Closing Bell - Closing Bell Overtime: Rocket Lab CEO On Stock Surge; BlackRock Co-Founder On M&A Pickup 6/30/25

Episode Date: June 30, 2025

Two major narratives unfold — one on Wall Street, the other in Washington. We kick things off with market insight from Richard Bernstein of Richard Bernstein Advisors and Citi’s Scott Chronert. Stifel’s Brian Gardner breaks down the latest from D.C.. Evercore Chairman Emeritus and BlackRock Co-Founder Ralph Schlosstein weighs in on global M&A and the policy landscape. Plus, Morgan digs deep on the Army’s autonomous push. Rocket Lab CEO Peter Beck on space demand and the stock’s huge run. 

Well that's the end of regulation. NERI, the Association for Investor Relations, ringing the closing bell at the New York Stock Exchange as well as doing the honors at the NASDAQ. Well, stock's ending the day with the S&P and NASDAQ closing at record highs again. That's as financials and communication services led the gains two days in a row now of record closes. The Dow's still about 2% from its last all-time high. For the month, the Dow rallied more than 4%.

The S&P 5% and the NASDAQ more than 6%. Today is also the end of the quarter with the S&P posting its best quarter since December of 2023. It's also the end of the first half and Treasury has posted their best first half stretch in five years. In terms of today,

oracle jumping after saying that it's signed multiple large cloud services agreements. Robinhood hitting an all-time high as it announces an array of new crypto related offerings. Meta also hitting an all-time high as investors continue to be bullish on its AI ambitions and all of those hires we've been hearing about. Hewlett-Packard Juniper Networks both rallying after the DOJ settled its lawsuit challenging Hewlett's $15 billion $14 billion acquisition of Juniper clean energy stocks though like Enphase energy falling after the latest version of the mega bill will phase out tax credits for the large-scale wind and solar projects that we've seen earlier than in previous drafts and solar projects that we've seen earlier than in previous drafts. And financials higher today after all 22 banks tested past the Fed's annual stress test.

The financials ETF, the XLF hitting an all-time high in today's trading session. That is the scorecard on Wall Street. We just went through quite a lot, didn't we? Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Fort is off today. Well, that bell ends one of the wildest first halves of the year in market history with a decline of 15%, a rebound to new highs for the S&P 500. Literally, we've watched history. You've traded history. Our

market panel will tell us what to expect in the second half. And we'll talk to the head of one of the quarter's biggest gainers, Rocket Lab, which has doubled since the start of April. The CEO's gonna join us, that's coming up. Plus Ralph Schlaustein, co-founder of BlackRock. We're gonna get his take on global markets and M&A activity. He's over at Evercore now, but let's begin with the markets.

The close to the second quarter for the Nasdaq. It's the best quarter in five years. Mike Santoli joining us from the New York Stock Exchange to break it down. Hi Mike. Hi Morgan. You know you mentioned all these extraordinary things and it's landed us in a place that actually seems somewhat normal and expected the S&P 500 up between five and six percent for half the year. It's about half the annual average return. Also, if you remember coming into this year, there

was a line that said, oh, you don't have to get 220% up years in a row, you should expect some downside volatility. First half of a post-presidential election year, third year of a bull market, all often have a little bit of payback associated with them. All that being said, nobody thought we'd get what we got, which is a V-bottom around the tariff panic in early April. And what I think is interesting is you've reasserted the AI leadership, the revival of that story has really been consistent

and now it's only more so. And alongside it, we've almost gone through a psychology cycle with regard to viewing how the economy's performing. I do wonder if the data are going to back that up, but now we're in a sense of feeling as if or at least the market pricing in, the Fed easing within the next few months into a decent economy.

That's kind of the best backdrop for stocks. What's incredible to me, Mike, is the fact that all of the major averages, with the exception of the Russell 2000 and the Dow Transports, which tend to be smaller stocks and are still under pressure now here since the beginning of the year, the Nasdaq, the S&P, Dow Industrials, Nasdaq 100, they since the beginning of the year. The Nasdaq the S&P Dow and dress drills Nasdaq 100 they're all higher on the year that's coming after two straight years of double digit percent gains. We came into this year having the conversation that it was going to be very hard for markets to break out in the same sort of meaningful way after two strong years of gains. So how does this set us up for the back half. Well

that was all true and in a way it's kind of come to pass in terms of it being a little bit of a struggle. I think you could point to the fact that you know you're still if you look below the surface of the index it's still coming along in that direction but definitely the average stock is still like 10 percent below its high or more. So it's still more catch up to be done as part of that process. I think in general, look, you don't necessarily reflexively fade a new high. Usually, it shows you the market has been somewhat stress tested and better forward implications of that new high. That's over the multiple months.

