Closing Bell - Focus on Netflix Earnings, Trump vs. Powell, and Market Response 4/17/25

Episode Date: April 17, 2025

Malcolm Ethridge of Capital Area Planning Group and Barbara Doran of BD8 Capital Partners break down the shortened-week’s market action. Mark Mahaney of Evercore ISI offers a Wall Street rapid reaction perspective on Netflix, followed by broader entertainment industry insights from Ben Silverman, Propagate Content Chairman and former NBC Entertainment Co-Chairman. Former acting White House Chief of Staff Mick Mulvaney talks the President’s relationship with Fed Chair Jerome Powell. Huntington Bancshares CEO Stephen Steinour joins to discuss earnings, the consumer, and more. Mizuho’s Jared Holz breaks down major moves in the health care sector. 

That's the end of regulation read Alliance from the closing belt the New York Stock Exchange class over holdings doing the honors at the NASDAQ A mixed session to close out this shortened trading week the S&P 500 Outperforming while the Dow gets dragged down by United Health. It looks like the S&P finished fractionally higher That is the scorecard on wall street, but the action is just getting started. Welcome to closing belt overtime I'm Morgan Brennan. John Ford is off today We're just moments away from Netflix results, a key test for big tech. As earnings season gets into full swing,

we've got a great lineup of experts to help break down all the numbers. And also ahead, former acting White House Chief of Staff Mick Mulvaney will join us to talk about the dramatic day of heated rhetoric from President Trump toward Fed Chair Powell But as we await Netflix results, let's get to the market that just was and joining me now is Barbara Duran BD8 Capital Partners Founder and CEO and Malcolm Etheridge managing partner at Capital Area Planning Group and a CNBC contributor great to have you both here as I

Mentioned a mix end to the session here. The S&P it looks like as we settle out maybe 5282 the NASDAQ basically at the flat line here, but the Dow dramatically lower largely because of United Health. Barbara, I'm going to go to you first here because we have.

We had tax day this week and we know that tends to bring in some good seasonality. We also know there's a lot of macro uncertainty and earnings season is really just getting underway here. So what do you think of this market? Well, it's interesting. It's always a question of how much is being discounted in the market, because we're a couple months

into this correction. And I think it's unknowable. I think the worst is probably behind us because of the draconian tariffs. So we're out a couple a couple weeks ago we know that that's being worked on in fact there were some positive you know tweets about Japan today in Italy moving closer but we still have the shoes

dropped in terms of they're looking at semis and lumber pharma and what's going to happen there. But the question is looking at individual stocks where do you go now earning season will probably be reflecting a lot of good things guidance companies already are saying. With guidance this is what we

think but there's a lot of macro uncertainty so we don't know. The things tariffs have yet to work through the system because they've really just begun. So I think you can cherry pick in here very carefully I mean as someone

had just mentioned that names like meta. You know are down twelve percent on the month alone. Names like Amazon or Amazon's down 12% Metta 8%. So there's a lot that you can do, but I cannot say that they won't go lower in the near term. So we still have a few months of trading uncertainty, a lot of volatility ahead. Okay, well we've got Netflix results crossing right now. Stocks up initially here in overtime. Malcolm, I'm gonna warn you right now, I'm probably gonna interrupt you here in a second, but as we do see Mag-7 kicking off with, well, Mag-7's not kicking off with this report, but Big Cap Tech kicking off with this report.

What are you gonna be watching for? Nevermind, we've already got those Netflix numbers. Julia Borstin has them for us. Julia? Netflix beating on the top and bottom line. Big beat in terms of earnings reporting six dollars and 61 cents per share versus five dollars and 71 cents. Estimate revenues a smaller beat, but still a beat 10.54 billion in revenues

ahead of the 10.52 billion estimated. Operating margin well ahead of expectations at 31.7% versus the 28.5%. That was a street account consensus estimate showing how they're beating on the bottom line there. And in terms of guidance, also guiding to a beat in the second quarter, guiding to EPS of $7.03. The estimate is $6.28. Second quarter revenues guiding to $11.4 billion versus $10.9 billion. That's the estimate. Also guiding to a Q2 operating margin of 33.3% well ahead of the 30%, which is expectations. We're really seeing greater profitability here. And shares are trading pretty much flat after some growth in that stock earlier this week and certainly high Expectations back over to you. Okay, Julia. Thank you. I'm sure we'll see you again very soon with more from this report Malcolm

