Closing Bell - Earnings Avalanche: Tech, Chips, and the Fed in Focus 4/23/25

Episode Date: April 23, 2025

A packed earnings day drives the action, with major results from Texas Instruments, IBM, Lam Research, Chipotle, Whirlpool, and ServiceNow. Paul Hickey of Bespoke Investment Group and Brooke May of Evans May Wealth assess the market's reaction. Analysts dive into key takeaways, including commentary from IBM and ServiceNow CEOs. Patrick Moorhead breaks down the implications for IBM and ServiceNow, while Tore Svanberg joins to discuss Texas Instruments. On the macro front, former Kansas City Fed President Esther George weighs in on the Beige Book and Fed Chair Powell's latest moves. 

That bell marks the end of regulation. Rockefeller Asset Management ringing the closing bell at the New York Stock Exchange. Sprout Social doing the honors at the Mazdaq. And it's a solid rally for the major averages as tensions with China ease and the president turns down the heat on Fed Chair Powell. Those stocks did finish well off their best levels of the day. That's scorecard on Wall Street. But winners stay late. Welcome to Closing Bell Overtime. I'm John Ford with Morgan Brennan. Well, get ready for a massive hour of earnings results headlined by IBM, Texas Instruments, Lamb Research, Chipotle and ServiceNow. We're going to bring you all of the numbers and any commentary about tariffs and the economy

from executives. And also this hour, former Kansas City Fed President Esther George is going to join us to talk about the warning signs from the beige book and about President Trump's softened stance on firing Chair Powell as we await those earnings So let's get straight to today's market action joining us now is bespoke investment group co-founder Paul Hickey and Evans May wealth managing director Brooke May guys welcome Brooke Are you heartened by the market action over the past couple of days or is it just getting us back to before the crazy? It's hard to say. Who knows what next week's headlines will bring. That said clearly the focus has

shifted from inflation to tariffs and not just tariffs but Chinese tariffs and what that's gonna entail and while it's a little bit of a reprieve to hear that it's not gonna be 145% tariffs, but maybe 50 to 65% tariffs, that's still pretty salty. And it will be a burden to the US economy. We need clarity and we need it very soon. When you look at CEO sentiment, it's shifted. CEOs, if you listen to the earnings calls,

if you look at the ratio of positive statements to negative statements, it's declined and it's declined to a level that we saw in the pandemic. So we need clarity and we need it soon so they're not delaying hiring decisions and capital expenditures. Paul, how big a role do earnings play now

with some of the rhetoric on the macro front cooling off? Yeah, I think it's a big thing. I mean, granted, it's all the rear view mirror, but we're going to look for what companies are saying in reaction to guidance. The news isn't going to be good, but what you want to look for in these types of periods after markets had a big decline is how do stocks react to bad news? So if you start to see some positive reactions to that bad news it can be taken as a positive it can be taken as a good signal going forward.

Just yesterday the IMF lowered growth forecasts for just about every country around the world and since that release markets have done nothing but go up. So you know those are just you know small bits and pieces and crumbs but they there's something that we need to continue watching going forward. Well, speaking of going up, Texas Instruments is up about 5.5%. We've got those earnings results out. Christina Parts-Nevelis brings them to us.

Hi, Christina. Hi, well this is a beat on the top and bottom line, $1.28, stronger than what the street anticipated for EPS on revenues of $4.07 billion. The company's saying all our markets grew sequentially with the exception of a seasonal decline in personal electronics, specifically for analog revenue that also came in higher. That's their bread and butter, 3.2 billion dollars. And Q2 EPS guidance, stronger, a range of $1.21 to $1.47 on Q2 revenue guidance of 4.17 billion, which

is higher than the street anticipated, and that's contributing to the stock pop right now at 5%. Guys? Okay. Christina, thank you. Mike Santelli, I wanna bring you into this conversation because for better or worse, Texas Instruments is seen as something of a bellwether

on not only the broader tech sector, but also the broader economy with something like 150,000 customers I was reading today that they supply to. So to see results like this, perhaps most importantly, a stronger than expected forecast tells us what. Yeah, it's a refreshment. I mean, obviously, industrial demand is what the real story is the driver for Texas Instruments.

