Closing Bell - Closing Bell Overtime: Wall Street Whiplash: Averages Post Wild Intraday Swings As Investors Digest Tariffs 4/7/25

Episode Date: April 7, 2025

The Nasdaq swung nearly 10% today while the Dow’s range was over 2500 points. Dan Niles weighed in on the tech downturn and whether the pain is over. Relate Advisory’s Dana Telsey broke down earnings from Levi’s and the broader retail landscape. MP Materials CEO James Litinsky discussed China’s export controls and their impact on critical minerals. Plus, insights from 3Fourteen’s Warren Pies and Interactive Brokers’ Steve Sosnick on the broader market picture. 

That's the end of regulation. Faith Investor Services and Brightport Portfolios ringing the closing bell at the New York Stock Exchange. Community West Bank shares doing the honors at the Nasdaq. Stocks closing mostly lower as a wild session comes to a close. Looks like we've got gains on the Nasdaq here. But the S&P 500 touching bear market levels early in the session. The Dow swinging more than 2,500 points in trading today. And the Nasdaq trading in a nearly 10% range. It was to say the least volatile scorecard on Wall Street, but the action is just getting

started. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Fort is off today. We will be all over this volatility throughout the hour, including with noted investor Dan Niles who says a recession is not his base case scenario. But let's get right to this whiplash market action. Joining me now is Warren Pies, 314 Research Co-Founder and Steve Sosnick, Interactive

Brokers Chief Strategist, along with CNBC's Leslie Picker with some fresh comments from one of Wall Street's most important voices. But gentlemen, I will start this conversation with you because as I just mentioned, and Warren, I'll start with you. We did have a NASDAQ composite and a NASDAQ 100 that finished fractionally higher and an S&P that finished fractionally lower. It looks like 50, 62 maybe is where we're settling out

on the S&P. Warren, we came into this session, arguably very oversold here. We saw a massive flush out, a lot of margin calls coming into today. Is this a dead cat bounce or is this a market testing its bottom? Yeah, thank you for having me. Look, I think there are two important price levels to define for viewers. So if you study history and you go back and you look at where should we expect this market

to bottom without a recession, then I think we're at a place that's a pretty compelling entry point already, which is like anything below 5,100, you're looking pretty good. However, if we have a recession, then we're 500 points lower. My view is we're not going to have a recession, that the policies that have been proposed are not sustainable. It's kind of more should be looked at more as an opening negotiation, and therefore, I do think we're going to avoid recession. So I think when we look out one year, this is going to be a pretty good buying opportunity for investors.

And we've been pretty cautious coming into April. So yeah, I think there's no telling if it's the actual bottom. Sometimes you have to decide if you're going to be early or late in these situations. Personally, I'd like to see technical confirmation, but sentiment is really washed out. We see sentiment on our institutional measures, retail measures in the VIX at 25 percent for returns from that point historically. So I think we're getting close to a real bottom. Steve, we've had these conversations,

you and I have on the show. We've had these conversations with other folks coming into this year as well. But this was going to be a real bottom. Steve, we've had these conversations, you and I have on the show. We've had these conversations with other folks coming into this year as well. But this was gonna be a volatile year. I mean, look no further than today, and Warren just touched on it, but you have evicts at that very, very elevated levels as one sort of marker of the activity

we've been seeing in this market. Your thoughts here, especially as we've talked about in recent months, the role that individual investors have been playing in stock moves in general. Yeah, I'm Morgan. There's a lot to go on here. I mean, the volumes have been incredible. We set records on Friday in both stock volume

and option volume. So that's a tremendous lift. And from what we could see among our customer activity, the volumes were steadily increasing stock volume and option volume. So that's a tremendous lift. And from what we could see among our customer activity, the volumes were steadily increasing throughout as the week went on. Interestingly, among our 25 most active names, as of last week, 24 of them were to the buy side.

The only exception was Alibaba, and that was very slightly a net sell activity. So our customers remain buyers. There's definitely still a big faith component in the market. Clearly there were participants who had some issues, whether they were leveraged investors, people got a bit overexposed. I do think some of the selling came from risk parity funds, which then require you to sell stock as volatility goes up, which is kind of counterintuitive there in some ways.

But basically, you know, I'd say many investors are holding firm and you could see from today's activity, when we went, you know, from down, call it down 5% to up 3.5% in about a microsecond, it's telling you that there's still residual demand for stocks and nobody wants to miss a rally. Warren, I wanna get your thoughts on what you've seen in some of the other asset classes as well because crude oil, something I know you track, hit its lowest levels since April

of 2021. It looks like we actually finished with crude back above 60 in the close a couple hours ago. But you also saw bond yields, which had come off dramatically in recent sessions tick higher today to what are these markets telling us. Yeah I think the first with with oil there's been a supply problem for a while something we've

highlighted for clients and I think that- so there's a whole another drama going on there with OPEC returning- more oil to the market than investor did had expected in an ultimately lot of there's a lot confusion around here is it inflationary is it. Is it growth negative- the answer to all those oil to the market than investors had expected. Ultimately, there's a lot of confusion around tariffs.