I'm gonna get your response to this as the stock is bouncing around here in Overtime, but it looks like at least on that on the main metrics here beat across the board Yeah, Morgan like at least on the on the main metrics here beat across the board. Yeah Morgan I think that the point that Barbara was making that to start off about being selective about the companies that you want to own tied in worth with earnings season

tells this story right. Netflix is one of those that ironically has become a bit of a defensive play right now in an environment where consumer spending has definitely changed right. Where consumers aren't necessarily spending on bigger ticket items and maybe not traveling so

much what they are willing to still continue to pay for is that home entertainment and probably adding more subscribers- in this quarter- in the next couple- as we can have as we are concerned about. A recession Netflix is probably going to be one of the bigger winners in that space. So I think that the report right here just showed the strength of that name, even though you would assume the consumer will be pulling back on subscription services in the entertainment space.

Yeah, we don't even have those subscription numbers, Barb. This is the first quarter where they're not reporting those anymore. But the strength of the results they have put up here, does this reinforce this notion that Netflix is defensive in this environment? Yeah, I think so. I think Malcolm is dead right on that because the recessionary capabilities of this have to do with one, the quality of their content. You see that ever increasing and plus when they're introducing these special live sporting events. And the key now, since we can't know the subscriber numbers, is really user engagement. And hopefully they'll be

talking about that on the call. And the recent numbers in since we can't know the subscriber numbers, is really user engagement. And hopefully they'll be talking about that on the call. And the recent numbers in terms are about two hours on average, the average subscriber, and they've got a 302 million base of subscribers are spending per day on watching Netflix. So we'll be watching that. And plus advertising is really just beginning to scale up. And they expect it to double this year. We want to hear a lot more about that. In fact, the last time we had subscription numbers,

which was their blowout quarter in this last quarter, you saw 55% of new subscriptions were in the ad-supported tier. And that's important because in the fourth quarter, when they were up 19 million in subscriptions, that was almost half the total year. So I think that momentum is likely to continue. And plus international is a big growth area for them

with 30% of their streaming titles in non-English. So there's a lot of growth drivers ahead for this company. So Malcolm, how does this set the stage if it does for other mega cap tech? I mean, I always sort of think of it as it's a little bit in its own bucket. Is that the right way to think about it now given the current environment or does it actually portend potentially good things ahead here as earning season continues?

Well, I think whether it's true or not that the worst is actually behind us the way we started this conversation, what is likely true is that tech has taken their medicine or at least the majority of what they're going to take. So if we're talking about another 2%, 5% down from here versus potentially recovering all of the 20 plus percent in all of those individual mag seven and the rest of mega cap tech that you're talking about, I think that it's a good place for investors

to be picking up some names like Amazon, I heard mentioned initially- that are have been unloved coming into this slide starting in February. But also have- you know given a lot back in that same time I think that names that you've had on your list that you wish that you've

owned for quite some time that aren't. Performing the way the Netflix is for example being a positive one. A year to date versus some of the others in the tech space is a great time to be buying. Those names on the assumption that the worst, as we said, is behind us at this point. Okay, maybe get your shopping list ready. Malcolm Etheridge and Barbara Duran, thanks for kicking off the hour with me

on what was a mixed day of trading, but pretty marginal moves here for the major averages, although we are lower on this holiday shortened week. Let's bring in Julia Borson she's got more detail for us. Julia? Yeah digging into the Netflix guidance here I reported a big beat in first quarter numbers better than expected guidance for Q2 but it's notable here that the company is reaffirming its prior full-year guidance showing that despite the better than expected results so far and certainly expected through the first

half of the year, they're not increasing their overall guidance. Just a quote from the letter here, they say, there's been no material change to our overall business outlook since our last earnings report, though at current foreign exchange rates with the recent weakness of the US dollar relative to most other currencies, we're currently tracking above the midpoint of our 20, 25 revenue guidance range. To me that says there is still so much uncertainty. They're not even going to talk about the potential uncertainty down the line. One other thing here,

since you were just talking about how they're not releasing subscriber numbers this quarter, no subscriber numbers, but now they're talking about the audience, which is of course a more relevant statistic and number now that they're selling advertising. And they say, we have a huge audience that's estimated to be more than 700 million people with over two thirds of them living outside the US. Last quarter, they topped 300 million subscribers, but now they're focusing on all the people in those households that are watching at the same time. So the fact that the stock is only up about 1.5% makes more sense if you look at that guidance

over the course of the year. Back over to you. All right, Julia, thank you. And shares are about 1.5% right now. Let's bring in Mark Mahaney, Evercore ISI, head of internet research. He has now performed reading on Netflix. Mark, it's great to have you on.