Stock was positioned for some trouble. It just bounced off of like the low 140s, which is like on a two year basis, that was a big low before. So it seems as if it was in a good spot to take a little bit of benefit from a better than expected number. They also put that the number they reported

is also better than the first quarter estimate from all the way from back on December 31st. So I keep looking at where we expect the first quarter to be when the first quarter started and are the current estimates which were lower getting hurtled by enough and this one is an affirmative answer to that. Okay. Paul Hickey, one of the things I love about having you on is that you always come armed with lots of stats and historical references and today is no different. You brought us stats on volatility and how much, how outsized the volatility has been

that we've seen in recent weeks. And also the fact that we've seen these very broad-based rallies here in the last two days, particularly the NASDAQ 100. Would love to get your thoughts on what that signals, just as much as I'd love to get your thoughts on the earnings we're getting here. Yeah, so first in the earnings, I mean Texan raised guidance.

I mean, we were saying no one in their right minds would raise guidance after going into the uncertainty, but they did, so that's something to be positive about. But as far as volatility, we always make a big deal out of volatility in the moment, but if you look back going into post-world war two period this volatility we've seen in the last three weeks since liberation day Is right up there with the 87 crash. It's the financial crisis It's you know, the end of the dot-com bust COVID I mean this kind of these kind of moves are are all similar to periods that we all remember if we were around So we're not going to forget

about this period, but what you do also see going forward is they tended to happen, you know, towards the later stages of these corrections or bear markets rather than in the beginning. So the short term, who knows where the short term ends and the long term begins, but from a long term perspective, they have tended to be good for the market and good for investors going forward and yesterday the nasdaq 100 every stock was up in the index that's only happened seven other times six and twelve months later. The nasdaq 100 was up you know 20% over the next six months and about 25% over the next year. Okay. Las Vegas Sands earnings

are out as well Contessa Brewer has those numbers. Contessa. Yeah Morgan, Sands reports now revenues of 2.86 billion dollars for the quarter. That was a slight miss. The street was expecting 2.91 billion. Earnings beat 59 cents per share adjusted against the 58 cent expectation and the board of directors increased buybacks this quarter to two billion dollars. The company repurchased 450 million dollars in the quarter. Macau EBITDA though here is a miss. It comes in at 535 million. The street was expecting 607 and Marina Bay Sands in Singapore. This was the most lucrative property in the world. There we're seeing an adjusted EBITDA for property EBITDA beat 605 versus 530.

That continues the trajectory we've seen over the last few quarters. The real question on the call is going to be whether there is potential for USA brand blowback in Macau. Will Chinese customers opt for the other casinos in Macau because of this tit for tat in the trade war with China and the USA. And what happens if the Chinese economy becomes under pressure because of the trade war? We'll be listening for that coming up. The shares right now up a percent, John.

All right, Contessa, thanks. Also up a little bit, Whirlpool, those earnings are out. Diana Olick has the numbers. Diana? Well, John, it was a miss on the top and bottom lines. Whirlpool reported Q1 EPS of $1.70 a share versus estimates of $1.71. So not that big a miss. Revenues came in at $3.62 billion versus estimates of $3.67 billion.

North America revenue specifically fell short at $2.42 billion versus estimates of $2.47. Now non-GAAP operating margin also slightly slimmer at 5.9% versus estimates of 6%. Whirlpool reaffirmed all full-year projections, including EPS of $10 a share and revenues of $15.8 billion. That's important given the new tariffs, especially on China. And on that, of course, Whirlpool said it expects new tariff policies will help level the playing field and better support manufacturing. The company claims that since 2020, Asian producers have exploited tariff loopholes

resulting in significant cost disadvantages for U.S.-made products. That has had an increased impact on the company's results the last two quarters. And guys, you can bet they'll be talking way more about tariffs on the call. Yeah, they're not the only ones. Diana Olek, thank you. Well, IBM earnings are out. That stock is heading higher, almost 6% right now in overtime. Here are the numbers. Q1 revenues beat at $14.54 billion versus a $14.4 expected. Our earnings per share also beat at $1.60 a share adjusted versus $1.40 expected. Software revenue was right in line with expectations. Consulting revenue a hair better at $5.07 billion versus $5.05. Non-GAAP gross

margins were at 56.6% versus expectations of about a point lower. On the guide, they are maintaining versus expectations of about a point lower. On the guide, they are maintaining their overall guidance and expectations of constant currency revenue growth of at least 5% for the year. And I did have a chance to catch up with IBM CEO, Arvind Krishna, about these results. Here's some of what he told me. Back to that margin beat, he told me the gross margin beat

was across the board, infra, that's referring to infrastructure, actually year to year down all our gross margins are up almost two points year to year, three points from consulting and almost two points from software. Talked about the HashiCorp acquisition which closed during the quarter, they got about a month's worth of those results in there. He said, that was a very strong player, but that was the only large inorganic piece, so to speak. People wanna deploy infrastructure in a common way

across clouds and on-premise, and that's what HashiCorp allows them to do. Security's becoming a bigger piece. Parts of HashiCorp's portfolio go into data, and that's why data is gaining quite a bit. Now we talked about tariffs. Two pieces I wanna bring to you here. First he talked about the direct impact on IBM.

