I've been pointing this out since the middle of 2023. It really has been very, very similar cadence of gains. Now, Supermicro, which, of course, is a kind of smaller version of the NVIDIA trade, has had a larger percentage move up from a much smaller base. It's really a different story. So here you see NVIDIA, of course, accelerating beyond what Bitcoin has done. Bitcoin, of course, itself on the verge of breaking out potentially. NVIDIA is just a momentum chase. It's a fundamental momentum chase because we know in a linear way exactly what the orders are kind of building up toward. And it also is just a fevered moment ahead of this stock split. It seems to matter. It reminds me of Tesla in summer of 2020. Today, dollar volume in NVIDIA shares was about 8 to 10 times what it was in Apple or Microsoft,

which are the same market cap at this point. So it just tells you the level of attention here. Now, in other parts of the market, talking about the consumer, Costco, which is a member and a large member of the NASDAQ 100 and has been really putting up excellent fundamental numbers, has been trading over the last year much more like the semiconductor index than like the consumer staple sector, which is where it resides within the S&P. So Costco, arguably marginally a consumer staple stock. It's winning market share from consumer discretionary.

It's 13 or 14 percent of the staples group. Walmart's another 10, 11 percent of staples. So you have consumer staples, which people look at to say, hey, are people really afraid? Are they buying these stocks? And Walmart and Costco are really benefiting from still where consumers are spending. So I would argue that is not necessarily showing a defensive turn in the way investors are treating the economy, at least in that respect. Treasury yields and other things may be telling a different story. Mike, going back to NVIDIA Bitcoin and specifically zeroing in on NVIDIA, in a way, it reminds me of Apple's run to half a trillion like a decade or so ago. How do these things tend to get digested? There's always doubters who come out after a period of time and they say,

what's Apple got after the iPod or what's Apple got after the iPod? Or what's Apple got after the iPhone? Sure. Probably there are going to be people wondering about the sustainability of this. How does that tend to get reflected in volumes or in price action after a while? I mean, it feeds on itself until it has seemingly reached this. It's an unsatisfying answer, John, is the short one. Because there's no way of knowing exactly when it's completely satiated that demand. Now, if I want to look back at things like Apple and in the crescendo that led to that kind of blow off in Tesla, it was only temporary.

I mean, Tesla had this sort of a top in late August of 2020. Then it had another one when it was being put into the S&P 500. And it then went up from there after a short pullback. However, it's today trading below where it entered the S&P 500 in December of 2021 of 2020, rather. So obviously no guarantee long term. But right now, NVIDIA has been just incredibly hard to fight right here. I would note, too, I put this out today that the collective Wall Street price target on NVIDIA is basically where the stock is right now. They keep raising the target, and the stock catches up.

Yeah, the so-called law of large numbers, like the speed limit. It gets broken all the time, only sometimes you get a ticket. Mike Santoli, thank you. Lulu, soft Q2 guidance, but strong, much stronger full-year guidance. So that might be propelling the stock there. Okay, we'll look closer at that. It's right in the mid point of the range, though. The 10.75 the street was looking for. The EPS guidance. Oh, the EPS guidance. Nice. All right,

maybe there's our answer. They're growing margins. After the break, retail expert Dana Telsey on exactly this, breaking down results from Lululemon and Five Below as those stocks move in opposite directions on earnings. Plus, we're going to get some exclusive comments from Lulu's CEO on the quarter. And later, billionaire businessman Howard Lutnick on the market at record highs. And if he thinks the bull has more room to run, overtime is back in two. Welcome back to Overtime. Lululemon up almost 11% in overtime after beating on both lines. CEO Calvin McDonald speaking to our Sarah Eisen moments ago, telling her the growth of the company continues to be very strong. And they saw incredible momentum in every international market.