Wanna get your initial read on what we just got here from Netflix. There's a lot to comb through. They needed to put up a strong print and they essentially did. The bar was high for this stock. It's going to be lower for most other tech stocks that I look at. But the bar was high for this one. It was perceived to be a defensive stock and some of the other commentators have already

pointed out and it's showing that. In fact, the margin results are pretty darn impressive. So I think that's probably the biggest takeaway. Unfortunately, we're not longer gonna get subs. We sort of knew that. And it looks like that price increase was, they said that the churn related to it sort of came in in line with expectations.

We think it may have come in a little bit better than that. It seems to me like this guidance for the back half the year is reasonably conservative. I would think that we're gonna be taking up numbers as we go through the year. So I'm a little surprised it didn't take up the full year, but I get it. It's early in the year. They did point out this squid games, the finale is coming out the end of June. That should be a boost for the business as it was the last two times. Overall, it seems like a solid print to me. On the one hand, you see a weakening dollar and that is a tailwind as the

year goes on if that trend continues for Netflix and others that have these global businesses. On the other we've been talking about it non-stop all of the uncertainty tied to trade policy and tariffs. Now I realize that Netflix the actual business may be somewhat immune to the specific dynamics of trade and tariffs, but is there still a risk here that you could see folks in other markets start to pull the plug on Netflix because they are mad at the US or boycotting or whatever else narrative we've been starting to hear from certain places? It's possible Morgan. I think they're completely immune to the tariff issue

unless international governments want to start going after u s services companies which is a large part of our economy and uh... if there's retaliation against services companies okay maybe maybe something like that would happen with that looks i've seen so that in terms of the recession risk at netflix you know everything's there's nothing that's recession resistant but this is this is about as close to being recession resistant or relatively it's the most recession resistant name I cover.

It's just really high quality entertainment at a very low price point. The worst case you pay $7.99 for a whole month of access to content. Entertainment generally shows up, holds up well in kind of soft macro environments. Netflix will do, will as well. And Netflix has been tested.

We've seen that Netflix now through multiple economic cycles. And even though it's much bigger now than it was in the past, I think the value proposition holds this is a recession resistant, a tech play as you can find. So Julie, you just mentioned more than 700 million people, over two thirds of them outside of the U.S. Is that number in line with your expectations? And how important is that number for them

as they build out this ad tier and all the infrastructure associated with it? That number is just maybe a little bit bigger than I think we in the street would have thought, but modestly bigger. The one quick thing here is this is a subscription business and so you don't get these huge massive upsides. It's just you've got that large of a base that you can only, you know, you can bring in a lot of new subs, but it just doesn't move the needle that much. So it's still. You got that large of a base that you can only you know you can bring in a lot of new subs but it just doesn't move the needle that much so. It's still impressive the upside they have now I know I I realize part of that is

some. Part of that is currency and then the two new things if you're looking at Netflix fresh today. You like what's new what could be new about the story there's two things. One is there's ramp up an ad revenue. If they can can if they can double it this year they laid out some informal. Guidance or at least they talked about it internally in the end and something that was disclosed- earlier this week in Wall Street Journal. You know I think they can probably get close to nine

billion in in ad revenue that would that that that would make them a different. Player think that would probably well help support the multiple maybe even take a little higher. And then the second thing is a new investor or look taking a fresh

look at this, live sports. I wanna see and I think the market will respond positively to them kind of building out more of the bundle if you will. And the way you do that from Netflix today is building up more live events, live sports at the top of that list. So we wanna hear about these. That'd be kind of the second catalyst

I'd be looking for in the stock. Okay, Mark Mahaney, always great to have you on on Netflix earnings day. Thanks Morgan. Appreciate it. We're shares in Netflix up about 2% right now. Still ahead, we've got much more on those results when we're joined by content expert and former NBC entertainment co-chair Ben Silverman. Plus, the latest on President Trump's harsh words for Fed Chair Powell, former Trump acting and Chief of Staff Mick Mulvaney will join us to discuss this

developing story and we'll talk to an analyst about Eli Lilly's big weight loss pill news today and about the plunge for UnitedHealthcare over time is back in two. Welcome back. Netflix shares are higher after an earnings beat. We're up, well, now we're up four and a half percent, almost five percent. Let's get back to Julia Boers and for more on those results Julia. Morgan just taking into some commentary here about the impact of the price hikes as Netflix did roll out price hikes in some of its larger markets including the U.S. U.K. and Argentina.