He said while nobody is immune, we think we've managed that quite a bit with how we have optimized the supply chain, both with what we sell in the US, as well as what we sell outside the US. Now talking about this idea of America and how that might affect companies, here's what he said.

I asked him specifically about that. He said, now the place you went to is my paranoia and worry. First, as in America first, is different. I think every nation should worry about themselves first, but as long as you're part of an integrated global trading system, that's good. If this perception goes up that American companies

will only do things good for America, the country, that will cause a problem. Now I began by saying we haven't seen it in the data. Our Japanese clients look at us as being good for them. Our UK clients look at us as being good for them. Our Indian clients look at us as being good for them. So far, it has not yet penetrated into this side. And we do see that stock up at the moment, about 3 a little bit off the highs but a lot to go it's gonna talk more about the tariffs and about the software growth on the call.

Well we've got Chipotle earnings out as well Pippa Stevens has those numbers Pippa. Hey Morgan the stock here is lower after a mixed quarter EPS coming in at 29 cents adjusted that was a penny ahead of, but revenue of 2.88 billion did miss expectations. But take a look at the same store sales number because it was down 0.4% while Wall Street was looking for growth of 1.7%. This is the third straight quarter of same store sales misses, and it is also the first same store sales contraction since the second quarter of 2020.

Now drilling down on that, transactions were down 2.3 percent that was partially offset by an average check size that was up 1.9 percent but the company said they faced several headwinds including weather and a slowdown in consumer spending but that they do see a strong plan to return to positive transaction comps by the second half of the year. That said they did did offer a tempered full year same store sales outlook of up low single digit range compared to the prior forecast of low to mid single digit range, the stock down here more than 2%. Morgan?

Okay. Thank you, Pippa Stevens. Lam research earnings are out. Christina Parsonvelis has those for us. Christina? Another chip name to beat on the top and bottom line. EPS is $1.04 for Q3 on revenues of $4.72 billion for their guidance for Q4 EPS that came in at the midpoint of $1.20 which is higher than the street with Q4 revenue guidance of $5 billion also higher than the street. Within the report the CEO said

quote, our outlook remains strong even as we address near term tariff related uncertainty and we are highly confident in our ability to outperform semiconductor industry growth in the years to come. And just one key point in terms of revenue coming from China that hasn't changed. It's still coming in at 31 percent. Last quarter was 31 percent. Nonetheless, shares are climbing almost 5% higher. Indeed, yeah. Christina, thank you. Also higher right now, ServiceNow by about 7%.

Those results are out. ServiceNow revenues beat at 3.09 billion versus 3.08 expected. Earnings per share beat at $4.04 adjusted versus 3.83 expected. Within that, subscription revenue was at 3.01 billion versus three even expected. Q1 non-GAAP gross margin at 82% versus 81.7 expected.

And let's see, CRPO, the remaining performance obligations at 10.31 billion versus 10.11 billion, indicating a strong pipeline. Guidance also above expectations, Q2 subscription revenue guiding to 3.03 billion to 3.04 billion versus an expectation of 3.02 that's below the low end of the range that ServiceNow is giving here.

And the full year guide a bit ahead of the street's consensus. I did have a chance to catch up with ServiceNow is giving here, and the full year guide a bit ahead of the street's consensus. I did have a chance to catch up with ServiceNow CEO Bill McDermott about these results. He said on the overall financial performance, this quarter was a rule of 68 between free cash flow and subscription revenue, so not too bad. Our AI business quadrupled year over year,

so it's really amazing, and we had 39 deals that had three or more now assist, that's AI products in them. I asked him why customers are buying AI. He says they want to improve their margin profile with the uncertainty around how much revenue they will actually have. So they are preparing for a lower revenue situation,

so they're really thinking about efficiency, effectiveness. OpEx down, margin profile improved, even if there's less revenue. They're not saying there will be, but they know there could be. Now on the issue of delivering AI value and the cost of that with the GPU spend, all these questions about infrastructure spending, how is ServiceNow able to deliver these kinds of results? He said, what we bet on a long time ago, John, is that the cost to operate those models would precipitously drop each and every month.

