Closing Bell - Closing Bell Overtime: Trump–Putin Meet in Alaska, Fed Outlook & China Slowdown 8/15/25

Episode Date: August 15, 2025

Kristina Partsinevelos sets the market theme before Rick Santelli breaks down bond market reaction to fresh economic data. Eamon Javers reports on the Trump–Putin meeting, followed by insight from former Defense Secretary Mark Esper.Gene Sperling, former NEC Director, discusses the economy and the Fed, while Adam Crisafulli of Vital Knowledge reviews the week that was and the week ahead. Beeneet Kothari of Tekne Capital examines China’s economic slowdown, and Aneesha Sherman of Bernstein previews retail sales and earnings. 

Well, that's the end of regulation. Enigmatic, ringing the closing bell at the New York Stock Exchange, International Youth Foundation, and the Burberry Foundation doing the honors at the NASDAQ. Stock's closing lower today for the S&P and the NASDAQ. It looks like the Dow just barely eeking out a gain. That's after hitting an intraday record on the back of United Health. The weekly numbers, though, pretty strong. Roughly 1% gains across the board. The Russell 2000 was really the standout. This week, it was its best week in three months. United Health adding about 350 points to the Dow on the week. Today's gains driven by those 13F filings. Some big names, including Berkshire Hathaway, have been buying the stock after it's been so beaten down. And oil lower, as the world watches this meeting between President Trump and Russia's Vladimir Putin. We're going to continue to watch that as well.

That's the scorecar on Wall Street. Welcome to closing bell overtime. I'm Morgan Brennan. John Ford is off today. And this is no quiet summer Friday. We've got a lot of big news to talk about. We're going to discuss this Trump-Pooten summit in Alaska with former Defense Secretary Mark Esper.

And we've got former NEC director, Gene Sperling, here, to talk about the economy, inflation, and the Fed having big impact on the markets this week. Plus, we're going to get you ready for next week when many big-name retailers will report results, including Home Depot, Lowe's, Walmart, and Target. But first, let's begin with the markets and Intel having its best week

and get this, 25 years. Christina Partes-Nevilis is at the NASDAQ with more. Hi, Christina. Hi, Morgan. Well, it was a very busy day for me in the world of chips. The SMH and the socks, both actually closing 2% lower. I'll get to until in a second, but applied materials was really one of the biggest laggards in the group. Plunging about, look at that 14% after warning of a $1 billion surprise shortfall,

split between China and leading edge foundry demand. The shortfall really points to the end of China's long spending boom, at least in applied materials case and the danger of relying on just a few leaders like TSM, Intel, and Samsung. That warning, though, weighing on other semi-cap equipment makers today, that's why you saw KLA close over 8% lower. Lamb, same thing. ASML, almost 2% lower. But Oppenheimer and a few other analysts really pushed back and they were optimistic saying applied materials massive shortfall stems from product mix and conservative guidance, but it's not a sudden industry wide collapse. That's according to them. Switching to memory card maker,

Sandisk, also closing roughly almost 4.5% lower on weaker margins and light guidance, despite upbeat commentary from the CEO on demand, specifically from the PC mobile world and the data center markets. And then lastly, you spoke about Intel. We have to talk about Intel. It actually closed higher, 3% higher and continued enthusiasm that the U.S. government will step in with cash to get an equity stake in the chip manufacturer. We haven't heard from the government yet. We haven't heard from Intel on where that leads. But it's optimism, right? A big cash influx into this pained name for the last little while. Morgan? Yeah, we're going to continue to watch that. Christina Parts and Evelas keeping you busy this week. Thank you. Now let's get to Rick

Santelli in Chicago as a busy week of economic data continued today too, but didn't really paint a clearer picture of the economy. Rick, what have we been seeing, particularly in the bond market? We talk so much about volatility in stocks in August, but we've been seeing it in the bond market. Well, the bond market has a definite opinion. I mean, just consider that yesterday we traded down at 419 and a 10. We're about ready to close around 432. It's had a healthy bounce. Those that say it's tame, maybe looking close to close or how little activity we had on CPI and PPI. But as you look on this intraday chart, you can see yields moved up. But here's the key. We're not alone. Let's look at one week of Boone's JGB, the Japanese tenure, in U.S.

And what should jump out at you is that last place on that chart. Last place is the U.S. 10 year. Now, let's open it up to one-month charts. And who's in the lead? The lead is boons. Boons are closed at a four-and-a-half-month high yield, just shy of 280. Global rates are going up. The long rates are going up.