Honestly, you can start to say this market's gonna start to look overbought, it's gonna the multiple months. You know, honestly, you can start to say this market's going to start to look overbought. It's going to need a rest. You have some exhaustion signals that I look at sometimes in terms of the technicals. But that shouldn't change the overall path. In mid-May, we already had an overbought market, and all that happened was you kind of eased back by a few percent and went flat for a few weeks, and that took care of that. Okay. Mike Santoli, we'll see you throughout the hour. Thank you. From Wall Street to Washington. As the Senate begins what's called, being called a Voterama

on the massive budget bill, Emily Wilkins is joining us now with the latest on that process. And it does seem to be shifting hour to hour here, Emily. Morgan, yes. I mean, look, senators, they're continuing to work through dozens of amendments. They were expecting a final vote actually on the bill either very late tonight or very early tomorrow on whether or not that bill can pass. That is, of course, as long as they have the votes. Break down the math here. Two Republicans voted against a procedural vote this weekend.

That means if those two plan to vote against the bill, which they do, senators can only lose one more and several senators, including fiscal hawks like Ron Johnson, and then more moderate leaning members like Susan Collins. They haven't said yet how they are going to vote on the final bill. And the part of the reason is that the bill could still change before it passes. There are a number of amendments being put forward by Republicans that are actually gaining some degree of support. So Senator Rick Scott, he's planning to offer an amendment on further federal Medicaid cuts

that would shift a greater burden to the states. Another group of senators are seeking to reverse some changes that were made over the weekend to clean energy tax credit so the changes would have limited the scope of the credits. The senators want to expand it again and then senators Marsha Blackburn and Ted Cruz reached an agreement over the weekend to change that ban on states implementing AI laws so the new language they're putting forward would have the ban to just five years it would also extemp state laws that seek to protect kids and content creators. So we're gonna be keeping a very close eye on all of these amendments if and when

they come to the floor and if they wind up changing that final vote tally. And if the Senate does wind up passing it, it's still not in the clear yet. It's onto the House and the House could potentially vote as soon as Wednesday. Of course, again, if they have the votes, because Morgan, there's a lot of concern over there on some of the fiscal aspects of this bill. This is just a heavy sprint that could potentially happen by the end of the week and Emily Wilkins you've got a front row seat you're bringing us the latest and we appreciate it. Emily Wilkins from Washington she's there on the Capitol reporting all of this out in real time. Let's begin with the market let's and what a strong quarter it's been on Wall Street the Dow is

up four percent the S&P 500 soaring to 10% The Nasdaq is higher by 17% Tracking for its best quarterly gain in five years. So technology communication services industrials discretionary are among the top performing sectors on the S&P 500 quarter to date and Joining us now with key things to watch in the second half is Richard Bernstein, advisor CEO, Richard Bernstein and city U.S. equity strategist Scott Cronert. I mean, this is an all star market panel to have this conversation. So welcome to you both, gentlemen. Richard, I'll kick it off with you. We're at record highs for the S&P and the Nasdaq.

Stocks continue to climb the wall. Worry. What's next? So, Morgan Morgan good afternoon I think you know stocks are- looking at a situation where it looks like we're going to have. Pretty significant fiscal stimulus. And I think more than that the markets are still banking on the

fed being able to cut rates. So if you've got positive fiscal policy and positive monetary policy. It's hard to see why stocks would go down. However, that being said, what's I think more confusing, and everybody should be kind of scratching their heads a little bit, is why with all this broad policy in the economy, are we seeing such a narrow stock market?

That doesn't seem to make an awful lot of sense. We should be seeing, if these policies are actually going to work, we should see a much broader stock market, meaning more companies are going to benefit from it. Why do you think it is so narrow? We talk about big cap, Richard. We talk about big cap dominance. Has that sort of reasserted itself? And if so, why now. So Morgan I would correct one thing I don't think it's even large cap I think it's about 10 or 15 or 20 companies you know when you mentioned before the NASDAQ 100 the NASDAQ the S&P but not things like the Russell 2000 and the Dow transports it's the same 10 or 15 or 20 companies that are dominating the marketplace I personally think that reflects the speculative fervor in the stock market. There are way more than 10 or 15 or 20 growth stories.

It's just that nobody cares. They only want to trade, key word trade, 10 or 15 or 20 companies. I think if you're an investor, it doesn't get much better than this because nobody cares about all these attractive investments as opposed to simple trading. Scott, what do you think? You used the word euphoria in your note. Yeah, Morgan, I think we're approaching euphoria in our classic sentiment indicators, but I

pick a couple of points of issue with Richard's comments. I think what we're looking at here is really a follow the growth mantra to this market. We walked to the edge of the cliff fundamentally with DeepSeq earlier in the year, and then the more than the Liberation Day tariffs. And since then, we've been walking back from concerns on both. You've begun to see the AI tailwinds kick in, if not accelerate. But what's happening here is that the MAG7 are showing a perpetual earnings growth dynamic into 2026, which is actually beginning to increase now from where it was. The other 493 searching for bottom still, but what we're seeing here

is a very clear differentiation between those companies where there's an upward bias to numbers as we go into the back half of this year Begin to look ahead to 26 and we think that's going to be your ongoing driver here so what we need in terms of the the Fed discussion the fiscal narrative is that we need to see you know some Sense of a soft landing continue to show through. But ultimately, ultimately we need to begin to see an earnings revision dynamic to the positive for that part of the market

that's more traditionally interest rate sensitive. And of course we start to get earnings again in full throttle in about two weeks, give or take. So Scott, where do you put money to work right now then if this is how you see the next six months year playing out here? How do you position yourself in the second half? Well we just put out our quarterly sector call over the weekend and let's say that we we went all in on growth going into Q2 and we're digging in on that call. We still like the tech sector, we like communication services, both media and the telecom component, interestingly.

