Closing Bell - Closing Bell Overtime: Warner Music Group CEO On Future of Music and Streaming; Firefly Soars in IPO Big Shifts 8/7/25

Episode Date: August 7, 2025

Kevin Gordon of Charles Schwab and Victoria Greene of G Squared weigh in on the broader market picture, while earnings roll in from Block, Expedia, Dropbox, Pinterest, and more. Mizuho’s Dan Dolev joins to break down the fintech landscape post-Block results, and Warner Music CEO Rob Kyncl joins to talk earnings and the bigger picture for the music industry. Plus: the Firefly IPO, the Lilly-Novo rivalry, and a White House push on private assets in retirement plans.

Well, that's the end of regulation, the museum of the city of New York, bringing the closing belt, the New York Stock Exchange. Limonatus Farma doing the honors at the NASDAQ. An early rally in stocks faded in the afternoon following a move higher in yields, and the president's global tariffs kicking in. The NASDAQ ending higher as Apple's move higher continued. Salesforce and Caterpillar are both weighing on the Dow today. Utilities and consumer staples, those were your S&P sector leaders,

health care and financials were the laggards. Yields on the move, with the 30-year spiking midday on the back of a week off. auction. Gold moving higher today, hitting the highest level since June 16th and heading back near the all-time highs that it hit back in April. The gold miners' ETF is now in pace for its best week since April 11th. Well, staying on commodities. We had a bullish day for silver as it hits a two-week high. Silver's on pace for a nearly 5% gain this week. And three consumer names warning about tariffs in their latest earnings report, Elf, saying they have raised prices on products since 75% of their producers are made in China.

Crocs will take a $40 million hit from tariffs in the second half, and Ralph Lauren noting that it was cautious about the second half due to inflationary pressure from tariffs. Well, that is the scorecard on Wall Street, but welcome to closing bell over time. I'm Morgan Brennan. John Ford is off today. We've got another busy hour of earnings coming up. Block, Expedia, Flutter, Pinterest, all due out in the next few minutes.

We're going to bring you those results as soon as they hit. And Warner Music Group, Rising, following its results that were out this morning. The company CEO will join us to discuss those earnings and the music industry. This is a CNBC exclusive first time he's joining us since taking over as CEO. As I mentioned, stocks giving up early gains, closing lower. On the NASDAQ in particular, we saw a tug of war between chip stocks and the software names. Christina Parts and Nevelace is looking at those two groups for us today. Hi, Christina.

Hi. Well, Apple did have its biggest point impact on the NASDAQ, so it barely just closed higher. But Apple, we said, we know, announcing a massive $100 billion U.S. investment, investors betting, this commitment helps shield the company from tariff threats. The tariff protection theme really extending to chip stocks. Arista networks, for example, touched an all-time high today. AMD closed almost 6% higher. Lamb Research, applied materials, micro on KLA, all gaining at least 1, 2% on your screen.

Markets really are pricing in safety for companies with U.S. manufacturing commitments, despite the looming 100% tariff threat from President Trump. But when chips rise, software falls. The constant sector rotation hit hard today. The IGB software ATF dropped about almost 2% and broke below its 50-day moving average throughout the day. HubSpot led software's decline down about 10% last I checked. You can see, oh, 6% coming back.

It's joining service. Now, Wix 5'9 in a troubling pattern. Even strong results can't overcome AI disruption. fears. And what do I mean by that? OpenEIs chat GPT5 launched today and Sam Altman's warning about software as a service entering a, quote, fast fashion era. Have investors convinced AI will eliminate some traditional software companies or at least hurt them? Investors are fleeing anything AI might replace while flocking to hardware they believe has geographic protection, Morgan. All right, Christina Parts and Eveless. Thank you. We got some breaking news in the last few moments

on who the president is nominating to fill the vacancy on the Fed board. until January. Let's bring in Steve Leasman for that news. Steve. Yeah, so the president's saying he will nominate Stephen Amir and the CEA chair to that position. That seat opens up essentially tomorrow when Adriana Cougar leaves the Federal Reserve Board of Governors after a couple of years in change on the board. Unclear how quickly the Senate will confirm him so he can take his seat for the September 17th meeting, a little tight there. We'll see what happens. It's possible, I suppose. There probably have to be committee hearings and then on to the full Senate. But almost certainly for the October 29th meeting,

which would be the second one, where the market has a 61% probability of a rate cut. Stephen Mirren is an individual who is really one of the intellectual economic architects of what the president is doing. He's written about the idea of bringing down the trade deficit, devaluing the dollar. More worrisome is his support or even authorship of of this idea of the Mar-a-Lago Accords, where certain long-term bondholders, foreign government bondholders, or even just foreign holders of long-term government, U.S. bonds, would be crammed down and forced to take a hundred-year bond. So don't know if that's something they're thinking about, but it was certainly something he wrote. But Miran has been a strong supporter of the president's

policies and a strong advocate for the president on our air and elsewhere. Yeah. Speaking of On Our Air, he joined me right here on overtime, Steve Myron, did for a wide-ranged in conversation yesterday. And actually, the last question I asked him, Steve, was whether he has any role in advising the president on who to pick for this position yesterday and whether that Senate confirmation process could happen in time for that FOMC meeting in late September. And what he said to me was I think the seat is very important to the president, and you can tell that from how he talks about it.

