Closing Bell - Closing Bell Overtime: Rough First Quarter Comes to A Close; Debating the True Tariff Impact 3/31/25

Episode Date: March 31, 2025

Scott Wren, Wells Fargo Investment Institute Senior Global Market Strategist, and Victoria Greene, G Squared Private Wealth CIO, discuss the latest market trends. Joseph LaVorgna, SMBC Nikko Securities America Chief Economist and Former Trump Economic Advisor, and Mark Zandi, Moody’s Analytics Chief Economist debate the true impact of tariffs. Neuberger Berman Portfolio Manager John San Marco talks the impact of tariffs on consumers, while Veriten Partner Arjun Murti talks energy and macro policy. Mizuho Healthcare Strategist Jared Holz provides insight on vaccines. Plus, NASA Astronauts Butch Wilmore and Suni Williams on returning to Earth after their odyssey in outer space. 

That bell marks the end of regulation. Rainbow Push Coalition and Citizenship Education Fund ringing the closing bell for New York Stock Exchange. Stealth Gas doing the honors at the NASDAQ. Stocks making a striking comeback as we close the books on the first quarter, which was marked by steep declines for the major averages, including a double digit percentage drop for the NASDAQ

driven by weakness in Tesla, NVIDIA, and other mega cap names. That is the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Well, coming up on today's show, the great tariff debate. Former Trump economist Joe LaVornia and Moody's analytics chief economist Mark Zandi will

join us with opposing views on how tariffs could impact the broader economy. Plus, will the first quarter winners keep on winning this year? Well, we'll talk about the opportunities in the energy sector. The top performer in Q1 up about 9%. And biotech stocks getting burned today, sitting out the comeback after the FDA's vaccine chief resigned. A top analyst weighs in on how much more pain could be ahead. Now let's get straight to today's market action

and this major comeback off the lows to finish out the first quarter with the Dow swinging more than 900 points in this session. Joining us now, Scott Wren, Wells Fargo Investment Institute, senior global market strategist, and Victoria Green, G-Squared private wealth founding partner and CIO. She is also a CNBC contributor. Guys, welcome.

Scott, Q1 was rough, but many were predicting volatility to start the year. So do you stick to the US-centric playbook here or did new cracks form in the thesis? Well, John, I think for us, we still wanna be US over international, at least for now. I think these markets, clearly know, we still want to be US over international at least for now I think these you know markets clearly we had a pretty good rally and in some of the developed world and emerging world for that matter But I think those are those are really ahead of themselves at least in our opinion

I think the US we're gonna have a slowdown here But the US is gonna lead out of the slowdown and these other markets are going to eventually follow. So for us right now You know, we saw the retest today. We might get a little bit of a bounce here. We want to buy while we've got a pullback, but for us it's US over international still. Okay. Now with those headwinds, Victoria, are you playing defense in portfolios?

And if so, how? Yes, I am playing defense right now. I think this is still an extended dead cat bounce. We never had a 90% down day. We never had Vicks wash out over 30. I agree that 5504 holding today, that March 13 interday low was big, but we have so much macro that might override

the kind of near term technical strength in the bottoming process. I think we have a little bit to go. I'm not saying this is gonna be a massive bear. I just think we have a little bit more downside. So I not saying this is gonna be a massive bear. I just think we have a little bit more downside. So I'm playing defense. Look at who were the key one winners. You had AT&T and Philip Morris

in the top five for the S&P 500. I think defense is gonna win the day a little bit right now. I'm staying away from high multiples. Want my cash flows, my good balance sheets, my blue chip dividends. I'm gonna hide out a little bit there. So Scott, what is it about the US that you think

makes it still exceptional from a stock perspective? And I guess just as importantly, given the fact we have seen this weakness in the mega cap techs, does that actually signal broadening out of the rally and what you'd be buying right now? Well, Morgan, we were expecting some broadening out in both earnings and just stock performance this year. We don't think it's going to be another year

where you've got a handful of stocks, you've got a handful of stocks leading the charge. But when we think about these international markets and you think about the EU or the Eurozone or Japan, I mean, their economies, they're not very flexible. Their productivity's low, their unemployment's high, they're not really that entrepreneurial. They have a hard time reacting.