And then we're beginning to broaden beyond that from a cyclical perspective, we've been on financials via the banks for the better part of the year, still like that. And we're starting to allow, as I mentioned earlier, for some room for those areas of the market that have a bit more of an interest rate sensitive bias to it to kick in. We went overweight utilities as an example of that. some room for those areas of the market that have a bit more of an interest rate sensitive bias

to it to kick in. We went overweight utilities as an example of that. So where we're going with this is that wherever the growth revisions are taking us, and we think that's gonna be this AI and related construct, that's where we wanna continue to focus for now. Okay, gentlemen, thank you for kicking off the hour with me, Scott Cronert and Richard Bernstein. With the&P finishing on a new record, 62.04. Well, we've got breaking news

on Boeing and Phil LeBeau has the details for us. Hi, Phil. Morgan, we have a transition when it comes to CFO of Boeing, Jesus J. Malave, former CFO of Lockheed Martin, former CFO of L3Harris, of UTC Aerospace, very experienced when it comes to being a chief financial officer. He will become the Boeing chief financial officer on August 15th. Brian West, who has been CFO over the last four years, who has steered the company through

some really turbulent times in terms of capital raises and some challenges in terms of the balance sheet. He will now transition to a senior advisor role to Kelly Ortberg, CEO of Boeing. Again, new CEO, excuse me, at Boeing, Jay Malave starting on August 15th. Morgan, send it back to you. All right. Jay Malave, former Lockheed, as you just mentioned, someone I've spoken to quite a bit over the years. Phil LeBeau, thank you. Apple, by far the worst performing mag seven stock in the second quarter.

It's the only one that actually finished the quarter in the red. But today Apple is the leader. Let's bring in Steve Kovac for more on the news that is pushing those shares higher. Yeah, and it looked like for a second there it it was going to lose that $3 trillion market cap again. But what happened today was Bloomberg reporting that Apple is considering third party AI companies to partner with if it can't get its own version of Siri off the ground.

Now you might remember Morgan, earlier this year, Apple gave that splashy delay of the AI upgrade to Siri. That was part of the reason the stock has been under pressure, most of the year, tariffs also play into it as well. But what Bloomberg is reporting, Apple is looking at Anthropic and OpenAI as potential partners to kind of power

this new version of Siri if they can't get their own large language model off the ground. In fact, the story specifically says Apple right now is leaning towards licensing Anthropics technology. Now, we know that Apple or other companies have had success building on top of these two companies. Perplexity is the search engine company is the best example of this.

They take Anthropix technology and OpenAI's technology and put their own search layer on top of that. So we do know this is possible using that kind of technology for it. But it would also kind of be an admission that Apple is further behind than maybe even it thought it was or at for it, but it would also kind of be an admission that Apple is further behind than maybe even it thought it was, or at least it said publicly it is,

when it comes to these big generative AI things. So we'll have to wait and see. Apple had said right now that it's gonna be 2026 when they get this out the door. This kind of gives them insurance. That's the way I'm looking at it. If they can't figure it out on their own, at least they have this kind of backup plan

that they can go to and say, Anthropic, we'll start paying you for your models can't figure it out on their own, at least they have this kind of backup plan that they can go to and say, Anthropic, we'll start paying you for your models until we can figure out on our own. How common or unusual would it be to see a big player like Apple doing multiple partnerships, multiple deals, multiple licensing with competitors like this? They kind of have to, and I mean, it's competitors, but also partners at the same time, right?

And look at what all these other companies are doing. We have Meta today spending enormous amounts of money just to build this, what they're calling that super intelligence team. Apple, as we know, they're just kind of allergic to big acquisitions, big splashy hires, spending a lot of money on these kind of people and companies to bring them in

in order to build this stuff. So partnering would make sense. It would make less sense, at least historically, for Apple to go out there and buy a company like Anthropic, but licensing the technology, that is definitely on the table. The one problem here, though, Morgan, is the cloud stuff. Now, we know Apple loves all their privacy and talking about that.

What this report is saying, they've figured out a way or have at least talked about a way to run those models on their own private cloud servers as opposed to what you have from Google or Microsoft or another thing. So that is another potential option here, but it does at least put them on a path

and that's why you see the shares up to get this shipped now on time or at least the new time of 2026. Okay, we'll be watching. Shares finishing up 2% today. We'll see if the catch up trade continues. Steve Kovac, thank you. Well, coming up, we're gonna break down the latest

from Washington. The Senate working on this budget bill as trade negotiations are moving forward with Canada and others ahead of the looming deadline there as well. And with the second quarter now in the books, we're gonna look at some of the biggest winners over the past three months. There are quite a few, quite a few so stay with us overtime is back in two. Back to overtime the S&P with a 10 gain in the second quarter let's take a look at the biggest

winners on the index. Coinbase the leader it more than doubled over the past three months. Energy names also big winners. GE, Vernova, NRG and Vistra all in the top five. Well, let's turn back to Washington because the spending bill getting all the attention as the Senate, Voterama is underway, but the Trump administration is also racing to finalize trade deals as that July 9th deadline looms next week. So joining us now is Brian Gardner. He's Steve's Washington policy strategist. Brian, it's great to have you back on.