Is it inflationary? Is it growth negative? The answer to all those questions is ultimately yes, but it's mostly a growth scare. It's a growth negative. So obviously, crude oil, one of the most economically sensitive assets on the menu has gotten hit. Bonds are a little trickier. I think they've been acting more or less like you would expect until today. Then we saw a lot of selling.

The rumors going around that these were potentially foreign sellers of treasuries, I don't think we have evidence for that story yet. That just shows that that is a potential consequence of this entire, quote unquote, trade war that Trump has initiated is that we have, we buy stuff and foreign government, foreign countries buy our debt and equities. And so if we unravel that relationship, then obviously, the potential is for those capital markets to suffer. So those are the two, those are really the oils of growth story and bonds.

I think they're a little bit caught between two forces here, but I wouldn't make too much of today's action. Yeah, you raise a key point there, too. We'll dig into that a little bit more, the fact that there's a national security element to how our economy is currently structured, which I think speaks to how these tariffs were invoked from a national security standpoint.

There's a whole debate to disentangle there, but Warren, Steve, stay with us, because we do have some breaking news from Washington. tariffs were invoked from a national security standpoint. There's a whole debate to disentangle there. But Warren, Steve, stay with us because we do have some breaking news from Washington. So let's get to Eamon Jabbers at the White House for more. Eamon. Hey there, Morgan. Just within the past couple of seconds, the White House has finished an Oval Office pool spray with President Trump and President Benjamin Netanyahu of Israel, the president of the

United States, saying he is not considering any type of pause in terms of tariffs going forward and in fact doubling down on his threat to impose an additional 50 percent tariff on China if that country doesn't lower its retaliatory 34 percent tariffs on the United States. So the president here holding a firm line and explaining that he feels that he has a once-in-a-generation Shot here to reset the global trade table as he put it in terms of the US relationship with countries around the world interestingly Morgan in this Oval office session with Benjamin Netanyahu The Israeli prime minister said that Israel is committing to President Trump that it is going to lower

It's or eliminate its trade deficit with the United States. So the implication there is Israel is going to find some way to buy a lot of American stuff and do that pretty soon. And what President Trump is saying here is that what he wants is other countries to come to him to negotiate. And in order to negotiate, what he wants them to do is to come down to zero in terms of tariffs and then go Below that in terms of what they call non-monetary tariffs or non-monetary Barriers to trade so the president here putting down a pretty hard line here, but saying he's

Simultaneously looking to raise revenue with these tariffs and have them be permanent while also Engaging in negotiations, Morgan. He's been consistent, and so has most of his administration with that messaging, even if it seems like it contradicts itself. I am curious, you sort of just took the words right out of my mouth, Eamon, and that is, how closely now should we watch the dynamics between the US and Israel as a template

from which other countries start to maybe negotiate their own bilateral agreements, assuming that's what comes out of this. Morgan, you use the word template. Benjamin Netanyahu used the word model in terms of what he wants the Israel example to be here. He said, we're going to do this and we think that we can be a model for other countries. Clearly, you know, these are two political leaders who are joined at the hip in many ways politically, Netanyahu and Trump. And so this is among the friendliest negotiations that you might see on the global stage. But we also saw Scott Besson, the Treasury Secretary, signal earlier today that he is

opening negotiations with the Japanese government to lower tariffs and non-tariff barriers. So you know, I guess the answer is we'll see, right? I mean, this is both a White House that is saying that these tariffs are permanent and also a White House that's saying that it is engaging in negotiations to eliminate them. All right. Eamonn Jabbers, thank you. You bet. Notable that it's two very significant allies of the U.S. on the geopolitical stage as well

that we're talking about here to start this process. Now let's bring in Leslie Picker with headlines from BlackRock CEO Larry Fink, who spoke earlier about the market turmoil. And he had some very pointed things to say in his messaging today. He absolutely did. He was speaking at the Economic Club of New York and Fink seemed pretty bullish despite the recent market volatility. I would say in the long run, this is more of a buying opportunity than a selling opportunity.

