Closing Bell - Closing Bell: Trump Tariff Impact, Biggest Takeaways for 2025 02/07/25

Episode Date: February 7, 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.

Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break out begins with unsettled stocks, with tariffs, inflation and earnings all pushing and pulling the markets today. We'll ask our experts over this final stretch how to navigate all of it, including Tom Lee. He'll be here at Post 9 momentarily. In the meantime, I'll show you the scorecard here with 60 to go in regulation. It was late morning, really, when that U-Mish inflation expectations report hit stocks, along with more tariff talk from the White House, some other things going on, too, that we will tell you about. But that's your picture. Former Fed Vice Chair Rich Clarida with us later on on how all of this might impact the Fed's road ahead. Amazon, you know by now,

big mover today on its guidance and spending plans down some 4%. And more magic from Meta, that stock hitting an all-time high, going for its 15th straight up day. Of course, we'll track it to the finish as well. And Uber is surging after hedge fund manager Bill Ackman reveals a new position in that name. 30 million shares, he says. Started buying it in January as well. Look at that lift, 8.5% highs of the day for Uber. Does take us to our talk of the tape, the markets according to Tom. Tom Lee, that is. Fundstrat's managing partner, head of research. He is with me here at Post 9.

Welcome back. Good to see you, Scott. I said, so as you, Mish, inflation expectations spiked. You've got more tariff talk from the White House. And then I saw a report, too, from Jake Sherman, Punchbowl News. $4.7 trillion tax plan is what the Republicans are said to be discussing. I thought the market took a little bit of a move lower on that as well, just given where rates are, concerns about the deficit, et cetera. Your thoughts on all three?

Well, you know, it does seem like a pattern in 2025 as markets sort of take a hit on Fridays and maybe panic Monday. So I don't know if that's going to be the case. To me, I think the inflation headlines from you, Mish, are they're not great to see. But also, I think that they they are messed. There's a political component to this, because if you break that down between Democrats who see four or five percent inflation, Republicans at zero, the blend is actually pushing this number up. But to me, it's it just gets messy around elections. I mean, let's be honest. There are broad concerns about parts of this agenda from this White House, including, I might add, from the Fed, that it could be inflationary. When rates are already more elevated than I think the Fed would like to see, they'd like to be able to cut more, but their hands are tied.

And one of the reasons their hands are tied, because of tariffs and unknowns about inflation. Fair? That's fair. I'm not sure the UMich survey reflects their assessment necessarily of the tariffs as much as, let's say, the bond market. And the bond market seems less concerned about it because, as you know, yields have backed off from 4.8 towards 4.5. But you're right. Tariffs are a reason to be uncertain. But so far, I think if I looked at how markets reacted, I think they've actually taken them in stride.

I mean, your biggest takeaway thus far, you say, is that the market's proving resilient, which, I mean, let's be honest, too. Since the start of this bull market, it's been one heck of a resilient market. It's been able to deal with almost anything thrown in its face. You've had a couple of panic moments Monday off of the tariff news, last August with the unwind of the carry trade, and then we just continue to set new highs. That's right. And I think in 2025, a lot of investors thought maybe the playbook would change because we just put 22, 20 percent years behind us. But I think with January being up 2.7 percent and I think these sell offs being bought, it does feel like the same market that we had last year.

What are you worried about? Well, I'm worried about sentiment becoming too bullish, but actually it's turned the other way. You know, sentiment actually has weakened pretty meaningfully. And I'd worry about a policy error from the Fed. And as you know, the bond market still thinks there's more than a 20% chance the Fed hikes this year. I think it would be obviously a policy error if they raise rates. Worry about a policy error from the White House. That's also something markets

worry about, yes. But so far, I would say that the news that we've seen on tariffs, they've had more bark than bite, meaning they've proven to be opportunities for investors to buy. What would you buy? Well, the big news this week in our minds is the ISM moved back above 50. That really does point to earnings dispersion improving. So I like industrials, you know, the financials. I mean, small caps, which have been, you know, not a great outperformer yet, but we still think small caps are going to do well this year. What happens if some of the uncertainty around D.C. and policy has a more negative impact on not only sentiment, but actual transactions. I saw

a stat today that M&A is off to an incredibly slow start this year when part of the narrative coming into this year was animal spirits. Can I tell you how many times I heard that phrase over the last three, four, five months? What if we don't get that? I mean, it's still too early, right? Because we're only one month into the year. The recovery and optimism, both in the NFIB and even the ISMs, I do think it would sort of argue CEO confidence should be better. So I would expect M&A. We had all but one of the mega caps report.