So I think it would be premature to prejudge the process when it's still very much ongoing. But it is interesting that we're here 24 hours later having this conversation about, to your point, somebody who has been literally wrote the paper on trade and tariffs that the administration is referencing here and has had a lot to say about the dollar. Yeah, I watched that interview. I watched him answer that question and I thought for sure he was a candidate for the job. What's interesting, though, is the president saying that he was going to feel the temporary position, the temporary opening, and we'll figure something out later. I don't know if I have the exact word, verbi is in front of me. I mean, we may have a full screen on that, but the idea is that that term is up, I think, in January. So he either has to be renominated or somebody else take the position.

There is a very complicated question about whether or not the president wanted to put somebody on that who would be his number two pick for Fed Chair. This would protect the president if he didn't want to nominate Waller, And Powell did not step down in May. I fully expect Powell to step down from his longer term or longer running governorship job. I don't know how much you want to get into that. But he could stay on the board after leaving his Fed chair. It's typically not done.

I don't expect him to do that. But if there were concern, what I'd heard this morning is you might nominate your number two position to fill the cuggler job today. You number two choice for it to fill the cougler job today. Okay. More will be revealed. Steve Leesman. Thank you. We got block earnings out.

McKenzie Segalos has those numbers. Hi, Mac. Hey, Morgan. So block shares surging about 9% and after hours trading. Despite a miss on both the top and bottom line, EPS coming in at 62 cents. The street wanted to see 69 cents. Revenue, $6.05 billion for the quarter against estimates of $6.3 billion. I'm seeing transaction revenue coming in in line with estimates. Same thing with subscription and services revenue. GPV, that is a read on how the cash app and square business is doing. that came in slightly ahead of estimate, 66.62 billion versus 66.32 billion. Bitcoin revenue, though, a miss, 2.14 billion against 2.48 billion. Investors don't seem, investors are pretty bullish, though, up 8% and after-hours trade. Back to you. Okay. Mackenzie, thank you. Well, let's turn back to the markets in this pick for the governor board opening.

Let's bring in Charles Schwab, senior investment strategist, Kevin Gordon, and G-squared private wealth, CIA, and CNBC contributor Victoria Green. Great to have you both here on what was a reversal of a day for the major averages. Kevin, I'm going to kick this off with you because I know you make the case that the Fed doesn't actually need to cut here. But I do wonder what a beginning of a shift to the Fed composition is going to mean for that outlook, not just this year, but through next. Yeah, well, I think as it stands now and maybe pre-jobs report, it wasn't as much the case. You could start to put together the argument that they could definitely, you know, cut in September. Assuming you have what we saw for July jobs, and that continues with pretty significant revisions to the downside and also probably more of a softening in hiring. So I think that if that were to continue to be the case and you didn't get some significant surge in inflation, not just in the goods component, but what is broadly CPI or broadly PCE probably sets them up for a little bit of a cut.

Because Powell noted in the most recent press conference, it's not as if they're not looking at any downside risk to the labor market. They still do view that as the case. So I think that'll continue to be, you know, sort of the driver's seat force in terms of driving Fed policy and also driving the equity market. I think the one thing to keep in mind, though, is just because we got a really soft print for July and there were those significant revisions down to the downside. And John Williamson, the New York Fed has been, I'd say, probably out front in terms of leading this thought out there where you do have a little bit of a catchdown, race to the bottom for a supply, but also demand for labor. So it's not just the case that because you see a significant slowdown in job creation each month, that doesn't necessarily mean it's this ultimate bearish case for the economy because we do have a pretty significant contraction that we're seeing in the labor force.

It just means that the run rate for payroll growth can be a little bit lower without seeing the unemployment rate tick higher significantly, but it also doesn't dismiss the idea or the notion that we have started to see a lot more softening in labor for sure. Yeah, it's a key point. Brian Moynihan made it on our air earlier this week, this idea that the supply side is coming down as you see foreign-born workers come out of the economy here. Victoria, I want to get your thoughts on markets here on a day where you do have the S&P and the Dow both taking a pause.

