Closing Bell - Closing Bell Overtime: The Moment in the Oval Office That Shook the World 2/28/25

Episode Date: February 28, 2025

We have you covered from all the angles on the tense moments between President Trump and Ukraine’s Zelenskyy with former CFR President Richard Haass, Evercore’s Krishna Guha, plus the latest from the global reaction with our Eamon Javier’s at the White House. 3Fourteen Research Co-Founder Warren Pies breaks down the market reaction—including why stocks surged into the close. Chicago Fed President Austan Goolsbee talks inflation and productivity. Later, Jon covers a big winner in the cloud this week and Morgan has the latest Manifest Space.

That's the end of regulation. Claritab ringing the closing bell at the New York Stock Exchange. Webus International doing the honors at the NASDAQ. Well, stocks closing at session highs. The Dow at more than 600 points. Even after a tense exchange in the Oval Office between President Trump and Ukrainian President Zelensky led to a volatile session.

As we wrap up trading for February, all the major averages are lower on the month. But that's the scorecard here on Wall Street. The action, though, is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. Coming up this hour, Chicago Fed President Austin Goolsbee is going to join us for an exclusive interview on the market and the world today when we speak with Council on Foreign Relations President Emeritus Richard Haass and Evercore ISI Vice Chairman Krishna Guha. Let's begin right there with the breaking news out of Washington, the Oval Office argument between President Trump and Ukraine President Zelensky. Our Eamon Jabbers joins us with the latest. Eamon. John, unprecedented scenes in the Oval Office as a total diplomatic meltdown took place between

President Trump and President Zelensky, arguing about whether or not Zelensky has been thankful enough for U.S. military aid and whether he was being disrespectful to Donald Trump and the American people during the course of that meeting. I want to play you a couple pieces of sound from that to just give you a sense of how it all went down this afternoon. First of all, we had this moment in which Trump accused Zelensky of gambling with World War III. Here's what he said. You don't have the cards right now. With us, you start having cards. Right now, you're playing cards. You're gambling with the lives of millions of people. You're gambling with World War III.

You're gambling with World War III. And then in another exchange, President Trump's trying to emphasize to Vladimir Zelensky that he doesn't have an advantage militarily or economically in the war against Russia and that Ukraine needs the United States in order to prevail or at least end the war on some terms that are favorable to Kiev. Here's that exchange. Your country is in big trouble. Wait a minute. No, no. You've done a lot of talking. Your country is in big trouble. I know. You're not winning. You're not winning this. You have a damn good chance of coming out okay because of us. Reaction now pouring in from around the world, particularly in Europe. And you can sense, guys, that this is a moment

in which the Atlantic alliance between the United States and Europe is fracturing just as much as the relationship fractured between the United States and Ukraine in the Oval Office. And take a listen to some of these statements that we're seeing from politicians. First of all, we know that President Zelensky spoke to France's President Macron and the head of NATO after the Oval Office meeting today. The German Chancellor Scholz says Ukraine can rely on Germany and can rely on Europe. The EU Commissioner, President Ursula von der Leyen says to Zelensky, your dignity honors the bravery of the Ukrainian people. Be strong, be brave, be fearless.

You are never alone, dear President Zelensky. And then the vice president of the European Commission saying the world needs a new leader. The commissioner saying Ukraine is Europe. We stand by Ukraine. We will step up our support to Ukraine so they can continue to fight back the aggressor. Today it became clear that the free world needs a new leader. It's up to us Europeans to take this challenge. So what you see there, guys, is Europeans rallying to the defense of Vladimir Zelensky here. We saw cheers in Moscow. Former President Medvedev tweeting out earlier his support for Donald Trump,

saying he slapped down Zelensky appropriately in the Oval Office. And we're seeing Republicans in Washington rallying around the president as well. We saw Senator Graham, Lindsey Graham, come out here to the sticks a short time ago at the White House and say that Zelensky may need to resign in the wake of this incident, guys. So reaction, as you can see, pouring in all over the world. Eamon, for some context here, perhaps, I can't recall a time when there was that kind of break in decorum in the Oval Office followed by this sort of varied response, well, maybe it's not that varied, among allies.