And that Putin-Trump meeting, I'm sure that's part of what's going on in the European markets, especially in Germany, if that gets fixed, it certainly isn't going to hurt their economy. It certainly isn't going to put natural gas and energy prices higher. It's going to put them lower. So these are a lot of moving parts in the marketplace, but suffice it to say that the real story this week is that yields have an avoidance to lower levels. They hit support and they bounce. That 419, we bounced off of yesterday.

As I said, on Wednesday down on fast money, that's a huge $50. percent retracement. It held perfectly. Morgan, back to you. All right. Rick Santelli, thank you. Well, President Trump and Vladimir Putin meeting now behind closed doors. Let's get to Amon Javers in Washington for the latest. Hi, Amin. Morgan, that's right, a historic handshake between President's Putin and Trump in Alaska today. This is the first time a Russian leader has ever been in Alaska. Remember, the state was sold to the U.S. by the Russian government back in 1867, $7.2 million price, not a bad real estate deal. It was derided at the time. Maybe it's paid off over time. Then we saw this motorcade, an interesting moment here where Putin

gets in President Trump's car, the beast, and you see the two leaders riding side by side in the same vehicle, all smiles from Vladimir Putin, a little wave there. And the two men on top of a platform in Alaska. This was a fascinating moment also because you had the two men walking to this platform flanked by F-22 Raptor fighter jets, so a display of U.S. military might

just outside the shot there. And a flyover by a B-2 bomber and American fighter jets, another reminder of American air superiority of military might there, even as you get this very warm and friendly greeting. So sort of two sides to the same coin,

I guess you could say. say, Morgan, as they have this greeting. Now, they've had a quick bilateral meeting with both sets of leaders and their top advisors, and they're now behind closed doors. The pool, as you can see there, pool camera a little shaky, as reporters were eager to capture these photos and then quickly ushered out of this meeting room. Reporters now out, meeting now underway, and we wait to see what might happen, Morgan. Yeah, that flyover got my attention, too. Amin Jabbers. Yeah. Thank you for bringing us the later. and we'll continue to see you throughout this hour as you monitor for more headlines.

Well, let's get reaction to this historic meeting between Trump and Putin. Joining us now in an exclusive interview is Mark Esper, former Defense Secretary. Secretary Esper, it's great to have you back on the show. Welcome. Great to be back, Morgan. Thank you. So let's start right there, because this is Putin's first time in Alaska. It's also his first time in American soil since 2015. What is the significance of this meeting and the expectations that we should have here? Well, the world's holding its breath right now, hoping that it plays well.

in terms of Ukraine's favor, that there might be a ceasefire that leads to some agreement, but we won't know for some time. And obviously, everybody's going to be focused on what happens in this initial one-on-one or three-on-three now and what comes out of it. So I think we're all waiting to see it will determine, it could determine the future of Ukraine and obviously stability in Europe. What are your thoughts on the fact that this has gone from a one-on-one meeting, at least the initial part of it, to three-on-three that's going to also include Secretary

of State Marco Rubio. and Special Envoy, Steve Whitkoff. Yeah, look, I think that's a positive because it means the United States has more eyes and ears on its side looking at what Putin's saying, listening to him, understanding the nuances of what he may be trying to communicate, what he's trying to put on the table,

and then being able to give President Trump advice or interject as need be. You know, I've been in those meetings with world leaders with President Trump, and he's open to having his cabinet members and others contribute to the conversation. So I think it's a positive that they're there. The flyover we just talked about,

with a B-2 bomber, the F-22s, the show of military force. This is obviously taking place at Joint Base, Elmendorf-Ritchardson. What's the read through there? Yeah, look, it's great stagecraft by the president, right? To have that big red carpet flanked by four F-22s, the B-2 flying overhead. And it's interesting, as you know, that many times aircraft from Alaska, American fighter aircraft are intercepting Russian bombers to fly close to our airspace. And so it has that twist to it as well.

And of course, we know about the history with United States buying it from Russia, Alaska, buying from Russia in 1867. So it has all these drama behind this history of these theatrics. But look, it's part of this. We'll see what happens when these two men come out of their meeting and what they have to say. President Trump is very clear. He said he'd known the first couple minutes. We know that he had those few minutes in the car ride over in the beast.

and they were seen sitting there in the room together with the three-on-three, but we'll know more in the next hour or so. I mean, it's been framed for, as we enter the fourth year of this war in Ukraine, it's been framed as this David and Glyeth story, this war, and just the ability of Ukraine to adapt, to counterpunch above its weight, if you will. I mean, even just earlier this week, I think there was video footage that was circulating of Ukrainian drones making attacks into Russian territory. what does it take to actually get to a ceasefire, let alone some sort of peace deal?