That doesn't mean we can't fall another 20 percent from here too. But I do believe over the long run, the vitality of the United States will persist. He was a little more concerned about the macro picture, though. He said the, quote, ripple effects of potential tariffs is going to be longstanding. And he said the quote with ripple effects of potential tariffs is going to be long standing and he said the economy is quote weakening as we speak. In fact, he said most CEOs he talks to say quote. We are probably in a recession right now. Think said President Trump is focusing on areas that in the

short run are quote very inflationary and destabilizing the economy. He said there's a quote, need for the administration to focus on these pro-growth agendas, things like tax cuts and deregulating and streamlining the permitting process. He said the market's not focusing on these things and forgot about the power of AI, Morgan,

but you can't blame the market, given just the various headlines today being the perfect example of that. Yeah, and it was interesting because you did see some of the tech names and Mag 7 names actually lead things higher today even though I realized it was a mixed picture for stocks overall. I was actually in the room, I was at this luncheon that the Economic Club hosted today and it was an hour long wide ranging conversation on the record.

They covered a lot of topics. Just to put a little more meat on the bone around the recession you know CEOs that I've spoken to you know say we may already be in a recession commentary he pointed to the airlines as a canary in the coal mine just seeing the changes that are happening in real time around travel for example Canada. So it's going to be one to watch as we start to get earnings season underway, not only with the banks and with BlackRock on Friday, but also with airlines starting to report to and see whether that's an early indicator of what

consumers are doing and how they're changing their behavior. Absolutely. And it also very much echoed some of the things we saw from Jamie Dimon's letter. That's the chairman and CEO of JP Morgan. This idea that, you know, he believes we're already slowing down the economy, whether we go into a recession as a result of these policies remains to be seen, according to Diamond. But just the act of slowing down, it happens very quickly.

And he said that the kind of the, unless things are reversed quickly, they can have long-term effects. It's not one of those things where you can kind of reverse it down the road and everything goes back to normal There are some permanent impacts of these tariffs Yeah, I do want to bring back Warren pies and Steve Sosnick to this conversation get your reactions gentlemen to those comments from Larry Fink and even Potentially Jamie diamond in his letter. So Steve, I'll start with you because one of the other things that got my attention from Mr. Fink today

in that conversation was the fact that as Leslie just mentioned he Warns that this could be much more inflationary He basically said that you should expect a Fed that may not cut at all this year That is not what has been pricing into the markets here And I just wonder how much hope is hinging from investors on the Fed stepping in with policy Well, yeah Morgan, I think there were two things that disappointed the market, and that's part of the issue we have here. I think there was an implicit feeling

that there was a quote-unquote Trump put, that if things got bad enough that the president was going to step in and say conciliatory things or do things to aid and abet the market if it got too ugly. That hasn't happened yet, and it doesn't seem like that's there. The second thought is the Fed put, which is the idea that the Fed's going to step in and

do policy adjustments to help out the stock market. A couple of problems with the Fed put. We have no idea what the strike price is on the Fed put. And secondly, it doesn't really apply to equities at all. It's a systemic put. It's not a save the equity market put. It came about in 1987 as a result of the stock market crash, but that was because the crash had metastasized into banking system problems, and that's when the Fed stepped in.

That's why they stepped in, let's say most recently, Silicon Valley banking crisis, because it was the banking system. Even there, remember, the Fed has a dual mandate. It's stable prices and full non-inflationary employment. Well, the full employment portion of the program is still okay, and the stable prices right now seem okay. What happens if they start to diverge? It's not clear to me which way the Fed moves.

I think that's the issue that Larry Fink exposed is, you know, if you start to get rising prices and a weakening economy, how they're in conflict and you have to get a pretty weak economy for the Fed to then step in. And so if things just sort of muddle along with some higher prices from tariffs and an okay but not terrible labor economy, you really can get that scenario. Warren, I want to get your thoughts on this, and perhaps just as importantly, what we will be watching in terms of possible catalysts for the market this week as we get inflation readings, including CPI, and we do get the start of earnings,

including some of those big bank names. Yeah, I mean, look, I think the Fed is in kind of a reactionary position, but I do expect them to cut, but I also don't think they're gonna save the market from what ails it right now. I could do 25 basis point cut. That's not gonna erase the tariff threat that hangs over everything right now. So I think that what you wanna watch for,

what's gonna be a catalyst at these really depressed sentiment levels is some kind of news out of Washington that the market can interpret as movement towards negotiation. And I think we got the first signs of that today. I think that was somewhat was mixed in with the market wanting to rally a little bit

with Besant taking over the negotiations with Japan. I think one successful negotiation amongst any of these major countries ultimately will show a lot of daylight to the market. Cause if we can do it with one, then Trump's willing to do it with most of the other countries, except maybe China, which is a whole other issue. And so that's what I'm watching.