They said those pricing adjustments have performed in line with expectations. They're also announcing that today they're rolling out price increases, what they call adjustments in France, which has already been factored into the 2025 guidance. Also just want to mention one other thing here, which is that Reed Hastings, founder and also previously executive chairman, is transitioning from executive chairman to chairman of the board and a non-executive director. Shares now up nearly 5%. Over to you. Okay, Julia, thank you. Let's bring in Ben Silverman. He is chairman and co-CEO of Propagate Content.

He is the former co-chairman of NBC Entertainment. And it's great to have you back, Ben. Let's start right there with the results we got from Netflix. Your initial thoughts. Well, you know, I think it's clear that the international investment that they made early is paying off with over two-thirds of their subscribers, and as they're calling it, audience, overseas. And I think scale is unbelievably important to advertisers.

And so the ability to reach that many consumers through one platform, I think, is going to unlock a lot of opportunity for them. And also, as so many products are global and global CMOs or look and CEOs don't have a means to go global outside of the social media platforms. And I just think contextualizing yourself with premium content, with high-end content as Netflix produces is such a better environment than being around

more haphazard content that you may not have control over or even like the context of. So where do you think that those growing ad dollars to Netflix come from? Do they come from things like social media and other online you know online venues and platforms or do they come from other media companies? I think it's the combination, right? They've obviously been competing with traditional media companies since they, you know, turned from DVDs to original content.

So clearly there's money there, but also I really do think there's so much money in the social and their biggest competitor now is looking more like YouTube than Disney from the past. And I think they will have opportunities as they deliver global audience to go after those dollars and the premium context of how they produce high-end content. If you're a, if you're an advertiser and you want to be in safe zones and zones around content you trust that is really vetted and for quadrant and I think they have that ability

to really take from social, where there is a lot of anxiety among parents and a lot of anger among constituents of how unfettered the social media platforms are in their delivery of content. So in light of that, how important is sports and live events now and the build out of that for Netflix? Well, we make the Untold franchise. We're dropping some new ones coming out, which is one of their early stage pieces of content, sports related and the best sports stock series in the world.

And I think when they start adding these live events, that's only going to trigger more advertising dollars. It's obviously as well going to galvanize an audience to watch something in one moment, right? This has been a service that served a need. It created a la carte on demand opportunities for you to watch whatever it was that they had on the service whenever you wanted it. And that's a disparate audience that's not all going to be aggregated in the same moment. Live sports is going to deliver that audience in that moment, and I bet they're going to start betting on sports that can deliver that audience around the world, not just in the U.S. or in France or in Argentina.

And I think they'll pay for itself, those investments, very quickly because of the scale they have to reach such a global audience. If you look at a U.S. player who's buying the rights to a NFL game, they're not selling that game internationally. Their money is only made within the U.S. market or the territory that they license, maybe North America, whereas they'll be able to monetize those products around the world. And football specifically, you're watching grow in places like Melbourne and Germany and Mexico where the NFL is taking it

So I think there's gonna be a lot of opportunity for them to continue to do that They do need to continue to invest in premium content at a high level Apple stuff is getting really good and and Amazon made a change in leadership and I bet their stuff gets better So they need to continue to focus on that. Okay. Ben Silverman, thank you for joining me. Of course, Morgan. Well coming up, could President Trump actually fire Jerome Powell? And how would the market react? We're going to discuss potential scenarios with former White House Acting Chief of Staff

Mick Mulvaney. And we will talk to the CEO of Huntington Bank shares, fresh off earnings, about his read on consumer lending, small business, so much more over time. We'll be right back. Welcome back. Shares of Huntington Bank shares closing higher today after reporting first quarter results this morning.

