Closing Bell - Closing Bell: Retail Sector Under the Weather, The Momentum Migraine 2/24/25

Episode Date: February 24, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

All right, guys, thanks so much. Welcome to Closing Bell. I'm Scott Wapner, live post-9 here at the New York Stock Exchange. This make or break hour begins with stocks looking for some stability today, especially among momentum names, which continue to correct. We're watching all of those for you right now. Look at Palantir down another 10 percent, Vertiv down five, Vistra down five as well. And there are others that continue their sell-off. We'll have special reports on each. All of this happening, of course, as NVIDIA readies to report earnings midweek. We'll ask our experts to make sense of all of it. In the meantime, we'll show you the scorecard here with 60 to go in regulation today. We did recover somewhat midday. The Dow's up a third of a percent, and the S&P's still fighting it out today. NASDAQ is negative. Some of the airline names are getting a bit of a lift today. Apple and Alphabet are higher. Goldman and Bank of America rebounding as well following last

week's sell off as we continue to watch financial stocks, too. We are also monitoring this hour the meeting at the White House between French President Macron and President Trump. We're going to take you there live as soon as the Q&A does begin. Both men still making their remarks to the gathered group there at the White House. We do begin with our talk of the tape, the continued sell off and some of the more expensive growthy names in this market. We do have reporters, as I said, on that case. Seema Modi is watching Palantir today. It's CEO speaking here in New York. Seema, what are we learning from Mr. Karp today?

Is that stock down another, as we just said, 10%? It is, Scott. You know, Palantir CEO Alex Karp really used this opportunity to address the concerns about military budget cuts that have sent shares down about 20% over the past week. Karp says government programs need to be reviewed to instill confidence in business, the country, and that it will ultimately benefit Palantir. The single best thing that helps my company is meritocracy. Pen test everything. Yeah, I don't know. We have hundreds of contracts. Maybe, I don't know, maybe there's a contract that doesn't deserve to be renewed. Great. Maybe there's a contract that does deserve

to be renewed that gets canceled. Pen test everything. Those comments come after a leaked memo from Defense Secretary Pete Hegseth revealing a proposal to cut the Department of Defense's budget by 8 percent this year. Palantir in total makes about 50 percent of its sales from government contracts around the world. Now, when asked about the recent drop in the stock, Karp said, I'm skeptical that the market actually prices effectively, certainly in the short term. The stock down about 10.7% right now, Scott. All right, Seema, appreciate that very much. So that's Palantir. Another story, Robinhood, those shares under pressure yet again today off the worst levels. Nonetheless,

Kate Rooney still down another 2%. Yeah, Scott, it's been a tough stretch for Robinhood. It's been a lot about the valuation. Some of the risk-reward picture has been weighing on Robinhood. It's on pace right now for its fifth down day in a row. Longest losing streak we've seen for the stock since September. That is despite some positive news on the regulatory front and some relief we're seeing from Washington.

This morning we got news the SEC was dropping its investigation into Robinhood over its cryptocurrency business. Robinhood says it got a letter explaining that the SEC had concluded its investigation and does not intend to move forward with any sort of enforcement or lawsuit. Robinhood's chief legal officer, Dan Gallagher, former SEC commissioner himself, saying this morning this investigation never should have been opened. He also said, as we explained to the SEC, any case against Robinhood crypto would have failed. He says we appreciate the formal closing of the investigation. They're happy, he says, to see a return to the rule of law and commitment to fairness at the SEC.

This is the latest win, Scott, for crypto companies in the Trump administration. Many also backed his campaign. These companies did have a tense relationship with the former SEC chair, Gary Gensler, under Biden, and complained of what they called regulation by enforcement. It does follow a similar win for Coinbase that we saw last week. The SEC dropped its lawsuit against that company as well, Scott. A heck of a run for those shares, as you see on that screen, but not over the last couple of weeks. Kate Rooney, thanks very much for that.

To AI demand, power demand especially, remaining a very hot topic, and Vistra shares remaining unsettled. Pippa Stevens here with more on that. Pippa? Hey, Scott. Well, Vistra is down another 5% today, building on last week's double-digit loss with Constellation and Talon Energy also in the red, amid fears that more efficient AI models will ultimately cut overall power demand, which had been the catalyst propelling independent power producers to record levels. T.D. Cowan also saying today that their channel checks point to data center lease cancellations from Microsoft, although the tech giant told CNBC its plan to spend over $80 billion on infrastructure this year does remain on track.