Also saying store traffic was positive, but the consumer environment remains dynamic, and inflation and higher rates are weighing on the minds of consumers. Joining us now ahead of the earnings call is Dana Telsey, CEO of Telsey Advisory Group. Dana, welcome, and maybe you can help us with this mystery. Maybe Morgan got to the bottom of it, but it didn't look like the guide was that strong compared to expectations. But the stock is higher. Is this a story of stronger margins heartening investors or maybe that the stock has been down so much that expectations were really low? I think the stock was down so much. You have a company that was down 35 percent in their stock price year to date. Here you came out and you just raised the guidance for the year. You beat,

frankly, your sales came in in line with expectations, if not a touch better. You look at the gross margin that came in better than expected. Basically, that gross margin was up 20 basis points and the guidance was for flat. And you look at the operating margin, the same thing. The operating margin was down 60 basis points with the guidance of down 130 to 140. And your inventories were clean, too. So you talk about navigating the environment with agility in a category where they're driving more innovation. And you add to your Sherry Purchase Program basically shows you where they believe. They believe that the strength of their brand

with their innovative product can continue to drive demand and they'll navigate the U.S. while having growth overseas. OK, so all of that being true, if the stock trades tomorrow where it's trading right now in overtime, it'll be about where it was three weeks ago, which is still massively down from where it was in February. What do you have to believe about the rest of the year, about Lululemon, to think that this is a great place to buy it? I think you have to believe that there's going to be an acceleration in top line growth, that you're going to have a stabilization in North America and continued growth in international. And I think you have to believe that the gross margin, that there's still going to be upside on the gross margin because you have a strong balance sheet. But the continuation

of positive beats is an encouraging sign. And this is your first marker that they did it, frankly, in an environment that I've termed a squishy consumer environment. So they've been able to deliver better than expected numbers, both on the gross margin and also on the operating margin with clean inventory. OK, Dana, stay right there. So we've got more earnings. Victoria Secrets is out and Steve Kovac has those numbers. Steve Morgan, yeah, and shares kind of wobbling around here after hours on those results. I see it up or now down slightly. Let's go over what the results are, though. EPS was a beat here at 12 cents adjusted. Street was looking for nine cents. Revenue is right in line with expectations at one point three six billion

dollars. As for guidance, a really wide range here for their EPS guidance for Q2, say between five and 20 cents. Street was looking for eight cents EPS. And then as for Q2 revenue guidance, they say it's going to be down in the low single digits, which is roughly in line with estimates. And then as for full year guidance, they are reaffirming that. And it looks like shares just bouncing all over the place down about two tenths of a percent here, guys. OK, Steve, thank you. Dean, I want to get your thoughts on this. And I guess zooming out more broadly, what this earning season has signaled about where you should be invested and what's hot, what's not. You got it. I mean, that what's hot, what's not. We've seen some of the what's hot, what's not.

When you look at companies like Ralph Lauren, when you look at Deckers, when you look at On Running, when you look at some of the essentials players and look at the off prices, they've done great. When you have brands that have had mishaps or really are not doing as well, you look at Kohl's, which also missed the bar. I think, if anything, it's clean inventory. It's new product that's driving demand. You look at Victoria's Secret, these numbers of 12 cents, it was at the upper end of their guidance range for the first quarter. But there's a lot that they need to happen in order to be able to deliver earnings for the back half of the year. Got it. Dana Telsey, thanks for joining us. Thank you for having me. Coming up next, Cantor Fitzgerald, chairman and CEO Howard Lutnick, with his read on the market rally, rates and real estate. And later, we're going to talk to the CEO of Archer Aviation about the FAA news today that

sent the stock skyward and how close we really are to seeing commercial air taxis in the real world. Meantime, check out Smartsheet, the productivity software provider, topping earnings and revenue estimates, also announcing an inaugural $150 million buyback. Adjusted EPS guidance for the second quarter was strong, as was full-year guidance. It's up 9%. Overtime,

we'll be right back. Welcome back to Overtime. Stocks getting a boost today as favorable data and a push higher from NVIDIA drove the S&P 500 and the Nasdaq to record closes, all ahead of next week's Fed decision and this week's jobs report on Friday. Joining us now from Piper Sandler Global Exchange and Trading Conference is Cantor Fitzgerald Chairman and CEO Howard Lutnick, alongside our own CNBC's Bob Pisani. Morgan, good to see you. Of course, we're here at the Piper Sandler Global Exchange Conference talking with one of the leaders of the exchanges that are out there and, of course, the trading platforms, Howard Lutton, GBC's partner CEO.

Good to see you, as always. Talk a little bit about what the outlook is for the markets in the next six months. We've got the macro set up heading into the back half of the year. What's your thoughts on that? Give us a little thoughts on where we might go and the volatility we might be expecting in the next few months. All right, so in December and January, everyone was talking about six or seven rate cuts.