First going to start with one big, beautiful bill and the fact that we even have a daytime votorama in the Senate. How unusual is that? We only get these every couple of years, so it's not a regular occurrence. But a votorama is part of the reconciliation process. So we have seen these before. There's also votoramas as part of the budget resolution, which is a precursor, which we had back in the winter.

So these things happen from time to time. They're kind of entertaining to watch for policy wonks. But we'll see what impact it has on the overall bill when the voting is all finished and what gets added or what gets dropped. Yeah. And of course, and I guess it's not the fact that we even have a Voterama, it's the fact that there was a break and then they came back to have the Voterama instead of dragging it through the wee hours of the evening.

I know that was getting some attention earlier today. They're just pushing to see if they can get this done, to get one big, beautiful bill signed on one big, beautiful holiday. And that's the ultimate goal here. Can it happen? What are the sticking points? I think the sticking point is still Medicaid. I think Emily was discussing this before.

You have the conservatives, the budget hawks on one side, who want more spending cuts related to Medicaid. You have moderates who are apprehensive about those cuts and may hold out. Both in the Senate and the House side, there are very narrow margins. My base case is this gets done by the holiday. I mean, I was skeptical until going into the weekend, but if you're a holdout, you're going to be asking yourself, you know, what am I going to stick out for? What am I going to get?

And do I want to put up with the wrath of President Trump if I vote against this? We see how he reacted to Tom Tillis over the weekend when Tillis voted against a procedural vote on Saturday. I think there are going to be a lot of Republicans who just don't want to go through that, and they may not like everything that's in the bill They're going to be apprehensive about a lot of what's in the bill and at the end of the day

They're going to vote for what's in the bill I mean bond market seems to be somewhat sanguine right now in terms of what this potentially will add From a debt load perspective, but is there a point at which that could change? We have been talking kind of in doomsday scenarios for 40 years. People have been concerned about debt and deficits for a very long time, and it hasn't mattered. It's not going to matter until it matters.

Are we at that tipping point? Are we at that catalyst moment? I kind of doubt it. I think that's further down the road when we get closer to 2034, when the trust funds for Medicare and Social Security Can't pay out all of their obligations a hundred percent of their obligations I think that's when it when it really gets real for now

I think the bond market feels comfortable enough about the short-term medium-term Economic outlook in the United States and its ability to service its debt it gets more challenging in the next decade the not shift for some countries. Treasury Secretary Scott Besson joined me here on this show on Friday and basically said 10 to 12 possible deals waiting in the wings, another 20 that could get negotiated. You could potentially even see, you know, that deadline slip for if they felt they were negotiating in good faith. That's a lot of potential countries coming to the table. How do you game it out? I think we're going to see some extensions.

I've always believed that. If we were having this conversation back in April when the pause was announced, I would have said, well, look, you have some very large, complex trading partners, trading arrangements, and rearranging those, restructuring those in 90 days is very difficult. And it's not just tariffs.

People focus on the rate of tariffs, but there are non-trade barriers. Just to give you an example, some countries that block genetically modified foods from being imported into their country, that's a big sticking point for the United States. And so these are issues that are not easily resolved in 90 days. And so I think we're going to get a handful of deals over the next 10 days, and then we're going to see some pauses. Okay. Anything on the deregulation front we should be watching as well as we move through some

of these key dates here over the next couple weeks? It's funny because the deregulation story takes place in the background, right? We're talking about the high profile, big headline stuff with trade and one big beautiful bill. But the whole time in the background has been the deregulatory story. We saw a little bit last week in financials with some changes to bank capital rules. I think we're going to see some loosening up of bank M&A. I think we're going to see an increase in bank M&A over the next couple of months. I think we're going to see more loosening up of bank M&A. I think we're going to see an increase in bank M&A

over the next couple of months. I think we're going to see more of it in energy. So there's a lot going on behind the scenes that it's tougher to talk about, because it's not one moment. It's a process over a long time. But it is going on, and I think that is a positive for the markets.

Brian Gardner, thank you. Thank you, Morgan. Coming up. Stocks with a record setting rebound to end the second quarter. What can investors expect as we turn the corner to the second half of the year? And self-driving isn't just for robo-taxis. The US Army is also working on autonomous vehicles

as part of its big tech transformation. We're gonna take a look at that next. Back to overtime, the S&P with a 10% gain in the second quarter. We'll be right back. The top five. But let's turn back to Washington. Because the spending bill getting all the attention as the Senate, Voterama is underway. But the Trump administration is also racing to finalize trade deals as that July 9th deadline looms next week. So joining us now is Brian Gardner. He's Steve's Washington policy strategist.

Brian, it's great to have you back on. First, going to start with one big, beautiful bill. And the fact that we even have a daytime Voterama in the Senate. How unusual is that? Uh you know we only get these every couple of years so it's not a regular occurrence so but a votorama is part of the reconciliation process so we have seen these before. There's also votoramas as part of the budget resolution which is a precursor which we had back in the winter. So these things happen from time to time.