They have a lot of locked in regulatory things that really, in my mind, create headwinds for their economy. So even though we've seen lower rates out of the ECB, is that really going to cause European consumers to go out and spend? Probably not. Not to any great extent. I mean, they're reliant on export markets, as is Japan. So I think their economies are just a lot less flexible

than the U.S. You know, the most innovative companies in the world are U.S. based, and I think that's what's gonna get us through this, and that's what's going to, you know, we are gonna have a little bit lower interest rates. We've had some lower interest rates. That's going to take some time. These next couple of months, the uncertainty over the tariffs and some of the things the administration are doing, I mean, that's going to bounce around. But if your outlook is one of moderate growth, moderate inflation, which ours is,

you know, you need to take advantage of stocks when they're down. You know, we took money a couple of weeks ago, we pulled it out of the long-term bonds, think the 10-year yield's too low, and we put that into mid-cap stocks, so we're overweight mid-caps, we're overweight large-cap U.S. stocks,

so that's the way we're leaning. We're not getting defensive. We're getting more cyclical exposure on the pullback. Victoria, so-called Liberation Day is this Wednesday. It's April 2nd. How much is the outcome of Liberation Day going to matter to liberating the markets? It's massive. See, I mean, seasonally, April, especially if you've had a weak March, seasonally, April tends to be pretty strong. It does. It does. It's, seasonally, April, especially if you've had a weak March, seasonally, April tends to be pretty strong. It does.

It does. It's, I think, one of the top three seasonally strong months that we would like to look at. But we did see March not perform the way we want or in December not quite follow seasonal patterns. I think this is going to be so much more macro-driven than technical or seasonality. Right now, it's going to be all about what comes out and how sticky those tariffs are. We did start the year saying, hey, tariffs are negotiating. We have developed that thesis and said, hey, tariffs are here to stay. This is going to be a headwind. I mean, the sell off this morning was Wall Street Journal was saying, hey, it's going to be

20% across the board. It's 20% across the board and they're here to stay. That is a very large headwind for consumers, for prices, for inflation, might not get those three rate cuts. And so I look at this and I say, for inflation, might not get those three rate cuts. And so I look at this and I say, I think this is going to be a pivotal moment. Really happy they're not doing this on April Fool's Day. They were smart enough at least to put it on the second. But for me, it is what comes out and then how do they follow it up? But listen to the rest of the administration.

It's not just what Trump is tweeting, which we know sometimes can be a little bit contradictory, but Bassett, Treasury, Commerce, they're all saying tariffs are here to stay. We're trying to reshuffle the global trade order. To me, that is a headwind that's here to stick that might make the rest of the year a little bit more difficult. All right, Victoria, Scott, thank you. Well, we turn now to tech,

the NASDAQ rallying off its lows today, but still falling more than 10% in the first quarter. Christina Parts-Nebulous joins us with more on what's been dragging the space lower. Christina? If I may call it lag 7 down 12 out of the past 13 weeks and all of those names down on the quarter. For example, Microsoft closes fourth negative month in a row, something we haven't seen since 2009 and Nvidia having its worst month since September 2022.

Big picture. The Nasdaq has really wiped out a little more than half of last year's gains this quarter versus the S&P 500, which only lost losing less than one third of last year's gains. You've got, you name the pick, tariff uncertainty, AI momentum, losing steam, upcoming earnings. They're all weighing on these names. There was some research just out from Trivariate that believes it could get worse as analysts' expectations have only modestly been revised down about 1.6% lower for 2025, highlighting this disconnect, according to them, with bearish sentiment. So these earnings should come down a little bit more.

And then while DeepSea's emergence created headwinds for US tech, it simultaneously highlighted Chinese AI progress. This dynamic has really benefited Chinese internet companies including Baidu, Alibaba, Tencent, Xiaomi, which you can see on your screen, a sea of green, as well as traditional telecom providers like AT&T up 24% on the quarter, which have really also outperformed

broader market benchmarks. And then one winner, I wanted to find one winner, that would be billionaire investor David Tepper. His last 13f filing So I know it's backwards looking showed his two largest positions in Chinese names were Alibaba and JD calm representing 20% of his portfolio I'm sure he's happy he's made a lot more money as Wall Street's tech darlings do fall from grace yesterday's overlooked sectors really are just quietly Stealing the spotlight in this market reversal guys Morgan. All right Christina parts and Abilis thank you lag seven I'm gonna

borrow that. Bank of America okay stole it from them. Well now let's turn to senior markets commentator Mike Santoli for a look at how Tesla's under performance has weighed on the consumer discretionary space this is actually the worst performing sector of the first quarter Mike. Yes and it was mostly because of Tesla and a related point I want to start out with which is this market is basically punished aggression basically the most aggressive volatile stocks the high beta part of the S&P 500 is right here this is a two-year chart so it just gave up

all of that outperformance relative to the lower volatility type stocks it's the tortoise in the hair story right here. It does suggest perhaps that some of those more volatile, very heavily weighted, TORQ tech stocks maybe have gotten a little bit washed out after this major gut check. Now take a look at Tesla relative to the consumer discretionary sector, XLY. That's a market cap weighted version right here.