And I thought that was a ha-ha, as in, ha-ha. That's funny. I mean, the Fed doesn't come to the party late and leave early. Come on, they're slow moving, steady and slow. So I thought the right term then, and I think of it now, steady Eddie. Okay, steady. Basically one cut in September. Nothing coming in the next couple of days.

One cut in September showing off. Why? They're running off the balance sheet. That's a tightening idea. I mean, think about it. The Fed's buying less. They're saying, I'm a seller. You spend the money.

That's Fed tightening. So they cut a little. They tighten a little. They're doing nothing, which is another way to say just keeping it steady. One cut in September. That's all you got this year. A little showing off before the election, but that's all you get.

You don't need to show off before the election. You don't need to be involved in making, appearing that you're getting involved in the election. You seem to be making a political point. Oh, they're going to make a political point. Look, you're at the Fed. You want to keep your job? Come on. You help the guy who's there now, keep his job. Maybe he'll keep you in place. So one cut in September. Is it supposed to be political? Is it not? If there's a cut in September, is it political? Oh, come on. to take it, Bob. Howard, it's great to have you on. It's good to see you.

Because you just said it. There have been reports, right, about fundraising. You've been co-hosting some fundraising efforts for Trump. We know that this does seem to be a key moment. A growing list of high profile investors and entrepreneurs are throwing their support behind the different candidates. But in particular, Trump right now, it, ahead of this election later in the year. How does it speak to this moment we're in and this moment specifically with policy? Well, look, you know, I don't really get into politics that much. There are lots of people on Wall Street who are making their decisions now, which way to go. Remember, it's only Trump versus Biden. You only got two choices. So lots of people are going to pick one versus the other. Look, the stock market's doing great. So President

Biden gets to say the stock market's doing great. You know, President Trump gets to say, you know, the border is makes no sense and regulation makes no sense. So it's a horse race and it's a foot race. Lots of people are going to put their bets out there. And, you know, obviously it's been reported that I've been raising money and backing Donald Trump, but that's just my opinion. You know, there's lots of people going both ways and it's going to be a horse race if there ever was one. So you are at this exchange and trading conference. You're standing up the FMX exchange to take on the CME and futures and derivatives trading. We also got news this week about a Texas stock exchange. It seems like some of the same backers between both of these exchanges as well.

But why is why is this a moment for disruption with the current duopoly in stocks, the monopoly in commodities and futures trading? We've seen these attempts in the past. Why is now the moment where that can actually break through? All right. So BGC Group has been working on this for a long time. So we rolled out our treasuries platform that's called FMX, U.S.s treasuries and that's been growing one or two market share points per quarter so fourth quarter we had 26 percent market share first quarter 28 market share then 10 of the largest banks so the texas thing is just two players and we can talk about that they're playing with each other but this is 10 10, 10 of 10. Goldman Sachs, Morgan Stanley, JP Morgan, BAML, Citi. I mean, the cast of characters, Jump, Citadel, everybody who matters,

partnering with us to take on the monopoly of the CME. So I think the time is now because our systems are doing great. They're already installed, fully approved CFTC. I think it's coming. I think exchange competition in futures is coming and it's called FMX and it's owned by BGC Group. BGC. I'm just pumped up about it. Being at this exchange, what's more fun about that? Howard, I know that I don't want to ask you about individual stocks, about NVIDIA specifically. It is a historic day, kind of inching past Apple and market cap. But I do want to ask you about artificial intelligence. What impact do you expect AI to have on the way markets function, say, over the next five years?

All right, so you've got the trading firms are all using AI now to try to basically speed up their models to try to do it better. And they're all using it and they're all using it now and they're speeding up their models and trying to train their models to be faster and faster for their algorithmic and quantitative trading. So that's happening now. Now, I think what you're going to see is it's going to go all the way through the financial markets, which will happen is the work that people are doing that is not clever, that is not fundamental, will be done more and more by machines. There'll be less outsourcing to India, less outsourcing to offshoring, and more computers doing it. But what it's going to do is it's going to create more high-paying jobs. So the smart people are going to do better. Capable people who can help AI do a better job are going to do better.