Now it's about one-thirtieth the cost it was when we started integrating with those models in the beginning of our march to integrate with all those models. So they're cheap to run. So it might be that the GPUs or the infrastructure was expensive for the hyperscalers to invest in and the LLM providers to invest in, but for us to access and run use cases on our platform, it's very de minimis in cost. Now I was just talking about Arvind Krishna and his concerns about brand America making sure that that doesn't get damaged. I asked Bill McDermott about that as well. Here's what he said. He said, I'm seeing that these countries recognize that America is a great country. Everybody goes through speed bumps, changes administration are hard, rethinking economic terms and trade is difficult.

I don't think they're going to hold it against brand America that we're in a period where we're working things out. Now, of course, there's the earnings call, but for a lot more on CNBC from Bill McDermott, don't miss Jim Kramer's exclusive interview with him coming up 6 p.m. on Mad Money. Woo, we just went through a lot right there. A lot of big movers. Brooke May, I wanna bring you back into the conversation here because there's a lot to react to.

You can sort of pick your name if you will. Whirlpool in the sense that it seems to be a proxy for tariffs and this made in America bet, this made in America trade. Las Vegas, Sands, Chipotle talking about slowing consumer spending. And then of course ServiceNow, which is perhaps the next chapter of the AI trade and where investors should be looking. I couldn't agree more. We own ServiceNow in our growth portfolio. And while this year hasn't been great, last year was up over 50%.

And if you look at macro trends and go out five years, ServiceNow is the kind of company you wanna own. Workflow processing is only gonna make companies more efficient and their ability to incorporate generative AI has really made them a leader in this space. So when we look at it, it's a little expensive right now at 46 times forward earnings, but if you're patient, it's the kind of company you want to own for the next few years. Okay. Paul Hickey, Brooke May and our own Mike Santoli. Thank you so much for kicking off the hour with us.

Mike, we'll see you in a little bit. After the break, a long time tech watcher and industry expert, Patrick Morehead joins us with his reaction to IBM and ServiceNow results and the broader setup for tech amid all of the market volatility. Plus, we'll talk more about earnings from Texas Instruments and the read through for the rest of the chip space when Overtime is back in two.

Welcome back. Night Swift earnings are out. Frank Holland has the numbers. Hi, Frank. Hey there, Morgan. Share is on Night Swift right now. They're down more than 3% following the company, missing on revenue but beating on EPS. EPS, 2 cents above the estimates of 26 cents to share.

However, the company also lowered its current quarter guidance. The prior guidance above the estimates of 26 cents a share. However, the company also lowered its current quarter guidance. The prior guidance was 46 cents to 50 cents a share. Now it's at 30 to 38 cents a share. In the release, the CEO, Adam Miller, really talked about a lot of the tariff-related uncertainty facing the company. He said that there was a tariff drag on March activity

that dampened the typical season build and freight volumes. Also said that customers are grappling with fluid trade policy, thus causing some to delay decisions while others are managing inventories more tightly, out of an abundance of caution. And then goes on to say other customers are taking action to mitigate their tariff exposure

while others are taking a wait and see approach. It's basically describing a lot of the uncertainty created by the trade policy. He also said that Knight Swift has taken the same actions that a lot of other logistics companies are doing, trying to reduce costs and basically tighten up their operations. Some people call it right sizing.

So again, shares of Knight-Swift, you can see, actually they're back to flat right now. They did fall just a short time ago. After a miss on revenue but a beat on EPS, also lowering its current quarter guidance, prior guidance 46 to 50 cents a share, now 30 to 38 cents a share. Back over to you.

Swift bounce for Knight-Swift. Back over to you. Swift bounce for nice Swift. Back to even, Frank, thanks. Meantime, some key tech earnings out just moments ago, including IBM and ServiceNow moving in opposite directions now in overtime. IBM down about 3%, ServiceNow now up nine. Joining us now is Patrick Morehead, CEO, Chief Analyst at More Insights and Strategy.

Patrick, thanks for coming on. So IBM first, not sure why it's that. I don't know if you saw anything in this report that particularly concerned you, but there was software strength overall about in line, including HashiCorp, and they're sticking to this 5% constant currency revenue growth for the year, which might not sound like much,

but I remember when IBM couldn't grow on the top line at all. No, that's right. And you know, Arvind Krishnan came in, turned it more into a product company, spun off the low growth businesses, and we are here. And what I particularly liked was double digits on the software. I think HashiCorp acquisition was brilliant.