They're kind of entertaining to watch for policy wonks. But we'll see what impact it has on the overall bill when the voting is all finished and what gets added or what gets dropped. Yeah. And of course, and I guess it's not the fact that we even have a Voterama, it's the fact that there was a break and then they came back to have the Voterama instead of dragging it through the wee hours of the evening. I know that was getting some attention earlier today.

They're just pushing to see if they can get this done, to get one big, beautiful bill signed on one big, beautiful holiday. And that's the ultimate goal here. Can it happen? What are the sticking points? I think the sticking point is still Medicaid. I think Emily was discussing this before. You have the conservatives, the budget hawks on one side who want more spending cuts related to Medicaid.

You have moderates who are apprehensive about those cuts and may hold out. Both on the Senate and the House side, there are very narrow margins. My base case is this gets done by the holiday. I mean, I was skeptical until going into the weekend, but if you're a holdout, you're going to be asking yourself, what am I going to stick out for? What am I gonna get? And do I wanna put up with the wrath of President Trump

if I vote against this? We see how he reacted to Tom Tillis over the weekend when Tillis voted against a procedural vote on this. We see how he reacted to Tom Tillis over the weekend when Tillis voted against a procedural vote on Saturday. I think there are going to be a lot of Republicans who just don't want to go through that and they may not like

everything that's in the bill. They're going to be apprehensive about a lot of what's in the bill. And at the end of the day, they're going to vote for what's in the bill. The bond market seems to be

somewhat sanguine right now in terms of what this potentially will add from a debt load perspective. But is there a point at which that could change? We have been talking kind of in doomsday scenarios for 40 years. You know, people have been concerned about debt and deficits for a very long time and it hasn't mattered. It's not going to matter until it matters. Are we at that tipping point? Are we at that catalyst moment? I kinda doubt it.

I think that's further down the road when we get into closer to 2034, when the trust funds for Medicare and Social Security can't pay out all of their obligations, 100% of their obligations. I think that's when it really gets real. For now, I think the bond market feels comfortable enough about the short-term, medium-term economic outlook

in the United States and its ability to service its debt. It gets more challenging in the next decade. And of course you have the offset of potentially spurring some economic growth in the middle class here, depending on how all this shakes out in the final details of this bill. Let's talk trade, shall we?

We got this July 9th deadline, which may or may not shift for some countries. Treasury Secretary Scott Besson joined me here on this show on Friday and basically said, 10 to 12 possible deals waiting in the wings, another 20 that could get negotiated. You could potentially even see, you know, that deadline slip for if they felt they were negotiating

in good faith. That's a lot of potential countries coming to the table. How do you game it out? I think we're going to see some extensions. I've always believed that. If we were having this conversation back in April when the pause was announced, I would have said, well, look, you have some very large complex trading

partners, trading arrangements, and rearranging those, restructuring those in 90 days is very difficult. And it's not just tariffs. I mean, people focus on the rate of tariffs, but there are non-trade barriers. You know, just to give you an example, you know, some countries that block genetically modified foods from being imported into their country. That's a big sticking point for the United States. And so these are issues that are not easily resolved in 90 days. And so I think we're going to get a handful of deals over the next 10 days, and then we're

going to see some pauses. Okay. Anything on the deregulation front we should be watching as well as we move through some of these key dates here over the next couple weeks. It's funny because the deregulation story takes place in the background, right? We're talking about the high profile, big headline stuff with trade and one big beautiful bill. But the whole time in the background has been the deregulatory story. We saw a little bit last week in financials

with some changes to bank capital rules. I think we're going to see some loosening up of bank M&A. I think we're going to see an increase in bank M&A over the next couple of months. I think we're going to see more of it in energy. So there's a lot going on behind the scenes that it's tougher to talk about because it's not one moment. It's a process over a process over a very long time but it is going on i think that is a positive for the markets brian gardner thank you thank you coming up stocks with a record-setting rebound to end the second quarter what can investors expect as we turn the corner to the second half of the year and self-driving isn't just for robo taxis. The US Army is also working on autonomous vehicles as part of its big tech transformation.

We're gonna take a look at that next. Welcome back. We have a news alert on Circle, and Taneya McKeel has the details for us. Hi, Taneya. Hey, Morgan. Yeah, stablecoin issuer Circle has applied for a national trust bank charter.

That's a move that would allow it to custody its own reserves and hold assets for institutional investors. So, we're gonna take a look at that next. So, we're gonna take a look at that next. So, we're gonna take a look at that next. So, we're gonna take a look at that next. So, we're gonna take a look at that next. So, we're gonna take a look at that next.

So, we're gonna take a look at that next. So, we're gonna take a look at that next. So, we're gonna take a look at that next. So, we're gonna take a look at that next. So, we're gonna take a look at that next. So, we're gonna take a look at that next. Hey Morgan, yeah stablecoin issuers circle has applied for a national trust bank charter That's a move that would allow it cut to custody its own reserves and hold assets for institutional clients The new bank entity would be called first national digital currency bank Which would be overseen by the office of the controller of the currency It would be the second crypto company to obtain such a license after Anchorage Digital. Shares little changed after hours, but the move does come after a wildly successful IPO, of course, for Circle and debut trading month on the public markets.