Can you recall a time? No, I mean, this is unprecedented, John. This has never happened before. Even when there's been meetings between U.S. leaders and hostile world leaders, and you can think of so many over the years, these are usually well-choreographed exchanges. People know what they want out of the meeting before they have it. and you can think of so many over the years. These are usually well-choreographed exchanges.

People know what they want out of the meeting before they have it. The aides on both sides don't let the leaders go into the room together until they're pretty sure what the outcome is going to be. American presidents have sought to project a statesman-like tone, a tone of responsibility and reasonableness to the world. This president operates differently. He operates in a world of leverage, in a world of sometimes stirring chaos and seeing that as to his advantage by disruption. This is a president who is comfortable shattering norms.

He did that today. And the question now is, will that be to the advantage of the American people will the American voters get what they want out of this exchange that's still of course TBD yeah we'll see how all of this plays out and Eamon you've done a great job reporting on this developing story all afternoon Eamon Jabbers thank you for being with us to kick off the hour now let's get to 314 Research co-founder Warren Pies for the investor take on everything we've seen this afternoon. Warren, what was amazing to me is that we did have this volatile session. You actually saw the VIX spike as all of this was playing out in the Oval Office. You saw stocks, you know, take a leg lower. It seems like those World War III

comments coming from a sitting president in the Oval Office, whether it was Algo's or not, seem to have been what triggered that. And yet we finished the session at highs, the S&P up almost 1.6 percent today. Yes, lower on the week, but the Dow even clawed back its gains for the week to finish up almost 1 percent. And actually, crude oil settled lower, too. What does that tell us about how the market is reacting to these geopolitical circumstances and what is really a rewriting or a tearing up, if you will, of diplomatic normalcy? Yeah. Oh, wow. What a day.

Thank you for having me. I think that what it tells us from a market perspective is the market's getting a little bit more used to this. I mean, like if we zoom out, there are a lot of emotions on each side. I think that we we're all adults here. We know that this was a huge change to go from the last administration, this administration. And there have been a number of bullets fired at this market in that in that changeover. So, yeah, there's been a lot of volatility policy policy uncertainties, like the buzz were out there on Wall Street. But I think the market is getting somewhat used to it.

I think that the close today, it doesn't really resolve what we've seen in the markets. We've been in this historically tight range and we're right in the middle of that range still. I think there was a lot of mechanical buying at the end of the day. And the real worries, the real concerns, if you're gonna be a stock investor

and think about reducing exposure is on, is it to the economy and the growth scare that I think has started to gain traction on the street this week. That was exactly where I was going to you with my next question. And that is we basically started the day with growth scare in focus. You had the Atlanta Fed's GDP now model turning negative, which is something we don't see or haven't seen very often. We had a PC reading that was basically in line with the street today, but shows that inflation is still stickier than where the Fed would like it. We've had some softer data or disappointing data as well. And we've seen this massive move in the Treasury market. I mean, we were at four or five,

maybe higher last week in the 10-year Treasury yields, and we're down at four-two now. So do you invest in stocks here? Do you invest in the bond market? Do you sit on your hands and go to cash? How are you thinking about it? Yeah, well, you know, I don't want to like just tell us what we've already done, but it gives you some instruction going forward. So we downgraded stocks a couple of weeks ago, and we've been riding the bond overweight since really the 10-year hit 4.6. And so in our view has been there's going to be a growth slowdown, a growth scare that's coming here. And we're right in the middle of that risk window.

So I'm not ready to jump back into a real overweight equity exposure here in this market. I think when you look at it, you have the Fed meeting next month. I don't expect the Fed to do anything. I don't think they're really prepared to react to a weakening economy and things we saw in GDP now or the things that we're seeing in the housing market. And so I think that there's no help coming from the Fed in March. And then when we get to April, one of the things we've studied is that these years that follow major bull market rally years, there's a pretty big liquidity drain that occurs starting in April. And so all of these things are kind of coming together. You have obviously the policy uncertainty and the tariffs that we've just already talked about. And we have a Fed that's not really ready to be proactive this year like they were last year.