We've got to wait a couple more weeks for NVIDIA. What's your takeaway? Well, it's been a good earnings season so far. The MAG7 as a group hasn't been great. You know, in fact, they've been a drag on the S&P this year. So part of it is it's telling me I think a lot of good news is baked into some of these names, and especially with CapEx going up. But it doesn't mean I don't think they're market performers. I just think the outperformance this year comes from financials, small caps, industrials. Can't accord genuity today on the MAG7. We think it's fair to say this has been the softest quarter for this group collectively in the last few years. Is that a meaningful

softness that may be the best times for a while or behind it? Well, and that's a relative term, because on an absolute basis, these companies are growing far faster than the S&P. But from what's priced into the stocks, clearly it wasn't a market surprise. That's why year to date they haven't been great. What about your paying up, in some respects, for declining revenue growth, especially in key areas like cloud for some of these players, where that's an essential part of why you were willing to pay up in the first place? Does that matter? Well, you know, these are secular stories. So to me, stocks might actually underreact to earnings and they might overreact to earnings over time.

And, you know, they may consolidate for several years. But to me, the key drivers for why you want to own the MAG7 haven't changed. Seems like these names have sort of separated themselves from each other. If you look at a chart, for example, of Meta, it's been magnificent. It's like the magnificent one, as some are suggesting today, because it's on a 14-day winning streak, hoping to get 15 today. Julia Boorstin's covering that for us. This run over the last two weeks alone has just been remarkable. That's right, Scott. The stock extending its gains again today is higher for the 15th day in a row and is trading at all time highs. Meta shares are up 16 percent

in the past month. It is the best performing of the MAG7 stocks of 2025, and it's up by more than half over the past 12 months. Now, Meta has not had a single negative day since President Trump took office just yesterday. We heard CEO Mark Zuckerberg was at the White House to discuss how Meta can help advance tech leadership abroad. And there was another Meta headline today, the information reporting, and we have confirmed that the performance-based job eliminations impacting 5% of Meta employees will begin on Monday. Those job cuts were first announced last month. Scott? Julia, thank you very much for that. That's Julia Borson. Back to you, Tom. I mean, if anything, this just shows that the monolith is over,

at least for the time being, that they have separated themselves from one another. What do you make of that fact? Does it matter for overall market performance? I think it should be expected. Correlations between stocks have actually fallen to 20-year lows. So I think this is a year of stock picking. So I wouldn't be surprised for the MAG7 to diverge. But I also think that means investors can find a lot of other names that can outperform this year. All right. Let's bring in Cameron Dawson into the conversation now. She, of course, of New Edge Wealth here with us at Post9 as well. It's nice to see you and have you back. You've been listening to Tom. What do you make of what he said?

So we do think that this market is very different than last year's market, mostly because of the starting point of where valuations are, the starting point of where positioning is, and the fact that you were seeing much more dispersion under the surface and different leadership, I think it's important to note that tech has been effectively flat for the last four months. It's been on the road to nowhere and that you have seen things like financials start to take on greater leadership. But at the end of the day, we do think tech still has to play ball for the market to continuously make new highs simply because it's such a big part of the index. So there's a lot of shifting sands, a lot of trend under the surface. And at the end of the day, we've also seen fading momentum on the index level, which just says to us this sideways chop

could continue at least in the near term. Let's hit tech first since you went there. I mean, it is worth noting, too, it is the only sector over the last one month that is in the red. You really need to continue to get a pickup from these other areas of the market. That's why the market sputtered a little bit, right? Tech is flat and you just haven't had enough buy-in to get that next leg. And I think the challenge is tech is also the most crowded of the sectors. If you look at those Deutsche Bank sector flows, tech has been the only sector over the last two years that has had

net new money flow in. You've seen a little bit come into financials over the last few months since the election. So it's a good argument or a good question of is this market offsides in the fact that it's not prepared for a leadership rotation away from tech, which could suggest that maybe there's some more pain in that churn. I mean, that's why equal weight S&P is ahead of the S&P year to date. Yeah. Right? Because these areas other than the mega caps have performed better than those stocks. What do you make of that? The fact that tech is the only negative sector over the last month? Well, I think, again, it sort of speaks to market resilience because tech's the biggest sector.