And the jobs that are just more functionally, you know, dotting I's and crossing T's, I think those jobs, especially the ones in India and things like that, they're just going to be reduced, and AI's going to do it better. So more efficient, better. But like, I think we're going to have more people employed in New York and in London on high paying jobs, doing a great job because that's what AI needs. It needs smart people telling it where to go. It's not telling the smart people where to go. People get that backward. And NVIDIA, I mean, how awesome is that? Three trillion. I love three trillion. It means it means that BGC's got a long way to go. Well, on that note, we appreciate your insights, Howard. Howard Lutnick,

thanks for joining us on our own Bob Fasani. Thank you. Time now for a CNBC News Update with Seema Modi. Seema. Morgan, top House Republicans send criminal referrals to the Department of Justice today recommending charges be brought against Hunter Biden and James Biden, President Joe Biden's brother. The letter accuses the president's relatives of lying to Congress in an effort to hinder the impeachment inquiry into Joe Biden. It comes as Hunter Biden has been standing trial since Monday on unrelated gun charges in a Delaware federal court. UK Prime Minister Rishi Sunak has put forward JP Morgan Chase CEO Jamie Dimon and former Google CEO Eric Schmidt for UK honors, that according to the

Financial Times. Now, it's unclear what level of honor the two men could receive, but one of Sunak's ministers telling the FT that Diamond would be, quote, a strong candidate for a knighthood. And India's Prime Minister Narendra Modi able to secure a coalition and the backing of two parties to lead the country for a third term. This after his party failed to secure an outright majority in the national election, guys, for the first time in 10 years. Back to you. All right, Seema Modi, thank you. Up next, the CEO of Archer Aviation is going to join us, along with the managing director of United Airline Ventures, as the FAA paves the way for electric air taxis. And another check here on today's overtime movers. We're going to be right back. Welcome back to Overtime.

Shares of Archer Aviation getting a pop up 6% today after getting one step closer to launching urban air taxis. Archer announcing it received FAA approval to begin operating an airline service for its EV tolls. Our Phil LeBeau is here with an exclusive interview with Archer CEO Adam Goldstein and United Airlines Ventures Managing Director Andrew Chang. United Airlines Ventures is a major backer of Archer. Phil? Thank you, John. Adam, let's start first off with you. Part 135 certification is a big deal, and I know you guys have maintained all along this is a crucial step in getting towards commercial service, perhaps as early as next year.

Is it really too optimistic to believe that you guys will start commercial service next year because you're still waiting for certification of the Midnight EVTOL that you're developing. Yeah, that's right, Phil. It is a really exciting announcement. It's probably one of the, you know, biggest milestones, you know, for the company. You know, it's a big deal. So since I founded Archer, we've really been focused on two things. And the first has been building the airline and getting it certified so that we can fly passengers all over the country with our partners, United, and then also certifying the aircraft itself so we can begin mass production. And so we're at the final stages of the ladder. But today we've announced that the FAA has certified our airline.

And so I'm very excited for the opportunity to be able to launch Archer soon in cities like New York, L.A. and San Francisco. And just to be clear here, a real quick answer, if you could, you do plan on starting commercial service next year? Yeah, so that is our goal. There is, you know, our plan, what we're going through today is working on certifying the aircraft here in the U.S. with the FAA. And so our goal is to certify the aircraft and launch as soon as next year with a focus on cities like New York City, Los Angeles and San Francisco. And then internationally, you know, our plan is to be able to launch as soon as next year in cities like Abu Dhabi and Dubai. Andrew, have you guys started mapping out

potential routes where United would say to customers, hey, look, if you want to go from Burbank to LAX, we can offer you a trip there in one of these eVTOLs? Absolutely. So the big mandate for United Airlines Ventures is to think about how to innovate and bring and enhance the customer travel experience. We have seven fantastic hubs here in the U.S., all advocating for urban air mobility. And so we are working with Archer. We have the line of sight to the end customer and what they're looking for. And so working with our network operations, flight operations, real estate teams, a number of stakeholders within United

working with Adam's team to bring that product and service to our customer base. Andrew, I wonder how and if, hi, it's John Fort here in Inglewood Cliffs. I wonder how you might be modeling operating costs and how those will result in pricing, particularly when you're talking about EVs, the maintenance side, as well as what I presume over time nets out to being lower fuel costs. That's right. So look, we're creating, Archer's creating a new aircraft. We're together creating a new industry

and we're looking for new use cases, right? Broadening the cash flow area of our hubs and of our customer population. And so it's working with his team as he's developing the aircraft, both on the CapEx side and the operating cost side, marrying that with the unit of revenue that we could potentially generate and offering that to our customers and looking at what makes sense. That is part of the background work that we're working on. Okay. Adam, it's good to see you and have you back on the show.