And it's occurring against the liquidity drain backdrop. So I'm not going to be overweight equities until we get through that this period that we're in right now. And I'm going to hold an overweight in bonds, at least for a little bit more. We are starting to get to a place where valuations are not so attractive on bonds. But still, I think they're a great portfolio hedge and we're going to remain overweight. Well, I want to go back to geopolitics as it potentially affects stocks and the action today. So and let me connect this perhaps to tariffs. If President Trump's tariff talk and say his talk that Canada is the 51st state was really a negotiating tactic meant to set up a dynamic, bringing others to the table, tough talk. Looking at the reaction that our Eamon Javers just brought us out of European

leaders, does it make it less likely that the other side in these conversations gives in and that we do indeed have a trade war before we get a resolution to that if this dynamic continues, and it seems to be continuing or escalating, where people see our president, President Trump, as an aggressor who needs to be responded to aggressively? Yeah, I mean, that's possible if if in my in my view, if this turns out to be really his his tact is more of to shake things up and have a renegotiation of some bilateral trade agreements, then I think that there's going to be some political bluster that comes from those other trade counterparties. But ultimately, you know, we're going to all do what's in our best interest. I think that's the market signal today to, you know, these these news, the head the headlines have hit in the

market dips and then it rebounds. I think that's the posture that we're in right now. So, yeah, I mean, I understand why it can be scary and the headlines are scary to me. I don't look at the counterparties and worry about what their reaction is going to be. I'm really worried about the Fed. You know, that's my concern when it comes to the tariff talk, because what we've heard from the Fed is that we can't move and be as proactive with the threat of tariffs hanging out there. It could be a little bit political, whatever you want to say, because they don't always react to policy before it happens. But that's the tactic that you're taking right now. And for stock investors, that represents a character change from last year.

So I'm less worried about the counterparties. I think that stuff's going to work itself out. But in the here and now, maybe I'm just too focused on the stock market. But that's my job. I'm looking at the Fed and how the Fed is reacting to the tariff headlines. Okay. Makes sense. Warren Pies, thank you. Thanks for having me.

Now let's bring in Senior Markets Commentator Mike Santoli for his dashboard. Mike? Yeah, John. So as we kind of wrap up the month of February, what's really relevant is how the market and especially the riskiest parts of the market had their peak about 10 days ago. February 19th, that was when the S&P 500 closed. We'll have 6,100 until today's open. It was down 4.5% or so before the late recovery. But here's how that pain was distributed, mostly to high momentum and tech stocks.

This is the cloud ETF, WCLD, down just about 10% over the course of less than two weeks. You see also the semiconductor index. We're talking about NVIDIA's weight there. And then SPMO, that is the momentum factor segment of the S&P 500. So, again, in less than half a month, you got down five-ish percent. And then what did work was low volatility stocks. So the market did manage to find a little bit of shelter, a little bit of support in some of the more stable areas of this market. And it's not that unusual to see that kind of action when you're trying to absorb a pullback. Now, take a look at the Nasdaq 100 and where it got this bounce today, just above that 200 day moving average,

just a two year chart. So it's a pretty long standing uptrend that we're in. And if you can imagine just sort of the general channel that it's traveling in, just a little bit below yesterday's close, it was like, oh, that would be the logical place to bounce if you're going to stay in that zone. So far, so good. I don't think you declare victory. We didn't get super washed out, but I think that's good context for why there was a rally attempt today. And then you had those just the big mechanical orders on the close that drag things higher. The growthy stuff seemed to be moving around quite a bit. I think it was overnight or early this morning. Bitcoin actually dipped below

80,000. Now it's up close to 85,000. And then, you know, a lot of the smaller stocks in the WCLD that you mentioned, you know, that have been down quite a bit. They they bounced off their lows as well. What to make of that, given how much leverage and options action we see among retail investors who tend to like those? It just means that, you know, there is kind of this equal and opposite reaction type thing, the stuff that was hit the hardest. Everybody realizes that at some point charts that look awful can just rip in a V bottom and go and go higher. So I do think you don't want to be too dogmatic about, oh, we have to see further lows. And so if you see any sign that something has stopped going down, it's going to have a short covering kind of dip buying rally. You want to see it, you know, sustain itself for a little while there.