It's down 10%. A lot of folks would say that would take the tape down, and instead we're up 3% for January. And, you know, if tech underperforms this year, I'd actually still think it doesn't make a difference. S&P would still be up more than 10%. One of the best stats, I think, for the bulls, you know, was towards the argument, Cam, of, well, you can't get any more multiple expansion in this market, right? You're at 22 times. You better have earnings growth that lives up to the hype. And it appears that it is. I mean, you're two thirds of the way through earnings season thus far, and we have 15%

earnings growth. That is the strongest in three quarters. That was at the high side of expectations. That's where you really need to see the proof in the pudding of what's happening in this market. And the fourth quarter has shown this dynamic of broadening out, and that is expected to continue in 2025. If you look at consensus, 2025 has that equal weight going from one% growth last year up to 11%. So there is an implicit broadening out that's already baked into consensus numbers. But watch one thing. Yes, fourth quarter earnings came in better than expected, but we've actually seen slight estimate cuts to 2025 and 2026 numbers over the last two weeks. It's very slight. It's 1%. So it's nothing to say run for the hills,

but watch those estimate revisions because we think the most important thing for this market is that 12-month forward earnings estimates continue to rise. That has been the underpinning of this rally for the last two years. So it is a true imperative that you see that 12-month forward continue to climb. How do we feel about earnings, that stat that I just told you, right? You really do believe that you need earnings to remain at least this strong, correct? Yeah. The ISM turning above 50, it's been below 50 for 26 months, the longest stretch since the ISM was created. That leads earnings growth by four months. So it's particularly bullish for what I call mid-cap and small-cap earnings. So I think you're going to get the

earnings delivery this year. And it's maybe not just the U.S. You know, year to date, Germany's outperforming significantly. I mean, Europe looks like it's going to have a great year. So I think that there's plenty of places to find opportunity. You want to talk mid-cap, small-cap, right? Tom's obviously loved small-cap, made a big call last year, sort of missed the actual return on it, but the direction was right. It didn't have a terrible year. It just didn't match up to what the other major averages did. You like mid over small? We like mid over small. We continue to see small as struggling with a high bar of expectations.

Look at consensus estimates for 2025 earnings. They're set to grow 32 percent In a world where interest rates remain elevated, in a world where growth on a nominal basis potentially slows down, and yes, maybe some uplift from interest rate sensitive parts of the market or cyclical parts of the market recovering, we're a little bit less optimistic on using ISM as an indicator because it has been so flawed in the past. But if we think about small caps, we think that the challenge you have is that you could still be in an earnings revision down cycle because estimates are already starting from such a high place. You have a number in your mind, Tom, on what level of rates would be a problem again? I threw out the number that was one of the reports I saw.

Four point seven trillion would be the reconciliation package number for Republicans on tax cuts. We'll see whether that ends up being the real number, but you're going to be in the ballpark, you have to believe, amid concerns about where the deficit already is and having a backup at the long end of the curve once again because of concerns about funding it. Yeah, I mean, the level that's going to be a concern for markets is the day the bond market loses confidence. So I don't know what that level is. I know investors don't like it near 5 percent. But I think one of the things that that is helping to contain yields is the idea that this new administration is finding ways just for spending,

but also finds finding ways to save money. So I think Doge is actually one way that markets are getting a little more confident about yields maybe having a ceiling. Well, I mean, they threw out the $2 trillion number at the very beginning. You don't actually think that's a real number, do you? Well, we'll have to see. I mean, I guess we can sort of measure it with every quarterly refunding. But it does sound like they're finding ways to save money. I don't know what number they're going to achieve, though.