And then this is the equal weighted version. So you see five and a half percentage point difference in those performance numbers year to date, almost all because of Tesla. Tesla is right now by 15% of the S&P 500 consumer discretionary weight. Amazon's at 22. So it's a incredibly top heavy sector.

That's why you wanna get a macro read from the equal weight, which has done a little bit better, even if it's underperformed the S&P a little bit. Look at the same chart though, over a longer span of time, and you see it went the other way. Tesla had that massive move in the latter part of last year, and that did cause outperformance by the market cap weighted version.

Also Amazon helped in there too. So you kind of have to know what your gauge is measuring at a given moment, guys. And of course we get Tesla deliveries later this week and then there's a lot of when you talk about tariffs in the auto industry Tesla is one of those names because of its vertically integrated supply chain here in the US that is seen as a potential beneficiary but not the only one Lucid for example and Rivian have also popped or at least they did last week on those possibilities as well. They did. Now again, that's to the extent that at any given time Tesla is trading as a car company

based on car fundamentals more than other things. And it's been tough to find that moment, like what's the actual core of the business that's relevant to the market at a given time. But that is all true. And I mean, really Tesla's the only one of the ones you named at any scale that could probably absorb any net incremental demand, but as we know, just a lot of other noise around this brand and everything else. Yes, Mike Santoli, thank you for breaking it down for us.

We'll see you later this hour. Coming up, we're gonna talk more about consumer discretionary stocks when we're joined by New burger berman's portfolio manager with the names he says could rebound in q2. And up next, former trump economist joe lavornia and moody's analytics chief economist mark zandi debate the impact of tariffs on the broader economy ahead of wednesday's potential wave of announcements over times back in two wave of announcements over times back in two. Welcome back. The major averages rebounding today was pretty dramatic

turn of events actually here, but it has been a very volatile quarter for stocks in general with tariff headlines swinging the market regularly. Now investors are bracing for a potential wave of tariffs come Wednesday. Richmond Fed President Tom Barkin weighed in on how the tariff impact will play out on the last hour on Closing Bell. Consumers are exhausted and frustrated and tired of paying high prices. Think of it as a cage match between a very strong immovable force and an

irresistible object and I'm going to be very interested how this plays out. I'm not as convinced that people are going to be passed the tariffs on. I'm also not as convinced that there's not going to be inflation. Well joining us now are Moody's chief economist Mark Zandi and Joe Lavornia. He is SMBC NECO securities chief economist and a former economic advisor during President Trump's first administration. It's great to have you both here. Mark, I'm going to start with you and get your reaction to Barkin, who is not a voting member of the FOMC, but certainly echoes what we've heard from a number of Fed officials since that FOMC decision earlier this month.

Well, I mean, I think the terrorists put the Fed in a tough spot, right? I mean, they raised prices inflation, so that would argue for higher rates, but it also weakens growth, which would argue for lower rates. So what do you do? They don't know. They don't know how this is all going to play out given the uncertainty involved. And so they're just sitting on their hands and they're not going to change policy. So there isn't much economic policy out there that makes life more difficult for the Fed

than tariffs. It's a shock that just very difficult for them to figure out what to do with it. Joe, there's a lot of talk eking into the market and in the economics community, investor community about the rising risk of stagflation. Is it warranted or are folks missing some of the nuance around tariff policies? I'd say they're missing the nuance around tariff policy because it's part of a more holistic program

whereby if you have tariffs, and the tariffs are used for a variety of reasons, I understand many of the points that Mark will probably disagree with me on, but the tariffs are used for a variety of reasons I understand many of the points that Mark will probably disagree with me on but the tariffs are going to raise revenues and ideally encourage capital back into the U.S. but that only works if you've got low corporate tax rates a very friendly business environment we change the permitting process and of course you have low energy costs so that when you make things the after-tax return and the input costs on those are low

So to me the tariffs need to be looked at more organically more holistically. They're neither good nor bad tariffs in economics There's a there's there's a removal of consumer surplus removal of producer surplus So there's some deadweight loss as economists say But there is also revenues to the government and it's a tax and we need to look at I think less There is also revenues to the government and it's a tax. And we need to look at, I think, less hyperbolically and look at how it's being used as a tool. And we could debate about that, but I don't think tariffs are inherently bad. In this case, I think they could be quite good. But, Mark, we don't know, do we? I mean, I'm trying to think.