The NASDAQ, though, eking out a gain, which I think speaks to the ongoing dominance of big tech. Yeah, I still think big tech is the place to be. Obviously, software took a little bit of a hit today, led by Salesforce a little bit lower there. I think people are kind of trying to figure out how protected is everybody's moat as AI continues to make leaps and bounds forward? Are some of these software-as-a-service company is really going to be able to grow sales,

and they're going to have to come through with it. They're going to have to say, hey, these AI add-ons are actually worth it. They're going to have to show revenue growth. They're going to need to show growth in their user base, and they're going to have to show their moat that, hey, so Open AI and chat GDP, they're not going to eat our lunch and we can continue to grow our profits. I didn't really think all in tech is a wonderful place to be still.

I still like my Mag 7. I don't think this is the end of the world. I think you could see winners and losers are becoming a little bit more apparent. So as the chips were winning a little bit because there seemed to be a lot of exemptions to the 100% tariff, you know, at the same point, then you saw software give it out on the other side. So I think you have to be extremely picky as an investor, know your company, and specifically understand your company's strengths, weaknesses, and moat against threats from AI.

Kevin, what do you see as attractive in this market here? I mean, where are the areas that you'd be thinking to invest? We just talked about some of, you know, some of these companies that are actually investing in the U.S. seeing exemptions, enjoying exemptions from tariffs. I have to think that's an area to at least investigate. Yeah, it definitely comes down to having a little bit more of idiosyncratic or stock-picking mindset because, you know, to approach this thematically or even from a sector basis, it's getting a little bit more difficult just because you do have a lot of exemptions being carved out, not just at this point now for sectors, but also for individual companies.

But I think that if you've been approaching, and our sort of position has been the same on this inconsistent for the past few years, you know, really post-pandemic, looking at everything from a factor characteristic-based, you know, viewpoint, not necessarily from a sector view. Because even if you look at what's leading this year and where leadership has started to become concentrated in the S&P 500, you know, it's tech, it's utilities, it's industrial. So those three don't really necessarily fit into what is considered, you know, one traditional category. You've got growth, classic defensive, classic cyclical, all represented in those three sectors, but they all happen to have, you know, a little bit more of an AI theme or common thread there. also happen to have relatively solid fundamentals in terms of earnings growth and profit margins. So if you have that absorption power as a company or as an industry, then we think you can

handle the sort of coming in macro environment relatively well because we know we're staying in a relatively elevated tariff rate environment. We know we're probably going to stay in an environment of more contraction in the labor force and a little bit more downward pressure on supply. So all of that together leaves you with those characteristics and those factors that tend to be up in quality, specifically though, when it comes to margins. This is much more of a margin story than anything. Okay.

Along those lines, especially when we're talking about something like margins, even just looking at some of these consumer-facing stocks, Victoria. And I realize we're going to get more retailers reporting in the coming weeks here. Is that just an area that you steer clear of? And if so, what other sectors, in addition to tech, do you think are attractive here? Right. I really do like the financials, industrial, utilities, the AI play. All of those are strong.

Financials to me, I think you shouldn't overlook, even though they've been a little hiccups there because I think they're the massive beneficiaries. of the one big, beautiful bill and deregulations, both of those things should drive further lending, drive margin expansion for financials. Two areas, I think you have to be extremely careful with our staples and our health right now.

Both of those sectors are a minefield of problems. And as we're going into consumer discretionary, we have a lot reporting this week, there are going to be winners and losers based on taste. You know, we saw the American Eagle effect. We saw Crocs really stumbled a day. I think it's hard to draw a firm line. You know, McDonald's wins and Chipotle loses.

And so it's much more, like we said, it's individual company performance. Are you able to provide value to your customers? I think that is the key. Is a customer perceiving value? McDonald's did it extremely well. Chipotle struggled with it. And so as we look forward, is the consumer going to continue to want to buy your product? We saw Lulu Lemon struggle with that earlier in the year.

They had these new threats from Allo from some of the up-and-coming brands. So for me, it's going to come down to you. Are you increasing sales? Are you providing value to your customer? and are you reaching out to new avenues? So potentially, if you are losing some of the lower income customers, you can pick up maybe some middle income. I'll be extremely interested to see what Target and Walmart have to say.