Yeah. The Fed, where does the Fed play in your thinking? A lot of Fed speakers are out now because the blackout is over. They're able to give their perspective. And most of it seems to be we're on hold because we don't know any more than you do about what the impacts of tariffs or a trade war or renewed trade wars is going to be we heard from mester this week and

there seems to be this consternation from the fed that inflation expectations are at risk of becoming unanchored go back to the summer of 2022 why did the Fed raise 75 basis points? It's because we got a hot University of Michigan consumer inflation expectations number. It ended up getting revised lower. But the point here is that the Fed is concerned that if you see tariffs get pushed through, that it will cause consumers to expect higher inflation. Look at egg prices. Look at people at Costco. You still have this notion of inflation that is still simmering in the consumer psyche. So the Fed is concerned about that, which is why they're on hold. But the good news is the job market isn't giving them any reason to say that they need to rush to

cut rates. Jobs data today was still strong. You saw the unemployment rate tick down. Wage growth actually ticked up. All suggests that the Fed can remain on hold, prioritize this worry about inflation without the risk that the job market is falling off a cliff. So Cameron makes a good point, Tom. What about egg prices literally being an existential threat to this ongoing bull market and bull economy that you have, there's no strategic egg reserve, right? You can't really go and find them somewhere and release all these eggs. And you do have hoarding as, as we've seen of people trying to get their hands on eggs. What happens if that becomes a legitimate issue where people are saving money to pay for eggs and they're not spending it where they otherwise would. You, Mish, suggest that sentiment's deteriorating to some degree,

unexpectedly, I might add. Are we downplaying the possible impact of all that? I know people laugh, but I mean, I think it's a legit issue. Yeah, you never know what becomes burned into, like, sort of people's minds and what, like, exemplifies where they see inflation. But, you know, I'd say maybe I'll just hold judgment until next week. We get a CPI report. People are bracing for that seasonal higher upward bias in that number. But if it's a soft number, I think all this talk about inflation pressures are going to abate.

You thinking at all about more of what you said and what the impact is if you are a consumer and you're more worried about putting eggs on your table than you are clothes in your dresser? That's a potential problem. Well, we've certainly seen some pull forward of demand as well from tariffs of people trying to say, let me get ahead of price increases. And that speaks to the psychological component of inflation and why the Fed does care about inflation expectations. We do think that as the Fed is contemplating the risk of higher inflation, as they're thinking about tariffs, the key difference between today and 2018 is that you're starting from a higher inflation level.

You're starting after a very scarring inflation period. So they are worried of that pass-through happening at a much more rapid pace versus getting absorbed by companies as it did back in 2018. I mean, there's the reaction in the stock. We're showing you the Dow for a reason, because I think this is about the lows of the day, down 450. You can blame it on whatever you want, the inflation expectations, the tariff talk, which we're going to get some degree of tariffs, it looks like, next week, reciprocal tariffs at the very minimum the president has suggested already today. And then, of course, reports about the reconciliation package, the price of it,

these tax cuts and renewing them and what the impact is going to be on interest rates. Guys, it's good to have you. Thanks for being here. That's Cameron Dawson and Tom Lee. Two Christina parts of Novelos now for the biggest names moving into this close. Christina. Well, city analysts are downgrading Nike shares to neutral and slashing their price target to $72 after meeting with Nike CEO. They say core products like Air Jordan 1s are still struggling and there aren't enough new products to actually fill in the gap. They're expecting this turnaround

for the company to be pushed out to 2027 at the earliest, which according to them is too long to wait at these valuations. That's why shares are down three and a half percent. Expedia shares hitting an all-time high today after posting strong bookings during the holiday quarter and reinstating its dividend. HSBC and Bank of America say this name is a buy and the stock is up 17 percent right now. Airbnb shares are also up in sympathy, almost up 2 percent. Scott. All right, Christina, thanks. Back to you in a bit. We're just getting started here. Up next, the former Federal Reserve vice chair, Rich Clarida, is standing by. We'll find out what

he thinks about potential tariffs, what they could mean for the economy and the Fed's next move. It's just after the break. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. We're back. An unexpected rise in inflation expectations, along with threats of more tariffs weighing on stocks today and potentially making the Fed's rate cut path even more uncertain. For more insight, let's bring in former Federal Reserve Vice Chairman Richard Clarida. He's now PIMCO's global economic advisor. It's always good to catch up with you. Welcome back. Good to be here. What'd you make of you, Mish, today? Not good. Hopefully it's a blip. Look at a number like that and you're thinking it's probably

an aberration. But my goodness, not good if it were to continue for sure. What do you think the Fed's big takeaway? Do you think they were as startled as you appear to be? Well, I think they would certainly, you know, a line, one point does not make a line. And so I think there's time to look at additional data. But certainly, Scott, if we were to get a run of these, it would be quite concerning, I think, to the Fed. You know, the Fed seems to be confused into into and I don't mean that in a negative. I mean, I think generally I mean generallybee, the Chicago Fed president this week, where he talked about learning lessons from the pandemic about supply side disruptions causing inflation, not just a demand issue.