This is kind of an experiment. Pro-tariff economy watchers seem to be assuming that the U.S. market is so big and so essential that imports are going to continue at roughly the same pace as they have been. Demand won't be affected. Do you think that's likely? No, and I don't think there's much debate. I mean, I think most economists would, based on history, and we've got a lot of history here, I mean, decades, centuries worth of history, that tariffs are a pretty bad idea.

They're a tax, as Joe mentioned, on the consumers. And it's a very regressive tax. It hits low-middle-income households harder because they've had a higher share in their budget to imported goods. It's a tax on American business. I mean, many businesses use imported product in the things that they produce.

And of course, it invites retaliation. That always is the case. Other countries aren't gonna stand still, particularly if they think that the tariffs are going to remain in place for a long time. If they're actually going to be used for generate revenue, I think other countries will respond, and that costs American jobs. That's just the near-term impacts.

I mean, longer run, it reduces competition, and it results in less investment and lower productivity growth and higher inflation. I don't know. you add it all up, I think history's pretty clear here. Even the history that came out of President Trump's first term and the tariffs that were imposed then, which are very small in scale to what we're talking about here, the strong evidence is that they didn't work out

at all well for anybody, so it's a loose loop. Okay, Joe, thinking back to what Barking, thinking back to what Barkin was just saying. I just want to address the history aspect of it. Address it, but first let me form my question. No, hold on, this is important. Joe, is it your position that the- On the history, John. John, on the history. Let me form my question and then answer however you want. Hold on a second. We don't have a lot of time. On the history. Is it your position that these tariffs will not lead to a significant recession or that if they do, it's not a big deal? You already knew the answer. No, see, that's not the right question.

If we're talking about history, and I understand Mark's points, we talk about history, you go back 100 plus years, in Smoot-Hawley, the US was the world's largest producer. We had a lot of production relative to consumption. That's the exact opposite today. We've got too little consumption, too much consumption relative to too little production.

So we need to realign the system. The Great Depression was not due to smooth Wally and tariffs. It was done to the Federal Reserve that was aggressively a tightening policy and let the banks fail. Inflation today, it's a price level adjustment. We know from the last period that the price level was absorbed through margins and the currency. We'll see what happens this time.

We don't know, we're still in the negotiating phase. So let's not just assume that everybody knows the answer. You're making as if there's more agreement on this subject than it is, and that's the issue that I have. So my question, are you saying no recession, or if there is, it's not a big deal? We didn't talk about recession. Right now, if you look at the data in the first quarter,

real income is up 3 1 1, real income is up three and a real income is up three and a half percent I do not expect there to be a recession. No, I do not expect there to be a recession then we'll see Joe mark Thank you We got breaking news out of the White House on executive order. Megan Kasella has the details Megan Hey, absolutely John We are just learning in the last few minutes that President Trump is set to sign later this afternoon an executive order targeting price gouging in the live entertainment industry. This is something that the White House says will end price gouging by middlemen. They're doing this involving multiple government agencies here. They're directing the

Federal Trade Commission to work in partnership with the Attorney General to enforce competition laws within the industry. They say they'll be asking the FTC to ensure price transparency at all stages to take enforcement action to prevent unfair, deceptive and anti-competitive conduct as needed. They also are directing Treasury to get involved here with the AG to ensure that ticket scalpers are following the law as well and that Treasury, DOJ and the FTC will deliver a report on this within 180 days and come up with recommendations for additional legislation as needed. John so White House official now confirming to me as well. The president will be signing this in the Oval Office at 5 30 p.m. today and that kid

rock will be in attendance for the signing guys. All right. Megan Casella. Thank you. Shares of live nation are down about two and a half percent right now in overtime PVH earnings meantime are out and that stock is jumping Courtney Reagan has the numbers. Hi court. Hi Morgan Yes, so PVH is reporting stronger earnings per share than the street was expecting at 327 adjusted The street was looking for those to come in at 321 so six cents above Revenue is also coming in at two point three seven billion. That also above consensus of $2.33 billion.

When you're looking at revenues by Brandon by segment, Tommy Hilfiger revenues were down 5%, Calvin Klein down 2%. Wholesale revenues down 5% as well as direct to consumer also down 5%. The company is announcing a $500 million share repurchase program in 2025. That is included in the company's current $5 billion stock repurchase program in 2025. That is included in the company's current $5 billion stock repurchase authorization. And when it comes to the outlook, most of it is above consensus with the exception here

of the first quarter adjusted earnings per share. The company is looking for that to come in a range of 210 to 225, while the street is looking for 229 on that. However, the first quarter revenue is projected to be higher than the street at flat to negative two. The street was looking for that to be down more than 2% and then full year revenue also higher than expectations as well as the projection for the adjusted full year earnings per share. So you can see here shares are up almost 11% on this news, John, and we will hear more from the company tomorrow morning with our conference call. So we're going to have to wait this evening and just go through the release in more detail before we can hear more from the company themselves. Back to you.