Those two are massive bellwethers for me on the strength of the consumer. Absolutely. Okay. Victoria Green and Kevin Gordon. Thank you for joining me in what was a mixed picture today for the major averages. Well, Bitcoin jumping 67% since President Trump was elected in November. Coming up, we're going to tell you how the president is giving crypto another boost. And we will get reaction to Block's results ahead of that company's conference call. That stock

is rallying right here at overtime. It's now up 8%. We'll be back in two. Welcome back. Let's take another look at Block. Those shares are up after reporting second quarter results. Let's break down their report with Dan Dola from Azuho. Dan, it's great to have you back on. I mean, it looks like it was a miss on the top and bottom lines, but cash app slightly ahead. What was your takeaway? Yeah. Hey, Morgan. Great to be again on the show. Look, this was actually one of the better quarters. I'm not surprised to see the stock trading up 10%. You know, we would underwrite that as well. So I think the key thing to remember is they're raising the guide by a very, very significant amount. So they beat Q2 adjusted operating income by about $100 million. That's like

20% beat. And they're raising the guide by over 2%. So 2.5% to 2.4%. That's a really big achievement, especially versus what happened earlier in the year where they sort of were a little bit clunky. So I can see why the stock's trading up, and we see it actually moving, continue to move up from here. Okay. What drives the growth in this company from here? I mean, is it cryptocurrencies and Bitcoin? Is it just sort of the buildout of all of this next era of fintech and the role that block plays in that? It's actually really interesting. It's the only name and payments that has a true two-sided network. So they've got the cash app on the one side, and they've got the point of sale business on the other side.

And because both are doing incrementally better than what we thought they would do earlier in the year, you have the chance to actually connect the ecosystem and actually create a network of its own, which nobody else has. And if they continue to execute like this, plus some crypto stuff and Proto and all these great initiatives that Jack has, this thing should continue to go up and be to the right.

So quickly, Dan, how does this fit into what we've heard from FinTech in general this reporting season? It's actually really interesting. We've been asked the same question. We haven't seen that many raises to the guidance. If you think about sort of like some of the other payments like FIS or people were complaining that toast didn't raise by enough, this is the first time where we see a true raise to the fiscal year guidance.

It's a show of confidence by management. So it actually stands out in terms of the rest of the pack. Okay, Dan Dolov. Thank you. With shares a block up 11% right now. It's a different story for shares of Eli Lilly. Having their worst day in 25 years is the company falling behind Novo Nordisk in the obesity drug race. We've got more on that coming up. Plus, Crocs, Dutch

bros, duolingo, Celsius, huge moves following results. Mike Santoli is looking at the growing trend of big earnings reactions. So stay with us. Welcome back. Eli Lilly having its worst day since 2000 following its results, but the markets are really focused on the results of a trial for a weight loss pill. Patients lost about 12% of their body weight in a year. The company's CEO saying that that was in line with the company's own expectations, but the street did have higher hopes. Also, about 10% of the people in that trial stopped taking the pill due to the side effects. November Nordisk shares jumping meantime on this news, as the Lilly drug might not be as strong of a competitor as predicted, but that stock is still down 43% this year. So you could say

weight loss in the price of these stocks. Now let's bring in senior markets commentator Mike Santoli for a look at the dramatic moves that earnings have caused in the market. Mike. Yeah, and it's been kind of a longer term trend, Morgan. Goldman Sachs has this chart that shows the average one-day move when it's an earnings day or reaction to earnings. That's the top number there. And you see, you know, this is sort of a long-term trend higher. And it's pretty much at an extreme that was not part of the pandemic. Or this is the very end of a bare market recession period in the early 2000s. And then on non-earnings days, volatility is very suppressed. You have very low average moves. So it's essentially the market waiting to react and to essentially reprice these

stocks when you get the quarterly results. There's probably some structural reasons if you go back a while, which is one, it used to be that companies could sort of selectively disclose guidance and how things were going before. And so the performance kind of leaked out into the market a little bit more freely on an ongoing basis. Now it's much more about, you know, rigid disclosures around earnings dates, but also I think there's a lot more short-term tactical players, these kind of multi-manager hedge funds and whatnot, that are really just using earnings, earnings momentum and guidance and what is relative to the whisper number to make their whole kind of buy or sell decision on these names. So what we've seen this quarter is pretty

extreme even in this context. I mean, just to sort of take a step back here, when you look at the valuations we've seen in stocks, I mean, is this a situation where when you have certain companies that are putting up quarters. We'll use an example of this today, right? Beat and raised quarters, and they're still trading down dramatically. It's really a scenario in which you have earnings catching up to where investors have already priced the stock now. Yes, absolutely.

