Closing Bell - Closing Bell Overtime: Palantir Pops, Ford Falls, and Markets Weigh Tech and Tariff Risks 5/5/25

Episode Date: May 5, 2025

Kevin Gordon, Charles Schwab Senior Investment Strategist kicks off the show, tracking the S&P 500 ‘s first down day in the last 10 session. Morgan breaks down Palantir’s quarterly numbers, plus a bull-and-bear debate on the stock with Dan Ives, Wedbush Global Head of Technology Research, and Brent Thill, Jefferies Analyst. Michael Kantrowitz, Piper Sandler Chief Investment Strategist, joins on the macro and Fed outlook, while Arjun Murti, Partner at Veriten, weighs in on the energy sector and falling oil prices. Plus, Hollywood gets caught in the crosshairs of U.S.–China trade tensions—our Julia Boorstin reports on the growing tariff risks for the entertainment industry.

That bell marks the end of regulation. Constellation Brands ringing the closing bell at the New York Stock Exchange. American Woodmark Corporation doing the honors at the NASDAQ. And the Dow and S&P 500 snapping nine-day win streaks with small losses, even as Treasury Secretary Scott Vestent signals trade deals could be coming soon. That's a scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Ft. with Morgan Brennan.

We've got a big hour of earnings on the way, including results from the S&P 500's biggest winner of this year, Palantir, along with Ford, Mattel, Clorox and more. Plus, U.S. oil prices falling out of bed, settling at their lowest level since 2021, after OPEC Plus agreed to a jump in production. We're gonna talk to ConocoPhillips board member Arjun Murthy about what's behind OPEC's decision and how much lower prices could go. As we await earnings though, let's get straight to today's market action.

Joining us now is Charles Schwab, Senior Investment Strategist, Kevin Gordon, and CNBC Senior Markets Commentator, Mike Santoli. Guys, good afternoon. Kevin, US-China relations, I think, hanging over this market still. I have to imagine also over US deals with other countries as the US sort of wants to isolate China.

Stocks effectively took a breather today after a strong jobs report, big tech earnings, Fed Day's Wednesday, what matters now for investors? Well I think a lot of the, in addition to earnings and the guidance or maybe lack thereof that companies are giving, it really is this gap, I think, between the soft data and the hard data. How big that gap is, if it even exists at all.

You'll probably start to see, you know, I'd say maybe more into mid to late summer. That's when maybe the hard data starts to confirm, if at all, some of the weakness that we've seen in the soft data. And you know, the jobs report in particular, what becomes, I think, really important, especially because a lot of the focus

for the trade disruptions around the world have been on the good side of things, in particular our goods deficit. There is never really a lot of focus on the services surplus that we have with a lot of countries around the world. And I think in particular for something like US tourism, if you were to take that and put it under a microscope, there's pretty significant decline you've seen recently in how that potentially impacts sectors like leisure and hospitality here in the States,

which are huge, and anything adjacent to that industry in particular. So when you start thinking about getting into the May and the June jobs reports and potentially what that means for the services side of the economy, that is one example of a hard data point, you know, so to speak, where I think you could probably start to see some weakness filter over. But again, we have still a little bit of time to see whether that's the case per ISM services this morning. You know, employment improved a little bit, still contracted.

But you know, that's going to be an important sequencing to follow. And Mike Santoli, is that also a reason why we should expect to see the Fed stay on pause? Yeah, I do think it makes sense to expect them to stay on pause. There just hasn't been enough of a buildup of the real weakness in the hard data and certainly not a pure green light from the inflation numbers for them to be doing anything right now. All the rhetoric leading up into the blackout period of this meeting says that. Now would they have some nods in the direction of maybe we could be prepared sooner than

later if we do get some weakness to ease in June or something like that? Sure, I wouldn't rule that out at this point. You know the Fed has always said it's data dependent and the data has started to soften up so they could basically reposition their rhetoric without necessarily seeming like they were bending to any political pressure. So Kevin, there's lots that's going to happen, presumably, and we don't know what exactly it'll be, but there will be a lot between now and summer. Do you like this rally, even though it took a little bit of a breather here?