The company highlighted growth in loans and deposits and net interest income expansion. This comes as regional banks posted their best week since January. So joining us now is Huntington Bank share CEO, Steve Steinhauer. Steve, welcome to overtime. It's great to have you on. Terrific to be with you Morgan, thank you. So let's start right there because you saw

first quarter profit up 26%. We just talked about it, net interest income up 11%, strong loan and deposit growth. And perhaps most notably to me, given how much talk we're engaged in here on CNBC about the uncertain economic environment is the fact that you boosted your net interest income forecast for the year as well. What's giving you the confidence to do that?

Our net interest margin expanded nicely during the first quarter. We expect to hold that at roughly the current level, which is higher than the prior forecast. Also, our loan growth has been exceptional during the quarter. Our deposit pricing has also been strong. Fees have been strong. Charge-offs have been below forecast, below expectation. So, we're sort of hitting on all cylinders. And as we come into the second quarter, we've got a confidence in that quarter. As we talk to our customers, this is a challenging time for some, but not all. And there are some businesses that are actually going to take advantage of this and I think perhaps even perform better.

What are the types of businesses? And I ask this knowing that you do a lot in the SBA space. So you're working with and lending to a lot of small businesses across the U.S. Who do you expect to take advantage? Well, many of these smaller businesses, in fact, don't export or import. They're not having metal-bending activities where you have uncertainty or significant increases in like steel or aluminum prices. So those businesses should perform very well going forward.

You know, for years, probably five or six years, we've been hearing, you can't get enough labor, a chronic in all markets and types of businesses. And so there's an equilibrium that we're adjusting to. And I think over time, what's happening with the tariff discussions, the end result being fair trade, will be really helpful for many of the manufacturing and other larger businesses that we have here in the US. Obviously where we are in the Midwest, there'll be a reshoring dynamic that will benefit us,

but we additionally expanded into Texas and North and South Carolina last year. I was talking to one of our advisory board members just minutes ago, who's in the construction business in South Carolina. He said it's never been busier. It's interesting to hear that. It's a different take than what we get, I think,

sometimes on the coast or even from some of the big bank CEOs who, my read through on what you're saying right now sounds a bit more cautious and I've been talking about rising risk of recession. I don't hear that coming from you to the same level right now. Well, there are varying scenarios that we all model to. And a recession, a mild one or even a sharper one is something we look at.

But we don't see that as a necessary outcome or a likely outcome at this stage. We think there's a lot of strength. Again, the unemployment rates are still very, very low by historical standards. And interest rates, although they're up from the all-time low, they're still at relatively attractive levels as you look back over time. And again, a number of businesses are doing very well. I mentioned that construction firm. Many of these are working with multi-year backlogs. There are a number of other businesses that are doing well.

I think some businesses have paused a bit. And so as we proceed in the year, we'll see their demand return. What are you seeing on the consumer side? You have a big book of auto lending, for example. We've been talking, you just mentioned deposits and the fact that charge- deposits has been lower than you expected.

We have been able to grow deposits sequentially now for a number of years. First quarter was very good. Deposit pricing was favorable on much of our portfolio of deposits. We expect to continue to do

that. The consumer has been sort of in a bifurcated world. If you are a lower or more moderate income consumer, probably for the last year and a half as rates ticked up, you've been feeling pressed. And so we have a lot of empathy for them. There's a lot of support that we try to provide to them. We as Huntington and certainly our industry.

But there's also a large segment of the consumer population that's doing just well. In the Midwest, there's a housing shortage. There's more demand than there is supply, as one example. Autos had a very good month in March. Maybe some of that was pre-buying, we'll have to see. But our consumer delinquencies are holding in very nicely and the consumer generally looks good for us. Some reduced transactional activity, but as we look at our card business,

but it's off a couple of percent and it could be seasonal in part. I do wanna ask about the news of the day and that has been some of the public rhetoric we've gotten from the White House and President Trump in regards to Fed Chair Powell and just the back and forth publicly over the last call at 24 hours here as the CEO of a major American bank, how important

and I guess perhaps just as importantly, how do you define stability in terms of leadership at an agency like the Fed? Well, not going to comment about what's in discourse today or even yesterday between the president and Chairman Powell, but I do believe stability because it creates confidence. And confidence is an essential element to how the economy is going to perform over the next year. So, we're looking for things like tariff resolutions. It was very encouraging yesterday to hear about Japan

having made tremendous progress. We believe there's opportunity to advance very significantly with Canada, Mexico, Europe, and our key Asian allies over the next number of months. And that will be a substantial reset for fair trade, again, which will benefit many industries in the US Steve Steinauer of Huntington Bank shares. It's great to have you on Terrific to be with you. Thank you so much shares finished up more than 3% today and are up another one and a half percent