Right. Well, look, it's due to Ukrainian courage and persistence and adaptility on the battlefield that they've fought the Russians to a strategic standstill. I mean, let's face it, Putin wanted to conquer all of Ukraine. He wanted to replace the government with a puppet regime, and he wanted to rule that country and bring it back in what he sees as the Russian Empire. But he has not been able to accomplish that. He's only gained less than 20 percent of Ukraine. Ukrainian territory. So the question will be as each side has exhausted itself, and we know the numbers for the Russians, over a million killed or injured in this conflict over the last three years, they're going to look to some type of agreement. Putin obviously has maximalist demands.

He's continued to say that he wants Ukraine to demilitarize. He wants the army to shrink, no Western assistance, no opportunity for NATO to join. And he wants removal of the so-called Nazi regime, which is Russian propaganda for Zelensky and his. and his cabinet and his government. And for Zelensky, he wants just the opposite, right? He wants Russia to withdraw and to pay reparations and to return the tens of thousands of Ukrainian children that have been taken off to Russia. So the stakes are high, the sides are wide apart.

And the president's aim here today is to get some type of ceasefire and continue the conversation and get Putin into a position, hopefully leveraging sanctions or the threat of sanctions to compel some type of movement by Putin. We know the Europeans are finally. opening the financial floodgates to begin to spend more on defense. What do you think happens to NATO in the wake of all this? Look, I think it's a great outcome that the United States got the Europeans to 5%. I think it takes too long. They're looking at a 20, 30 plus time frame. I think they need to accelerate that because I think deterring the Russian and Putin

is important. We know the NATO Secretary General has said that Russia may be able to attack NATO by 2030 or so, which to me is why there needs to be more haste when it comes to spending on defense. Look, I don't think the Russians will go that far, but nonetheless, we, they need to prepare, and all of NATO needs to prepare and deter. And not just against Russia, by the way. I would say we have to always keep our eye to the east on China. To me, that's the greater strategic threat. But we are facing the hot war in Europe right now. I know you've spent a lot of time very focused on the defense industrial base here in the U.S., also the intersection of technology, national security.

So I'm just going to go there with this last question. But the reports about Intel and the idea that the government could be making a stake. And by the way, we saw something similar with MP materials a couple of weeks ago. How does that speak to this idea of rebuilding a U.S. industrial base and rebuilding those U.S. weapon stockpiles? We certainly need to build the United States industrial base, not just broadly in terms of all manufacturing, or at least key manufacturing, but certainly defense on this industrial base right now does not have the capacity to build the types of munitions that are needed in a high-intensity conflict against the China. We know that our stocks are low. We need to rebuild. And the numbers required for such a conflict are extraordinary. But then we look at the conflict in Ukraine, which has been marked by drone warfare, counterdrone, all those types of tactical engagements.

And we know that we don't have the industrial base either to build the numbers of drones that are necessary. I mean, this year alone is expected that Ukraine will build four million plus drones to fight the Russians and push them back. And we have nowhere near that capacity. And as you said, I work in the venture capital space. these days. I know that America has the best innovation, but at the same time, we need government support and really coming from Congress to allow those multi-year appropriations to build out the industrial base and to allow and to make sure the DOD, the Pentagon itself, quickly buys into the innovation coming out of Silicon Valley and elsewhere to capitalize on these new technologies. Yeah, you just mentioned China. We know China will be watching these talks very closely,

among so many others right now, too. Secretary Esper, thank you so much. Great to speak with you today. Thanks, Morgan. Thanks. Have a great day. Well, coming up, it's been a confusing week for economic data. The CPI was cool. The PPI was hot. Today, retail sales in University of Michigan sentiment painting a different picture of the consumer as well. And after seeming like a guarantee, now the markets are less certain about a Fed rate cut. So coming up, former National Economic Council Director, Gene Sperling, we'll be here to try to help us make sense of it all. Overtime's back in two. Welcome back to overtime. This week's economic reports haven't made it easy to decipher the state of the economy. This morning's retail sales

showed consumers kept spending in July, but consumer sentiment for the month dropped to its lowest level since May. These reports come after yesterday. We saw wholesale prices rising far more than expected, but CPI was lighter than expectations, at least on the top line. Joining us now is Jean Sperling, former director of the National Economic Council under President Obama and President Clinton. It's also the only person to be in that role twice across two different administrations. It's great to have you on. And let's start right there. What do you make of the economic data we have gotten so far? Yeah, you're right. I mean, there were some mixed messages, but I think the overall story is a somewhat unfortunate one that if you go back to November and December, you really had uniform expectations of that, you know, beautiful soft landing, right? If you look at Goldman Sachs, if you look at the IMF, they're projecting around two and a half percent growth, about two.