And I think that we're in a coiled spring type of situation. Yeah, we can go lower, of course. But any kind of movement away from this very hard line that Trump has taken, I think the market will rip. All right, Warren Peis and Steve Sosnick, thank you for joining me. And Leslie Picker here on set. Thank you for bringing us those headlines. Thank you.

Well, now let's bring in senior markets commentator Mike Santoli with a look at the action in Treasury bonds. Mike. Yeah, Morgan. So pretty conspicuous as you guys were just talking about the rise in longer term Treasury yields over the course of the day closing above 4.2 on the 10-year. And it shows you it sort of reversed just a little bit of the recent game we got.

I'm open to the idea that perhaps there's a lot of selling what's already gone up in price, like gold, like longer-term treasuries, because people are liquidating in general and deleveraging and perhaps going into cash. But there's also this question out there in terms of whether really reducing the trade deficit is gonna reduce the amount of dollars

in the rest of the world. And then you have the inflationary potential implications of tariffs, whatever the reasons, I do think it's notable where we're sitting right here. We didn't get anywhere near the low in yields that we got in these prior two growth scares we had last year, especially down in the fall, that 3.6. Now global yields are higher since then, so that spread hasn't changed very much, but

it does show you we're not getting a whole lot of relief on borrowing costs domestically out of this big growth scare we're having. Take a look at the performance of that 60-40 portfolio, 60% equities, 40% bonds, AORs, and ETFs that basically tracks that. And you see how it's essentially giving you no help. It has not really absorbed this decline very well. Now, there have been times recently when bonds have done their job. In other words, they've rallied or killed their value as stocks fell, vice versa. The correlation's turning negative again, but it has not sustainably been the case.

Finally, in terms of mortgage borrowing, that seems to be what Treasury Secretary Besson is focused on in part. Take a look at the spread between the 30-year fixed rate mortgage and the 10-year Treasury yield on a long-term basis. It's still elevated. Now, it's well down from last year.

Once the Fed stopped hiking and started to cut that is had some relief there but it's still well above historical levels 1.8 percentage points is kind of the very long term norm so it's still you know it's better than it was but it's not necessarily the kind of level of

rates that's going to really refresh demand in the housing market just yet. It is one to watch though as the fed starts to slow down on its quantitative tightening right and I almost think that that takes on a greater importance because even if the Fed doesn't cut rates anytime soon if they continue to loosen the policy there then perhaps those barring rates continue to come down and maybe perhaps maybe consumers can absorb

price increases on things like vehicles and homes a little bit easier if their monthly payment is a little bit lower because their rates their borrowing rates are a little bit lower. I wonder what it takes to get there. Yeah exactly you have to have both rates down the spreads come down and see how that how that leaves folks and see if they have the confidence they want to be taken on leverage as well. All right, we'll see. Mike Santoli, we'll see you a little bit later in the hour. We're keeping you busy today. Levi Strauss earnings are out.

Courtney Reagan has the numbers for us. Hi, court. Hi, Morgan. Yes, so Levi Strauss earnings, they're reporting an adjusted earnings per share of 38 cents on revenues of 101.53 billion, I should say. Now Levi is not including dockers in the results because it's exiting this business.

So we're not gonna compare the results to analyst consensus because while Levi had said it was exploring alternatives, we don't know if analysts were including or excluding the dockers numbers in their estimates there. Gross margin coming in though, above 62% at 62.1% operating margin, 13.4%. Levi is reaffirming its previous guidance. Now, I spoke briefly to the CFO and CEO about the results and CFO Harmet Singh said prior to the tariff announcement five days ago, we were debating whether to carry forward this 10 cent beat to full your earnings guidance. But given every day there's a new twist, we felt it best to maintain guidance. We have task force working through different scenarios. It's a very fluid situation and we are working through different levers that we can pull.

Now, CEO Michelle Goss told me, quote, it's still early days. We are getting our arms around the issues. We source from 28 countries, 20 into the US and no one country accounts for more than 25% of production. China is less than 1%. We come at this from a position of strength. Our brand has never been stronger. We are gaining market share and we are at the center of culture globally and locally. Now of course the company putting out some SEC documents here and I should note that in

the 10-Q they do note yes that they are still working through things but that these tariffs announced on April 2nd will have a material impact on the year. Back over to you. All right Courtney Reagan thank you. these tariffs announced on April 2nd will have a material impact on the year. Back over to you. All right, Courtney Reagan, thank you. Shares of Levi's up 2% right now. Don't miss Jim Kramer's exclusive interview with Levi's CEO. That's coming up at 6 p.m. Eastern on Mad Money.

Got a little taste of that with the headlines from Courtney Reagan, though. We have a news alert on Broadcom. Those shares are higher after the company said it was authorizing a $10 billion buyback program. CEO Hock Tan saying the buyback quote, reflects the board's confidence in the strength of Broadcom's diversified semiconductor and infrastructure software product franchises.