Does it have legs? You know, I think it makes sense from the textbook standpoint of you know, you go through this massive washout in sentiment I would say with the important caveat though A lot of it's been more on the attitudinal side not as much on the behavioral side But a really powerful force underpinning all of this and Mike was mentioning it, you know in the Leading it right into the closing bell is the power of the retail trader and how? Strong that by the dip mentality and ignoring of you know sell the rip mentality has been. And that's been you

know whether you track the data that comes from Vanda, whether you track the data that comes from ETF flows into the into the equity universe. I mean all of that has been relatively strong throughout this period. So on the one hand I think it is a support or it has been a support for the market. On the other hand if you do get more tariff-related uncertainty that kind of hits the market and comes from left field, and that does exacerbate more selling pressure, it does still mean that households and investors are more exposed to stocks. So you probably get the potential for another leg lower, especially if you don't see a meaningful

recovery in breadth statistics, which I would argue you're starting to see now. You're getting into those early phases of a big spike in the number of companies that are making new four-week highs. If that follows through over to the number of new 52-week highs, which I think we've still got some runway, but if that happens then you probably have more of a case to be made that there is more of a durable rally. Well, speaking of retail investors, one of those names that's very widely held by retail investors and others, Palantir, we have those results just crossing and we're going to bring them to you right now. Q1 EPS in line, 13 cents per share but beats across the board on everything else.

Revenue of $884 million, that's up 39% year over year. U.S. leading the charge once again. US government revenue growing 45% year over year to 373 million. US commercial surging 71% to 255 million dollars. Palantir closed 139 deals of at least 1 million dollars last quarter. For guidance, the AI and Data Analytics company raising forecasts. All metrics above street estimates. Q2 revenue now 934 to 938 million expected. Full year revenue forecast 3.89 billion to 3.9 billion expected.

US commercial revenue is also expected to grow at least 68% this year. Higher free cash flow, higher adjusted income from operations also anticipated. Now CEO and co-founder Alex Karp telling me, quote, this is a moment for the world to see how you actually do next generation AI implementation. Our numbers show that the revolution is real, but you need specific and very particular products and ways of doing it to capture that value.

On defense spending and geopolitics, Karp telling me, quote, there's been a lot of reforms in the DOD that have made it possible for people to enter the market besides us. Super positive on that. The Defense Industrial Base is going to be a metaphor for manufacturing globally, so we're very optimistic about how we can help manufacturing in the US where the Defense Industrial Base,

both new and older, pave the way. We see our products heavily in use there, and you know, America has all the advantages. We just have to take advantage of those advantages. Now on large language model costs coming down, something we've been hearing from some CEOs, particularly on the software side, Karp explaining that, quote, the cost of LLMs

are a problem if the LLM doesn't create more value than the cost of purchasing them. The cost of purchasing them is much less currently than the cost of producing. And that's why he says none of these companies are public. But last I checked, shares of Palantir were under a little bit of pressure here. Not anymore.

Okay, there you go. There you go, it was largely a beaten array as across the board for a name that's at more than 60% this year, at more than 400% over the past 12 months and has basically regained or come close to regaining all of the losses from that downdraft we saw start for the broader market in February. So shares are now at 4%. Yeah.

On that news you just broke. And Ford earnings are out as well. Phil LaBeau has those numbers. Phil. Hey, John, this is a beat on the top and the bottom line for the first quarter for Ford. Keep in mind the estimates have been slashed dramatically over the last 30 to 45 days. Nonetheless, Ford beats the street on the bottom line earning 14 cents a share. The street was expecting a 2 cent profit.

Revenue automotive revenue we should say coming in at 37.42 billion above the street estimate of 36.21 billion. The metrics for the first quarter, not terribly improving or not terribly appealing, I should say. Cash burn of $1.5 billion and adjusted profit of $1 billion compared to $2.8 billion in the first quarter of last year. Vehicles, commercial vehicle profit there down to $1.3 billion compared to $3 billion last year.

The internal combustion engine vehicle profit, wow, it really fell in the first quarter due to volume and the mix, $96 million was the profit in internal combustion engine vehicles. 901 million is what they made in that division last year. They did improve results with the EV division, losing $849 million compared to losing $1.3 billion last year. But the guidance is what people will be focused on.

Ford is now expecting an impact because of tariffs, total impact to be $1.5 billion. They say $2.5 billion, but they can offset a billion. That's how you get to $1.5 billion as the impact for 2025. They are suspending their full year guidance. Lots to discuss with Ford CEO Jim Farley. He has been very candid about his comments about the impact of these tariffs. We'll talk with him about not only the results, but more of the outlook and how Ford is going to further offset these impacts tomorrow morning. You don't want to miss it first on CNBC on Squawk Box. Guys back to you. Alright looking forward to that. Phil LeBeau thank you with shares of Ford up fractionally right now. Mike Santoli want to get your thoughts on two reports. Okay Palantir is lower again now. It's bouncing around here in after hours and Ford is actually also lower. We want to get your thoughts on two names that are arguably in their own rights, proxies for broader market activity right now, albeit different parts of it. Sure, absolutely. Palantir, as you mentioned, is the retail favorite. It trades at, I don't know, 100 times 2027 earnings estimates. And it's because of this very open-ended thematic