Nice pop there. Yeah, Courtney, thanks. Thanks. Up next, we'll look for opportunities in the consumer discretionary sector, the worst performer in the first quarter, and discuss the real impact of tariffs on customer spending. Plus, why hedge fund exposure to MAG 7 stocks could give a clue about the group's next move. Over time, we'll be right back. Welcome back.

Consumer discretionary, the worst performing sector for the quarter and posting its worst quarterly stretch since 2022. The biggest decliners in the sector, Norwegian Cruise Line, Tesla and Deckers. Joining us now is John San Marco, Senior Research Analyst at New Burger Berman and Portfolio Manager of the Connected Consumer ETF. John, good to see you. Was this a case of a few really rough stocks dragging the whole thing down? Are there names in here that you still like as we enter Q2?

Great to see you. Thanks for having me on. No, this is not the case of just a few stocks. It has been pretty broad-based weakness the consumer pulled back after a strong holiday and the uncertainty that tariffs and geopolitics and supply chain disruptions have created. They created challenges for the executives running these consumer businesses as well as some uncertainty for the consumer. So it's been a tough start to the year for the sector.

But the answer to your second question, yes, we do still think there are great ways to make money in the space, positioning well against for that backdrop, for that uncertain backdrop. So tell us how. What are the characteristics of companies that you think can do well during this period? Is it less exposure to goods that are likely to be tariffed or just a structure that allows them to weather it? Yeah, it's resilience and it's flexibility and some of the same business characteristics

that were tested when inflation started to spike in 2022 and 2023, would be tested again as these tariffs become more and more reality or any other challenging dynamic for that matter. And that's pricing power with the consumer, it's having flexible and advantage supply, a name like TJX strikes this as the ultimate advantage supply for how flexible it is.

Or a name like Home Depot seems very well positioned with pricing power, as well as negotiating power with its suppliers. And another name we'd throw out there, I'd throw out there is Dollar Tree, which seems to have gotten a lot of the bad news behind it, and now has a much cleaner story prospectively. John, when I see a name like PVH spiking

on stronger than expected earnings and forecasts for the year and they own brands like Tommy Hilfiger and Calvin Klein, we know the 90s have been back. I mean, can we say that there are winners and losers across the consumer discretionary space right now that it's not a matter of consumers just pulling back all their spending, but rather perhaps being very specific about where they wanna spend their dollars.

I think that is a very astute observation. For sure, we're seeing some separation between winners and losers. It's not all services or all retail, it's not all trade up or all trade down, but some very company specific situations. And PBH is a great example that they've done so much portfolio transformation

that has gotten to them to this point where they can surprise to the upside. So this should be a stock pickers market, at least in the consumer discretionary space, for sure where the consumer is doing well enough that with solid execution and business advantages like some of the names I had mentioned earlier, I think the environment can be perfectly good enough.

But for those losers who are falling behind, you're certainly seeing the pressure on several P&Ls. This appetite for services, do you think it continues that it persists? And if so, how would you be positioning yourself as an investor to make the most of it? Services tend to be a little more discretionary. So there tends to be some cyclicality there.

And we're also coming off of this revenge spend cycle from the consumer. It was several good years. And now inflation has started to creep up and put some downward pressure on demand for services. And investor expectations have obviously been reset 100 miles higher than where they were a few years ago. So we think that much of that trade has largely played out. You know, although, you know, selectively we, you know, we do see some opportunities in dining and in travel. But, you know, we're pretty balanced across goods versus services. All right, John San Marco, thanks for joining us. Well, it's time now for a CNBC News Update with Kate Rooney. Hi, Kate. Hi, Morgan.

So the Trump administration deported more alleged members of a Venezuelan gang and MS-13 to El Salvador over the weekend. The State Department said today the 17 men were transported by the U.S. military, but a spokesperson declined to comment when asked what the authority the administration had used for those deportations. Meanwhile, the State Department also saying today a team from USAID is heading to Myanmar to help identify the country's most pressing needs in the wake of a 7.7 magnitude earthquake that hit the country on Friday.

It comes just days after the Trump administration notified Congress that it would cut nearly all remaining jobs at the agency and shut down USAID. And transportation secretary Sean Duffy today announced two investigations into what he described as allegations of diversity, equity, and inclusion hiring at the FAA. In an announcement, Secretary Duffy said the investigations will be conducted by the FAA's inspector general and by an outside law firm. Guys, back over to you.