And we are seeing some serious generative AI backlog take shape. But right now, six billion dollars, I think that grew a billion dollars over the prior quarter. One thing to recognize, and you brought this up a little bit with your interview with Arvind, was that Z17, their mainframe platform hasn't even hit yet, right? Mainframe hardware is at a low, and that is really

all software and many software and services draft off of that, and that's not even there yet. And we'll see that hit in the second half. Yeah, perhaps there's some reaction to uh... i'd be a maintaining uh... their guide despite the strength but you know given the macro conditions i don't know how folks will feel about that going to service now up about nine percent right now i was struck by

uh... bill mcdermott's bullishness overall on a i and the use that customers are getting out of it to control what they can control to try to drive efficiency when Topline is uncertain. What do you think? The company's story is really good, right? There's two ways to look at them, right? They have their own enterprise SaaS apps,

which are very effective. But what they've been building for years is this layer that sits on top of everybody's enterprise SaaS platforms, whether it be SAP or Workday or Salesforce, and now they have put agentic AI on top of that, and the value proposition can cut both ways. We can make you more effective, let's say hit you on the top line, and then

more efficient, which I think could be the manner of the day today. And quite frankly, you can double down on a ServiceNow's agentic platform and not have to pay the additional money to an SAP, to a Workday, to a Salesforce force, and many of these enterprise clients are seeing value in that. It's interesting, Patrick, because IBM has been trading almost defensively, at least within tech. I mean, stock was up before the move we're seeing here in overtime, it was up something like 10% this year

versus the 12% drop for the S&P. But then given the comments from Bill McDermott at ServiceNow about the cost to implement AI falling as well, I wonder if that too perhaps represents a more defensive play because if you do see companies pulling back on spending and on investing, names like this that can do more with less and can help push that adoption of AI applications faster, I

would imagine you're going to be in good positions. I think they will be, and particularly the ones that A, it's true, B, they have real customers that they can cart out and talk about how they have lower costs, and it is actually deflationary. This is exactly what the market wants right now. And listen, within a few months after we get all over this tariff and recession fears, it'll be all about how do we drive top line revenue, right? As opposed to how do we do more with less?

Okay. Patrick Morehead, great to get your thoughts. Thanks for joining us. Thank you. Well, we've got more after hours action coming up next when we talk to an analyst about earnings results from Texas Instruments with that stock up more than 5% and the read through to the rest of the chips. And later, former Kansas City Fed President Esther George is going to be with us to talk about the

big takeaways from the beige book and how trade uncertainty is factoring into the outlook. Be right back. Breaking news on tariffs and the automakers are Eamon Jabras has details from the White House. Eamon. John that's right the Financial Times just reported a few moments ago that the White House is working on an effort to exempt automakers from certain Trump tariffs. Now I just spoke with a White House official on this who confirms that that is under consideration here at the White House. The idea here is that automakers are subjected to a whole series of overlapping tariffs under the current scheme, including the fentanyl tariffs,

possibly aluminum and steel tariffs, all the sectoral tariffs, all of those kind of overlapping and stacking up on one another. And the idea is under consideration here is looking at a way for automakers to help destack some of those tariffs so they don't all multiply on each other and the number ultimately comes down to a more reasonable figure. What we don't know is exactly what that reasonable figure might be or what that destacking effort might look like, but the FT is calling this a trade war climb down by the administration and an official here now confirming that it is at least under consideration for now and not a done deal just yet but we'll wait for official details. So to put just a fine point on it it's not that tariffs are necessarily going away for automakers

but that you may see a pairing back given how many different tariffs potentially face them right now. Right you have all these tariffs going in all automakers, but that you may see a pairing back given how many different tariffs potentially face them right now. Right. You have all these tariffs going in all these different directions here from the White House, focused on fentanyl, focused on specific imports. The idea is that the automakers are getting hit by all of these, and is there a way to sort of de-stack those in their terms to show that some reasonable level of tariffs will remain in place, but the sort of super high number

that those all add up to is not the number that the automakers are ultimately subjected to. Okay, Ammon Jabber, thank you. We've got more earnings to bring you. Southwest results are out, and Leslie Josephs has the number for us. Hi, so these just came out from Southwest Airlines, beat on the top and the bottom line.