growth story that people are embracing. Whereas Ford, it trades at six times earnings because people don't think those earnings are going to stick around and now the company is essentially kind of bowing to reality and suspending guidance on there. By the way, Ford was supposed to at the beginning of this year, the first quarter earnings estimate was like 50 cents a share, went down about break even or worse and they come and adjust it a little higher than that. So that's the world that Ford is living in right now. It's very cloudy out there. Wow. Yeah, Palantir is wiggling on the hook plus or minus five percent in about five minutes Meantime Mattel earnings are out Courtney Reagan has those numbers court. Hi there John. Yes So I think the headline here is more about the tariffs, but let us let's get you through the some of these numbers

So putting up a better than expected quarter of eight hundred and twenty seven million dollars in revenue That's better than the seven786 million expected. The street was also expecting a loss of 10 cents when it comes to earnings per share. They did report a loss, but smaller than expected at three cents. However, Mattel is pulling its full year guidance, basically saying it's just too unpredictable right now when it comes to what's going on with the tariff situation, but it is going to do what it can to offset some of the, or mitigate, I should say, some of the impact here. And in the release, they do talk about

when it comes to production, but there are some headlines from the Wall Street Journal saying that they will indeed increase prices with quotes directly from an interview with the CEO if that is in fact necessary to do so. The adjusted gross margin did also come in stronger than expected, above 49%. The street was looking for that to be up about 47 percent.

But again, we now no longer have guidance to work with as the company is trying to lobby the Trump administration to exempt toys from these very, very high tariffs. Jeffries estimates about 22 percent of Mattel's cost of goods sold do come from China, which we know have a very, very high tariff rate as we sit here right now. But shares look like they're unchanged because I think there's a lot to dig through right here with those stronger than expected quarter. But big question mark going forward back over to you. OK, Courtney Reagan, thanks.

So two out of three companies just now pulling their guidance in their earnings reports, hims and hers earnings are out. Let's find out what's going on there. Brandon Gomez has the numbers, Brandon. Hey, Morgan. Yeah, different story when it comes to guidance here after reporting and earnings beat. EPS was a beat, revenue 586 million above the 538 million that was expected by the street. Now the company announced last week its users

will have access to Novo Nordic's Wigovia weight loss drug directly through the HIMSS platform. I asked how that might impact revenue guidance today. The company keeping its full year guidance within range with the analysts estimates of 2.3 to 2.4 billion, 2.32 billion expected for Q2, Q2 guidance, I'm sorry, below estimates did raise their full year EBITDA guidance though. News out earlier this morning too that the company is bringing in a former Amazon executive

Nadir Kabani as its chief operations officer. He oversaw Amazon's acquisition of PillPak and the launch of Amazon Pharmacy. Guys, I'll be talking with the CEO and CFO in a few minutes to bring you highlights from that conversation perhaps about that lowered Q2 guidance and that adjusted guidance going forward for the fiscal year. All right.

Brandon Gomez, thank you. We're gonna keep with the panel for another moment. Kevin, the China factor here, arguably helping Palantir because it is key to that sort of AI, military, industrial, like software surge response, but hurting Mattel and China's global response just starting to take shape, it seems. We've heard them sort of discourage others from from trying to isolate according to the U.S. plan. What do you expect to see from them over the next several weeks?

How might it affect the markets? Well, in terms of China. China. Yeah, I think that the response mechanism is so different this time versus the first trade war, if you want to think about it that way, the 2018 to 2019 period, especially because over the several years

that you've had since the first Trump administration, the broader block of Southeast Asia in terms of its relationship with China has strengthened in terms of trade. Whether it's because things have been rerouted through those countries to the US or whether there's just been more direct trading between China and those countries, I think it maybe probably benefits China this time relative to where the position they were in in the first trade war. It's not like it's a massive benefit because they're still hurting, you know, both countries

are still hurting in terms of the U.S. and China if tariff rates stay this high. But I think that that's an important thing to consider in this, you know, you talk about Chinese demand for other products or other services. It's not, you know, it's feasible to think that that's the case. That could be the case moving forward where they can sort of act as their own source of demand. They don't necessarily need the United States. But, of course, relationships are a lot more complex than just that.