2% inflation. Now what you're seeing is not stagflation, but kind of stagflationary direction. You're seeing growth look a little weaker, going more towards 1%. You're seeing inflation, going up to 3%. And it puts the Federal Reserve, as you note, in a difficult situation when you have stagflation. Do you focus on the weakness in the economy and cut, or do you worry about the inflation you're already seen and the estimates that the amount being passed through on tariffs to consumers has been relatively light so far, maybe 25 to 50%, but is now headed to closer to 70% and higher inflation. I think the thing that is really tricky in these numbers was that retail sales were pretty solid, which would suggest maybe you should be worried

more about inflation. Because when you look at that consumer sentiment, what's really striking to me is not only are you having the lowest consumer sentiment outside of the pandemic and financial crisis. But when you look at what the average person expects on inflation, Election Day 2024, it was 2.6. Now it's 4.9. So if you're looking, if you're at the Federal Reserve, you're looking and saying, well, you know, we're seeing weakness in the jobs and the economy, but retail spending was okay. But inflation's going up, and inflation expectations have almost doubled since November. And that's just the unfortunate part about this tariff policy.

It has a stagflationary direction. It lowers growth and it raises inflation at the same time. So it's not an easy time to be at the federal. reserve, even if you didn't have the president yelling at you all the time. I know one of the key pieces of this debate is whether the tariff impact is going to be transitory or not. When will we know? Well, I think there's a couple of different things. One thing we're seeing, you know, it's funny the president was upset at Goldman Sachs, but actually Goldman Sachs had really told most of us that there weren't as much of the tariffs

being passed on to consumers. Now what they are saying is pretty much when I hearing from every financial institution, that close to 70% of the tariffs will be passed on. Now, for average people, the fact that the level of shoes, the level of coffee, the level of bananas, of clothes are all going up, is not going to make people happy. And then the question is, well, is it just kind of one-time pain? Well, what we learned, those of us, you know, what the Biden administration learned is people are very unhappy when the level of price. going up. You know, eggs and milk went up in the pandemic, and they didn't really keep going up, but people were unhappy. And then the other and last question, I think, that goes to your

issue of is at one time, is that you don't get the feeling from the president that this is a one and done tariff regime. He just put 50% on Brazil. He just put 50% on India for different foreign policy issues. There's a lot of debate about. about whether the investment agreements are going to happen. So I think what you'll see is in some ways the president will back down. I'm going to bet he's going to cave on coffee and bananas and other things that we could never make here.

But on the other hand, I think there'll be more threats and more volatility, which will be making it harder to say it's kind of a one and done level increases. Because my guess is there will be a lot more volatility in US trade policy going forward. And again, it's not just a projection. You look at Brazil and India, whether you like the reasons why or not, you can see the tariffs are being used, not just for trade balance.

We have a surplus with Brazil, but as a general foreign policy tool that the president likes to use to kind of show his personal power and his personal ability to make threats and force countries to react to him. And certainly we've seen India get scooped up in the crosshairs as both President Trump and Russia's Putin meet here in terms of Russian oil purchases. Quickly, Gene, and that is Rick Santelli was on the show earlier, and he basically said the takeaway from all the data and all the moves we've seen in the bond market this week

is that yields just don't want to go down here. That's been especially true at the long end of the curve. Your thoughts? It's a very difficult time right now because, you know, we have had these moments where there's been moments where there's concerns, where there's conflicting pressures. We're used to the idea that if equities are doing, you know, poorly, that then bond yields come

down, but now you've got more volatility, more risk, you've got an increasing deficit fiscal situation. I think, unfortunately, you have a lot of abuses to the rule of law and certainty. These things hurt uncertainty, and I think it makes it a little harder to just determine what the, you know, to go off a playbook or a standard rulebook of what's going to happen. So I don't know that I have any, you know, insights on that. But, you know, I will say if you look at Russia right now, you know, it's very interesting. In the Biden administration, there was a great worry about if you completely cut off their oil,

it would hurt them, but it would also hurt us and Europe and prices would go up. Now the president tells China in India, you know, he wants to cut off. Well, there's part of me that likes him being tough on Russia because I'm a great supporter of Ukraine. Yeah. But that would raise gas prices here significantly. So, you know, I think all of us were kind of watching day by day, but you don't get the clear signals that make it easy for anybody in the investment field right now. Yeah, which is why we have you on, Gene Sperling. Thank you.

Yeah, and those price caps, which have enabled India to buy that oil have been something, and Europe's part in all of that have been something to pay attention to too. Coming up on overtime, the Dow hitting an all-time high today. It's the first record high of 2025. It's playing catch-up to the S&P and the NASDAQ. The S&P 500 also hit a record today. It was its 19th of the year before reversing course. Coming up, a closer look at the Dow's underperformance.