All right, Kate Rooney, thank you. Coming up is the worst pain over for the Magnificent Seven. We're going to look at one metric that shows the group may be due for a bounce after a brutal quarter. And an expert weighs in on what's been driving the strength in the energy sector and why he says the rally has been unloved. We'll be right back. Welcome back to overtime. The Magnificent Seven not living up to their name in the first quarter finishing out with losses of 15% as a group.

So are those stocks due for a bounce? Well, let's ask Mike Santoli. Mike? Yeah, John, well, here's a look at how hedge funds are positioned in the Magnificent Seven. This is according to Goldman Sachs based on their client activity. So what you see here, the net exposure of those firms to the Magnificent Seven has really crashed here

in the last little while. It's down on the left-hand scale, let's say 12, 13% net exposure. Remember, the Magnificent 7 is still something like 30% weight in the S&P 500. And then the orange line, which has really dropped, it's the long short ratio. So it's sort of like how many dollars

do these hedge funds have long in this seven stocks versus how much they are short so clearly a lot of diminished expectations here maybe some washed out positioning we've tried to call this few times I don't think you have to make the call that says aha they've probably bottomed out and then they're going to resume their leadership profile that they had for two years going into last summer or anything like that they could just get some relief

maybe participate in any relief rallies, and then see where it goes from there. Take a look at how that group has performed though, since the middle of last year compared to the equal weighted S&P 500, you see actually, it's pretty close, right? I mean, MaxEmin is now underperforming by two and a half, three percentage points

after building up massive gains through the middle and latter part of last year. So we've had a market that's come back into balance and as I constantly have said, you know Everyone wanted a broadening market somehow This is how it broadens which is the biggest stocks get slammed and the average stock does a bit better than that But Mike don't we have to be careful looking at these seven as a group? I seem to recall over the past few quarters It was like watching a WWE tag team match

where one or two Mag-7 Sox would be getting beaten up and then they'd reach out and tag in another one, you know, Meta or Nvidia would start doing well while the others weren't. But then over time, they all started, or most, started not doing so great. Yeah, to varying degrees. The group really did splinter, as you say.

I mean, you know, Tesla had this tremendous, you know, surge and crash move. Meta was the outperformer for a long time. Microsoft's down substantially on a 12-month basis. And then you have, you know, things like Apple, which acts as a defensive proxy more than anything else along the way. So yeah, you're absolutely right. It was a kind of convenient packaging for a particular investment theme for a period of time. And in fact, I think you're gonna have to, it's gonna be nip and tuck as to whether they're even the seven largest companies anymore.

I think Broadcom maybe is gonna sneak in there. Berkshire Hathaway is bigger than Tesla. So, you know, it's sort of a little bit of a judgment call as to whether we wanna call these things a single unit anymore, Morgan. All right, Mike Santoli, thank you. After the break, will the top performing sector in Q1 continue to rally in the second quarter? We've got an expert weighing in on what drove energy's surge.

Plus biotech stocks getting crushed today after a key FDA official resigned from his post. But we've got an analyst who says it may be a bit premature to cast such a dark shadow over this space He'll explain why coming up Welcome back to overtime energy finishing as the top S&P sector in March It's the best performer in the first quarter overall after lagging last year. Is there more upside ahead in Q2? Let's bring in Arjun Murthy, a Veriton partner focused on energy, macro and policy.

He's also on the boards of ConocoPhillips and Liberty Energy. It's great to have you on the show, Arjun. And I'll start right there. The fact that we saw this rally in energy stocks and then over the weekend, we had more geopolitical angst with president Trump making comments about Russia. How does this position us for Q2 with oil and gas? It's caught most energy experts by surprise here. People were bearish coming into the year on oil prices and concerned about a correction.

And lo and behold, we've hung in here into the 70s. And I think that plus recovery, natural gas prices has really got this group going again here. The impact of trade policy, foreign policy, some of these other macro dynamics, how do you see them factoring in? I mean, it's part of the uncertainty that people had come into the year concerned about. And I think if you told people we're going to have concern about recession, throwing trade tariffs, and OPEC's going to announce production increase, people would have said, look out below. But in fact, some of this is catch up from years past where

we've been told over the last several years, we were in an energy transition out of traditional oil and gas only into the new stuff. And I think people are coming to recognize we're going to need all forms of energy going forward that plus the mag 7 correction That was highlighted earlier has allowed people to to put money back into the sector Especially in light of returns on capital free cash flow and the dividend policies being much better for this sector than we've seen in years Past so Arjun you mentioned OPEC has already announced production increases So does energy's outperformance even even in the face of that, leave the sector more exposed to any macro data

that suggests global demand is flagging further, or there are other things that are bolstering energy right now? You're hitting the nail on the head on one of the key points. People have been worried. China's slowing. What if we have recession in the US?