But I think it's an important factor to consider because a lot of dynamics around the world and global trade have definitely changed. Some for the better, some for the worse. But that's an important differentiator, especially because this current disruption, it's not just two countries going at it. It's not just US v China. It's US with basically the rest of the world and trying to figure out, through various negotiations,

trying to figure out what percentages make the most sense from a tariff standpoint. And we've seen this across all asset classes, including just today, major volatility in the Asian currencies versus the US dollar too. That was the other big story in trading today. Kevin Gordon, thank you for joining us. Mike Santoli. We'll see in a little bit. Well, up next, much more on Palantir's results,

the top performing stock of the year heading into today's print. We're going to hear from a bull and a bear with our first reactions to the numbers. Plus what's really behind OPEC's move to increase output. We'll talk to ConocoPhillips and Liberty Energy board member Arjun Murthy about the decision that sent oil prices to their lowest levels since 2021 when overtime comes right back. Welcome back to overtime. Clorox earnings are out. The stock is trading lower. Steve Kovach, how's the numbers? Steve? Yeah, John, that's due to misses on the top of bottom lines and a tariff warning in here

for guidance. First, let's go over EPS. That came in at $1.45 adjusted. Street was looking for $1.57. Revenues a miss as well, 1.67 billion. Street wanted 1.73 billion. And then they're lowering their guidance here. Clorox lowering their guidance for the current quarter, also wrapping out the end of their

fiscal year due to tariffs and macroeconomic uncertainty. Now lowering it to about 6.95 billion to in the low seven billions. Street wanted to see $7.1 billion there. So this is really impacting Clark's future sales for this quarter. And then margins though did come in above expected. Gross margin was 46%.

Street was looking for 44 percent You see stock off 3% now Morgan. Okay, Steve Kovac. Thank you Well pounds your earnings just out a few moments ago the stock lower after an initial pop now down about 2% I spoke with CEO Alex carb about the quarter and the uncertain macro environment Here's what he told me about tariffs and global trade quote The only negative impact we see in our business is continental Europe's unwillingness to buy the best product as defined by what's succeeding in the most dynamic market, the US,

and that that is an ongoing trend. In fact, he has been talking about it, honestly, for years now. There's a lot of theory in the market, he says, quote unquote, but when the rubber hits the road, it's value creation when it really matters. And to get to 71% growth in the US, that's for commercial, and the 83 rule of 40,

you see that we are downstream from very significant value creation. Well, joining us now is Jefferies Brent Thill and Web Bush's Dan Ives with opposing ratings on the stock. Brenton has an underperform and Dan has an outperform. So this is a good old fashionedfashioned, bold, bare discussion here. Dan, you're on set.

I'm gonna start this conversation with you. Your reaction to the commentary from Carp, who basically said to me, look, macro uncertainty, if you can deliver value in this market, people are still gonna spend, companies are still gonna spend, governments are still gonna spend, and they're seeing that in their results. And look at those numbers.

I think you could print this press release off, frame it, and put it in the Louvre, because if you look at the numbers, you look at those numbers. I think you could print this press release off, frame it, and put it in the Louvre. Because if you look at the numbers, you look at commercial, you look at, in terms of AI, they are leading when it comes to AI revolution. The software numbers are showing, even on the government side. And look, if you look at the bears, they hated 30, despised it at 50. Absolutely, say it's expensive at 100, 125. Look, I believe this is going to a trillion dollar mark cap in the next two to three years.

These numbers just show. I think it's get the popcorn out. It's still in the early days of playing out. Brent, want to get your thoughts on this, especially since you have a price target that is markedly lower than where the stock is trading right now, basically half of where it's trading right now. And Dan's price targets lower than his bullish view. That's true. So look, I think when you think about the fundamentals are alive, right? They beat by 24 million. They raised the guidance by six times the beat. We're not arguing

the fundamentals. They are fully alive. The question becomes, there's not a single software stock that we've ever covered that trades at this multiple and sustained it. Snowflake, Datadog, you go through the list. So it's largely just history and valuation lessons, which haven't worked for any of these names. And so we watched Snowflake go to 50 times revenue and then went to eight times revenue.

And so Palantir is in a different league. There's no question the fundamentals are delivering. It's just the question, what is the stock worth? And our job is to find names where we don't feel like there's downward pressure on multiples. There's upward pressure. So Microsoft, Apple, and there's a handful of other names that Jeffries covers that we're recommending

that we just feel are great franchises and have better durability at multiples that aren't at 65 times revenue. There's not a single tech name that's ever sustained that multiple. Dan, I hear what Brent is saying, but in a world where Nvidia and Tesla have done what they've done recently,

does history have that much bearing? If you believe, as you seem to, that Palantir is this generational opportunity. Well, I think, but look, I mean, the value, if you go back the last few years, right, I mean, they hated it at 10, despised it at 100, and that would be the continued argument of valuation. If you look what's happened in the AI revolution,

two trillion of spend over the next three years, on the software side, it's their world, everyone else paying rent, and it comes to Palantir. So my view is, if you look at it just on valuation, and if you went back, you've missed every transformational tech stock last 20 years, if you just focus on valuation, where is this in the next two, three, four, five years? And I view what CARP's doing to Palantir as generational.