In particular, we are uniquely positioned to emission critical infrastructure software and enabling hyperscalers to drive innovation and generative AI into their expanding subscriber platforms. We'll have more on this ahead. You can see those shares are up three percent right now. Meantime, a roller coaster day on Wall Street with the S&P 500 trading in a more than eight percent range, briefly touching bear market levels and the Nasdaq swinging nearly ten percent from the lows to the highs and ultimately finishing just above the flat line during us now is Dan Niles from Niles Investment Management. Dan, it's good to have you back on the show. And that's exactly where I'm going to start with you. Given what we have seen this downdraft in stocks, would you be a buyer here?

long term or short term. But right now, I think over the short term, when I saw the market down this morning, I started going in and doing things like shorting volatility, where I thought we would hopefully see a pickup in a rally. Obviously, I wasn't expecting what happened intraday, where the market goes from being down 4.7% to up 3.4 and then back to below flat. But I think it shows you that unlike prior drawdowns that you've seen, global financial crisis, you're not gonna fix the problem in a day because you've accumulated tons of bad mortgages. You're not gonna fix COVID

because it's a global pandemic in a day. You're not going to fix the tech bubble meltdown because you over invested for five years back in the late 1990s. This you can literally fix overnight if everybody resettles the tariffs because this is a self-inflicted wound. I think that's what you saw with that move from down 4.7% in the S&P to up 3.4%. I think what that does is it makes it so that in the near term, the path of least resistance is probably higher.

If you look long term, the one thing that brought me into this year, if you remember, one of my top five picks was cash. I had no magnificent seven in my top five picks. I was negative coming into the year before all this stuff started to happen. The issue was valuation, which nobody wanted to talk about who was bullish. Now, everybody who used to be bullish is talking about valuations, which have dropped from 25 times trailing on the S&P down to 21. The problem I had was with inflation at these levels, the average S&P should be around 19 times. And so that's still another 10% lower from here.

So I think the short term, yeah, I think you're going to see a bounce and you're going to see that continue. Longer term, I'm always focused on how much you're paying for things. And that's the thing that would keep me a little bit more cautious longer term. So in light of that, let me play this sound bite from Jeffrey Gunlock, who is on In the Last Hour with Scott Wapner. Take a listen. We have a lot of dry powder. And I talked about cash as a recommendation on Fed days for the past few Fed days, as much as 25% or 30% cash.

I would not be deploying that cash yet. I think you're kind of in the middle innings of this thing, although certainly the market going down so much on Thursday and Friday, it's a little bit disconcerting that we don't have more of a bounce in the market. Sounds like you think we're in middle innings or maybe middle towards getting towards the end, if you're talking about maybe another 10% draw down here for the S&P. So assuming that happens, assuming we fall further at some point here in the near term, we get even more washed out. Some of those technical levels are realized. some of those valuation metrics that you just mentioned are realized. What would you be nibbling at first?

Well, I think it's very company specific. So I think there are certain names that I went into recently. But the big thing I would focus on is which companies are generating a lot of cash, which ones tend to pick up market share during recessions? Those are the types of names that you want to be in because if you're in stuff where well, you know ten years from now It's gonna be a big market. You're gonna get absolutely murdered if you get into a recession and so That's the stuff. I would, I guess, in that scenario. Don't forget, even if you go back to the global financial crisis when the S&P was down 57%

from peak to trough, you had 11 rallies in the S&P 500 of 10% each, 11 of 10%. I guarantee you, you're going to get, or you can't guarantee, but it's highly likely, given what happened the last time, that you're going to have stuff like that happen again, and you're going to have the bullish analysts come out yet again and tell you how the market's going to be up 20% trying to ignore valuations. I think until you have the economy settled down, you want to stay in the cash generative names profits today, not 10 years from now, where the multiples discount the risk. And I think the AI trade now that you've reset some of these valuations a lot lower, those

are some of the names you can go back and look at. And that's some of what we did today. Is the US still the best game in town? There's a lot of talk, a lot of focus on it's time to, U.S. exceptionalism is going away, diversifying international markets, they're gonna perform better this year. The spoke tells me this afternoon,

the average decline since liberation today across 45 country ETFs is 10%. Yes, it's a self-inflicted wound, but we're inflicting it on everybody else too right now. Well, are we? Because here's the thing, Morgan. If you go to Friday, where we have the exact numbers, the S&P is down 14% year to date as of last Friday.