Now, both Vistra and Constellation are now down more than 20% since January 27, when deep-sea concerns first rattled investor confidence in these names. Bank of America also today cutting its target on Vistra and reiterating its neutral rating, noting the company has not yet announced a major deal with a hyperscaler. Vistra does report on Thursday where commentary on the company's data center pipeline will be top of mind. Scott. Pippa, thanks for that. That's Pippa Stevens. Well, the big event of the week, despite what's happening with momentum names, NVIDIA. Seems like it's lost its momentum, reporting earnings on Wednesday. That stock treading water lately. Deepwater's Doug Clinton here on set with his

expectations. Good to have you here. So we've seen what's happened with the momentum names, which I'll get to in a minute because you've got some of those in your portfolio. But what about NVIDIA? What should we expect midweek? I think you have to look, Scott, at what have we learned since DeepSeek. I mean, DeepSeek is really where NVIDIA went off the rails and sort of lost its momentum permanently. And we've learned two things. One is that basically all the hyperscalers continue to spend. And in fact, if you look at the beginning of the year, what the expectations were for CapEx on the hyperscalers versus now, it's up about 30%. So not only are they still spending, they're spending more. We've learned that. The second thing we learned is Jensen actually just gave an interview

last week where he said he thinks investors got the deep seek thing completely wrong. That's right. He makes the argument that this is all going to lead to more compute, not less. Which really echoes some of the commentary we've gotten from CEOs of the hyperscalers when they've spoken over the last couple of weeks. That's right. I mean, everybody has basically come out and defended that this CapEx boom is going to continue. NVIDIA's report will sort of be the final verdict, I think. And I think if you put all of what we've learned together, it seems like the report should be fine. Will that be enough for the stock to move up? You use fine. I mean,

fine is probably not going to be good enough. And much of the commentary certainly today is that the ability for NVIDIA to beat and raise at such a magnitude as they have in the last couple of years is going to run its course at some point. And the market's going to have to decide if that's okay. I think the expectations going into this quarter, though, use the word fine. Fine might actually be enough, because I think there's more fear going into this quarter about NVIDIA, because everybody knows if you're following AI and you've seen the deep seek thing, you know that if they have a bad number,

the stock's down 15, 20%. I mean, it will get crushed. So I think there actually could be an alleviation of fear if numbers are just fine, and they could be better than fine, I think, given what we're seeing again on the CapEx side. How about the market overall right now? When you look at the correction

that's taking place in momentum, these are the growthier, more expensive, in many cases, technology-focused names outside of the Mag7. Yeah. You know, you think about this report from Microsoft and them potentially cutting CapEx spend. They say they're not. I actually think that's a reflection of the broader attitude in the market. The vibe has shifted. And I think investors in the market more broadly, they sort of almost want to believe that the AI trade is over. They're looking for evidence, reasons to doubt. And so I think that's the hard thing for this trade right now. Momentum has lost its momentum. From our perspective, the AI trade is still real. I don't think this boom is over. I still think we have two

to four years to go. But we always go through these periods in technologically driven booms where you have doubt. That's a healthy part of the cycle. And I think we just need to work through this doubt. Maybe NVIDIA earnings get us through this. I don't even know, you know, quite honestly, if it's doubt more than it's questions about just how fast these stocks ran up. A lot of them, the Palantirs, the Arista Networks, which you own, for example. I think there's still great promise from the investor class and the investor base out there, but that still might not justify the valuations that a lot of these stocks traded to. I think that's fair, but I think you have to also kind of compartmentalize them in two ways. If you think about the hyperscalers, those valuations, I think, largely are still reasonable, even though they're a large percentage of the market, which makes people

concerned. We were talking about mid-20s PEs for them. Some of the other more growthy momentum names, I think some of those still have more upside that the multiples look expensive now, but as they continue to grow, and that is the fundamental question, those multiples actually will appear higher than they will be in the future. Well, I mean, you know, you could look back and say NVIDIA is a good case study in that. As the company experienced incredible growth and their guidance through these last couple of years, the multiple has come down. But the multiple of an NVIDIA, for example, wasn't nearly as high as the multiple of some of the stocks that we've been talking about out of the momentum space that are still undergoing a correction. That's right. And I think you have to pick and choose through that space.