But again, the haters are gonna hate, I get it, valuation, check the box, you look at these numbers, I just, to me, I think this is just another sort of table pounder moment, you know, for what I view as the messy of AI, Palantir. So, Brent, what breaks Palantir then in the amazing run that it's been having? Is it overall sentiment? And if it's an overall sentiment issue, how many other things have to break at the same

time? I think ultimately you hit a point which you've hit on the multiple. I mean, look at the numbers and the stocks down 5% in the after hours. There's some break point where, you know, investors, this has been fueled by retail. There's not a single institutional investor I talked to that even talks about the same. That's part of the problem. It's a retail driven story and it's not being driven by institutions. Our investor base is institutions. And so the reason why I spend such little time is no one can make sense of the multiple.

And so I spend my time on things that have multiple support. So again, I'm a huge fan of the fundamentals. I'm not gonna argue, and I think Dan's had a great call. So kudos to him, and no one's gonna take that away. It's just my views, I think there are just other stories that we have more confidence in with that valuation support. Dan, I'm gonna respond to this.

I'd say Brett brings a really important point because retail has been way ahead institutional and Palantir. And Palantir, again, they continue to hate it and they'll continue to hate it when I believe it's up another 40, 50, 60%. Part of the problem here is that institutional, they just, they paint it with a certain brush,

they have a certain negative view, and I agree with what Brent's saying. I think institutional has been way wrong on this. Retail has been right, but I do believe institutional eventually, just given, you know, from a waiting perspective, you can't just continue to hate what I view is gonna be a trillion dollar markup. To be fair, Alex Karp has a very negative view

of institutional too. And that has some help. Dan, Brent, thanks to you both. Good debate. Well, still ahead, stocks making a full round trip since the tariff announcement, but is sentiment now getting stretched? We're gonna talk to Piper Sandler's

Chief Investment Strategist about one thing he says needs to happen to keep this comeback rally going. And we've got much more ahead on today's After Hours action, with right across the screen, including a closer look at Mattel and how tariffs could take the fun out of the toy business. Overtime we'll be right back. I can say that I am highly confident that we have 18 important trading partners. We'll put China to the side. The 17 other partners, many of them have approached us with the very good trade proposals. President Trump is going to be involved in all of those.

He will be the final decision maker. That was Treasury Secretary Scott Bessen earlier today with Sarah Eisen at Milken saying he's highly confident about the trade proposals from partners excluding China. How much does the market really care about non-China deals? Let's bring in Piper Sandler, chief investment strategist, Michael Kantrowitz. Michael, welcome. I can't help but think that the deals with other countries have to include some kind of China component, right?

Because it really sounds like the Trump administration is trying to isolate China. China is trying to keep that from happening. So how much of that are we going to see play out and how much of it matters until we see what's going to happen with China and whether this enormous tariff rate comes down? Yeah, good afternoon. I think that that does matter at the fringe, but ultimately, you know, what I think continue to propel markets the last couple of weeks is how President Trump said that the tariffs in China, which are currently 145%, of course, I know, paraphrasing will come down, and we

believe they will. He campaigned at a rate of something he mentioned 60% pretty often So I think ultimately again the markets heard a lot and has taken president Trump and the administration at their word But I think we're gonna be going from just you know hearing is believing to wanting to see action to believe so what's the? What's the deadline there? Is it this 90-day tariff window? I mean, how long do you think investors need to tap their feet and wait for reality to set in, whatever that is? Well, yeah, that's the interesting aspect of this current backdrop is that we really still have yet

to see a broad-based material impact from the price increases that we're seeing in some of the survey data, from the demand hits that we're likely to see in the economy. We're seeing a lot of demand, and we're seeing in some of the survey data, from the demand hits that we're likely to see in the economy. We're seeing it in the shipping data, the cargo data, but we're not seeing it on the shelves really all that much. So even in Q1 earnings season, which has been fine, there hasn't been much guidance

to help shape the picture for investors. So really all they have to go with right now is coincident lagging data and rhetoric for the administration, which admittedly has been incrementally positive. So that's not gonna last forever and either it's gonna be a function of time until all of that changes and the data show up

or the market keeps moving higher and I think that also raises the bar for some action to need to happen. And of course Canada's Prime Minister Mark Carney is going to be going to the White House tomorrow to meet with President Trump. So one to watch perhaps in light of what this means for North American trade flows. You call this an economic suppression rather than an economic recession. What does that mean? Yeah well I don't really like the term recession because it's too binary.