It almost flies in the face, if you will, of conventional economics, the way that all of you were raised to believe more demand creates more inflation. Demand gets out of control. Inflation goes up. Yeah. The pandemic proved otherwise, that it was a mostly supply chain disruptive impact on the inflation picture. Do you think that that's what they're getting at, that they are so mindful now on the impact of cutting off supply chains and what the impact of inflation could be as a result?

Certainly, you know, supply shocks can push up inflation. We saw that in the 70s. We saw it two or three years ago. You know, I think with regards to tariffs, you know, the real question is going to be, are tariffs a bargaining chip for the White House or a battering ram? There's just news today, for example, that Europe may cut tariffs on U.S. cars just to avoid the tariffs that we might put. So I think that I think the Fed is not confused as it is. It's very uncertain about the details of the policy. But you are correct, Scott, there will be an adverse supply element to higher tariffs, especially because a lot of goods that we import are capital goods and inputs to production. I mean, what if they're both, they being tariffs, both a bargaining chip and a battering ram? Well, yeah, if it ends up being a battering ram that stays in place for a while,

then that will start to show up in the inflation data and potentially also in the production data, for sure. I mean, when I tell you that, you know, the Republicans, according to reports, are eyeing a four point seven trillion dollar reconciliation package on tax cuts. What's your reaction to that? Well, I think I've expected that all of the of the Trump tax cuts would be extended. The question mark is what will be the payfors on the other side of that. And from what I can tell, looking at the news coverage, there's no real consensus among Republicans themselves over how much of this to pay for. So obviously, if none of it's paid for, then that puts additional debt in the hands of the Treasury market. But again, like with tariffs, I think the details will be important and it's just too soon to tell.

I mean, the president himself, though, has suggested that tariffs are going to be the offset. Do you do you not believe that they could be? Well, certainly they could. Again, that that that could be one of the one of the approaches that Congress takes to use some tariff or a lot of tariff revenue to offset the the cost. So, again, that that's an additional source of uncertainty that you pointed to. But I mean, that would suggest, I guess, is implicit in my my my question that they would have to be more permanent than not. Well, if you were going to use those as a primary source of trade off. Yeah, there's only one way to go.

I'm I'm not an expert on budget scoring, but you're right. I think nor am I believe that to be offsetting other elements of the package, that there would have to be some assumption about them staying in place and thus not being the bargaining chip that I referred to a moment ago. When you're thinking about the number of cuts that the Fed can legitimately get to this year, you know, I don't know if your own mind has changed at all, But where are you today on that question? Well, you know, we came into the year with a baseline of two cuts this year, but certainly highlighted that there were scenarios where the Fed could be could be on hold. Indeed, our reading of both the

December and January Fed meeting is that Chair Powell and the committee wanted to buy time in part to assess and resolve some of the uncertainty that we've talked about. You know, coming into the year, I think all but one member of the committee thought that at least one cut would be appropriate. We heard today, for example, from President Kashkari making a comment along those lines. But we also heard from President Logan, which I read her remarks to indicate that she could see scenarios where there aren't cuts at all. So, again, I think there will be additional cuts, but that's really going to depend on the flow of data for sure. I thought I thought it was interesting. You know, obviously, the president made waves, which he likes to do in his comments to Davos, where he said he's going to demand.

I think he used the word demand that interest rates move lower. Now, the Treasury Secretary Besant gave an interview this week in which he suggested they're more in tune with watching the 10 year yield than they are in lowering interest rates, at least demanding that the Fed do something about that. What's your reaction to that? You know, I applaud I applied the comments by Secretary Besant because it reflects the reality that most people don't borrow at the very front end of the yield curve at the federal funds rate. People get 30 year mortgages and they get auto loans and corporates borrow money. And so and so I applauded the focus on the part of the Treasury secretary to that as being, you know, probably the most important interest rate in the economy. And obviously,

you know, decisions by the Treasury have a lot to do with that. Richard, I appreciate your time very much. We'll talk soon. Thank you. All right. That's Richard Claret up next. Investing beyond equities. Jeffrey's wealth management's Laurie Goodman will tell us where she's seeing opportunity right now. Closing bells coming right back. Welcome back right across the board today. Moving lower as well here as we head towards the close. Dow and Nasdaq now negative on the week. Our next guest looking beyond stocks for opportunity. Joining me now, Jeffrey's Wealth Management's Laurie Goodman. It's good to have you. Hi. Thanks so much for having me. So alts are really your focus,