I mean, we just talked about Palantir briefly. I mean, that one, I think the multiple is really hard to justify. We've owned it in the past. I think it's a great company, but it's hard to pay. I think last time we looked at it, I mean, it's over 60 times sales, if I remember correctly. That's a hard multiple to pay. I think last time we looked at it, I mean, it's over 60 times sales, if I remember correctly. That's a hard multiple to justify. Some of the other names where I think it is more reasonable, maybe you're paying 30, 40, 50 times earnings. I still think you might have upside to growth there where that number is not actually as high as it appears. So what about the other

stocks? It feels like we have gathering uncertainty, a lot of it coming out of Washington. That has hurt, if it's a growth scare, that's hurt other parts of the market. You know, Russell's down 5% in a month. And part of the 493 that everybody likes to point to and suggest there's going to be this broadening, as long as there's some degree of uncertainty, that broadening is in trouble, isn't it? I think it is. It's funny, like every year for the last two years, it feels like, well, this is the year for small caps and this is the year of the broadening. And we still haven't seen it. And in an odd sort of contrarian way, I don't know if you can get the alleviation to get a broadening unless the mega caps continue to perform well. Like, you know, everybody wants the mega caps to sort of underperform, to believe in the broadening story.

But I actually think they are such an indicator of strength of the broader economy that it would be counterintuitive that they would have to drastically pull back to allow the rest of the market to have this broadening. I don't think that's going to happen. Well, I mean, it actually, for a moment, it started to happen, right? You know, tech was a big underperformer uh as the rest of

the market uh actually did uh quite well you guys you know what i'm going to thank you very much for being here i'm sorry for being abrupt at the way i do that but we're going to go to the white house now as we do have this news conference between president trump and president macron they are taking questions now ran on you're accomplishing that you've got the support of the american people including stopping the war in uk Ukraine if you can comment on the latest Harvard poll I appreciate that well I was honored by it it was a big poll and it's uh usually a poll that leans on the other side of things the other side of the world so to speak but the Harvard poll is a respected poll and it has us not only leading but leading by a lot and leading on every

single issue that we've talked about. And as I said, we've become the party of common sense, and I think that's a very important element now, common sense, because what's happening in the world and even in this country, some of the things that took place, many of them are now canceled and the rest are being canceled as we speak. But we've moved very rapidly and, I think, very effectively. So I was honored by that poll. Thank you very much.

Appreciate it. Go ahead. Please, go ahead. Mr. President, you said before that you would like to see Russia. Yes. Go ahead. Are there any conditions that you want to meet with Ukraine? And you're meeting in Saudi Arabia with President Putin. Would that happen regardless of any progress on the Ukrainian side?

I think the meeting in Saudi Arabia was a fantastic one. We met with the Crown Prince, who's a fantastic young guy. He's young but with great imagination and tremendously respected all over the world. And he goes right to the King, and the King is incredible. Gotten to be friends with both of them very much, and they want to see this ended. And they're going all out to make sure

that it is ended. I think Russia, likewise. I've spoken to President Putin, and my people are dealing with him constantly, and his people in particular, and they want to do something. I mean, that's what I do. I do deals. My whole life is deals. That's all I know is deals, and I know when somebody wants to make it, and when somebody doesn't, I know is deals. And I know when somebody wants to make it and when somebody doesn't, I will say this, before I came here, there was no communication with Russia whatsoever and Russia wasn't answering calls. They were not talking to anybody,

they wouldn't talk to anybody, and people sort of accepted that as being that they want to go forward and just keep going without stop. But when I got here, one of the first calls I made was to President Putin, and we were treated with great respect, and they want to end this war. So that's a big thing, because I didn't know if I could say that, but it's a big thing. They want to do it. And the group in the front row that I introduced, they're all very active in it. And we're working on deals right now, transactions right now. And in particular, the big one is to

get the war stopped, whether it's ceasefire or direct to an agreement. I'd like to go directly to an agreement, but ceasefire will always happen a little bit quicker. And every day you're saving thousands or at least hundreds, but thousands in some cases, lives. So we want to see if we can get that done very quickly. Yes, for the president, please. Thank you. Cindy Kovach, I'm a correspondent based in Paris.

Question for both of you, actually. Mr. Macron, you were one of the last Western leaders to speak to Putin before Ukraine's invasion. What advice, what recommendation could you make to President Trump to make sure that this time you can get strong enough guarantees from Putin to get a peace deal that lasts this time. And Mr. President Trump, what makes you think you can trust Putin in those negotiations? Thank you.

Look, I will never give any advice to President Trump. We have friendly and trustful discussion. But my experience with President Putin is the following. Number one, I always think it's good to have discussion with other leaders, and especially when you disagree. I stopped my discussion with President Putin after Butcha and the war crimes because I considered that, I mean, we had nothing to get from him in that time. Now, there is a big change because there is a new U.S. administration. So this is a new context.

So there is good reason for President Trump to re-engage with President Putin. But my experience is the following, and I shared it with President Trump and the team. In 2014, our predecessors negotiated peace with President Putin. But because of the lack of guarantees, and especially security guarantees, President Putin violated this peace. And I had several discussions, especially beginning of 2022, several times, seven hours with President Putin, 15 days before the launching of the attack. He denied everything, but we didn't have security guarantees. So this is why being strong and having deterrence capacities is the only way to be sure it will be respected.