Circle surged more than 480% in June, as well as a wave of optimism after the Senate's passage of the Genius Act, which would give the US a regulatory framework for stable coins. Circle also saying that having a federally regulated trust charter would help the company meet requirements under that proposed legislation. Lots to watch here.

Morgan. All right. Of course, the stock is jumping another two and a half percent right now here in overtime to tame Tanay and McKeel. Thank you. It's time now for a CBC News Update with Contessa Brewer. Hi, Contessa. Hi there, Morgan.

President Trump has just signed an executive order ending U.S. sanctions on Syria. The White House said that order still maintains sanctions on former President Bashar al-Assad and his associates. The country's transitional government has been pushing the White House for sanctions relief because, of course, it's trying to rebuild after a devastating civil war. Law enforcement officials say they've identified the suspect behind yesterday's deadly ambush of firefighters in Idaho. Authorities say 20-year-old Wes Roley is suspected of intentionally setting the fire to lure the firefighters and then opened fire. Two were fatally shot, a third was injured. Officials say they're still trying to identify the motive. And Kilmar Abrego-Garcia will stay in a Tennessee jail for now.

A federal judge today sided with Abrego-Garcia's lawyers. They have asked for a delay in his release because they worry he could be deported if he's released before his trial on human smuggling charges. Alright Morgan, that's the news. I'll send it back to you. Contessa Brewer, thank you. Coming up, I'll be joined by the co-founder of BlackRock. We will get his take on the markets right now and what he's seeing in the global economy in the second half of the year. Ralph Schlaustein is on set. He's coming up next. Welcome back. The markets had a major sell-off in April as investors panicked about the impact that tariffs would have on the economy.

However, following that brief tariff tantrum, stocks have turned around. They posted their fastest rebound in history following a 15% drop. Joining us now is Evercore chairman Emeritus and BlackRock co-founder, Ralph Schlastein, right here on set. It's great to have you. Welcome. It's great to be here. Let's start right there. Because what an incredible second quarter of the year. America's and Black Rock co-founder Ralph Schlaustein right here on set. It's great to have you. Welcome.

It's great to be here. Let's start right there because what an incredible second quarter we had. Tariff tantrum. Is it over? Is the fear about peak tariffs behind us? Well, I think you can never say it's completely behind us because I don't think we have a absolutely certain path as to where the president and his team are gonna take the tariff discussions and how our trading counterparties will react.

But I do think there is a strong desire on the part of both our government and the governments with whom they are negotiating to have as least disruptive settlement of these discussions as we can have. So I'm cautiously optimistic that there won't be any big disruptions as a result of tariffs over the second half of the year, but I'm sure there'll be some mini tantrums. Yeah. year, but I'm sure there will be some mini tantrums. Yeah, volatility certainly seems to be here, at least here to stay in this market right now. Goldman Sachs this morning pulled forward their outlook for a Fed cut sooner to

September and they basically said look, inflation is not materializing the way we thought it was going to through the summer. Do you see it the same way or is it still too early to tell? I, you know, you can never predict with certainty future economic statistics, but the trend for inflation certainly seems to be positive and they're laying a very strong foundation for a justification for a cut in September. And at the same time,

we're seeing a teeny bit more looseness in the labor markets, which would also gently push you in that direction. So I think if you look forward, it's pretty clear that the next directional change in interest rates from the Fed will be downward. I think the only question is how many cuts do we get this year? I would be in the camp of two, and if it's not two, I'd say three rather than one. Three rather than one. Why? Because maybe the economy is not holding up as well as hoped? I just think there's enough room both in the inflation statistics and in the employment

statistics to gradually take the Fed funds rate back toward neutral. Where do you think we end the year with markets? And I ask this knowing that we're starting to see some signs of the IPO market percolating and M&A. We've got some deals today. There seems to be some more liquidity coming into this market here. Does that continue? Well, let me first talk about M&A and then I'll talk about the markets generally.

I said at the beginning of this year that I was very confident that 25 would be a stronger year in M&A than 24 and that 26 would be a stronger year than 25. Obviously the first few months of this year had a huge amount of volatility and uncertainty so the pickup in pace that I had anticipated has been a little slower than I expected. I still stand by that. I think 25 will be better than 24 in terms of dollar volume of activity and 26 will clearly be better than 25. With respect to the markets as a whole, I think if you look at the big picture, first monetary policy as we discussed is going to in my view become somewhat more accommodative as the remainder of the year goes by. We clearly are going to have a very

stimulative fiscal policy when the big bill, whether you call it big and beautiful or big and something else, passes as I think it's almost certain to do, maybe with some storm and drawing over the next few days to get it done. But I think it's inevitable that something passes. What does pass is highly likely to be very stimulative from a fiscal point of view. So you've got a somewhat more accommodative monetary policy. You've got a stimulative fiscal policy. I think government actions are going to do their best to not be disruptive of the confidence that is building in the economy generally.