Last earnings that you reported a couple of weeks ago, cash and cash equivalents of $405 million. As you develop Midnight, as you get ready to launch service as soon as next year, are you going to need to raise more capital or do you feel comfortable with what you have given the regulatory and technological processes to get there? Yeah, so Archer was very fortunate to have raised a substantial amount of capital. And we chose a strategy that is a, you know, I'll call it a capital light strategy versus what a lot of the other competitors in the industry have chosen. And so we chose a strategy where we have partnered with the tier one aerospace suppliers that have helped develop a lot of the other competitors in the industry have chosen. And so we chose a strategy where we have partnered with the tier one aerospace suppliers that have helped develop a lot of the

core engineering solutions that we need to build and ultimately certify the aircraft. We also partnered with Stellantis, one of the largest auto OEMs in the world, who is helping us on the manufacturing side. And so we've really focused on making sure we can build a safe, quiet, and really effective vehicle that can bring this new form of sustainable transportation to the masses. And together with our partnerships, the company is in a really strong position to be able to do that here in the near term.

Adam, how's the process right now in terms of manufacturing? Where are you guys on the timeline in terms of as you move towards certification of the Midnight? So we have two large manufacturing facilities. The first one is in California, where I'm based, which is right next door to the headquarters. And that facility is where we started to build the first, I'll call it tens of aircrafts. But the large facility in Georgia will open up later this year. And that's the facility that has the ability to produce up to 650 aircraft in its first phase. And so the capacity to build this aircraft, the partner through Stellantis, which gives us the capabilities to really manufacture at scale,

is all in place. And so really, the manufacturing side of the business is probably one of the most exciting parts, because as we start to bring these aircraft online and as we've seen really this global interest in bringing it online, I think you will start to see a large adoption of the aircraft globally and really become a major industry here, you know, in the following few years. All right. Thank you to Adam and Andrew and of course to our own Phil LeBeau as well. Well, the S&P 500 closing at a new high. And up next, Mike Santoli is going to look at what that means for how expensive stocks look. And investors were toasting the record closes today.

But Brown Foreman holders may be drowning their sorrows. Stock, the worst performer in the S&P after the spirits maker missed revenue estimates due to sliding sales of Jack Daniels whiskey. Sounds like a country song. Welcome back. With new highs being set in the market, Mike Santoli returns with a look at whether stocks are starting to look too pricey. Mike. You know, Morgan, on a headline level, stocks have looked relatively fully valued at least for a while. 21 times forward earnings for the S&P 500.

One of the stories you hear, and it's some validity to it, which is it's the mega cap growth stocks that really are pushing that premium higher. Now, that's somewhat true. But here's Ned Davis research's long term chart of the median trailing price earnings ratio in the S&P 500. So this is trailing earnings last 12 months. And it's the median stock in the market, not the overall. But that's not going to help us out. That's a different picture. However, it's around 25 times right now and it's well well above the long-term average, which is around 17. Now, this goes back even further than I do, Morgan, 60 years. What I will note is that since the mid-'90s, the box has been at a higher level than the longer-term average, where it hasn't spent much time below the 17 area.

So maybe it's not an imminent issue. Of course, we have traded higher than this now. But it is worth keeping in mind that it's not as if the run of the mill average stock, you know, kind of bouncing around the market is outright cheap at these levels. I would say we can hold our valuation as long as we think earnings are going to continue to grow, which they look like they will this year. And if the Fed's next move is lower in rates. OK, that's that's that's two ifs right there. I almost, by the way, I almost wish we could go back to the other picture because it was like your Peter Parker moment down in New York City, Spider-Man.

Scale the side of the building. Yeah. Yeah, totally. Okay. So how high is the hurdle in terms of that earnings growth? Especially as strategists have been revising their estimates higher, which we don't typically see. And given the fact that it does seem less and less likely that we get much in terms of meaningful rate cuts this year, unless the bottom falls out of the economy. Yeah, I mean, I think you definitely have seen the revisions go in the right direction. But even there, that's been dominated by a relatively narrow cluster of growth stocks. So I think it's OK. A lot of stocks are actually still not at record earnings levels.