And I insisted on that. And this is why I believe that the U.S. has the capacity to do so. And this is why I think we should never say, I will never send a dimboot on the ground because you give a blank check to violate any type of commitment. So I think it's good to have discussion. I think it's useful to have negotiation. I think it's super important to go to the peace. But my strong point was to say, let's try to get something first, which can be assessed, checked and verified. And let's be sure that we build sufficient guarantees

on the short run. And this is where we are ready to be engaged. As for France, a lot of my European colleagues are ready to be engaged. But we do need this American backup because this is part of the credibility of the security guarantees. And this is our collective deterrence capacity.

And I have the feeling that the President has this capacity. I think it's very much to the benefit of Russia to make a deal, and I feel that we'll do that. It is what it is. Again, it's a war that should have never been started. It's a war that would not have been started if I were president, but it did start, and it's at a terrible level where cities are burned down and shot down to the ground. It looks like demolition sites, a whole big pile of demolition sites, and we got to get it stopped. Too many people, too much agony. The whole culture is destroyed when you rip down some of those ancient, really ancient or near ancient buildings. It's it's so sad to see. But I think it's very much to the benefit of this tremendous distrust on both sides. That's why it's good that I'm coming in now. But I think it's to the very much benefit of Russia to make a deal and to go on with leading Russia in a very positive way.

That's what you have to do. But I really believe that he wants to make a deal. Maybe wrong, but I believe he wants to make a deal. Yeah, go ahead, please. Mr. President, next week there's a key deadline for your Canada and Mexico tear fully do I believe those countries have done enough on the border to stop those from taking effect and for president Macron I'm wondering if you believe that this critical minerals deal with Ukraine represents a de facto

security guarantee by the United States since the US would have an interest in protecting those reserves in Ukraine. Thank you. We're on time with the tariffs, and it seems like that's moving along very rapidly. We've been mistreated very badly by many countries, not just Canada and Mexico. We've been taken advantage of. We were led by, in some cases, fools, because anybody that would sign documents like they signed where they were able to take advantage of the American people, like has happened over the last long period of time, except for a little four-year period that took place four years ago. But anybody that would agree to allow this to happen to our country should be ashamed of themselves. No, the tariffs are going forward

on time, on schedule. This is an abuse that took place for many, many years. And I'm not even blaming the other countries that did this. I blame our leadership for allowing it to happen. I mean, you know, who can blame them if they made these great deals with the United States, took advantage of the United States on manufacturing, on just about everything, every aspect that you can imagine they took advantage of. I look at some of these agreements, I'd read them at night and I'd say, who would ever sign a thing like this? So the tariffs will go forward, yes, and we're going to make up a lot of territory. All we want is reciprocal. We want reciprocity. We want to have the same. So if somebody charges us, we charge them. It's very simple, but it'll be very good for our country. Our country will be extremely

liquid and rich again. Plus, we're doing other things, as you know. We're finding tremendous waste, fraud, and abuse at levels that nobody thought possible. You're seeing what's going on. And that was also part of the Harvard poll. Do you agree with what President Trump is doing with Elon and others that are looking for the waste, fraud, and abuse? And the numbers were staggering. It was like 70 percent to 2 percent. Everybody wants to find out. They don't like it. And, you know, the radical left or whoever it may be starts screaming about the Constitution, but it has nothing to do with the Constitution. It has to do with fairness to this country. It has to do with being ripped off. And when you read the things that all of these billions,

and I mean many billions, hundreds of billions of dollars have been spent on, that's all you have to do is stand up here and read them. I could stand up all day and read the kind of things where we're spending all of this money. The good news is that when you think of how rich a nation we can be when we get rid of this, you know, sometimes you'll buy a company and you'll see it was really well run. They accounted for every penny. Well, not much you can do there.

You got yourself a bad deal. This one is the exact opposite. Tremendous fraud, tremendous waste. And when you think of what it is, you know, Elon uses an expression, caring. If we had people that cared, just cared a little bit when they did contracts, when they negotiated with outside vendors on behalf of the United States. That's what I'm doing now. I'm negotiating for the people of the United States. So we're doing a great job of it. I will say we found it'll be hundreds of billions of dollars of waste and fraud and abuse. Thank you. Please.

Luke, I think this discussion is a very important one. OK, that's President Trump there and the French president, as you see at the White House, discussing their bilateral today. Most of it centered, as you heard there, on the war in Ukraine and the president's desire, as he said, to end that, saying we've had great discussions on ending that war. Our focus is on achieving a ceasefire, he said, as soon as possible. Ultimately, he hopes a permanent peace.