I do think that you have kind of low margin for error, given where valuations are, and also just given the three or four month run we've had in most stocks since the lows of the spring. And then on the upside, when you do have these kind of stampedes into stocks, to me, a lot of times that represents this sort of winner take most type of dynamics in a lot of these sectors or just the recognition that you've had trillions of dollars in value gained by individual companies that are just on the right part of a secular trend. So people feel as if you can actually buy them higher when in fact they're reacting that way on earnings. Okay, Mike Santoli,

thank you. We'll see you later this hour. We've got more earnings to bring you. MP materials results are out and it's a beat. Adjusted loss of 13 cents per share. That was better than expectations. Revenue also topping estimates at $57.4 million. That's of 84% year-over-year, thanks to increased production of its U.S. rare earth metals. CEO and founder Jim Litinsky telling me the beat, mainly driven by faster growth and profitability in the magnet segment. MP is not providing an outlook, but coming off of a quarter of massive investment news, a big public-private partnership that was announced with the Pentagon, a half-billion dollar deal with Apple for its American-made rare earth magnets. And I am going to take us to President

Trump at the White House right now for some breaking news. Does he have to agree to be Zilitsky? Is that what you're saying? No, he doesn't. No, no. So would you think that means? They would like to meet with me and I'll do whatever I can to stop the killing. So last month, they lost 14,000 people killed last month.

Every week is four or five thousand people. So I don't like long waits. I think it's a shame. And they're mostly soldiers. They're Ukrainian and Russian soldiers. And some people from the cities where, you know, missiles are lobbed in and you'll lose 35, 40 people a night, which is terrible. But no, mostly it's soldiers, and you're talking about, on average, 20,000 a month. 20,000 people are dying a month, young, generally young people, soldiers.

We're going to speak about soldiers. We'll see you over for. Thank you, Stephen. Thank you, Press. Thank you, President Trump in the Oval Office. Obviously, on the heels of this news that he is looking to nominate CEA chair, Steve Myron, to that vacancy on the Fed, just tuning in there to see what other news we could get here for our investing audience. But we're going to check out shares of Figma because those are falling sharply again today.

We're down more than 30 percent since the close on its debut day, which was just last Thursday. Well, the same fate befall. Today is hot IPO, Firefly Aerospace. That stock pricing at $45. It opened at $70. It closed to just over 60. We've got much more on the space economy. That's coming up on overtime.

Welcome back to overtime, Firefly Aerospace debuting today, rocketing higher. The stock closing up some 40% after opening well above the $45 per share pricing level. By the way, that IPO price higher than the all. already hiked range and an upsized offering. I spoke with CEO Jason Kim this morning on Squawk Box ahead of the first trade, and I asked him, what's fueling the demand for the space sector?

We're seeing a lot of growing engagement with investor community. And if you look at some of the things that we're doing, like the 24-hour, tactical responsive space launch and the successful loon landing, and we're building a 16-toned-reson usable rocket called Eclipse, as well as a multi-mission orbital vehicle called Electra.

Those are all things that are going to help with future space domain awareness missions, future Golden Dome missions. There's annual lunar landing missions, and you just heard the Secretary of the Department of Transportation and Acting NASA Administrators to say that they're interested in putting nuclear power plants on the moon. So we were the first commercial company to do that, so we want to be able to contribute all of our capabilities to support all those great missions. Well, joining me now for more is Andrew Shannon.

He runs Procure Space ETF, ticker UFO. It's one of the largest funds dedicated to the space economy. It was the first one out into the marketplace. And, of course, you're also CEO and co-founder of Procure AM. It's great to have you here. Great to be back. What are your thoughts on this Firefly IPO today that we got? It was 25 times oversubscribed.

And Firefly just sort of dovetails into what we've already seen from some of the other, what I would call Space Tech, Defense Tech, IPOs we've gotten this year. just what we're seeing in commercial space, publicly traded companies in general? I think companies are excited for this current IPO window. It's giving them the opportunity to, from what we saw today, raise even more cash than maybe they were expecting. Seeing that they raise about $868 million from the sale is going to help the company build out its runway, and it has a lot of really ambitious goals.

So looking at a time like today where markets have been, you know, very near all-time highs is an exciting time for these companies to come out. Yeah, it's not profitable. They're, you know, in the tens of millions in terms of quarterly revenue, but they have a $1.1 billion backlog. And I think one of the things that's interesting to me is that some of these names are trading on the promise of space and the space economy that we're seeing usher in. How much of it hinges on government involvement and government support? It helps. This isn't a company that's completely reliant on just government contracts. So they are looking for commercial clients and others.

Certainly, you know, NASA helps, the Pentagon helps and anything that they could do with Space Force. but to the more, the more they're able to diversify, something like we've seen Rocket Lab be able to do as well. That's also helped keep excitement for some of these other names. And, you know, Rocket Lab, AST Space Mobile, these are all companies that people weren't maybe that familiar with a couple of years ago. And you do see people trading them at some pretty significant premiums at times. And, of course, we're awaiting Rocket Lab results here in this hour. We haven't gotten them yet. But in general, we're seeing a lot of these space companies that are publicly traded report earnings.