And you could have all sorts of recessions, short ones, long ones, deep ones, shallow ones. What's going on now is really a suppression of economic activity due to uncertainty about the future. This is not coming, or the potential weak data that is likely to come in the next several months is not a function of the classic cycle drivers such as a shock from interest rates or a spike in oil prices. If anything, interest rates have been fairly well behaved, albeit flat for the last

couple of years, and oil prices are at a multi-year low. So, putting that aside, the economy should be pretty good right now, but all this uncertainty is somewhat holding it back or suppressing it. Well, it is interesting we're seeing oil prices come down. So far the inflation data seems to be somewhat behaving or at least moving in the right direction according to Wall Street expectations.

And we know labor data has been holding up. I mean, the jobs report on Friday was better than expected. If you're the Fed, how are you gaming this out this week? I don't think you're doing anything different. I don't think anything has changed for the Fed. We saw some better data in terms of job openings came down. Powell often talks about that. PCE core inflation came down.

The jobs market was okay. Certainly the bulk of the data that Powell looks at. There are obviously signs of rising inflation. We saw that in the last week. The ISM manufacturing prices paid got up to nearly 70. The services prices paid today got up to about 65. So those are worrisome numbers. But remember, the last time we saw those numbers, oil prices were also rising sharply

in the first half of 2022, which couldn't be further from the case today. So I think Powell's going to have to continue to wait and see, as so are investors as well. Okay, Michael Kantrowitz, thanks for joining us. Great to have you on overtime. Thank you. Bye. It's time now for a CNBC news update with Kate Rooney. Hi Kate. Hi Morgan. The Israeli military says it carried out an air strike on Yemen's second largest port. The strikes do come a day after the Iranian-backed Houthi rebels launched a missile that struck near Israel's main airport. The IDF said today more than 20 Israeli fighter jets took part in that operation, which dropped

more than 50 munitions on dozens of targets. The Houthis have claimed the U.S. was also involved in the airstrikes, but a U.S. defense official said U.S. forces were not involved. Meanwhile, the signal-like messaging app that former national security adviser Michael Walz was seen using during a cabinet meeting is temporarily suspending service following a reported hack. The parent company of the app called TeleMessage telling CNBC today that it made the move, quote, out of an abundance of caution.

The White House has yet to respond to comment, requests for comment rather. And Georgia Governor Brian Kemp announced today that he won't run for the Senate in 2026 against the Democratic incumbent John Ossoff. Kemp, who is term- to just one eight year stint, has been seen as a contender to challenge Ossoff. Guys, back over to you. Okay, Kate Rooney, thank you.

Just wanna get a quick check on Palantir, which is now trading the lowest we've seen here in the overtime after hours session, down almost 9% right now. That's after EPS came in line, everything else beat, and they boosted guidance. But of course we know this had been a high flyer coming into this print as well. So those shares down about 9% right now.

After the break, toys and tariffs. We're going to take a look at how Mattel stacks up to the competition as the company pulls its foliar guidance. And as President Trump says, kids should be happy with fewer toys. Sure. And speaking of tariffs, Netflix getting hit earlier in the session after the president threatened to tax movies and shows produced outside of the US but how would that actually work we will discuss ahead on overtime. Welcome back Mattel out with earnings earlier in the hour and that report

comes as President Trump comments about the impact of tariffs on toys saying quote a 10 year old girl doesn't need $37 Mike Santoli is back with a look at the charts and Mike neither Perhaps does a nine-year-old but she probably with me. Well, it's exactly right You know, maybe not need Morgan But you know the economy wouldn't work if we all we did was buy to need the human desires the reason capitalism keeps running but look the stocks of Mattel and Hasbro, obviously feeling the effects of the tariff proposals, haven't really regained in the instance of Mattel, the blue line here, really

very much of what was lost because of course they're very levered to China. We saw that in the results and outlook there. So it's really going to be kind of a prove that there's something we don't need to worry about in terms of the overall business model before investors get more confidence in these stocks. However, long term, it absolutely has become a lot more affordable to buy dozens of dolls or anything else in the toy category. This is the CPI index for the toy category. Well, there you see the late 90s around 2000, not too long before China came into the WTO. And this is what's happened to the consumer, the retail cost of all toys as a category. So as we know, things are much more affordable. Maybe that

means you overconsume, but also maybe that means there's some room to absorb some tariff impact, at least for consumers. The problem is the companies most likely. By the way, Morgan, the original Barbie, 1959, cost $3. In today's dollars, that's about 32 or $33. And today cost like a third of that. So obviously there's your disinflation in toys. That's an incredible chart right there. The fact that you have like the Mattels