Describe the meeting with Mr. Macron, another step towards ending that war, and that Macron agrees that this is the right time and may be the only time, in fact, to end that war. I want to bring in Eamon Javers, who's been listening to this as well. And, Eamon, you did hear at the end as well a comment on tariffs, which the president said, quote, relating to Mexico and Canada, of course, the tariffs are going forward on time and on schedule. Yeah, so it appears that the president didn't get a deal that he likes with Mexico and Canada in order to further delay those tariffs. So he says we're still on track there. And just an extraordinarily dynamic and delicate moment here in this negotiation over the future of Ukraine, as the United States has sort of

thrust itself in as the dealmaker here, as you heard the president there say, I'm a dealmaker, that's what I do. And yet the terms of this potential negotiation are so wide open as we sit here right now, whether or not the Russians will pay for any damages done, whether the Russians will give up territory, whether the Ukrainians will have to reimburse the United States in some way as President Trump wants for the investment the United States has made in Ukraine, whether that's through minerals or in some other way, what the role of the Europeans will be in this ultimate deal. All of that sort of wide open in a free-for-all negotiation at the moment. And you can see Macron and Trump here both very much at pains to emphasize their common

ground even as there are just enormous gulfs in difference in their approach to this war. Macron saying several times during this event and a previous event in the Oval Office that Russia was the aggressor in the war in Ukraine. That's something that Donald Trump does not like to acknowledge. But Macron making at pains to say that in front of Donald Trump here. And Trump, for his part, insisting that Ukraine has to pay the United States back for some of the investment that the United States has made and saying that the Biden administration made a terrible deal by giving open-ended defense aid

to the Ukrainians without guarantees of any kind of payment or loans or resources in exchange for that. So a fascinating, wide open, multidimensional negotiation rolling out right in front of us here, Scott. Yeah. And we'll continue to monitor it. Eamon, thanks very much for that. You'll let us know what else we might need to know from those two gentlemen at the White House today. Eamon Javers, thank you. We'll bring in Lauren Goodwin now of New York Life Investments, Alicia Levine of BNY Mellon Wealth Management. It's good to have you both here with us as well. Lauren, one of the knocks on this market right now is there's too much uncertainty, a lot of it coming from that town where the White House is located, D.C.

How does that factor into how you view the market right now? Well, I think that uncertainty is one of the key reasons why we've seen such balance in the market lately, actually. We have growth that's underpinning a reasonable circumstance for the most part, but I think the market is still seeing the positives and negatives of policy change as roughly balanced. Now, that, from my perspective, is potentially a precarious balance. We have the 10-year Treasury yield sitting right at 4.5%. That's right on the edge of where you start to get into the equity market danger zone. You have news around technology that's been a little more uncertain, policy uncertainty. You add all these things together and you get what looks a little bit like market paralysis.

And there's two points I'd make about that for investors. One is that that policy paralysis doesn't mean investors have to be paralyzed. I think there's a lot of changes we could make here. And the second is that the through line, despite all the uncertainty around tariffs, trade and other policy priorities, is that the world is changing, that we're moving into a more polarized, very, what I think is a very capital intensive investment backdrop. How do you see it? So, you know, it's really interesting because there's a lot of angst about all the policies coming out of Washington, and yet we're sitting less than 2 percent from the all-time high.

And it's kind of a relentlessly flat market, you know, two steps forward, one and a half back. This feels like the year because you really have two countervailing forces. You have the promise of growth and deregulation, you know, countering the threat of inflation and higher yields. And so that's the conversation essentially since we started the year and since we started the new administration. How does this all play into growth and inflation? So the market has not made up its mind yet. I'll say this, you know, I think that it's really important for tech to hold leadership

here because the earnings and the margins come from tech. So if that if that sector starts to falter, if the Magnificent Seven, the top 10 of the S&P start to falter, you'll get weakness in the rest of the index. You will because you really didn't get that. I mean, obviously, you're going to get if the biggest market cap stocks, you know, have a problem. You know, obviously, the S&P may have a bit of an issue. But to start the year, tech wasn't one of the best performing areas at all. It did spread to the rest of the market. You had a nice broadening out.