Quite a few of them are in the UFO fund. What is the takeaway? You know, we've been really happy seeing how these space companies have performed as far as a broad industry. You know, you look at things like the space report that comes out and they keep on showing us that space revenues are increasing and the size of the space economy is increasing. I think a really important part is going to be government spending. Certainly the NASA budget is up in the air, but things like Golden Dome are making people pretty excited about the opportunity for companies to win some of these contracts. And to the extent that they're able to, you have a company like Firefly that has some interesting partnerships with a lot of other primes already. And there's a lot of confidence when you see big companies wanting to partner with companies that maybe people aren't as familiar with.

You think the IPO pipeline is strong for this subsector? You know, we've had three so far this year. It's tough to say who's going to be out there. I know Sierra teased a little over a year ago that they wanted to be out in 18 months. If you're on the fence about doing it, now seems like an interesting time. and I think companies are starting to step up. One of the other things I think is interesting is some of the top holdings in your fund

are actually what I'll call OG space names. I think about Viasat, for example. They've been around, they've been making money for a while in this space economy. And for some companies, it's not a straight line. And so to the extent that companies are able to diversify, find new clients, get involved in other businesses,

they're able to position themselves well now because several years down the road, there are going to be areas that are really important. And if you're building it now, you might have a chance to win those contracts and be a winner in the future. All right, Andrew Shannon. Great to have you here on set. Thank you.

Thank you, Morgan. Well, we've got win earnings out. Contessa Brewer has those numbers for us. Hi, Contessa. Hey there, Morgan. Let's get the results on this luxury casino company, Win Resorts. Revenue in line at $1.74 billion, but earnings miss a $1.9 per share versus consensus expectations of $1.21.

Listen, I want to highlight here the sharp departure that we're seeing in results in Las Vegas from its competitors. Wynn set a second quarter record for profits in Las Vegas with adjusted property EBITA of $235 million versus the streets expectation of $221 million. We just heard weakness from Caesars, from MGM room rates, lower, not so for win. And that's important because we've seen international visitation decline there as well. Macau missed on all metrics, in part because of bad luck where it really matters. The VIPs got lucky and win, not so much. There, you're seeing the shares off by a percent and a half. The call is starting, well, it just already started, so I'll leave you, Morgan, and go jump on.

Okay, Contessa Brewer, thank you. Up next, Mike Santoli looks at why NVIDIA shares may actually be cheaper than fellow MAG7 members, Microsoft and META, even though it's outperforming both of those stocks this year. And later, why tariffs could become the Grinch that stole Christmas and cost you a whole lot more to buy everything from gifts to decorations like trees and lights. Stay with us. Welcome back. Let's check on some big movers right here on overtime.

Starting with Trade Desk, small beats on earnings and revenue. Similar story with the guidance, basically in line with estimates. The company also naming a new CFO, nonetheless, those shares are down 26% right now. Expedia moving higher, though, beating on earnings and sales, raising its full your guidance for earnings, revenue, and for bookings. Those shares up 14%. And Maple Bear, this is the company better known as Instacart, also rising. earnings and revenue topping estimates saying gross transaction value, everything in its customers, everything its customers spend on food, will be above estimates those shares up 7.5%. Pinterest, though, that's falling after reporting earnings of 33 cents per share.

And also, we're looking for 35. It did beat on revenue with just under a billion dollars. The company saying it has 578 million monthly active users globally, but those shares are down 13%. Now, let's bring back Mike Santoli for a look at the way that. market has been rewarding companies that have gone all out on AI spending. Mike? Yeah, Morgan, we're still for now until further notice in the kind of everybody wins phase of the AI boom where you have Microsoft meta, Nvidia, right? They're on either side of the AI buildout. They're all up, you know, between 23 and 35 percent year to date. The S&P 500 is up less than 8 percent on a year to date basis. Looks like a pretty similar cadence too, right?

everyone's saying if you're leading an AI in whatever fashion, we're willing to capitalize you pretty generously. Now, look at what's going on with the valuations based on free cash flow. Now, the thing about the big cloud platform companies and social platform companies like Meta, Microsoft, Amazon, is you always were able to say, well, they have access to massive free cash flow. It's a low capital intensity business, not anymore. So this is the free cash flow yields. It's how much free cash flow divided by the equity market cap of the companies. And you see Microsoft and Meta, now down below 2%. That means the stocks are trading at more than 50 times this coming year's free cash. So this is a 12-month forward measure, whereas Nvidia, which is collecting all the money from these companies,

is now has a good deal higher free cash flow yield. It's up near, you know, 3%. So not necessarily high, but definitely a beneficiary on a net basis. So implicitly, the market is saying that they believe all this spending is just going to be enlarging the pie, making everything more productive. It's not going to be redundant. result in overcapacity anytime soon. So we'll see how long we can stay on that track in this market. Okay. What's interesting to me is the fact that you have seen the sell-off in some of the AI infrastructure winners as of late. So maybe some of those beneficiaries that aren't the big tech companies themselves, but in terms of some of the dollars we've seen spent. Well, yes, I do think that there are some companies that were maybe either late to it or they're not exactly at the center

of the action. I mean, whether it's super micro, for example, that did have. have a tough week, or some of the industrial plays that are building out some of the electrical infrastructure. They haven't necessarily kind of gotten washed out, but they've had a little bit of a setback in terms of, you know, maybe they got ahead of themselves valuation-wise. Okay. Mike Santoli, thank you. Warner Music Group beating sales estimates. And that is music to the ears of investors. Up next, we'll hear from the CEO in an exclusive interview. After that stock closed up almost 4% today.