Thirteen cents a share adjusted. That's better than the 18 cents that analysts were expecting as a loss for Southwest. 3.43 billion for revenue. That's better than the 6.43 billion in revenue, better than the 6.4 billion in revenue that analysts were expecting. Of course, a lot of initiatives going on at Southwest Airlines now, the airline is completely changing itself, going to start charging for bags next month, it's going to have seat assignments, and we're going to hear on the call tomorrow how those initiatives are paying

off. What we also heard from Southwest Airlines is that they are going to make some capacity adjustments in the back half of the year. There has been some softness, especially in domestic air travel. We've heard it from Delta. We've heard it from United and those airlines are making similar adjustments as well. OK, Leslie Josephs, thank you with shares down right now. Texas Instruments is moving higher in overtime.

Meantime after reporting Q on earnings results just a few moments ago, let's bring in steeple managing director Tori Sponberg. He has a hold rating on the stock. Tori, want to get your thoughts on these results because it was a beat and then the guidance was stronger than expected as well. Yes, thank you, Morgan.

Thank you for having me. So yeah, the guidance is certainly better than expected and certainly better than feared. So they're guiding revenues to grow about 7% sequentially. Consensus was modeling 5%. They also said that all end markets did well in the March quarter with the exception of personal electronics, which is usually down seasonally anyway. So I would classify this quarter as a, this is sort of the beginning of a cyclical recovery because keep in mind, the broader semifinal industry has been in a correction of for two years

with still not a whole lot of clarity on tariffs so that's how i would classify the quarter. Autos, industrial, I mean these are these are key markets for Texas Instruments so when I hear you talking about the beginnings of a cyclical recovery, just how at risk is that given the tariff uncertainty or is this a situation where they could persevere despite it? Yes, I think that's the big question, right? Because prior to April 2nd, I think it was pretty clear that we were at the beginning of a cyclical recovery in most end markets and then obviously April 2nd happened.

And since then, it doesn't look like there's been a whole lot of impact to TI's business as it relates to tariffs. There could also be some pull ahead here because of the pause in tariffs, as you know, with many, many countries. So from that perspective, Q3 could potentially be the quarter when we see more of an impact from the tariffs.

Keep in mind, it takes a while to build electronic systems, right? So, you know, even though the tariffs happen on April 2nd, you know, there's definitely a lag effect, you know, when you get the tariff type issues. So I think Q3 might be a better read on, you know, the actual impact from tariffs. Doria, how do you feel about what you're hearing

about inventory levels and the kind of internal things that perhaps Texan can control even if they don't know what's going to happen with global politics. Yeah John so TI is very unique in the semitech industry in the sense that they actually run their inventory on consignment. That means that they tend to hold the inventory and they don't let their distributor customers or end customers to hold that inventory. So their own inventory still remains very, very high, obviously because we're coming

off a cyclical recovery, sorry, a cyclical correction. And then I would say that customers' inventory levels are more reasonable now than obviously we've seen over the last two years. But yeah, do keep in mind that they tend to hold inventory themselves on consignment You know because they don't like it when the channel holds it important to keep in mind tory Sponberg. Thank you Thank you. Well, it's time for CNBC news update now with Bertha Coombs Bertha Hey John the chief of staff to Ukrainian President Volodymyr Zelensky says he told the U.S. envoy in London that Ukraine will, quote, stand firm on its principled position in regards to its territory.

The comment comes in the wake of President Trump reprimanding Zelensky earlier today for refusing to recognize Russia's occupation of Crimea and jeopardizing a possible peace deal as a result. NBC News has learned two of the defense secretary, Pete Hegson, senior aides who were escorted out of the Pentagon and accused of leaking classified information to the media have been exonerated within days of having been fired. Sources say the Pentagon's official special office with special investigations did not contact the men Because another government agency had looked into the matter and ended the probe

Local police say the man they have identified as the gunman in last week's mass shooting at Florida State University Is still in the hospital and because of that the Tallahassee Police Department tells NBC News He has yet to be formally charged and no arraignment has been set. Two people were killed in that attack and five others were injured. Back over to you, John. Bertha, thank you. Up next, hard truth from Soft Data. Mike Santoli returns with a look at how Wall Street is trying to square a big disconnect showing up in the numbers. And later, green shoots in China.