your wheelhouse. You also say stay liquid, which is interesting because people think of alts as not exactly the most liquid place to be. So reconcile that for me. That's true. That's true. Well, there's a range of liquidity within alts, right? So if you're thinking about the more liquid end of the spectrum, you can talk about hedge funds. There's definitely liquid places in private credit. There's even some relatively liquid places in infrastructure going all the way out on the spectrum to private equity, longer duration, private credit, et cetera. What's your favorite area of alts? If you had to pick one, do you have one right now? No, I don't. I really look at things from a bottom-up perspective.

We're trying to find more esoteric strategies. And really, I mean, the topic of the day you've been talking about is what's going on with tariffs and what's it going to mean for inflation. And there's so much uncertainty out there. And so what we're trying to do is we're trying to find those strategies that are going to be insulated from that uncertainty, playing more in niche segments of the market. I mean, and you think, well, I guess I would say theoretically, yes. But if I'm going to be investing in private equity, for example, coming into this year, there's so much optimism about dealmaking and realizations from private equity. Yes. But if some of the issue caused by tariffs,

that upsets the market and then there aren't as many deals as one thought there might be, that could have an impact. That's exactly right. So actually, I was just looking at a headline before I walked on here, and it's saying that deal activity was really repressed in January because of all of this uncertainty. That's exactly right. And if you have a lot of inflation, there's going to be a continued kicking the can down the road, right? 2024 was the third consecutive year of below average distributions. What happens is this, right? It's LBO is the predominant part of private equity.

And leverage is like alcohol. It makes the good better, it makes the bad worse. And so when you have this inflation scare, people don't want to go to market. They want to see inflation and rates come down because they'll get better valuations. So it's something we're really looking at. With all of that said, there are parts of the market that you can play in in private equity where you're less beholden to what happens. So if there's areas with secular tailwinds, whether it's cybersecurity or AI or biopharma, where you're finding niche managers, managers

where the exit path may be M&A as opposed to IPO, those are going to be somewhat insulated from these dynamics. They're still going to be somewhat insulated from these dynamics. They're still going to be impacted, no doubt. I feel like it's two big areas for private equity that, you know, you talk to private equity executives, you hear a lot about data center and private credit, obviously. How do you view those areas? Sure. I mean, for data centers, a lot of it's going to be wait and see with the ramifications of DeepSeek and how much energy we're going to need. With private credit, it's been an interesting space as well, and it's been going through a lot of change.

So if you look at what's happened in the market over the last couple of years, a lot of large asset managers implemented private credit into their strategy, even if they were traditionally just credit hedge funds or traditionally buyout shops. Right. And so they're showing you in some ways that they think that the risk reward there is good if we don't get rates back to zero. At the same time, you have to be careful because the pendulum swinging and now you have a lot of assets moving into this space. And so they're going to be competing with each other. You're going to see spreads compress. And also banks, if we have the bank deregulation, you're going to see more competition from banks. So it was a couple of Mondays ago, the deep seek headline, which really caused an earthquake, obviously. Did that sort of form its own cracks in the way you're thinking about data center? I mean, are you being a little more scrutinizing of that investment at this point?

We haven't had much data center exposure in what we're offering in alts for our clients, but I think it's going to be really interesting to see how all of this plays out. On the one hand, the developments should hopefully lead to greater efficiency, and then it can open up a lot of new opportunities in the application space. I'd love to just get your view. I know we talked the whole segment about alts, but what about stocks? I mean, what about where the markets are? Are you positive on, are you trying to tell a good story to your clients

about where you think the equity markets are going? Yeah, I mean, look, I think we want to recommend staying diversified because there's a lot of uncertainty right now. It's hard to be a CEO when you don't know what tariffs are going to hit, where they're going to hit, when they're going to hit. So diversification is really the best thing you can do to insulate your portfolio from this uncertainty. Thanks for being here, Laurie. It's good to catch up with you. Thank you. Take care. That's Laurie Goodwin. Goodman, excuse me, from Jeffries.