And as we head to break, here's a look at how President Trump's tariffs could impact everything from gifts to decorations this Christmas. 87% of Christmas decor comes from China, and the rest comes from other Southeast Asian countries. And so there's quite a big tariff impact that's hitting this year. And so what many retailers are looking at is they're saying, hey, the average tariff I'm paying across these countries is going to be. be about 25%. And I don't want to spend more than my original $100 million. What we think that means this year is there's going to be about 15% fewer goods on shelves this year than normal. Once you start seeing the big, big, big box stores bringing goods in, I think you have, you know, six weeks after those come in to find what you want, and then I think we're going to start seeing

these shortages. We sell specialty lights that are still made in China, and so with a 63% tariff we didn't think that consumers were going to be willing to pay that price jump we couldn't buy as many goods this year because we had to save money to pay the tariffs so one of the categories we cut temporarily for this season are Christmas lights we see a huge bump in our in our daily sales starting on November 1st because people are taking down Halloween and then November is really the big month for Christmas decor sales and it peaks over Thanksgiving weekend in the United States. Christmas in July this year, which is a big event for us, was actually very soft

specifically in the U.S. market, and that certainly makes us nervous heading into this holiday season. Welcome back to overtime health care, the worst performing sector on Wall Street today. That's despite that. We had Beckton Dickinson and Zimmer Biomet Holdings. The big winners in the S&P 500 overall, both medical technology companies beating Wall Street's estimates, raising their full year guidance. And you can see those shares each finished up about eight, almost 9%. Well, meantime, shares of Warner Music Group outperforming today as well. The entertainment giant reporting total revenue up 9% year over year. Subscription streaming revenue grew over 8%. Warner did post a net loss in the quarter while analysts expected EPS of 27 cents per share.

But despite that, the stock closing over 3% higher and joining me now exclusively is Warner Music Group CEO Robert Kinsel right here on set. It's great to have you. Welcome. Thank you for having me. All right. So let's start right there. Because if you told me 20 years 10 years ago that your growing engine would be subscriptions from streaming service, I would have left. And yet here we are. It is the future. Yes, and it is the present. It's not just the future. It's incredible. It just shows how resilient music is. 20 years ago, none of us could have imagined this today. It's a high-growth industry. Very resilient. People love music. It makes them feel, whether it's sadness or its happiness,

which means it's resilient to any kind of economy. So what we're really focused on is just delivering against our priorities and making sure that we do an amazing job for our artists, homeguiders, and shareholders. Yeah, it's interesting. We've seen Spotify, for example, raise prices, I believe, outside of the U.S. just recently on their services. You've also negotiated contracts with some of these different streaming platforms as well. How does that set you up for the future? Well, we think about our future in the following way.

Our strategy is to deliver on three things, increasing our market. chair, and we do that by working with artists or new stars like Somber and Alex Warren, superstars who've been with us for a while, like Bruno Mars and Charlie XX, or iconic stars like Madonna and Fleetwood Mac. We accomplish our market share through those, and we've had, you know, market share expansion in the past quarter of 1% in the United States, which is the most valuable market, so that's what's helped us deliver some other results. Secondly, the priority is to increase the value of music and you just touched on it our our industry is going from volume only growth to volume and price driven growth so the recent Spotify price increases in many markets

around the world is at the stemment to that and the third piece of the strategy for us increasing our efficiency because that is really how we drive not only value creation for shareholders through expansion of our margin but also have flywheel of reinvestment into music so that we can drive further growth. And then we augmented with our joint venture with Bain Capital, which gives us additional firepower to drive that growth and underpin that by technology to unlock local creativity on a global scale. Yeah, and you just touched on it. You announced a restructuring recently, but the Bain Capital joint venture is particularly interesting because there's so much money in publishing,

and we've seen some big bidding wars for some very sought-after catalogs from artists. So how does this position you to go after more of those rights? It positions us great. Now we have a lot of firepower. We have an amazing partner with great domain expertise in music. They share our understanding of the industry and the belief that iconic IP will have greater value in the future and that it is AI resilient and that actually iconic IP will be valued more in the age of AI in general. So we have an amazing partner. We have lots of capital to invest and but most importantly what we've worked on is develop a plan that helps us invest this better in a more

more targeted way with better ROI. And that's why we're excited about our growth prospects. You just said it. AI. What is this new era of AI look like for music, especially at a time where there's a lot of debate about IP and theft and music that's being made artificially through AI? So I think, you know, if you look back 20 years, music has a lot of experience with disruption. It's always the first industry to get disrupted pretty much by any technology. And so So we've learned a lot from it and we've managed to create a lot of value in the past 10, 15 years as we've rose through the disruption. AI is no different.