Welcome back. The Dow hit its first record high for the year today, but it is still undercurrent. performing the S&P. Senior markets commentator, Mike Santoli, joins us with a look at why that may be, Mike. Yeah, Morgan, I mean, look, in bull markets, the Dow often lags. Although this is relatively extreme over a one-year span. The S&P 500 has opened up a pretty wide lead. We know generally why that is, right? The S&P is much more levered to the very largest mega-cap growth stocks that have been the main story about the AI theme. The Dow is more defensive. Obviously, the price weighting also makes it somewhat tricky.

And you see it's just been struggling to get back above its highs from December. Now, this whole game of trying to figure out when that mega-cap dominance might wane and we might have some kind of more enduring transition. Well, B of A is trying to come up with an answer here. Savita Subramania in there has basically tried to compare the current period of mega-cap dominance

over the equal-weighted S&P with prior instances of when this has happened. and basically says it looks somewhat like what happened from 1988 to 1998. And then, of course, at that point, you did see the massive peak in the tech bubble. So this blue line here is overlaid what this dynamic has been since 2015, suggesting maybe we're not that far from a moment where you might have some mean reversion happen. Obviously, that ratio went south for a while thereafter. I've always said it's unlikely this kind of a pivot happens just on the fly, right?

It doesn't usually just happen in an uptrending market with an ongoing economic expansion. But who knows, perhaps stranger things have happened, Morgan. I mean, is there a point at which you see a rotation out of the growthy names into value in this type of scenario? You know, I think the scenario when that happens is probably partly about, you know, rate cuts and some kind of massive questioning of the viability of the AI boom and all those things. I just have a hard time feeling as if that happens without a little bit of a shock or a mini-crisis, it could. And I think what you also can lean on is the idea that value and equal-weight S&P could do fine,

even if they're not leading, right? The equal-8 SMPs up 10% over the last year is not necessarily terrible. All right. Mike Santoli, thank you. We'll see you later this hour. Yep. It's time for a CNBC News Update with Contessa, Brewer. Hi, Contessa. Hi there, Morgan. Senator Josh Holly said he's investigating META. He says he's looked at a Reuters report that said the company approved rules that allowed its AI chatbots

to have inappropriate conversations with minors. In a post on X today, Holly said the probe will look at whether META's AI products allowed children to be exploited, harmed, or if META misled its users and regulators about its safeguards. Meta declined to comment. The Justice Department announced today that it sued California to end enforcement of its emission standards for trucks. Those regulations are some of the strictest in the nation. The DOJ said it filed two complaints in federal courts this week against the California Air Resources Board in a move it says will level the regulatory playing field and promote consumer choice. And Texas Governor Greg Abbott called for a second special session to pass new congressional maps in Texas.

That began this afternoon immediately after the first session. closed. The state has been trying to pass the GOP leaning maps for two weeks now, but dozens of Democrats have fled the state to prevent a vote from moving forward. So Morgan, we continue to watch a read on that one. Okay. Contessa Brewer, thank you. Well, despite today's declines for the S&P 500 and for the NASDAQ, it's been a good week for the markets. Up next, we'll get you set up for another busy week. When earnings are expected for many of the country's biggest retailers, that's including Walmart and Target. Closing bill over time. We'll be right back.

Welcome back. The major averages are wrapping up the week in positive territory. The S&P 500 gaining just about 1%. With names like Intel, United Health, TKO group, and United Airlines, all driving the index higher for the week. Healthcare, discretionary, communication services, and materials are the best performing sectors. So let's set the stage. What could be another eventful week for the market?

Joining us now, Vital Knowledge founder, Adam, Chrisafouli. Adam, it's great to have you on. I do want to talk about the week that's coming, but first the week that was. Were you surprised to see stocks moving to record highs, given everything that we saw for investors to trade off of? It was very impressive. You know, if you kind of just look back over the course of the week, news flow definitely skewed towards a negative end of the spectrum. You know, the CPI, I think, was better than feared, but I think it was more than overshadowed by the very hot PPI. The inflation data this morning was also very hot.

You had a couple of disappointing earnings, applied materials and deer, both July end reports that were quite negative. of a couple of the final June end reports, core weave tapestry, both were disappointing. You know, so just a lot of negative news that the market absorbed very well. And like you said, continue to rally. So very impressive and definitely a little surprising, sure. The big move in United Health Care this week, I mean, up something like 21, 22 percent. It's certainly been beaten down and certainly for good reason, arguably. But the fact that you do have Berkshire Hathaway and other big firms starting to take stake signals, what about whether it's that name specifically or the value trade more broadly?