You had a nice broadening out. It just has to stay in line, right? You can't have a situation where all of a sudden you get too much CapEx and earnings revisions go lower because the margin growth, and we're looking at 13.7% forward margins for the S&P, the highest ever, which is part of the reason why the multiple is being supported here, even with yields at about 4.5% because the margin is so strong. That's all coming from tech and communication services. So that has to maintain itself. So look, we think this is actually a really interesting investing environment because you have more dispersion. You have companies that

are really growing. There are great opportunities. On the index level, we think this is a year where it's positive but unsatisfying, right? At this point last year, we had something like 12 or 13 new highs. That has not happened this year. So it's just more of a conversation. Better for markets ultimately to digest, to move forward. We don't see a recession coming. Growth is good enough. We think disinflation continues later in the year. And let's talk about QT. QT is going to end. That's massively positive for markets and liquidity. Let's just wrap the conversation. How we started the beginning of the show is what's taking place in this unwind in momentum. What do you make of it? I think that the market is still working through something. And though we haven't seen momentum unwind in a way that has me deeply concerned about where we're headed, it does underscore one of our key investment themes for

this year, which is diversification. I agree with Alicia. We have growth that's slowing, but still good. Equity market returns that are probably going to look average, that's a good result. It just might not feel as good for investors after the last couple of years that we've had. When you say average, you mean like what, like higher single, mid-single digits, mid to high single digits? Yeah, 7%, 8% on the equity market. And that's an environment where, look, that's a good result. It's just not as good as the last couple of years. And so when we look at valuations and yields where we are, we are diversifying a portfolio. We're taking gains from the Magnificent Seven, deploying them in digital and energy infrastructure. We actually like international because yields are

moving lower more quickly there. It's creating some cyclical uplift in those regions. And we're deploying equity-like risk in credit where, again, if you're getting 7%, 8% on the equity market this year, why not clip something very similar in a high-yield bond as an example? High, mid-single digits. That's what it sounds like you're calling for, too. We're at 6,600 for the year, which was about 10% coming into the year. It's average. We never really have an average year in the S&P. We think actually this is the year you kind of get an average of like that seven to 10 percent coming into the year.

A lot of countervailing forces, digestion of a lot of price moves. Exactly what you talked about at the top of the hour. And yet so positive. No recession, earnings growth and best ever margins. I like your word resilient or I'm sorry, relentless, because it's been a relentlessly resilient market in the face of a lot. And we are right around these closing highs. So your points are well made. Thank you both.

Thanks for bearing with us, too. We've had a lot of news as we've begun here on The Closing Bell. We're just getting started, too. Up next, we're going to hear from top retail analyst Matthew Boss. He'll tell us what he's watching for. Some of the biggest names in that sector are now gearing up to report their earnings results. He'll join me just after the break right here at Post 9. All right, welcome back. Getting some news right now on AI startup Anthropic.

Kate Rooney has the latest for us. What are we learning, Kate? Hey there, Scott. We're hearing that Anthropic is reportedly now in the final stages of raising another funding round. This would be a $3.5 billion round that would value the startup at $61.5 billion. This is according to the Wall Street Journal, citing sources familiar. We did reach out to the company, no response yet, but this is the startup behind the chatbot.

It competes with OpenAI, was started by OpenAI co-founders, and I should note that number is a post-money valuation, so it would include the cash the company is raising. It does underline some of the investor appetite we're seeing and how eager Silicon Valley folks are to get into some of these AI companies, despite the disruption and the arrival of China's deep seek that shook up the markets. I had heard from sources that Anthropic initially set out to raise $2 billion. The Journal now reporting that it was able to increase that amount during some of the talks with investors. That is, according to people familiar with the matter, this round is reportedly being led by Lightspeed. One of the major venture

investors, Anthropic, was last valued at $18 billion, so roughly a 3x step up in value, Scott. All right, Kate, thank you. That's Kate Rooney. The consumer discretionary sector on pace for its worst month in more than two years, just as several retail stocks get set to report their earnings this week. For more, let's bring in the top-ranked retail analyst on Wall Street, J.P. Morgan's Matt Boss, with his outlook. Welcome back. It's nice to see you. Great to be back.

There are a lot of questions now about what the consumer is doing. Do you share concerns that we keep hearing about? So we put a note out this morning that I think really digs to the heart of it, meaning you've had the worst start to the spring in 30 years, meaning from a weather perspective, you've had store closures, you have the Northeast, you have basically every part of the country except for the Southwest that's been clobbered by unseasonable weather on top of that, 30% more snow. So if you think about what's happened, it's pressured store traffic and it's pressured seasonal sales. You're lapping up

against actually the warmest in 120 years a year ago. So it's just a very unfavorable. In fact, what I think is really interesting is we looked at that Southwest. So states like California, where the weather has been normal, you've seen zero change in consumer spending. In fact, in the month of February, consumer spending in states like California, Arizona, Nevada, up 5%. That's exactly the same as what we saw in November and December, and we know holiday was solid for the consumer. Okay, so I was going to say, well, what about eggflation?