Why the CEO of metals and mining giant, BHP, says the economic situation in Beijing might not be as bad as the headlines suggest. Over time we'll be right back. Welcome back. Now let's bring back Mike Santoli for a look at the disconnect between soft and hard economic data. Mike. Yeah, Morgan, been one of the biggest issues hovering over this market. The so-called soft data or surveys of every sort of consumers of CEOs of small business. The regional fed surveys, all that stuff, but profoundly negative. And that includes consumer confidence. That's the orange line here. Obviously taking a big dive near multi-year lows. The top is the unemployment rate. Now it's inverted so that it's going in the same direction, but you see it still remain relatively strong 4.2 percent This would suggest perhaps that there should be some convergence or the risk of it with a weakening up at the labor market It's a logical conclusion. We'll see if it happens But note that this divergence started like three or four years ago in the inflation shock

So a lot of this soft data have looked worse than hard for a while. We'll see if the whole tariff mini crisis so far changes that dynamic guys. All right. Mike Santoli. Thank you. Well, up next, much more on the macro outlook with former Kansas City Fed President Esther George. And later the head of the world's largest miner

on why commodity prices have been holding up so well despite trade angst and global growth concerns. Stay with us. Welcome back to Overtime. Let's get back to Contessa Brewer for more on Las Vegas Sands earnings. Well, Las Vegas Sands has just announced on the earnings call they're throwing in the towel

on trying to get a downstate casino license in New York. This is a big deal because remember, after selling their Las Vegas Sands has just announced on the earnings call they're throwing in the towel on trying to get a downstate casino license in New York. This is a big deal because remember after selling their Las Vegas property, they have no U.S. business to speak of in the United States. All of the business comes from Singapore and from Macau. They said they're looking for a third partner that they can transact with to bid on this license and mentioned there are concerns about iG gaming and how much that cannibalizes or encroaches on downstate bricks and mortar kinds of gaming. But this is a big deal because Las Vegas Sands has spent years and tens of millions if not hundreds of millions of dollars trying to get this deal done to win a license in Nassau

County about an hour to the east of New York City. And now they say they think a better use of their capital is buying back the shares of Las Vegas Sands. And to that point, they've now been authorized $2 billion of buybacks. In the meantime, we'll have to see whether somebody else comes in and is willing to bid four to $5 billion to get a license

and build this integrated resort out on Long Island. We'll continue to follow that. Shares right now up a percent, guys. Okay, Contessa Brewer, thank you. Meantime, fresh headlines on Trade This Hour. The FT reporting President Trump is planning to exempt carmakers from some tariffs. Joining us now is former Kansas City Fed President Esther George. Esther, it's great to have you on the show and that's where I'm gonna start with you because we got the beige book report this afternoon and it was showing some, what I will call storm clouds related to trade.

This was data that took us through the first, call it two weeks of April. So on the grounds, realtime insights, if you will. And now I would say in the last 24 hours or so, you have the president softening his rhetoric, softening his stance, at least verbally, when it comes to tariffs. And I wonder if it means, perhaps, that the peak is in, in terms of the tariffs, the size of the tariffs we've seen. And if so, we could see some of this uncertainty begin

to shift just as quickly as we saw it come in. Yeah, well, thank you, Morgan. I think this is such a key issue, and to your point about whether things have peaked or whether we have other issues to deal with is really part and parcel of the source of uncertainty here. I think what's certain is that tariffs are coming and that's been clear for some time, but we are beginning to see lack of clarity about where those will be applied to what sectors, how different countries will be treated in this negotiation, if you will.

And so that uncertainty is clearly weighing on people's mind, both households and it is certainly weighing on businesses in terms of how they think about where to invest in this environment. After what about the Fed? Does this sort of freeze you when you're watching the conditions, the facts on the ground changing

and trying to figure out how much to figure tariffs in when you're thinking about what to do with rates? Do you then have to wait and see the actual impact in the data or can you project? Well, you have to do a little bit of both, John, because what you're looking at right now is a Fed that is facing extraordinary policy change in the form of tariffs, at the same time that they have been very attentive to the levels of inflation, that they are really focused on bringing back down to their target. And so in that environment, just as we saw in the beige book today, the economic data is holding in there somewhat softer,

if you will, but not giving them the signal that the change is coming about in a way that would force their hand to lower interest rates. And so for now, they have to be attentive to what's happening with inflation, the fact that the tariffs will be inflationary to some extent once they see what happens, and also balancing that with what impact there will surely be to growth in the

short-term and medium-term. Ester, if you were still at the Fed, what would be the data you'd be watching most closely right now, given the uncertainty of this environment? Well, there's a couple of things, Morgan, that I think you have to

pay particular attention to. Things like the Beige Book are very important because they are kind of giving you a sense of what's happening on the ground and in real time. So, the various contacts that the 12 regional Fed presidents

have with businesses, with community leaders, very important right now. And the other thing that I'd be very mindful of are watching inflation expectations. We certainly have seen in survey data that those expectations are rising for households, for businesses as they think about what the future holds.