So if you ask me to bet, that's not my job, but if you ask me to bet, are stock markets gonna be higher at the end of the year than they are on June 30th, I would bet that and I would probably make that two to one or more. What could, I guess, what can derail this? We haven't talked about geopolitics. It's been trade talks, tax talks, and peace talks. Is that sort of the big risk out

there? Is it something else? Yeah, I think international conflagration and trade are the two clouds that are up there that if they burst could rain on the positive market parade market parade to carry forward a really ugly analogy. And I think the market itself, it's certainly, you can't say it's cheap, but it's not so richly valued that you sit there and say we're in a bubble or in a hyper extended market. And I think the one thing we haven't talked about is the prognosis for earnings seems to be pretty good.

And here again, we haven't really seen how tariffs might affect earnings. So far, we haven't seen any effect. And we haven't seen any real effect on inflation either. So if the tariffs, you know, we're going to have some tariffs. If those tariffs turn out to be a relative yawn on inflation and on the profitability of corporations, then I think you could see actually a pretty good second half. All right. Ralph Schlaustein. Great to have you here on set. Thank you so much for joining me.

Pleasure being here. Well, up next, an up-close look at how going autonomous is a huge part of the Army's transformation strategy. Plus, shares of Rocket Lab taking off like, well, like a rocket. This quarter, with shares doubling since the beginning of April, CEO and founder Peter Beck discusses his red hot stock and the outlook for the space industry. That'll be coming up later right here on Overtime.

We'll take a look at shares of Tesla in 15 years since going public because we are marking that anniversary. The stock has risen 27,000 percent, but the next leg of the company's growth is all about the robo taxi rollout and autonomy. It's not just Tesla though that's making big investments into autonomous vehicles. To Irene. Autonomous vehicles aren't just roaming city streets. They're now on the battlefield. When you gave her to us, she was a baby. Now she is a teenager. Temporal, a little sassy, but full of potential. Irene is an infantry squad vehicle, or ISV, built by General Motors for the US Army, and retrofitted with commercial self-driving tech

by startup Applied Intuition. The vehicle is one of 40 new technologies being tested in Western Louisiana by the 1st Brigade of the 101st Airborne Division. It's great to hear that you guys love it. I come out here to hear what you don't love about it, because we'll go back and change it. This transformation and contact brigade, one of just four, is the Army's most modern.

Equipped with AI platforms and nearly 400 drones, the unit tests new technologies and companies embed engineers and executives like GM Defense President Steve Dumont to help troubleshoot. The truck you're sitting in right now is 90% a Chevy Colorado. It's an award-winning off-road performance vehicle. So when we looked at what the Army's needs were in terms of tactical mobility, we had a great starting point. The automaker has been contracted to make 10,000 of these new infantry squad vehicles. Autonomy could add another layer. They sent over a couple of vehicles including an infantry squad vehicle. In ten days we had it running autonomously. In the commercial universe you don't have a year or two years of an acquisition

process. You have to deliver today and you have to deliver it before anyone pays you. It's just one piece of the Army's sweeping transformation initiative. Technologies being closely watched by the Army's Chief of Staff, General Randy George. I think we can move faster than we are and that's kind of our commitment at our level. Our troops can handle the move, they can go fast. And so what we've got to do is break down all the bureaucracy that comes above it. The U.S. Army is a real-time case study in military modernization and the role that new tech and more streamlined policies will play.

Defense has been a key part of the reconciliation bill too, arguably an overlooked one. As Callan said, if the House passes the Senate's version, DOD will get an astounding $156 billion in reconciliation, a quote, massive surge that will provide a massive upside for a lot of areas that would take the defense Budget above a trillion dollars and has brought some of those defense hawks in the Senate on board with with their own approvals or Backing for this bill. Well meantime rocket lab shares have gone to the moon doubling during the second quarter

The company CEO discusses that out of this world stock performance. That's straight ahead. Welcome back. Check out Rocket Lab. Nearly 100% in the last three months. Part of a bigger space trade. Rocket Lab also getting added into the Russell 1000 Friday after the close. The company achieving a big technical milestone this weekend as well, completing two launches

from the same site in less than 48 hours. That was a record turnaround. Joining me now, sir, Peter Beck, rocket lab founder, chair and CEO. Peter, it's great to have you back on the show. Welcome. Great. They're great to talk to you Morgan. Let's start right there with this fast turnaround you did with these launches over the weekend and how it speaks to how quickly you're ramping the cadence of your launches.

Yeah, well, I mean, there's a rocket rolls off the production line here every 15 days or thereabouts and it was good to get a couple of vehicles one after the other. Of course, you know, we've done 10 launches this year so far, so it's been a big step up in cadence so far this year, and we look forward to seeing that continue throughout the year. How does that speak to what you're seeing in terms of demand for launches?

I mean, case in point, whether it's commercial players or governments, everyone I speak to says they need more competition in the market, case in point, this very public spat between Elon Musk and President Trump really highlighting how dependent overall the market is on SpaceX. Yeah, I worry about a lot of things at night,

but that's probably not one of them is demand. And for Electron, our little rocket, we've seen increased demand over the last couple of years and we're not just launching a single spacecraft. These are generally entire constellations for customers. And then, of course, you hit on the point with Neutron is there's kind of a pseudo-monopoly in that medium-class lift right now. So Neutron is aimed to kind of break open that monopoly.