What if you throw tariffs on top of that? In fact, demand has been grinding higher. Now listen, if there's recession or some other economic correction to happen, energy usually struggles in that kind of environment. But at least so far, the demand numbers have been hanging in there. And probably as importantly, aside from OPEC, shale production is showing some signs of maybe the best days are behind it. And people are starting to wonder, maybe we're going to have to start looking for supply outside of the U.S. It's been the bulk of supply growth over the last decade.

So tell me if I'm oversimplifying here, if you're still bullish energy here, you think the consumer can continue to hold up despite the worries here and that that grind higher than continues? We would be concerned that if you have recession and demand weakness, energy is not immune for that. No one ever should think it is. What I will say is the new element can be that the supply side is starting to look less bearish than it was in years past,

where every time oil went up a little bit, we saw a flood of new shale supply. If those dynamics are changing, it at least provides some amount of stabilization for the sector going forward. Make no mistake, if you have recession, energy's gonna struggle. If we avoid recession, that's where you can get

your next big leg up in the sector. So Arjun, is it US exceptionalism that's gonna power production higher here or is it going to be something else? You know, energy has moved to where it's really about the global demand barrel and as we like to phrase it there's the lucky one billion of us those in the US, Western Europe, Japan, the rich economies, energy demand and especially for oil and gas it's all about the other seven billion people on earth who are just moving up these economic and energy s-curves so it is true we should be more worried about the health of China, but we've got India recovering, we've got other parts of Southeast Asia starting

to rebound. And really, those are going to be the dominant drivers of energy demand going forward. US is a part of it. US recession would be bad. But I think it's really about those other 7 billion people and the massive energy needs. That is the case for the sector, that we are trying to figure out how to meet the demand of everyone else in the world. We've been very dependent on just US shale over the last decade. What if we knew in different sources?

That means we need a new price cycle, and that means we need additional avenues to help meet that demand. Any lingering shipping logistics issues out there that investors should factor in? I'm gonna broaden that question slightly to just say the geopolitics are always a factor. I will say that the geopolitics can cause disruptions in supply. That is a reason to own the sector as a geopolitical or inflation hedge.

The best case for energy, though, is always you have good economic growth and supply might struggle to meet it. That is when you have good economic growth and supply might struggle to meet it. That is when you have your sweet spot for multiple expansion and good returns and earnings. So some of the geopolitical noise and volatility, including around some of the logistics you highlighted, that can be a short-term trading benefit to the sector, but it's really about long-term economic health and meeting that demand that we focus on for really thinking you can have a sustainable rally in the sector. Arjun Murthy, thanks for joining us.

Thank you. Coming up, I just spoke with the NASA astronauts, Butch Wilmore and Sonny Williams after their extended nine-month stay in space. What they told me about whether Boeing is to blame. Next. And it was a stellar quarter for gold, which will likely turn in its best quarterly gain since 1986, up 19%. Overtime we'll be right back.

An eight-day spaceflight that turned into a 286-day space odyssey. Quote-un, stranded NASA astronauts, Sunny Williams and Butch Wilmore speaking publicly today after the return to earth on March 18th, when they splashed down off the Florida coast in a SpaceX dragon capsule. Wilmore and Williams had traveled to the international space station

in a different spacecraft, Boeing Starliner. It was the first crewed test flight of that capsule, which did not go according to plan and resulted in an empty starliner returning to Earth. Now I asked if they felt Boeing had let them down. If you want to start with pointing a finger, you can point it at me because I'm the commander of the spacecraft.

I did not ask certain questions about certain systems, going way back years even, questions that could have maybe turned the tide and stemmed the tide. I didn't ask those questions. I didn't really think about needing to ask some of those questions but in hindsight I should have. So I bear part of the blame if you want to call it blame the responsibility NASA bears part of the responsibility Boeing bears part of the responsibility. They will be meeting with the Boeing executives this week to work on that Starliner program. But during their space flight,

Wilmore and Williams were ultimately absorbed into NASA's Crew-9 astronaut mission. And here on Earth, they were dubbed, quote unquote, stranded, stuck, abandoned, with a nine month timeline, even taking on a political element. Here's how the astronauts themselves saw it. We were part of this whole process. It's not just about Sunny and Butch in a spacecraft. It's also about our obligations to our international partners on the International Space Station

doing that work. And so like we all have mentioned, we're happy to be part of that and flow right into the natural flow of crew rotations. and that happened to be with Crew 9. Now she tallied 608 cumulative days in space, because for both of them, this was their third space flight. That is the second most for any US astronaut. Together with Colonel Nick Hague of the US Space Force, Crew 9 conducted over 900 hours of research. So for more of that interview,

you can check out Manifest Space, scan that QR code on your screen, download wherever you get your podcast or check out CNBC com where we will be publishing the full interview momentarily astronauts are just phenomenal human beings I don't even like to eat at home for that many days in a row that's how spoiled I would know we've got another human spaceflight tonight a commercial one with SpaceX called Fram 2 so astronauts continue to get minted here and the trajectory is ramping.