The global stock market excluding the United States was up 0.5%. Mexico, who we're having obviously big fight with, that was up 4% if you look at EWW. If you look at the Eurozone ETF, EZU, that was up 2% as of last Friday. Sorry, that's actually as of today. I don't know where the global is excluding the US. My point is that the issue coming into this year was everybody thought the US was the only place you could win because you've got AI and US exceptionalism. You're valuing these companies at levels that make no sense relative to the rest of the

world. DeepSeek shows up and you figure out, you know what, maybe China at half the valuation levels for some of their AI companies are actually at a third levels at one point. Maybe those look interesting. I think the good news about this is investors, for the first time since really Chachie PT showed up, are going to look at companies around the globe and go, where am I getting paid to take on the risk? And are there other regions besides the US, like China, for example, where if you look at K-Web, it's flat here today. Okay.

Magnificent seven are down 24%. And so that gives you an idea of risk to reward and as it relates to your US exceptionalism. Okay. Dan Niles, great to get your insights on a day like today. Appreciate it. Thanks, Morgan. Don't miss Dan Niles from the New York Stock Exchange on June 12th for the first ever CNBC Pro Live event. Scan the QR code on your screen or visit CNBCEvents.com to get your tickets today. Now we have a news alert on healthcare stocks. Those are surging in overtime. Bertha Coombs has the details for us.

Hi, Bertha. That's right, Morgan. Specifically, it's Medicare Advantage players, the Centers for Medicare and Medicaid coming out with rate increases for 2026. Much higher, almost double what the Biden administration had proposed initially. They are going to get a more than 5% rate increase for 2026.

CMS saying it's because they looked at the complete data for 2024 and saw that costs had risen. So they are giving them a higher rate increase. And as you can see, Humana, one of the largest medical, Medicare Advantage players surging 13% here after having been down during the session. This comes, Morgan, after a couple of years that have been really rough for the Medicare Advantage players with a lot of regulatory scrutiny, a lot of higher costs. So this is a big relief for them as they set their rates and look to their coverage

for next year. Back over to you. Massive moves. Bertha Coombs, thank you for bringing us the details. Coming up, we're going to talk to the head of one company caught in the trade war crosshairs, could actually benefit. The CEO of Rare Earth producer MP Materials will join us exclusively as China slaps export reach restrictions on rare earths as part of its tariff retaliation. Stay with us. Welcome back to overtime. Shares of Levi are higher after the company reported results and said it was coming into this tariff environment from a position of

strength. Joining me now is Dana Telsey, Telsey advisory group CEO and Dana it's great to have you on. They reaffirmed their full year guidance but they also said that they're not including possible tariff impact into that guidance your thoughts on what this says about Levi what we can expect from other reporters in coming weeks and the importance of a diversified supply chain I think a couple things and first of all Morgan thank you very much for having me. They beat the quarter.

They maintained the guidance. You look at the sales growth in the quarter, up 9%. The sales growth for the year is guided to 3.5% to 4.5%. So they left themselves room. No one knows what the magnitude of these tariffs could be. All we know that it's not good, given the pressure it puts on the consumer, given the pressure it puts on the consumer, given the pressure it puts on these businesses. So maintaining the guidance with a beat gives

them some wiggle room. The diversification of sourcing that they talked about is certainly critical, but prices are going up. It'll be shared by the consumers and the manufacturers and retailers and consumer companies are going to diversify. I've been speaking to a ton of companies over this weekend and the amount of change that needs to happen is very complex and companies are being very cautious about orders going forward because bringing goods in early allows you to get a better price. The fact that they got better sales, that their DTC business was strong, that the margins were solid, this could look like some of the better ones during this earnings season coming

up. And keep in mind, they didn't give guidance to the second quarter, let's hear what it is, because being able to beat and they're basing in for basically more conservatism going forward through the year. And I think that's what you're gonna see from consumer companies. So something very interesting happened with Ford last week in the midst of auto tariff implementation and that was they announced that they were offering employee discount pricing to all of their consumers. And then to follow suit, Stellantis is now doing the same thing.

So it almost seems like they're leaning into a pricing war to potentially gain market share and boost their brands. Could we see something similar happen on the apparel or retailer side? And if so, who'd be best positioned for that? A couple things. First of all, when you look at the average ticket of what a car is compared to what apparel items are, very different. I think the competitive nature of what you're going to see, the scale of what Levi's is with their market share, they'd be one of the best positioned also because of the diversification that they have in sourcing. But you look at what wins during this period of time, where you have more North American manufacturing, that's Bath & Body Works. What wins is where you have value, and that's TJX and Burlington with the off-pricers. And you

also take a look at what are the essentials consumers need, and that's the grocers and that's the Costco's of the world. So I think what we don't know is what the level of consumer demand is going to look like when they look at their 401K statements. All right. Dana Telsey, thanks for joining me. Thank you. I think we should keep an eye on Walmart, too.