So yeah, a lot of demand. And the demand is one thing, but reliably delivering over and over again is equally as important. So when does Neutron fly? Well, we're trying to get it on the panel launch this year. So it's an aggressive timeline, but we're giving it our best shot.

You also recently made an acquisition, Geost. Are you still acquisitive? How does that expand your portfolio? Yeah, absolutely. In fact, we've made two recently. So one was a company in Germany, Minarik, that's underway at the moment. And then of course, as you mentioned, Geost.

And Geost really is our first foray into payloads. So we're very well known at building rockets and building spacecraft, but now we foray into payloads. So, you know, we're very well known at building rockets and building spacecraft, but now we actually build the payloads to provide, excuse me, a real end-to-end service for our customers and a stronger foothold in national security. I was just talking about it before the break, the fact that defense spending is growing here in the U.S. but internationally as well. And we're seeing a lot of dollars being spent on international issues. We're seeing that defense spending is growing here in the

U.S. but internationally as well. We're seeing spending on things like space in particular whether it's from a national security standpoint or even a civil space standpoint, those dollars are increasing too. Where do you see the biggest that is domestic versus international? Yeah, so I mean, generally our backlog looks something

like 50% commercial, 50% government, and it kind of ebbs and flows between the two. But I would say that in a more unstable world, there's definitely more necessity for some space assets. So we see national security being a bigger part of our portfolio. But nevertheless, we like to hold that sort that healthy mix of both commercial and government. Yeah.

And investors certainly getting on board with this. Peter Beck, thank you so much from Rocket Lab for joining me today. Thanks, Morgan. Well, Apple rallying today, but a real drag on the Dow this corner. Up next, Mike Santoli breaks down Apple's valuation to see if the stock looks cheap on a historical basis. Stay with us. Welcome back.

All the major averages posted gains for the quarter, but the Dow is only 4% higher. Mike Santoli is back to tell us what dragged on the index. Mike. What did you see? What did you see? What did you see?

What did you see? What did you see? What did you see? What did you see? What did you see? What did you see? What did you see? What did you see? What did you see? Welcome back. All the major averages posted gains for the quarter, but the Dow is only 4% higher. Mike Santoli is back to tell us what dragged on the index. Mike. Yeah, Morgan, pretty stark differential between the Dow Jones Industrial Average and the industrial sector within the S&P 500. You see them actually parting ways here just in the last few months. Now part of this is what is in the S&P industrials that's not in the Dow. For example, Uber, big upside contributor for the S&P industrials, that's in the Dow. Transport's not the industrials.

And then there's all the non-industrial parts of the DJ-30. That would include things like United Healthcare, big downside drag, but also Apple. And so Apple of course has not played ball today at balance, but it's down like 18% year to date. Here it is on a five year basis relative to the NASDAQ 100. Now of course Apple is a huge component of the NASDAQ 100, so it shows you it's really in the last little bit been underperforming the rest of those components, but you see

the lead that have built up over that time in these two real big spurts of upside. Now how's the valuation of Apple look after all this back and forth? Well, relative to the S&P 500, the forward PE of Apple is lower than it's been for most of the last five years. So since the pandemic, this is about as low as the premium valuation has gotten.

It's around 1.2 times the PE on the S&P 500. You see there for a brief period there in late 2020, it kind of got a little bit lower. However, before 2020, before the pandemic, it was pretty routine for Apple to trade at not much of a premium to the S&P, or even a discount for a lot of years in the mid-2010. So it's kind of like eye of the beholder.

Definitely some risk has been taken out of the Apple valuation with this recent run of underperformance, but it's hard to make the case that it's truly a bargain that value investors would be rushing toward. If I just expand out, as we just finished the first half of the year, Mike, I mean, it's super interesting on Apple, but the other piece of the puzzle for the markets

has been how much volatility we've seen in trading in this first six months of the year. I just wanna get your context for what we've seen and how it compares versus historical norms. Yeah, one of the fastest 15% or greater drops that we've ever seen in the S&P 500. Now, a lot of these most since, greatest since, longest streak since is attributable to the fact that we have more than a third of the S&P 500. Now a lot of these most since greatest since longest streak since is attributable to the fact that we have more than a third of the S&P 500 bound up in seven stocks.

So the index as a whole can whip around a lot more than it did but in other respects this did obey some of the patterns of previous shock-based severe correction. So I keep pointing it out. Late 1998, late 2018, you go back to 1990, there was all of these kind of like exogenous event and it knocks the market down more than 15%. You don't get a recession out of it and then you have a quick snapback. In fact, probably the quickest snapback we've just seen since a 15% drop.

With all that, volatility is actually subsiding and we're receding in the VIX to around 16. All right, Mike Santoli, thank you. All right, well we saw major averages finish the day higher, record highs for the S&P and the NASDAQ, 62.04 for the S&P and the Dow Industrial is finishing higher too. Best level since February 20th, that's going to do it for us here at Overtime. Fast Money begins right now.