Up next, we're heading out to New Orleans as that city, as you know, gears up for the Super Bowl this weekend. We'll hear from the CEO of Caesars about betting on the big game. You think there's going to be a little bit of betting? We'll tell you exactly how much next. We're back. Super Bowl 59 this weekend in New Orleans. Our contestant Brewer is there. Joins us now with the CEO of Caesars Entertainment and probably can tell us exactly how much money is going to be bet on this game. Let's ask him, shall we, Scott?

Nice to see you. And nice to see you, Tom Reek, CEO of Caesars Entertainment. The only place in town that you can walk in and physically get a sports bet is right here at Caesars Sportsbook. We're not far from the stadium. How much do you think will be wagered on this game? I've seen numbers, what, a billion and a half plus. I know last year was a little shy of that.

I'd expect it to be another record. We'd expect it to be a record. We'd expect it to be a record for us and the business. How much opportunity do you have now to attract new customers or maybe lapsed customers? Because one, you've launched this beautiful property, almost half a billion dollars in renovations to rebrand what was Harrah's Caesars. And then the naming rights to the Superdome. And everywhere I look, every time a TV is on, you see that aerial shot with your branding everywhere. How much do you think that lifts your brand recognition?

Yeah, I like that shot. This was a, you know, this is the culmination of a five-year project that actually started before we closed on the Caesars acquisition. And we knew that if we could reach opening at the end of last year, we were ahead of the Super Bowl coming. And when we launched sports betting in 21, we signed a deal with the Saints that was all-encompassing where it just

so happened those naming rights had come up at the same time and we knew the Superdome is host of a lot of huge sporting events we started with the Final Four NCAA championship we've had NCAA football playoff game and now we've got the Super Bowl we think it does wonders for our brand, and we do get a lot of people that come and see this, and maybe they've got a dated view of what Caesars used to be even in New Orleans, and they see this and go back and are impressed with it. So we think it's huge for us.

Who do you want to win, the Eagles or the Chiefs? I want Monday to get here so we can get to Bears free agents. There you have it. Thank you for being a generous host today and letting us barge into the sportsbook. It's been a lot of fun. Tom Reed, thank you. Great to see you, Contessa. Earnings are coming up next.

He's not saying too much because, you know, quiet period and all of that Scott well they got the biggest free agent coach that was on the market so he's got to feel pretty good about that but I hear him on free agency I'm waiting for that from my own team Contessa thank you mr. Reek thanks to you as well all right still ahead shares of beauty stocks are sinking in today's session we'll talk about what's driving that next. Coming up next, Take-Two shares are taking off today. We'll drill down on that bounce and much more inside the Market Zone next. All right, we're now in the closing bell Market Zone. CBC Senior Markets Commentator Mike Santoli here to break down these crucial moments of the trading day. Plus, Courtney Reagan on beauty

stocks taking a hit this week. And Steve Kovac on the rally in take two shares we'll get to all that in a minute. Mike you first we're ending with a whimper. We are going to look ahead to some inflation data next week and who knows what else but we have to

be on the men on the mind. Off for tariff headlines. Yeah it's fascinating week so the low is not you know one hour into trading on Monday when we got a little bit of relief on what we expected versus what we expected on the tariff front. You have a basically a three percent rally going into this

morning, bumped sixty one hundred in the S&P again. We did that first two months ago, have not been able to really close above it but a couple of times. So that's sort of acting as a little bit of a ceiling. That was right before you were talking about it. The inflation expectations number plus this idea of reciprocal tariffs. I think everybody knows these are not the massive swing factors for whether it's going to be a decent economy, a good year. But in the moment, they do just pinch on tactical risk appetites pretty consistently. We'll see if that pattern changes at all. I do see some apprehension on Fridays in the last few weeks. So, you know, it just seems an

eventful, noisy news environment that the market, while holding up fine, has had a hard time getting comfortable with. Well, because you brace for something over the weekend that you have like last weekend where you come in Monday morning and you're, you know, the market acts shell-shocked. Yeah, which is fascinating because what happened last week was you had this buildup of anxiety into the open on Monday and it almost just crystallized all of that one moment and he got through it. So, you know, not to say it's always going to be downside pressure. I do think given that you have Amazon down 4% today, you have actually a lot of relatively nasty responses to some earnings reports and some work on that, that the companies missing are getting punished more than usual. In aggregate, we're going to