and the Hasbro's of the world getting increasingly into the media piece of this as well, in terms of leveraging their brands and being able to, you know, create that flywheel to sell more products in the future. Is that a piece we need to be talking about more here? Does it create a margin opportunity for them to offset some of the higher costs

related to the actual manufacturing? Yeah, it definitely has become a bigger piece of the story I think the issue is that the market got very excited about that in in prior years Obviously culminating with the barbie movie, but also others transformers and things like that I think the question from here is have we already kind of they already levered the most leverageable IP that they have in house So, I don't know. I mean, some of us are waiting for the Etch A Sketch movie, but I'm not sure the world at large is. I don't know, they did

Minecraft. So there you go. Jack Black is in it. You never know. Chicken jockey. Mike Santoli, thank you. Oil keeps sliding on concerns about rising supplies and an uncertain demand outlook. Up next, a board member at ConocoPhillips and Liberty Energy is gonna tell us where he sees prices heading from here. Plus, Netflix shares, snapping an 11-day win streak after President Trump announced plans for tariffs on foreign-made films.

Coming up, see, even media is not immune. That stock could be hit particularly hard by this new front in the trade war. Welcome back. WTI crew trading at its lowest level since 2021, settling around 57 bucks per barrel after OPEC plus said it would increase production next month. So joining us now is Arjun Murthy. He is a partner at PE firm Veriton that invests in the energy sector. He's also a board member at Conoco Phillips

and Liberty Energy as well as a senior advisor to the energy group at Warburg Pincus. Arjun, it's great to have you back on the show. Let's start right there. Why is OPEC Plus doing this, especially at a time where there are all these question marks about economic activity globally and thus future demand for energy? I mean, it's a great question. If we only had the trade war to deal with, I think oil would be trading up and down with the broader market that you've been discussing. It really is a surprise announcement that after really four and a half years since the depths of COVID, where OPEC plus has tried to manage oil markets to keep inventories at or near the low end of historical band, suddenly in March, and then it was worse in

April and May, they've decided to bring a whole bunch of production back onto the market. That's clearly what's driven this pretty big sell-off down to the 50s as we're seeing today. So Saudi Arabia has been pretty vocal in saying that they can weather lower prices. And certainly they've demonstrated that over the years when they have decided to, you know, open and close the spigot on oil production globally.

But can U.S. producers, what's the number at which you start to see rigs come down and wells shut in and perhaps some more pain in the US energy patch? You know, I've been doing this for over 30 years and versus prior downturns, the US oil industry is probably as healthy as it's ever been in terms of the balance sheets are healthy.

Unlike prior cycles, they didn't ramp up capex. We didn't quote drill baby drill this go round. On the other hand, when prices are too far below 70, it starts becoming problematic. And when you're below 60, you're not going to get the kind of profitability investors expect that it's still a little too early into the 50s. But if prices were to persist here for the next several months for this quarter, I think you're going to start seeing a pretty decent correction in activity levels versus if oil has stayed at 70 or higher. Yeah, Arjun, I mean, you mentioned if this is supply driven up to this point, given that

the macro data has held up, so how much lower can oil prices go if demand really starts to noticeably slack off in the numbers? The key thing to watch is when do inventories go from the low end of the range where we are right now to the high end of the range, unlike other commodities like copper or gold where you can buy a warehouse and pile things to the moon if you wanted to. Oil has to be kept in storage tanks or terminals or on ships, or it has to be forced to be kept into the ground. That's really the sort of dire scenario.

You fill up inventories, OPEC's lost control, and you have to get to, quote, shut in oil prices, which are well below $50 a barrel. We're far from that type of scenario right now. Exactly why OPEC has chosen the last two months in the midst of all this demand uncertainty to decide now they're going to abandon their prior effort to keep inventory lows is, is a reasonable question, but you're going to want to watch inventories. They're currently at the low end of the range. Do they get back to the high end of the range? And if they do,

we'll OPEC step in again. How quickly can they swing? They can swing very quickly. It is small changes in supply demand. This is a business where half a million to a million barrels a day of less demand or more supply over the course of three, six, nine months can swing you pretty quickly. So right now things still look healthy. It's more concerned than reality, but we are under no illusions that you can shift pretty quickly, which I would define as three, six, nine months type periods. The flip side of lower oil prices is, at least in theory, you start to get lower

gas prices and other types of refined product prices. So what does that do? If that ends up being the case, what does that mean for economic activity more broadly and also for inflation? Well, it's such a good question. And this is why this let's just call it current down cycle. We're in doesn't seem like the other ones. You're right. lower oil prices.