So there's some recovery potential there. I think Fed rate cuts probably should matter. Ideally, we get them because inflation comes down, not because the economy is in trouble for a lot of stocks. That's the formula for potentially a broadening out of the earnings picture. So, you know, it's a little bit of a of a needle to thread here. But again, you know, it's not a good timing tool. It's much more about the atmospheric conditions that will dictate longer-term forward returns. Okay. Mike Santoli, a.k.a. our own Peter Parker, thank you for joining us. NVIDIA wasn't the only thing that rocketed higher today. Boeing's long-delayed Starliner capsule finally took off with a crew on board.

Up next, what this means for the aerospace giant and for the future of space travel. Finally and check out the top performers in the S&P 500 today on this record-setting day of closes. HPE, Moderna, Broadcom, Micron and Lam Research all up 5% or more. We'll be right back. 3, 2, 1, ignition. And liftoff of Starliner and Atlas V. five carrying two american heroes well that's history being made as boeing starliner capsule lifted off from florida at 10 52 a.m eastern this morning hitching a ride on a ula atlas 5 rocket and reaching orbit with nasa astronauts butch will butch wilmore and sonny williams on board long delayed high stakes the mission marks the first time starliner has carried people so far it has been a success but there's much more to be done.

Tomorrow, it will dock with the International Space Station for an expected week-long stay before heading back to Earth. Today's flight becoming just the sixth inaugural journey of a crewed spacecraft in the U.S. And Starliner is now, if this mission goes as planned, poised to join SpaceX's Dragon capsule as the second commercial capsule contracted with NASA for these types of astronaut missions to the ISS. Elon Musk tweeting his congratulations on the successful launch as SpaceX gears up for its own test flight, the fourth of Starship, tomorrow morning as well. But, John, this was 10 years in the making. 2014 is when NASA awarded both SpaceX and Boeing these commercial crew contracts. We've seen a number of delays. We've seen a number of cost overruns.

But then you see a launch like today, and it's a huge milestone, not only for Boeing, but for U.S. spaceflight. Now, it's safe to say Musk would not have tweeted congratulations if it were Blue Origin. I mean, is this. I have found that the space world in general, very supportive of each other on these big types of launch days. That being said, there's been of course, there's been some trolling by Elon Musk of Jeff Bezos over the years. But in general, there tends to be support because I say it so much on TV, but I'm going to say it again. Space is hard.

So when you do something like achieve orbit successfully, especially when human lives are in the mix, it's major. It's considered a win for everybody across the industry. But we needed this one, too. Well, up next, all the overtime movers that need to be on your radar, as well as the big names that are set to report earnings tomorrow. And don't forget, you can catch us on the go by following the Closing Bell Overtime Podcast on your favorite podcast app. We will be right back. Welcome back to Overtime, a big day for Wall Street. The S&P 500 and Nasdaq closing at record highs.

Nvidia surging above $3 trillion in market caps, surpassing Apple. And some big movers in overtime as well. Lululemon getting a big jump after beating on both lines. You can see those shares are more than 12% right now. Five below moving the other way, though. Those shares are down about 14.5%. Revenue came in light. Full year revenue guidance was also weak for that retailer.

Smart Sheet is jumping on a beat on both lines. The company also announcing $150 million stock buyback. Those shares are also up 12 percent. Well, tomorrow is going to be another big day for earnings. On the consumer front, we will get results from J.M. Smucker and Vail Resorts. And in tech, we'll watch numbers from Sienna, DocuSign and Samsara. Samsara's CEO, Sanjit Biswas, is going to break down those results in an exclusive interview Friday on Overtime. Also on Wall Street's radar tomorrow will be the weekly jobless claims report, first quarter productivity and unit labor costs, the ECB rate decision, and annual shareholder meetings from Netflix and Chipotle. totally. And I've got to end this, Morgan, as we began noting NVIDIA not only hitting a $3 trillion market cap, but edging past Apple. But here's the setup also that's interesting for me. Over the

next few days, we get NVIDIA stock split, right, on the 7th. And then three days later, Apple WWDC, where we expect to hear more about Apple's AI strategy. How do those things factor into these two neck and neck? Yeah, it's such a great point that you bring up there, especially since the bar seems to be incrementally increasing for that event next week with Apple. As we know, there's partnerships reportedly with OpenAI and the like. And Apple hasn't moved much on AI ideas or news. The kind of sense has been, oh, well, Microsoft is benefiting from this. People think Apple's behind. But then they thought that about Google as well for a while.

Yeah. Also, Bank of Canada cut rates today. ECB expected to cut tomorrow. So watch that. That's going to do it for us here at Overtime. Fast money starts now.