Bitcoin really interesting today. Obviously, a lot of folks putting some downside targets on there. Bitcoin really interesting today. Obviously, a lot of folks putting some downside targets on there. And to me, the significant thing is the same folks own a lot of the same stuff, right? So if one thing's going up, it feels like it's going to kind of flow through to the rest of that category. Yeah, you saw it a lot. Liquidity very much in focus, not just today, but over the last couple of days, last couple of weeks, arguably. You saw it with Bitcoin, to your point, and the drawdown, but also yen carry trade concerns and some other aspects of the market. Mike, we'll see you later this hour. Thanks for joining us. Still ahead, Chicago Fed President Austin Goolsbee joins us exclusively to talk about this morning's inflation data and his latest thinking on the economy and rate policy.

And much more on the unfolding developments in Washington following the tense Oval Office meeting between Presidents Trump and Zelensky. Council on Foreign Relations President Emeritus Richard Haass joins us next. Don't tell us what we're going to feel. We're trying to solve a problem. Don't tell us what we're going to feel. I'm not telling you. Because you're in no position to dictate that.

Remember this. You're in no position to dictate what we're going to feel. I'm not telling you. Because you're in no position to dictate that. You're in no position to dictate what we're going to feel. We're going to feel very good. We're going to feel very good and very strong. You're right now not in a very good position. That was President Donald Trump with Ukraine's President Zelensky earlier this afternoon, a moment that set up uncertainty for the future of the U.S. relationship with Ukraine and with Russia. Joining us now on the phone is Richard Haass, Council on Foreign Relations President Emeritus and Centerview Partners Senior Counselor. He's also the author of the weekly newsletter Home and Away on Substack. Richard, great to have you in

your perspective right now. First off, I'm uh... given the response that we've seen that thus far coming in from developed countries in europe traditional post-world war two allies of the u s given some of the pullback in aid that we've seen from the trump administration thus far with u s a i d things like that what what do you think are the mid and longer term implications of uh... of these actions i think if you want to add them all up and today may have been the icing on the cake what a lot of our partners and allies will judge or determine is that this is simply a very different united states some may like it some may but more i think will dislike it and i think then it gives

them choices uh... it allows them to think about, do they appease or cozy up to a powerful neighbor? Do they become more self-sufficient or try to become more self-sufficient, perhaps developing nuclear weapons programs, because they're not confident that U.S. forces are going to stay in their country or nearby for long? I think the question is also what adversaries think. Do they sense that this is a moment where they can afford to be much more adventurous because there's much less chance that the United States would push back? So I think what we're essentially seeing, for better and for worse,

and again my view is more likely the latter, is what you might call the end of what is left of the post-World War II world, the alliance system and the international institution norms that the United States had so much to do with setting up lot more it's taken adhere then money but this is cnbc so i'm gonna have some money questions here given that uh... that reaction that expectation

and given the trump administration's position on tariffs trade relations does it make it more or less likely that these tariffs, as proposed, lead to just being a negotiating tactic without trade wars resulting with allies, or more likely that we actually end up in a less efficient, higher trade barrier environment, even with our allies? The answer is probably both. Some of the tariffs may simply be put into place for leverage.

We saw that with Canada and Mexico early on. Some of the others, whether they're against friends or adversaries, seem more structural, what the president calls reciprocal tariffs. And if there are a response to trade imbalances, it's hard to see how they get lifted anytime soon, all things being equal. I think we're looking at a trade environment, an economic environment, much more defined by tariffs. And I think also it'll invite reciprocity from other countries. And I think the big question for you all listening and watching is what it would mean for, among other things, a rekindling of inflationary pressures here at home. Richard, it's Morgan. It's great to have you on. I'm just going to take a step back and ask a really basic question here. The question to me isn't how could President Trump do this, it's why

he would do this, because it does seem to me like this was perhaps very calculated in terms of how it played out with he and Vice President Vance as well. What do you think the message was that he was trying to get across, not only to the American public, to the Ukrainian president, but also to other parts of the world like Europe, like Russia, even perhaps China? Always hard to discern motives here, but let me do my best. The president has said that he wants a ceasefire, and i think he's right to want to cease fire uh... i think you also those fees uh... latimer's lansky portobello let's see as much or if not more of an

impediment to a ceasefire as he does blotting their prudent and so i think what he's trying to do is put pressure on zelinski to drop his demands for certain types of military assurances security guarantees and the like in order to get a ceasefire uh... it's possible to let you would accept that if you get some desperate enough it's possible for a no i'm not going to take that kind of a ceasefire and i'll do as best i can on my own with european support

does the u s have all the cards and i've seen a lot of conflicting numbers in terms of how much money the u s has spent on aids and weapon packages and the like, especially as it compares to Europe. It's about even. Europe has actually provided slightly more aid overall. The United States has probably provided on the order of $125 billion, plus or minus, directly. But Europe cannot compete with the United States when it comes to defense industries and stockpiles that can be drawn down. So without U.S. support, Ukraine is clearly in trouble.