Yeah, I mean, I think managed care was probably the single most hated group of the entire market. Healthcare in general is very much out of favor. So, you know, the move you saw today, I think speaks just how thin and lean positioning is in this group. You've had a lot of very aggressive selling over the course of several months. Managed care has its own unique set of problems and then health care more broadly. And so, again, I think it speaks to kind of just potentially a sentiment shift in health care. We'll have to see if it continues. There's still a lot regulatory uncertainty around the group going forward, you know, but definitely a positive indicator for that group that's been very beleaguered.

We've got this Trump-Pooten meeting underway as we speak right now. Geopolitics, it's been one of those things that the market just continues to shrug off. Is there anything that would change that? No, I don't expect there'll be any real seismic event coming out of this meeting. I guess your two tail events would be either, you know, a wholesale ceasefire, which I don't think really is the expectation, and that's probably unlikely. maybe you get a partial ceasefire. And then the other one on the opposite end would be, you know,

a real aggressive sanctions program that's implemented, not just on Russia, but more important would be if you were to impose secondary sanctions on China, so large buyers of Russian oil. India already is being subject to those sanctions tariffs, but I think China would be the real big negative if that would occur. I don't think either of those are likely, which is why markets aren't paying a kind of attention to this event.

You know, I think much more important in the mind of stocks is next week where you have a big Powell speech and then a lot more earnings report. Oh, it's like you took my next question out of my mouth, Adam. What are you watching next week? Is it all the Fed speak and Jackson Hole? Is it retail earnings? Is it something else? I think definitely most important will be Powell's speech. You know, the Fed's at a really critical, difficult time right now. You know, on the one hand, you have employment numbers, at least for the July or July jobs report,

was quite disappointing for July plus those revisions lower. And then the other hand, you've had this week's inflation numbers, which, again, you know, point to upside pressure, not just within the goods categories that are being impacted by tariffs, but also within services, which is quite ominous because services hopefully could have been one of the opposite. So I think Powell is going to have to acknowledge that job support. And in doing so, he will sound a little bit dumbish, but he's also going to have to acknowledge this week's inflation numbers, you know, which, again, I think will speak to this is a very uncertain outlook. Look, it's likely they will cut in September, but what happens beyond that, it's really up in the air at this point. All right. Adam Chris Foley, great to have you on. Thank you. Well, Chinese stocks outperforming the S&P 500 this year. That's despite potential impact of tariffs. Up next, the top hedge fund manager on the three Chinese stocks he thinks are still cheap right now.

And a trio of retail giants are set to report earnings next week. We're going to discuss how to trade those stocks ahead of the numbers. That's coming up later on overtime. Welcome back to Overtime. We're turning now to China. The Shanghai Caposite hitting highs today, not seen since 2021. And it was one of the best weeks of the year for the Chinese Blue Chip Index, the CSI 300. At the same time, this week's 13F filing showing a broad pullback in Chinese equities from the biggest hedge funds, at least here in the U.S., including Bridgewater, completely exiting its U.S. listed Chinese holdings. So should you be allocating cash there? Well, joining me right here on set is Beneath Kathari, founder of hedge fund Techni Capital. He has a former portfolio manager for Stanley Drucken Miller's Duquesne Capital, and it's great to have you. Welcome.

Thank you, Morgan. Thanks for having me. So we were just talking about it in the commercial break. China's in a bull market, and I think a lot of U.S. investors don't necessarily know that or are paying attention to that. What are you seeing? So look, the economy bottomed in November of 24.

Six out of the seven major indices in China are in a bull market. The Hong Kong IPO market is having the best year since 2021. They've raised more money than any other market. And it's a bull market after about a three or four-year bear market. And this is where we think you find the best opportunities. So where do you see those best opportunities? The biggest thing going on in China, the biggest thing going on in the world, is AI.

Here's the problem. In the U.S., we are in year three of the AI market. ChatGPT got launched in November 22. In China, it's day 150. Deep Seek was earlier this year. And you know what's going to happen over the next three years in China. It's the same thing that happened over the last three years in the U.S., which is a massive buildout. And the Chinese consumers are adopting this.

You know, Sam Altman disclosed that they've got about 10% of the world, ex-China, using their products. In China, it's a quarter. So you've got a massive market. They're ready for this, but it's early. It's day 150. So we think the data center space, so we own a company called GDS, this is the landlord of AI in China. This is where we think you're going to make a lot of money over the next two to three years. Interesting.