move the chains and it looks like it'll be OK. But, you know, definitely a little bit of a delicate balance that this market is perched on. All right. Court, tell us about beauty stocks taking a hit. Yeah, pretty ugly here for the beauty groups here today. So Elf Beauty is really pulling down the entire sector in a big way. It's on pace, Elf at least, for its worst week since August of 2018. Ulta Beauty, that of course sells Elf Beauty products among others, also on pace for its worst week since August. Competitor Cody, worst week since August as well. Estee Lauder, worst since October. So the low-priced, often viral beauty brand, it's cutting its guidance. It's actually pretty rare. It's had a really strong sort of trend here for sales and otherwise, but also missed on profit. It called out seeing a slowdown in its

sales in January. And the CEO, Tareng Amin, isn't really worried about bigger issues at Elf Beauty specifically, even though he admitted that recent product launches kind of failed to perform as well as past offerings. Instead, he points to external factors from the slowdown in the beauty category overall after a huge growth rate and slowdown in social commentary around beauty last month with TikTok users, for instance, focusing more on a possible ban of that social media platform and also focusing on things like LA wildfires probably felt more appropriate than putting up beauty tutorials. Makes sense if that is what happened, why you're seeing the broader industry get pulled down if it's more than just an elf beauty issue, but definitely something to

take note of. All right, Courtney, thank you very much for that. Courtney Reagan, Steve Kovac to you. Many investors doing a double take at take two. You see what I did there? I caught on. At take two today. You're quick. You're quick. I there? I caught on. At take two today. You're quick. You're quick. I appreciate it. Let me tell you what's going on here. Yeah, let me tell you what's going on here, Scott.

So last night, they reiterated their guidance and the fact that Grand Theft Auto 6, the next in that big franchise, is going to launch this fall. Not a huge surprise there, but it was enough to send shares soaring, especially following pain from so many other gaming companies this earnings season. The big one, of course, was Electronic Arts back in January. They revised their guidance lower after Football Club, that's their soccer game franchise, failed to meet expectations in the December quarter. They had another game called Dragon Age Veil Guard that didn't sell well either. And then you had that Roblox guidance disappointing in their earnings yesterday, not to mention Bloomberg reporting it's part of an active SEC investigation.

Unclear what that one's about. The company is not responding to requests for comment. And then you had Microsoft. Their gaming revenue was down 7 percent and gaming hardware revenue down 29 percent. That, by the way, includes Activision, the big company they bought for $69 billion. Makes all that CapEx spending look kind of silly right now. All those regulatory headaches and so forth they went through. Was it worth it?

And in the meantime, we had Bloomberg reporting last year that Take-Two competitors are really just waiting to see what they do with GTA 6, including waiting for them to announce a specific date before launching their own games. The entire industry, Scott, you have wrapped around Grand Theft Auto 6 likely going to be the most valuable or most huge, biggest revenue entertainment property in the history. Scott. Good stuff. Steve, thank you. Steve Kovac, you heard the two minute warning. Throw up shares of Uber, guys, if you could for me, please. Bill Ackman announcing today on X that he's taken a new position.

30 million shares, $2.2 billion, started buying it in January. What do you make of that? It's interesting. First of all, I felt as if Uber had really become kind of a consensus favorite last year, especially kind of a hedge fund name. Everyone thought the platform was finally at a point of really kicking off lots of sustainable free cash flow. One thing you could make of it is, clearly, Bill Ackman doesn't believe that it should be going down

every time Elon Musk says robo-taxi, which had been going on with Uber, which is crazy that they was considered to be that vulnerable in the near term. That said, 30 million shares, or 30.3 million shares since early January. I went back and looked. He's been like 5% of the volume in the stock

since that point. Presumably, he's now got a full position because he's now talking about it. So it's almost like the buying's good. It's a vote of confidence. But it doesn't necessarily mean from here on out, you know, it's going to have a lot of legs in terms of more incremental demand for the stock. But it is, you know, kind of interesting, by the way, in the Dow Transports. And one of the reasons that I think a lot of the Dow Transports have been hanging in there better than some other cyclical parts of the market. Meta is going to be 15 in a row today because it looks like it's going to go green.

I mean, finish green, I should say. Yes. And that's an all-time high. You know, it was cheap enough. It was in the right spots. And now it's just momentum. I'm just shocked that Palantir is down a third know a third of a percent if they're going up 34 percent week to date That's the other one in that pocket. All right, great