And ironically enough, it will dramatically reduce whatever incentive Vladimir Putin has to agree to a ceasefire. This would reinforce Putin's hope or thought that time is on its side and that if he can just wait out Ukraine because American or Western support will fade. Richard Haass, great to get your perspective today. Thank you for joining us. Thank you all. Still ahead, much more on how the rapidly shifting geopolitical landscape could impact investors when we're joined by Evercore ISI's Krishna Guha.

And Chicago Fed President Austin Goolsbee joins us exclusively to talk about the growing list of uncertainties facing the American economy. We'll come right back. Welcome back. It has been a choppy month for the market, but history shows this all, too, is common post-election. So Mike Santoli is back, and he's going to explain this for us. Hi, Mike. Yeah, Morgan.

It was one of the lines coming into the year. A lot of folks were pointing to that the first part of a new presidential administration or even just a post-election year sometimes is choppy. You don't make a lot of net progress. Here's a chart that shows where we've been so far up until this morning in the S&P 500. That's that jagged blue line there. And that first that line right there is the inauguration. So this is all dated from the election. And we're right where we kind of ought to be based on the average path of the S&P 500 following an election. And you can see it kind of flattens out into the middle or latter part of that post-election year. And then similarly, it's not that unusual to see a defensive turn in terms of leadership in the market.

That's what this other chart shows from Ned Davis Research. So what you're looking at here is the line is the relative performance of defensive stocks, Staples, Healthcare Utilities, Telecom. And you see it's kind of like had a couple of swoops and then just shot upward recently. Well, that's kind of what history suggests might happen as well. So I don't put this out there to say that you should assume that what happens from here is going to follow the average historical path, but just that nothing extraordinary has gone wrong, so to speak, with the market finding itself here flat year to date as of this morning. Circuitous path, though, Mike.

Yeah, for sure. Thank you. Well, it's time for a CNBC News update with Seema Modi. Seema. John, the Democratic National Committee filing a lawsuit against President Trump today over his executive order aimed at controlling independent agencies. In the lawsuit, the party claims that the order would bring the bipartisan federal election commission under direct control of the president and that it violates federal election law. It is the first time the party has sued the president in his second term.

The Secretary of Health and Human Services, Robert F. Kennedy Jr., is proposing to end public feedback on many of the department's policy decisions that affect agencies, including the FDA and CDC. The proposal effectively ends a policy that has been in place since 1971. The HHS said the practice limited its ability to operate efficiently. And the U.S. Mint has removed bronze replicas of gold medals honoring the police officers who protected the U.S. Capitol during the January 6th riot from this website. The commemorative coins based on the congressional gold medals had been available to the public on the website. The Mint did not respond for comment. Morgan and John.

Seema, thank you. Coming up next, Chicago Fed President Austin Goolsbee, a voting member of the FOMC this year, weighs in on today's inflation print and the long list of uncertainties facing the economy and the market. We'll be right back. Fresh uncertainty on the geopolitical front today after a tense overall office meeting between President Trump and Ukrainian President Zelensky. But some clarity on the economic front. Earlier,

we got the latest read on inflation. The PCE report matched economists' expectations. Joining us now is Chicago Fed President Austin Goolsbee with our Steve Leisman here. Steve. John, thanks very much. Austin, thanks for joining us this afternoon. And it's become a bit of a tradition now. You're joining us on PCE Day. So we get your take on inflation. So let me start there, Austin. You were pretty upbeat on inflation last time, as in it was going to go down. And it looks like you got what you're after here. Yeah, look, we still got we got a read that was pretty much expected. It's still higher than what we'd like it to be. but it follows a couple of months

that we're a little under the target. So I'm comfortable still that we are underneath there on path back to 2%. I think if you break out the components, they also look favorable to my eye, which is to say housing continuing to moderate, services continuing to moderate. The place where we had the firmness was on goods. And if you take a step back, there's a long trend of low inflation in goods, even mild deflation in goods that I would expect eventually we'll get back to. Austin, the other side of the data today, however, when it came to the consumer especially, was a little bit weak. In fact, real spending was down 0.5 percent. And you had the Atlanta Fed, which admittedly was heavily influenced by the huge import numbers,