It's holding an analyst meeting on Wednesday. Time now for a CNBC News Update with Bertha Coombs. Bertha. Hey, Morgan. Chief Justice John Roberts just issued a temporary stay on a lower court ruling to return Kilimar Abrego Garcia, who was mistakenly sent to a notorious prison in El Salvador while litigation on the case continues. That means for now the Trump administration does not have to return Garcia to the US by midnight

tonight. The court gave Garcia's legal team until 5 p.m. tomorrow to file a response. At a hearing in federal court underway this afternoon that could give final approval to a nearly $3 billion NCAA settlement over name, image, and likeness deals. The judge has already granted preliminary approval that would pay back damages to college athletes who played between 2016 and 2024 and were not entitled to the full benefits of those things. Morgan?

Bertha Coombs, thank you. Up next we will look at one key S&P 500 level that should be on your radar during this period of market turmoil and we will talk about how Congress is responding to the terror-fueled uncertainty and what it could mean for President Trump's tax agenda. Over time, we'll be right back. Welcome back, Mike Santoli returns with a look at a key level to watch in the S&P 500, Mike. Yes, Morgan, a pretty long-term one as well.

It's right in the area of 4,800 on the S&P 500. This chart goes back to the very end of 2021. The reason for that is the high right there before that bear market of 2022 was right about 4,800, just under there as a matter of fact. You know, we almost got there in the morning low today, the intraday low was about 4865 in the S&P 500. We bounced very, very hard off of that.

That was about down 21% call it from the all time high. The other thing that that level represents is half of all the gains from the low here in the October, 2022 to the bull market that basically just about ended in February would have been gone. So sometimes you give up half of it that might be a place to stop and wait.

There's other people talking about a 200 week moving average. It's not that far below that. The point is, even if you don't look at the headlines, there's some evidence, perhaps, that there's a logical place for longer-term money to perhaps start to do some buying there. I wanna take a look at Blackstone relative to the S&P 500,

because Blackstone really does tie together a lot of the things that the market's been struggling with, including liquidity, expectations for capital markets, for deals, for confidence about the overall economy and markets, and you see it's been this massive outperformance in the fourth quarter, giving it all up. Watch this relationship. If Blackstone starts to find some traction

relative to the broad market, maybe it means that some kind of, some floor might be getting put in, at least in the financials. Okay, Mike Santoli, thank you. Coming up, the CEO of MP materials, this is the largest rare earth miner in the U.S., reacts to China's new export controls on those critical minerals and how it is impacting his business. Welcome back. President Trump threatening new tariffs on China, 50% more by tomorrow if China does not lift its own retaliatory tariffs on U.S. goods. China's measures are set to go into effect Thursday if no action is taken.

And it includes global export restrictions on rare earth elements, commodities that are crucial in goods like electric vehicles, consumer electronics, avionics. Joining us now is James Latinsky, MP materials founder, chairman and CEO. MP owns the only rare earths mine in the United States and makes magnets, which is a key part of the supply chain to go from these rare earths to actual finished goods in advanced manufacturing. Jim, it's great to have you on.

I want to start right there. Before we even get to China export controls, what do the tariffs as we currently see this framework rolling out in real time, mean for MP materials? Sure. Hey Morgan, it's great to see you. In simple terms, we've been ramping up refining and as you just mentioned, we're bringing our magnet facility online. For our refined products business, which is predominantly outside of China, and our magnetics business, it's outstanding in the sense that it helps us get a more level playing field.

For product that we still sell into China and we still sell quite a bit into China, tariffs from the Chinese obviously make the playing field even deeper against us. And so that's a negative in the short term. But NetNet, it's very bullish for the strategic value of everything that we're doing. I think it certainly highlights everything that we're doing.

Will you de-risk from China in terms of your operations and your selling there? Oh, absolutely. That's the mission of the company from the very beginning has been that we can't rely on a single point of failure in particular, and I guess we'll probably get to it in a moment, Morgan, but one of the things that they announced the other night is that there's going to be export controls around rare earth magnetics, including ones for a variety of industries

and very specifically for physical AI and defense purposes. And so I'm actually a little surprised that there's not sort of more concern around this because it is a really big deal. It's a really big deal. How quickly can you stand up a homegrown supply chain around this and what would it take for you to make even more investment to do so? Well, I wanna make, if you don't mind,

I'd like to make a really important point that I think has been lost in some of the dialogue. I know it's been going for days on this network, but there's a lot of talk about the president started a trade war. And people reference Smoot Hawley in 1930. And if you look at the US economy in 1930, we had a 2.5% surplus.