So the Fed has to be very attentive that they don't lose control of the narrative that inflation is going back to their target. Okay. Esther George, former Kansas City Fed president, thank you. Well, more tariff commentary showing up in earnings results this hour. We're going to tell you what one closely watched company just said in its release when Overtime

comes right back. Welcome back to overtime. Let's check in on a few of today's overtime movers. Chipotle moving lower, about two and a half percent after a mixed quarter, beating on earnings but missing on revenue. United rentals higher by almost two percent after beating on earnings and revenue and announcing a new $1.5 billion share buyback. And O'Reilly Auto down about 2%,

missing on earnings and revenue saying, the changing tariff landscape brings with it a high degree of uncertainty, and the fluid nature of the implementation of tariff adjustments makes it difficult for us to predict the impact to our business and our customers. And another check on two closely watched tech names,

IBM and ServiceNow, IBM down about 5%. ServiceNow up 10. All right. Well up next, the CEO of BHP, the world's largest miner on where he is seeing important green shoots in the global economy right now and how that could impact commodity prices. And don't forget, you can catch us on the go

by following the Closing Bell Overtime podcast on your favorite podcast app. We will be right back. Welcome back. BHP, the world's largest miner, up about 6% in the past week after reporting earnings, including a 10% rise in copper output. BHP produces copper, iron ore, some metallurgical coal. It's developing the world's largest potash mine in Canada. coal. It's developing the world's largest pot ash mine in Canada. I spoke with CEO Mike Henry this morning and I asked him how BHP is navigating tariffs and why despite uncertainty and worries about economic growth, commodity prices have been, to use his words, quote, quite resilient. He pointed to the biggest demand market for many commodities, China. In spite of the economic headwinds there, many of the more metals-intensive sectors of the economy, like infrastructure, machinery, manufacturing, have held up quite strong in recent months.

And we're starting to see some economic green shoots there. And so off the back of that, we've seen somewhat resilient demand, a bit of sentiment overhang on prices, but overall not as bad as the headlines might suggest. I realize we've had some cooling rhetoric from officials here in the U.S. regarding trade dynamics between the U.S. and China. But when you talk about green shoots there, what is your outlook for China, especially amid the uncertainty of these trade dynamics? So much of it depends on what happens on the trade front.

Having said that, in the face of any disruption to trade, we do know that the Chinese government is very clear on the levers that they would pull internally to stimulate the domestic economy. And of course, they're not solely reliant upon the U.S. as a market. And we've, you know, they've, over the past decade, they've pivoted many of their exports to other markets. And some of those markets remain healthy destinations for what China makes. And so the outlook for China, we remain confident in it over the medium to long term, notwithstanding the fact that there could be some near term pressure if things don't settle down on the trade front.

Now, BHP is betting big on copper. Henry telling me he sees copper demand growing globally by 70% over the next 25 years, even as new copper deposits become harder to find and extract. Now, BHP jointly holds a massive undeveloped copper site in Arizona with Rio Tinto. Just in recent days, the Trump administration has taken steps to begin those first steps toward regulatory approvals of an investment that could, according to Henry, run upwards of $10 billion to supply the U.S. with copper domestically over the coming years. So one to watch, if you will, among many to watch, John.

Yeah, interesting. He's measured there. And it's still early in earnings season, but I got to say, I feel like the CEO commentary thus far has been more measured, particularly on the outlook and on the guy given the macro than some have feared. Does that continue? How much of that is colored by the fact that the Trump administration, President Trump, forget about the administration, seems to be pulling back from his more extreme rhetoric

about the trade war? We'll see. Yeah. Mitigation efforts. That seems to be the theme coming off of conference calls across industries right now and all the different levers that CEOs are looking to pull here. We get Alphabet and we get Intel

and a number of others here in overtime for earnings tomorrow. And certainly tech has been one of the leaders this week as we've seen this rebound take shape in the market. Alphabet and Intel sure to be very different. Well, that's gonna do it for us here at overtime.