but they're now printing a minus 1.5 percent GDP tracking forecast for the first quarter. Other economists are weaker, but at one, one and a half percent. Are you concerned here that you're at a point where you're dealing with lower or weaker growth and potentially still high inflation? Partly, you know, as I say, nothing bad should happen that we haven't at least thought through the scenario at the Fed. Our job is to stay up at night. Everything keeps us up at night. Coupling this with the one month of deterioration of consumer sentiment that we saw coming out of Michigan, I would say it's definitely worth

keeping an eye on. But we've had strong growth. we've had a very robust job market stabilized at what feels like full employment so unless we get more observations in that style i i'd hesitate to call it a trend i also recall a couple months ago fed chair powell saying that some FOMC members are factoring in potential policy impacts, including tariffs in 2025, some not. Do you think we're at the point where you're able to factor in Department of Government efficiency moves or maybe even those potential $5,000 checks back to taxpayers as being having an impact on the economy? I think we're to the point where we should start working through scenarios. But all of these things are question marks and geopolitics is a question mark. And I'm out here at Stanford. I'm

going to give an address about productivity growth rates that have been surprisingly high and what they mean for monetary policy. That's also an uncertainty. So I think we are to the spot where we're not just political pundits, bunditizing where there are actual proposals that we should work through the scenarios, but I don't feel like we have enough clarity to make a forecast of here's how big they're going to be. Yeah, I know we did see that pop in jobless claims yesterday. Some folks are pointing to Doge for potentially as an impact. You just mentioned geopolitics, Austin, and I do want to get your thoughts on this because you've got this longstanding international policy, be it trade policy, be it foreign policy, that is basically being torn up and rewritten in a matter of days and a matter of weeks. So I do wonder how you track and analyze that if you're at the Fed from an economy perspective, especially when some of the actions that are being taken, case in point,

what we saw play out in the Oval Office today are, according to some experts, unprecedented. Yeah, all we can do is just analyze as best we can the impacts on prices and employment. That's our, the law says to the Fed, those are our two goals, are to stabilize prices and maximize employment. So we just have to try to think through all the possible scenarios and uncertainties. If they're going to drive up prices, then the Fed has to think about them. If they're going to drive down employment, then the Fed has to think about them. Anything else that's in the foreign policy lane of the administration or in the fiscal policy lane of Congress, we don't weigh in other than these are the conditions. You tell me the weather, I'll tell you what jacket we're going to put on. That's a great analogy because it's warming up a

little bit here, Austin. And we do have some visibility on the weather when it comes to tariffs, actually. It's not like it's theoretical anymore. We know that on Tuesday, at least, at midnight on Tuesday morning, Tuesday morning, yeah, we're going to have 25% tariffs on Mexico and Canada. So how do you think that through, Austin? Is that something, are you still in this camp where it's a potential one-time rise in the price level, the Fed looks right through it, or there's another side here that says, you know what, in this environment, it's different from 2018 because we have higher inflation now. We just went through a bout

of higher inflation. So you can't expect the same noninflationary response to tariffs that we got in 2018. It's some of both. Now, there is an irony, Steve, that your sentence was, we're not speculating now. He speculated. It still has not come to pass. And so we're going to just have to see what the magnitudes are. I was out in Detroit, which is in the Fed's district, talking to major auto suppliers and major auto executives. As you might imagine, they care a lot about what would be the impact of tariffs and how much they would flow through to consumers and how would they affect the supply chain. Anything that affects the supply chain of an order of magnitude like what we saw in COVID. I think one of the lessons of

COVID was that stuff can take a little longer than you first anticipated. So the first my first glance would be tariffs are a one time cost shock that monetary policy should mostly look through. But I don't think it's going to be that easy to figure out which part, if you started to see inflation going up, which part is the part you're supposed to ignore and which part is a sign of overheating. I have to ask you about the conference you're at, because none of this would matter if the thing you're talking about, productivity, goes up and stays up. Nobody cares about tariffs or any of this other stuff because productivity would wipe it all away and be a beautiful thing. Are you in the camp that this rise in productivity is a real thing?