We had 40% of our economy was manufacturing. Fast forward to today, and we have a 3% trade deficit and only 10% of our economy is manufacturing. That's because there's been a trade war waged on us for about 30 years. This is really the beginning of the end of a trade war, is really the better way to think about it. That's a long-winded way of saying, I think we need to contextualize where we are as an economy and a country.

It's not that we can't do this stuff, it's that we've really been at a disadvantage for quite some time. You know, at MP, we've been at this for a while and bringing back the supply chain. We made a tremendous amount of progress. We think that the president and his team need to keep going to make sure that they can create the conditions for us to continue to build our business. And so we're doing it as quickly as we can. But I'll tell you, obviously there's a lot of risk in the coming months and years ahead because as action is taken, the Chinese are responding and adding risk

to our economy at all levels. Jim, you make a very good point. As somebody who's covered manufacturing and industrial activity for more than a decade here at CNBC, there is a lot to talk about around the trade topic and policy over the longer term. And I would argue that what you're talking about is what has risen to this rise in populism in this country in recent years, too, and other countries where you see big trade deficits, as someone close to the administration made that point to me late last week. With all that in mind, what will it take

for you to continue to invest and expand production here in the U.S.? Sure. Well, it's really a question of capital and making sure that we're thoughtfully executing shareholder value. We've taken on this mission. It's been about 10 years of essentially MP bringing back this supply chain and taking on, you know, the Chinese and essentially

Chinese mercantilism, their entire industry is really two state-backed companies. And so, I think as we start to see a more of a level playing field and hopefully further policies from this administration, we'll make a substantial amount of investment. I mean, this there really is nothing stopping us other than the conditions that we feel are, you know, adequate for us to continue to invest. Jim Latinsky of NPMaterials. Great to have you on. Thanks.

It's great to see you, Morgan. Thanks so much. Well, quote unquote, unserious and disappointing. That's what the chair of the House Budget Committee is calling the Senate's budget proposal up next. What that battle could mean for extending President Trump's tax cuts and for the market. And check out Steel stocks surging today after President Trump ordered a new review of the proposed merger between U.S. Steel and Japan's Nippon, which was blocked by President Biden.

We've got some big overtime movers this hour. Broadcom climbing after the company announced a $10 billion stock buyback. Those shares are about 2.5%. Private Medicare names like United Health, Humana, and CVS Health all surging after the Centers for Medicare and Medicaid Services finalized boosted payments from the Trump administration for next year. Humana up almost 13% right now. But tariff turmoil sparking another wild ride on Wall Street. And it could spark a rethink of President Trump's fiscal agenda. We're gonna look at the changing math in Congress and what's at stake.

There's a lot, stay with us. Welcome back to overtime, the battle over the budget and extending President Trump's tax cuts. This is heating up on Capitol Hill. Emily Wilkins has the details for us. Hi, Emily. Hey, Morgan. Well, yeah, the framework for Trump's tax cuts. This is heating up on Capitol Hill. Emily Wilkins has the details for us. Hi, Emily. Hey, Morgan. Well, yeah, the framework for Trump's legislative agenda

and those tax cuts, it cleared the Senate, but it's now facing very high hurdles in the House. About half a dozen Republicans have publicly come out and said that they can't vote for the bill. They're concerned that it's going to be adding trillions to the deficit. Now, the bill still requires house members to find 1.5 trillion dollars in cuts, but it has completely different instructions for the Senate

It sets a floor of only four billion dollars in cuts for them So one bill two completely different instructions lots of heartburn over here Congressman Chip Roy said that he will not vote for that bill without the Senate coming closer to the House's cut level. He tweeted that the House's floor establishes important guardrails to force Congress to pump the brakes on runaway spending and to achieve critical reforms to badly broken Medicaid, food stamps, and welfare programs. Speaker Mike Johnson is planning to hold a vote as soon as Wednesday on this framework. Congressional leaders say if they can just pass this framework now, before Congress leaves town for two weeks, they will work out all of the other spending stuff later when they

fill in the policy details. Morgan? Meantime, Emily, you have all the tariff drama behind the scenes in the background here. And to your point, you have Republicans that are starting to flesh out some of the details around what a tax bill could look like and there were some headlines Friday afternoon that I would argue helped push markets lower that suggested that maybe it's not going to be as friendly to business or top earners as had been previously expected. I mean Morgan there's still a lot of questions about exactly what policy details go into this bill.

I will say that from the lawmakers and sources that I talked to on Capitol Hill, that this having additional taxes on the highest earners doesn't seem like something they're really considering seriously right now. That said, they are gonna have to find some revenue raiser somewhere in here. So we're keeping an eye out for what those will be.

Okay, Emily Wil Wilkins thank you. US trade rep Jameson Greer testifying before congress tomorrow as well keep an eye on that one that does it for us here at overtime.