Well up next, vaccine stocks getting hit after the FDA's top vaccine regulator resigned from his post. We'll talk about whether or not the reaction is overdone for names like Moderna. And check out two IPO movers on this final day of the quarter. Shares of Newsmax surging more than 730% on the first day of trading. And CoreWeave pulling back today after Friday's debut.

And one more check on PVH at post-market highs after earnings and revenue topped estimates and the forecast for the most part was better than expected. Now it's 16%. Stay with us. Welcome back to overtime. Vaccine makers suffered big losses today after the FDA's vaccine chief, Dr. Peter Marks, announced he's resigning in protest of HHS secretary RFK Jr's stance on vaccines.

Jared Holtz, healthcare strategist. Dr. Holtz, healthcare strategist. Dr. Holtz, healthcare strategist. Dr. Holtz, healthcare strategist. Dr. Holtz, healthcare strategist. Dr. Holts, announced he's resigning in protest of HHS secretary RFK Jr.'s stance on vaccines. Jared Holtz, healthcare strategist at Mizzouho, joins us now. Jared, welcome. Thank you.

So, the Wall Street Journal has an editorial saying that the critics of RFK Jr. are being vindicated by all of this. You think it's overdone? Hey, John, how are you? I'm not You think it's overdone? Hey John, how are you? I'm not really sure it's overdone. I just think we're in this, you know, gonna be in a weird pocket of time for the next several years,

assuming RFK Jr. is continuing to lead HHS here. I mean, we just have a cast of characters, no one's used to. Lot of controversies in healthcare, obviously. So it's really tough to know if the move is overdone. I just see that, you know, the vaccine complex of stocks as really unownable, given, you know, obviously COVID, you know, essentially dying down and just the vaccine controversies

are going to continue for a while here. Unownable, but are they tradable at the same time with this volatility and this fear? Yeah, totally tradable. I think I've been on with you in the past. You know, I think Bird Flu was the last kind of positive headline for Moderna. And at that time, I thought it was a trade.

I think this is probably, could be potentially an opportunity just on the weakness of the overall sector. So weak today on the back of this Marx resignation and obviously a lot of different changes at various agencies. So it might be an opportunity. I think the issue for Moderna and some of these others is the vaccine demand is just waning by the day. The liability shield laws that are in place. Do you think there's any possibility that those get amended or revoked altogether? And if so, what does it mean for the companies? It really could be, Morgan. I think that's one of the biggest issues that we really don't know. But if it's reintroduced even as an existential risk, I think it poses big issues for Moderna, all the other companies that were front and center during COVID, during the peak of the

pandemic. I'm not really sure what the odds are. It's not zero. And of course, you have, you know, a number of these leaders now, you know, within pockets of HHS that can make it a thing. I know the president has alluded to it in the past that, you know, maybe we should strip these companies of that protection. So it's an existential risk, I would say, but it's worth paying attention to. So as we enter Q2 here are there drug makers or biotech names that you like above and beyond the vaccine makers? What's grabbing your attention innovation wise? Well I think that the stocks that continue to do fairly well or at least have shaken off much of the degradation

with biotech as a broader sector, are names that actually have business models that are commercial that offer investors some revenue, potentially some earnings. So I think Insomed, Argenics are two that come to mind as larger cap stocks that have products on the market with a real business. I think if you kind of go beyond commercial and you go towards earlier stage higher risk

assets, I just don't think we're there yet in terms of a broader appetite. Okay. Jared Holtz, thanks for joining us. Thank you. Well, an interesting day for the major averages on this last day of March and last day of the first quarter, John, we had a mixed picture. The Nasdaq 100 basically finished flat after starting the day markedly lower. So we'll have to see what Q2 brings,

but you know, this week brings liberation day, so called, with reciprocal tariffs. On Wednesday, we've got a jobs report, the ISM readings, Tesla deliveries, a possible Senate reconciliation vote this week. What a year this quarter has been. and a shift in how investors are looking at the potential impacts of policy. We'll have to see if that continues or if we get data that shifts the perspective. Yeah meantime PVH jumping here in overtime

that's going to do it for us here at overtime. Fast money starts now.