I think it's been real. We're still trying to figure out how long is it going to last or was it a one time? There are there is evidence that it's technology related. And if it's technology related, you can't you have seen in the past technology spread through the economy, industry to industry. And that doesn't all happen at once. So I'm I'm at least intrigued by by the optimistic scenario on that. Cautious like a good central banker, guys. Chicago Fed President Austin Goolsbee. Thank you. Our Steve Leisman, thank you too. Pleasure. Voting member of the FOMC this year as well. That's right.

Up next, Evercore ISI Vice Chairman Krishna Guha on the potential economic and market fallout from the clash between President Trump and Ukraine's president in the Oval Office today. And check out the biggest S&P 500 decliners in the month of February, including Trade Desk, Tesla, Strategy, PayPal and Axon. Also some of the previously highest flyers. Stay with us. You're either going to make a deal or we're out. And if we're out, you'll fight it out. I don't think it's going to be pretty, but you'll fight it out. But you don't have the cards. But once we sign that deal, you're in a much better position, but you're not acting at all thankful. And that's not a nice thing. I'll be honest. That's not a

nice thing. That was earlier today in the Oval Office, part of an unprecedented scene between President Trump and Ukraine's President Zelensky. Now, the S&P 500 falling after that argument, but actually turning around and finishing the day sharply higher, up about 1.6 percent. Joining us now is Krishna Guha, Evercore ISI vice chairman and head of the global policy and central bank strategy team at the bank. And Krishna, it's great to have you on on a day like this. And there's a lot to dig into here. But first, just a basic question about the impact of international policy and resetting of the geopolitical landscape on the markets and how investors need to navigate this now? So this is an unprecedented moment. We are tearing up and remaking the political order that's prevailed in the West and between the U.S. and Europe for essentially more than half a century. So far, markets in the US

have been able to largely ignore this. Actually, for a period of time up until now, markets in Europe have even welcomed this as bringing peace on the continent more likely, even as European political leaders have been shocked and horrified by what they see as the U.S. turning its back on Ukraine. But I think going forward, the track we're on right now is one in which I think European assets as well as European nations are going to be in quite a difficult situation. Defense stocks in Europe, yes. Apart from that, I don't see how Europe can continue to gain in this environment. I also think in the long term, there are costs to the U.S. also from this rupture. The winners, European defense stocks,

distressed Russian assets, and China. It's interesting to hear you say that. And certainly we've seen European defense stocks shooting higher over the past, call it week, two weeks, as all of this tension started to bubble to the surface in a more public way even before today. We have the German DAX trading at record highs as well. So when I hear you say that, are you saying that it's time to go underweight on European equities? And if so, why specifically ex-defense stocks? Are they going to struggle here now? So I think the key thing here is a peace in Ukraine that is a quote unquote good peace, a stable peace, a peace that brings security to Europe. That is good for European stocks. It's good for the European economy. But a bad piece,

a piece that is the result of the U.S. losing patience with Ukraine, Ukraine losing on the battlefield, Europe being unable to step up to fill the gap the U.S. leaves. That is a situation that is bad for the European economy. It's not one in which, for instance, Russian natural gas starts flowing again to Europe, bringing down energy costs. It's not one in which those pre-war business relationships can be re-established. It's a situation in which what you will see is Europe being forced to go it alone on a military basis to an extent that they haven't tried since the Second World War. We would see in this scenario Germany funding

a 200 billion special defense fund potentially in the next few weeks. We will see not quickly, but we will see likely common EU defense funding maybe maybe ultimately reaching $100 billion a year. But that's going to be channeled into European defense stocks. Europeans are now concerned about over-reliance on the U.S., and that limits the upside for U.S. defense firms. So, Krishna, given that, let me ask you a twofer here. Does that reduce U.S. leverage in these trade negotiations where tariffs might be the stick with a carrot? And then why do you say China is a winner? So in terms of the the tariff situation, I think the reality is still that the U.S. has more leverage over Europe on tariffs than Europe has over the U.S., although a full blown trade war between the two would be substantially damaging to both sides, including the U.S. The reality is that the U.S. has an economic engine that is driven by domestic demand.