And what I hear you telling me is nothing is an issue but weather for the most part. In terms of trend-setting things that are going on. Yeah, I mean, Scott, you and I have talked about this. What we've said, and I don't think anything's changed, is the selective recession that I think is happening. So what's really driving consumer spending is the 50% of the economy that's driven by the higher-income consumer. $60 trillion of wealth creation since 2019 is the 50% of the economy that's driven by the higher income consumer. $60 trillion of wealth creation since 2019 is the number. Now, at the low end, they continue to be pressured. But at retail, that means those that are offering value continue to win.

That would be your Walmarts. That would be companies that cater to value and convenience. And that's off-price retail, TJ Maxx, which which reports this week but you didn't hear anything from Walmart and their guidance that spooked you a little bit and into that perspective no Walmart actually cited that they're seeing a very consistent consumer but it's a consumer that you need to continue to offer value and also be the most convenient for them that has been the playbook value Value, convenience, and product and innovation that's better than a year ago. Those are the companies that we're seeing win, meaning

I look at a coach brand, a Ralph Lauren. I look at some of these brands that are compounding in the face of what people are calling geopolitical pressures and a tough macro backdrop. If you have product that's better than a year ago, look no further than in the leisure space. Cruise lines are booked out two and a half years right now, and the pricing is at all-time highs. So if you are offering product that's better than a year ago, and you're viewed as a value, meaning you're battling on relative value, not price, that's the equation where you're seeing a real winners versus losers backdrop. It's interesting that you bring up the cruise lines, which the businesses may be doing great. The lines may be booking lines may be long. Those stocks got smoked last week on a comment from the commerce secretary about the companies not paying their taxes. We're talking

double digit percentage declines in a single day. Environment versus stock prices can be two entirely different things. No, you're absolutely right. What we do is we focus on the fundamentals. And that's even with today's piece that we put out. The real analysis was, sure, the retail trends that you saw in January, and I think what you're seeing in aggregate in February, are disappointing. It's showing a moderating trend post-holiday. And it's feeding directly

into the fears of the larger picture market. But when you dig another leg underlying, the trends, in my opinion, are unchanged, and the consumer remains resilient. That was the message that you've heard from companies so far. That's what I think you're going to hear from TJX this week, and it presents opportunities underlying some of this weakness is that your favorite name of anything if you had to pick one would it would it be that would it be ralph so i would say if you're looking for core compounding market share consistency look tj maxx is is just continues to offer that value-convenience combination. If you want to step out on the risk curve and think about brands that have changed the way that they go to business, that's where a tapestry with the Coach brand, a Ralph Lauren, a Birkenstock,

an Amherst Sports with the Arc'teryx growth brand. That's where I would broaden it out and look at best-in-class brands where companies are offering value and convenience. I know we've got to go, but what's up with Nike today? I mean, are you buying any bit of the turnaround story? Look, you and I have talked about that one, too. I mean, look, we see a three-year plan there. I don't believe that anything that the new management that's come on, I don't believe that anything they're doing is wrong. I just believe that that is a materially large revenue base, and that is equivalent to turning the Titanic in the Hudson River.

Wow. Okay. Not just the big ship, but the Titanic. Okay. Matt, thanks. Great to be back. All right. Up next, J.P. Morgan CEO Jamie Dimon sitting down with CNBC earlier this afternoon. Many highlights made, of course. There usually are.

We'll show them to you after the break. J.P. Morgan CEO Jamie Dimon speaking with our own Leslie Picker earlier today. She joins us now with the many highlights. Leslie. Hey, Scott. Yeah, wide ranging conversation. I started with the macro and asked Dimon whether the market jitters around economic growth, whether it be retail sales or consumer confidence or policy uncertainty. We're matching what he's seeing within the bank.

And when he talks to clients, he said it does and that there's been a slowing down. We've had this huge boom after COVID and all the money that was given out and spent. And so we see consumers are kind of back, almost kind of normal. So they don't have all the extra money, but they have jobs, wages are going up. But if they substitute a cheaper product for a more expensive one, they cancel a trip. So you're starting to see, what I put out, normal.