And we talk a lot about trade and tariff dynamics between the U.S. and China, national security dynamics, tech decoupling. I guess how to think about the risks to invest in some of these companies. And perhaps just importantly, are you investing in Chinese companies listed in the U.S. or listed elsewhere? So I think the first thing is we've seen President Trump walk back a lot of the really aggressive measures on tariffs. I think just this past week he delayed the August 12th expiry another 90 days. It's quite likely that you see more and more of that. I think tariffs are a distraction. I think the big story in China is they are going to become, as far as technology goes, completely independent.

So what we think you want to own are Chinese companies that are supplying to the Chinese technology sector. The biggest one there are semiconductors. You know, the U.S. and China want to decouple. And so the answer there isn't to get bearish China. If China and U.S. want to decouple, the answer there is to get bullish, the Chinese supply chain. And that's what we're looking at. There's a number of semiconductor companies in China that today have a market cap. That is a fraction of the big U.S. and Western semiconductor companies.

And that's going to equalize over the next five years. So you'd invest in some of those names as well? Exactly. What are they? So you've got companies like NARA, A-MAC. These are $20, $30, $40 billion companies. That sounds large. But the equivalent U.S. companies, AMAT, ASML, have a combined market cap of a trillion dollars.

Another company that we are looking at a lot is, and we're shareholders in, is D-D-D-D-D. So D.D. is currently the largest company on the pink sheets. It's a $20 billion, $30 billion market cap. It's bigger in terms of volume than Uber, but it's got the valuation of Lyft. And what's going to happen, the story in China over the next six to 12 months is going to be the IPO market's going to fully open up. So you've got a bunch of IPOs that people are waiting for and financial. You've got bite dance. You've got Cheehan. And the big one is D.D. And I think you can't buy any of those companies in the public market. it today. D.D. is one that you can buy in anticipation of that IPO mark. Okay. Beneathari, thank you for joining me. Thank you. Great to have you here on set. Thank you very much. Well, the July retail sales report shows consumers keep dining out at restaurants. Up next, Mike Santoli looks at whether there are any hints of a food spending slowdown and what that could mean for restaurant stocks and later. We will run through what you need to know ahead of a huge week of retail earnings. A week that's going to feature Home Depot, Target, Walmart. Just

at that screen stay with us the retail sales report showing restaurant spending is still going strong but could there be some moderation on the way well mike santoli is back with some food for thought mike morgan just just the barest hint perhaps that eating out has decelerated a little bit maybe curled lower so this is a breakdown is from our friends at at bespoke and it shows you the percentage of overall retail sales that's accounted for by bars and restaurants so eat eating out and food and beverage store, so dining at home. And you see, of course, the longer-term trend here has been to obviously spend more away from home than at home. But you do see just that little bit of a curl lower at the far end there.

So maybe there's some moderation in the restaurant sales at this point. Nothing that would suggest that you really have consumer stress happening. If these really were to converge, you might start to argue that the consumer is in a little more. However, the stock market has actually taken a little bit more of a pessimistic tone when it comes to restaurant stocks in particular. That's the restaurant component of the consumer part of the S&P 500. So really he's done nothing for months and it's started to underperform right here. We know about some big shortfalls that really have probably driven things over here. It's the sweet greens, Chipotle's, some of the more expensive chain restaurants that have not performed as well.

So that might be skewing these numbers. Yeah, that's exactly what's going to go with you because we had an office. awful week for Kava. And some of these sort of, I don't know, for lack of a better term, maybe like fancier, fast casual names seem to be really taking it on the chin, even as some of the fast food names are doing well. And some of the restaurant dine-in chains are doing well. Exactly. So higher price point for a lot of those newer chains, more expensive stocks, because they have been very good growth stories for a while, maybe a little more exposure to kind of your office worker lunch. So there's a lot of dynamics at play.

geographies are different, that maybe is causing that part of the restaurant business to struggle a little more than traditional, like you say, fast food, and even others some sit-down chains. It's done really, really well, like Chili's driving Brinker international stock. What are you going to be watching next week, Mike? Yeah, I think it's, you know, obviously the retail results are crucial, but I do think that Wall Street's got itself so wound up in anticipating a September rate cut that we're going to just be kind of whining ourselves into a knot before the Jackson Hole speech by Powell. So that's probably going to take precedent. So me watching the bond market get ready for that and try

to price in the scenarios that could dictate whether, you know, this week's 1% gain is going to hang in there for the S&P. Okay. Mike Santoli. Thank you. Have a great weekend. You too. Thanks. Well, should you be putting retail stocks into your investment shopping cart? That's ahead of next week's earnings from Home Depot, Target, and Walmart, we're going to ask a top analyst to weigh in. And don't forget, you can catch us on the go by following the closing bell overtime podcast on your favorite podcast app. We will be right back. Welcome back to overtime. Let's get you set up with next week's trade today. Earning season keeps rolling on Monday with Palo Alto's results. Tuesday highlights include Home Depot, Toll Brothers, and Medtronic. Target lows and