We look at it as an opportunity, but every opportunity for us, when you're in the IP world and when you work with artists or people, you have to also make sure that you look at protection of the IP and protection of name likeness, et cetera, for the artists. So we start with that, we have great relationships with very large companies, whether it's the Google, whether it's the Googles and apples of the world, to make sure that our IP and our name, likeness, and voice of our artists is protected. But at the same time, we're looking at the opportunities

how to drive further acceleration of our IP in the future. So you're in the business of creating content and distributing it. We just got Live Nation results a little bit earlier this hour, too. And one of the things they're talking about is the summer live music season has kicked up with a strong start. They're talking about record attendance, ticket sales, and spending at venues, more than 130 million tickets for Live Nation concerts sold this year through July.

That's up 6%. I guess how does it speak to this broader ecosystem and what people are willing, consumers are willing to spend their money on right now? People love music. I mean, I look at Live Nation as our cousin, effectively, because they're in the music business, obviously different than ours,

but it's all centered around love for artists and their craft. And we're so thrilled to be part of it because we're creating the stars of the future. We're working with the stars from the past. We're working with iconic catalogs of artists who might have passed already. And it's just an incredible privilege to actually handle those and be the stewards of their legacies and keep on carrying it on. My own daughter's favorite band is Fleetwood Mac.

It's amazing to see that because they rediscover iconic catalogs through new social platforms. And then it drives consumption of those catalogs and keeps them current. And we really focus on that. What's your favorite artist? My favorite dogs, I cannot tell you because it's a... It's like picking a favorite child. It's like picking a favorite child. We have too many children at the Warner Music Room.

Okay. Robert Kinsel, thank you so much for joining me here on set. Great to have you. Pleasure to be here. Well, President Trump signing an executive order, opening up 401K to alternative investments. We've got to look at the potential Wall Street winners. That's coming up next.

And don't miss a first on CNBC interview with OpenAI CEO Sam Altman on the launch of GPT5 and how his company is positioned in the AR tech race, or AI tech race, I should say. That's tomorrow at 8 a.m. Eastern on Squackpx. Welcome back to overtime. President Trump signing an executive order today, allowing 401K plans to offer alternative investments such as cryptocurrencies and private equity. Leslie Picker has the details. Hi, Leslie. Hey, Morgan. Yeah, the aim of the EO is to allow 401K investors to have greater access to

alternative assets, although technically they already do have the ability to invest in private markets. Here's what the order does. It directs the Secretary of Labor to re-examine guidance on fiduciary duties regarding alternative investments in 401Ks, and it also instructs the DOL to clarify its position on Alts and to determine alongside Treasury and the SEC whether regulatory changes need to be made. That's the key here, because as I just mentioned, 401Ks can invest in alternative assets. But plan administrators often choose not to because of litigation risk. That's because alternative investments charge pretty high fees, meaning fund managers need to make a strong fiduciary case and a performance one that these assets are worth including or they risk

getting sued. BlackRock's head of retirement telling CNBC in a statement that they, quote, applaud President Trump's executive order, which marks a major step forward in modernizing the retirement plans of everyday savers. This EO has been in the works for a while, and shares of publicly traded alternatives firms did end the day lower, guys. Why did they end the day lower? Is it because we just saw a run-up in anticipation of the executive order, so it turned into a sell-the-news event? Yeah, I think all of these details were priced in. I think there was some hope that there would be a little bit more clarity on some of the bigger impediments to getting alternative assets into 401Ks, But largely the EEO just sets out kind of a roadmap to study these things.

So it's a little bit more TBD on the exact impact on this $12.5 trillion market, which is 401K investments. Okay. Leslie Picker, thank you. Well, let's get you set up for tomorrow's trade today. There's no economic data on the calendar, just a pair of earnings to keep an eye on Under Armour. And Wendy's are the big ones we're watching. We're going to see if Wendy's follows in McDonald's footsteps, which had a nice beat earlier this week and really focused on the value proposition for the consumer. Meantime, it was a mixed day for stocks.

We basically saw some of the error let out of the gains here, although the NASDAQ did finish fractionally higher. Bond yields moved higher too. That's going to do it for us here at overtime.