Credit costs have normalized. So it's just almost back to what I call a normal environment. I followed up with Diamond on whether the activities out of Washington tariffs, Doge, cross-cutting could weigh on the economy in the future. He said it depends on the quality of what's done. A more effective government, more efficient government isn't bad. It's actually a good thing if they get overdone. Tariffs properly used, if they're overused, if there's retaliation, yeah,

they could be bad for the economy, but if they're just making up for use for negotiations, making up for unfair trade. So I'm more in the wait and see attitude about how this all plays out. He added later in the interview that tariffs could affect confidence in certain businesses, noting that if you pulled 100 of them, 80 would tell him that they wouldn't affect the business at all. And

some might even be helped by the tariffs. Scott? All right. Great conversation you guys had, Leslie. Thanks so much. That's Leslie Picker. Still ahead, Berkshire Hathaway hitting a record today following the release of CEO Warren Buffett's annual investor letter. We'll discuss when we come back. We're now in the Closing Belt Market Zone. CNBC Senior Markets Commentator Mike Santoli here to break down these crucial moments of the trading day. You've been watching Berkshire Hathaway, of course, hitting a record high today in a weekend in which we learned that they're still sitting on a mountain of cash. And we heard from them for the first time in a while. Yes. And the defensiveness and quality attributes of Berkshire is actually keeping this market from,

you know, from further falling out of bed this afternoon because it is the biggest upside contributor to the S&P. The market cap's back above a trillion dollars. It's actually coming back in line with Tesla. So you want to know what kind of market you have? When Berkshire Hathaway's market cap is exceeding Tesla, it does show you that there's a little bit of a cooling off of some of the speculative spirit. The insurance businesses in particular and the passive interest and dividend income accentuate to investors that it's really just kind of this machine of generating cash, even as the operating businesses didn't show a lot of growth. So I think you could make the case that that maybe can come back a little bit, the actual operating businesses, as earnings growth broadens out. And really more

to the point, this market wants the quality and it wants the defense, even if Warren Buffett says our stock's too expensive for us to repurchase any, much like Jamie Dimon said today. So it's a mixed message, but I think, you know, we're just sort of leaning on the fact that there's so much ballast in this in this stock. I'll come back to you in a moment. Thank you, Mike, for that. Sima Modi is watching Zoom earnings, which are going to be in overtime and telling us now what to watch out for. Scott, this is an important software name to look out to, but just take a look at this chart. The pandemic darling has fallen over 80% from its all-time high hit back in 2020. Since then,

Zoom Video has been unveiling a new suite of tools, pushing mobile usage and unveiling artificial intelligence assistance to summarize Zoom calls to drive enterprise demand. The latest third-party data from SimilarWeb does show that unique visitor traffic did sequentially decline in the latest quarter, but at a slower rate. So that's good news. The bad news, the stronger dollar expected to be a headwind with nearly 30% of its revenue coming from outside the U.S. Software stocks as a whole not holding up well over the past week. Worries around Doge spending cuts. Investors will be looking for a deeper read when Zoom reports after the battle. And Scott, we've got Salesforce on Wednesday. Seema, thanks so much for that. We will see what happens when those numbers hit

in OT, of course, at Seema Modi. Back to Mike. Still an unwind of sorts in the momentum names, and we've been watching those closely today. The Palantirs of the world, although Palantir feels like it's separating itself a bit from the pack in terms of stocks that are remaining pretty weak. Well, it also separated itself to the upside. And so really it is a recoil from this crazy move that it had vertically over the prior few months. I would say it's still very much a market that lacks a strong bid for cyclical or riskier stuff so when you have yields down as we have today and banks down it's telling you the markets getting a little bit concerned about something everything's happening within the normal zone of a

regular old pullback but it does show some unease in there you know you got the two-year yield clicking below 420 we may be repricing for more Fed cuts than we had before and whether that's justension, whether it's just we had a buying binge and a lot of risky stuff coming into the year, and now we have a little bit of a cooling off period, there is a history of, you know, the first six or eight weeks of the year, people going nuts in the NASDAQ and then, you know, backing away for a while. When we came into the year, I think pretty positive on what the outlook was going to be from policy and

the economy. And I'm not saying we've done a 180 since then, but we're certainly turning a bit to maybe a more neutral for the moment stance until we get more details to put with some of the noise. Yeah, a little bit of a loss of patience with seeing what the actual tangible realities of policy are going to be. We're still feeding off of, I think, a very strong initial setup, which is the economy growing nicely, inflation roughly kind of getting back toward trend. Yields are not standing in the way. But yeah, we haven't really celebrated the earnings boom that we've had this quarter as much as you might expect. Let's see what happens Wednesday. Does that change the tide? It could. I mean, right now you have the

big Nasdaq stocks kind of rolling over on a relative basis versus the rest of the market. I think the overall market is still hanging in there pretty well. The equal weight has had a bid all day. It's trying to make this rotation as painless as possible. We'll see if that can continue or if something cracks along the way. Good stuff, Mike. Thanks, as always. That's Mike Santoli. Doesn't for us.

Bell's going to ring. And I'll send it in overtime now with John Tua. We'll be right back.