TJX are the big names on Wednesday. Walmart, Intuit, Zoom, Workday, and Raw Stores are out on Thursday, and BJ's in Buckle close out the week. And there will be a deluge of housing data next week, too, starting with the Home Builder's Sentiment Survey on Monday. Housing starts on Tuesday. We'll get existing home sales as well as weekly jobless claims on Thursday. And before we talk about next week's earnings, let's look at a big decliner this week. Coach and Kate Spade Parent Company, Tapestry. It's down 7% on the week. That's despite posting strong results. The company warned, that tariffs will squeeze profits. Investors appear to be buying the dip. Shares are finishing the day

higher by about 5%. But joining us now is Anisha Sherman of Bernstein. She has a buy rating on the stock. Anisha, it's great to have you here. And let's start right there. Do you buy tapestry here? And if so, why? Yeah. So I was surprised at the magnitude of the reaction. You know, look, the stock was priced for perfection. It had been up 74% year-to-date up to that point. And the guidance was a little bit low. So I did expect a bit of a pullback. But the magnitude of pullback was surprising because the reason the guidance was low was a non-fundamental reason. It was because of the de minimis tariff exemption ending two years earlier than expected. And Tapestry takes advantage of this de minimis exemption to ship in goods that are less than

$800 in value with essentially zero tariff. And now that tariff is coming back at a full, you know, weighted average of 30 percent. And that drove a 20-cent dip in EPS. So it's really a non-fundamental reason. Of course, it hurts this year's earnings. But the momentum, The sentiment in the brands is very strong. Coach grew double digits for the third quarter in a row. There's been no deceleration in consumer demand. And so I think overall this is still a fundamental grower. Okay. Is this the thing to watch when we start seeing more retail earnings next week, margins and tariff impact on those? So this particular thing, I think, is an isolated one because it's about the de minimis exemption. Sure, the tariff impact is going to go up because since

the last round of earnings, we've had a new round of tariffs, which are a little bit. higher. So we are going to expect some additional tariff headwinds reported by companies. But equally, they've also been heavily engaged in mitigation efforts. So we've heard from the big box retailers. They've been going very aggressively to their suppliers. The off pricers have been trying to pick and choose between vendors. Brands have been trying to mitigate by shifting supply mix and by many of them taking pricing. So there's been a number of efforts rolled out, which we haven't seen the impact of yet, but we're starting to see now. So what do you buy ahead of the prints next week?

I think anything where there is either no deceleration in demand, so something like Coach is a great example, where consumer is extremely strong, demand is still very high, and they have pricing power. So if you have pricing power and you're able to offset a lot of the weakness, that's where I would buy. I think where the dangers are, and I hear you talking earlier in your program about some of the restaurant names and some of the trade down, you know, where the danger zone is, is where there is not a ton of differentiation and the consumer can very easily pull back and trade down. that's where I think the weaknesses. So in the middle, those retailers that are undifferentiated at risk the loss of market share from a trade down. You still like TJX? You also like Ross stores here? So I don't like Ross fundamentally.

I think it's a very good stock. I don't think it's very underappreciated. But I do think into the print, it would be, I think the print could be a positive move for them because they pulled their FY guidance last four, citing uncertainty. And I think there's a good chance they reinstate that guy that will drive a little bit more confidence. got a new CEO who needs to build credibility in the market. So I think that will be a nice positive surprise from them. So I would be buying into the print short term.

But longer term, I think TJX is a rock solid name. They are immune to any kind of big market reaction because they trade so broadly. And they're able to take advantage of trade down as well as tap into the higher income consumer. And they have really good management quality as well. So I would like that one better longer term. All right. We got about 40 seconds left. Longer term, you like some athletic apparel names.

Yes. Yeah. So long term, I like Nike. I think Nike is coming out of its slump. You know, it's, it's been beaten down the last two years. Estimates have come considerably down. The multiple is, it looks expensive because the estimates are so low. But as they keep posting more and more positive directionally results, I think that's going to drive a lot of upswing over the next kind of year or so. So I think over the longer term, maybe not into the quarter, but longer term, that's the one I'd like. Okay. Anisha Sherman, we covered a lot. Thank you. Thank you. And what was a mixed day for stocks, the Dow finishing slightly higher, hitting a new record high earlier in the trading session. We continue to monitor Alaska for that summit as well. And then, of course, Jackson Hole next week.

That does it for us here at overtime.