Europe has an economic model that is very reliant on external demand on global trade. So the U.S. is still the mightier partner when it comes to trade conflict. But don't underestimate the EU is a big market and it has ability to hurt the U.S. in a tit for tat situation. Let's really hope that we can avoid that for everyone's sake. Why China? Because when Trump came to power again, the great concern in Beijing was that Trump would focus his second term on the China challenge and that he would use U.S. leverage to force allies in North America, in Europe, in Asia, to make a harder choice to side with the U.S. against China, to adopt U.S. technology, to adopt countermeasures against China trade. Instead, what we see is that in the first month and a half of the U.S. at this new administration,

the conflict is between the U.S. and its allies. The conflict is with Canada. It's with the EU. This leaves the Chinese in a sweet spot. Makes sense. Krishna Guha, got to leave it there. Appreciate all that perspective. Thank you. Well, up next, the CEO of Nutanix on why his stock and market share gains are surging this week, even as other cloud rivals were getting crushed. And check out Bitcoin's very bad month, down around 17% since the start of February. We'll be right back. Welcome back to Overtime.

Smaller software stocks have had a rough end of the month with the WCLD Cloud ETF down 5% for the week and more than 10% since last Tuesday, as Mike Santoli was telling us earlier. But one name bucking that trend after earnings this week, hybrid and multi-cloud software player Nutanix, up 8% this week after a beat and raise quarter. I spoke with CEO Rajiv Ramaswamy about what he described as share gains over rival VMware, now part of Broadcom. Well, Spark was a major bank looking and they brought us in as a second vendor and are running a good majority of the database workloads, planning to do that on a Nutanix platform. So companies will either do some level for migration, bring us in as a second vendor,

and I'll give you perhaps one data point for you to think about is that for the last couple of quarters including this quarter, we've seen very strong growth in our new customer ads. Our new customer ads have gone up about 50% year over year for the last couple of quarters. And that's a sign of more and more customers adopting our platform. A number of enterprise software CEOs I spoke with this week mentioned demand strength in Europe for data management and pre-AI type services. I'll be watching how this Ukraine story develops for Europe's response. And indeed, if the Trump administration is stepping back from financially supporting Ukraine, will European countries step in and how will markets

respond? That does seem to be the key question. Well, up next, astronaut and the CEO of a cybersecurity company, Lane Bess, on the growing relationship between space and artificial intelligence. Well, it was a big week for space news as well. On Tuesday, Jeff Bezos' Blue Origin sent its 10th crew of paying customers to space, an autonomous suborbital flight that included Lane Bess, a longtime tech entrepreneur and investor, and now, as of this week, an astronaut two times over.

The principal and founder of Bess Ventures and Advisory and the former CEO of Palo Alto Networks, Bess first flew with Blue Origin in 2021. And when I sat down with him ahead of this week's flight, he shared that space has become more than just a passion. I think I'm going to spend a lot more time enjoying and taking in the view. The first flight, the weightlessness, just the overall experience of being in space. It's a lot to cram into what's essentially about a 16-minute experience. This time, familiar with the weightlessness, I'm going to probably just really enjoy the view. And they've stepped it up a little bit. Now they allow us to bring a GoPro that they provide, and I expect to get some great video.

Now, he's also the chairman of recently Public Blaze and a big investor in that company, which is a chip company that focuses on edge computing specifically for space operations. But meantime, Blue Origin has already announced the next crew for its next flight, which includes Katy Perry and Lauren Sanchez. And space tourism rival Virgin Galactic announced this week as well plans to begin flying as soon as next year with its new spaceship. Now attention turns to the moon, where Firefly Aerospace commercial lunar lander will attempt a soft landing on Sunday. And intuitive machines will follow suit just a few days later, next Thursday, after its second lander launched to

space via SpaceX yesterday. But for more from Lane Bess and for more on those moon missions, too, check out Manifest Space, available wherever you get your podcasts or scan that QR code. A lot of Amazon representation on CNBC this week. Jeff Bezos, of course, the Blue Origin owner and funder. And we had Andy Jassy this week kind of filling out the application side and the stack side of AI. Questions about whether that market driver continues post-NVIDIA earnings. Yeah, meantime, we actually had a major bump higher for the averages coming into the close today after a topsy-turvy week for the market and a topsy-turvy month. That's going to do it for us here at Overtime.