Your previous guests talked about it being better for inflation readings. It's good for demand to have lower prices. US producers were already noting that for some of the companies, they were starting to run through their best inventory. And you've heard mentioned on earnings calls that companies are starting to look overseas

and in other basins, which is a big change from the last decade decade where all anyone talked about was shale. So shale itself was showing some signs of maturity. And we're also in an environment, while the OPEC increase in production comes, I'll say it at an inopportune time, we've always thought OPEC's bear capacity itself is overstated. So yes, there's some oil to bring back on the market. Maybe it's two to three million barrels a day.

That's a lot if we're having a recession. But that is probably the extent of it. So you could very quickly, like quickly I mean over the course of one to two years, find yourselves back into a much tighter market. So we are looking for those kinds of signs going forward. Okay, Arjun Murthy, great to have you on. Thanks for joining us.

Thank you. Up next, $120 billion Pharma company Vertex. It's under pressure here in overtime after reporting results. We've got the details on that name and another mover after the break. Plus Netflix and Ill, not the cool 80s way, why President Trump's threat to put a hundred percent tariffs on foreign made movies could make Netflix investors sick to their stomachs. That's later on overtime. Welcome back. That's later on overtime. Welcome back, let's check on some more overtime movers. Lattice Semiconductor is lower after earnings and revenue

were both in line with estimates down about two and three quarters. Vertex Pharma down about three and a third as well. Earnings came in at $4.06 a share, missing estimates by 26 cents. Revenue was light as well. Another check here on Ford down just over two and a half, despite beating on the top and bottom lines

as the company suspends its full year guidance. Morgan. All right, well, President Trump unleashing a horror movie-like scenario for Hollywood. 100% tariffs on foreign-made films, the potential fallout for the industry straight ahead. And if you're thinking about a great graduation gift, we have the perfect idea.

A ticket to the Fast Money live event on June 5th at the NASDAQ. Now send the right message to the new grads. Start investing early. For more information, scan this QR code on your screen or go to CNBC events dot com slash fast money Welcome back to overtime president trump calling for 100 tariff on foreign-made films julia borrisson joins us now with the latest hi julia Hi morgan. Well president trump today addressing concerns that his proposed tariff on films produced overseas could deal yet another blow to struggling studios We're going to meet with the industry. I want to make sure they're happy with it because we're all about jobs. That's all what I'm, you know, it's very important.

It's a big industry, but it's an industry now that's, it's really left. It's abandoned the USA where it started. The Trump administration is responding to the fact that the film and TV production in Los Angeles has fallen about 40% over the past decade. And as of the first quarter of this year, an estimated 60% of spending by U.S. producers on movie and TV projects with budgets over $40 million went outside the U.S., as according to ProdPro. Netflix shares down over 1% on this news breaking its 11-day winning streak. Amazon, Warner Bros. Discovery, Paramount shares all lower today. Theatrstock, Cinemark, IMAX and AMC also lower on the news today. See, IMAX shares

down 2%. There's also the question of potential retaliation. If US films that are exported are taxed, that could hurt important global revenue for the studios, not to mention how it could impact the likes of Netflix and Amazon Prime. Guys, back over to you. This is a fascinating one to me, Julia, especially given the fact that so much the narrative around Netflix as a stock out performer recently

was the fact that it was defensive and sort of immune to tariffs. Why have we seen so much movie production actually leave the U.S.? Well there are a couple of reasons for it. The obvious one, which has always been the case, is for locations. We saw Lord of the Rings shoot in New Zealand, not just because of locations though, but also because of incentives or tax credits. So Australia, New Zealand, the UK, they have tax credits and because of those

tax credits there's been a base, a crew base that's built up. So if a Hollywood studio wants to go shoot a movie or a TV series in New Zealand, they know that there are people they can hire there who will be reliable and maybe less expensive than hiring people here in the U.S. There are so many unions here in the U.S. you know not not just the, this is not about the Writers Guild or the Actors Guild, but about things like Teamsters. So how much is it gonna cost to shoot a movie here in the US? I'm here on the Universal lot.

How much more would it cost to shoot something here rather than on location or in a studio somewhere else? All right, Julia Borsten, thank you. Well, before we go, don't miss my exclusive interview with Nvidia CEO Jensen Huang, who's gonna be at Knowledge 25, that ServiceNow's event with CEO Bill McDermott, live from that event in Las Vegas.

I'm gonna fly out in just a few minutes tomorrow, 2.30 p.m. on Power Lunch. It's a must watch TV, and of course, it continues this theme of AI adoption, who the winners and losers are in software. All right, that does it for us here at Overtime.