Here in overtime amid this discussion. Well, it's time now for a CNBC news update with Pippa Stevens. Hi Pippa Hey Morgan, local police say a person is in custody in connection with a shooting earlier today on campus at Florida State University in Tallahassee. A senior law enforcement official tells NBC there is at least one fatality while Tallahassee Memorial Health says it's treating at least six people with one in critical condition and the other is listed in serious condition. The Supreme Court is set to hear oral arguments on May 15th on whether the Trump administration can enforce its proposal to end birthright citizenship while litigation continues.

When they do, the judge will consider if judges in the lower courts overstepped their authority when they issued nationwide injunctions. But for now, the administration's policy remains blocked nationwide. Meanwhile, an appeals court said the Trump administration's claim that it can't do anything to bring back a Maryland man mistakenly sent to El Salvador, quote, should be shocking. In a ruling moments ago, the panel unanimously refused to block a judge's decision to order federal officials to answer questions under oath about what they have done to bring him back.

Morgan back to you. Okay, Pippa Stevens, thank you. Coming up next, much more on the story of the day. Former Trump White House Chief of Staff Mick Mulvaney on President Trump's harsh words for Fed Chair Powell and if he thinks the Fed Chair's job is in jeopardy Welcome back to overtime as we mentioned president trump turning up the heat on fed chair powell Posting this morning that powell has been quote too late and wrong on rape policy and that quote powell's termination cannot come fast enough The president doubling down later in the oval office

He's too late always too late little slow and I'm not happy with him. Uh, I let him know it and, uh, if I want him out, he'll be out of there real fast. Believe me, this afternoon, the Wall Street Journal reporting that the president has discussed firing Powell for months, including during meetings with former fed Governor Kevin Warsh. With us to discuss is Mick Mulvaney. He's the former acting chief of staff under President Trump and the former director of the Office of Management and Budget, among a number of other things. Mick, it's great to have you on.

Thanks for being with me. I'm going to start right there, and that is we have this debate all the time about whether the president can fire a fed chair without cause and yet we know this Humphreys executor decision is being revisited by the supreme court so how much now hinges on the court and depending on the outcome do you think the president would actually make a move here? Yeah well I think this entire discussion Morgan has caught up in the larger sort of debate about executive authority, the unitary theory of the president.

Does the president have the right to run the executive branch? And if so, where does the Federal Reserve fall in that? I know there was some discussion within Trump world before the election, maybe going back to last summer, that they thought they had a fairly decent legal basis for removing Powell as the chairman, although they didn't think they could kick him off the board entirely. At the end of the day, though, you have to think that Powell, I think, has only got, what, 12 or 13 months left in his term. Whatever, if Trump does try to do something, you got to think it would take at least that

long to go through the courts. The chances of Jay Powell staying in office for the pendency of that lawsuit are probably pretty high. I think that may be one of the reasons you've not seen Trump do something up to this point. It would be mooted by the fact that Powell's term would probably expire anyway before the courts would have a chance to render a final decision. This Wall Street Journal story we saw late this afternoon, is your sense that a story like that would be a leak

or potentially floated from someone in the administration to see how constituents react, including, by the way, the markets? Oh, it's always hard to read into that, but I think your question is correct, which is how are the markets going to react? Look, even if Trump does have the authority to do it, and look, count me amongst the people who said,

look, the independence of the Fed has been in question for a long time. I mean, I remember when Janet Yellen was the Fed chair when I was in the House Financial Services Committee, the Republicans were pulling their hair out over her politicization of the office. So put that aside, I think if Trump were to make a dramatic move right now, legal, illegal, question-of-legal, whatever, the bond markets would react very, very negatively. And I think, listen to what Trump said last week about how he decided to come to the decision

on the 90-day pause for tariffs, he watched the bond markets. The federal government, Morgan, and this is the most important thing I think people continue to miss, the federal government has to refinance $9.2 trillion of debt this year. Anything that the Trump administration does to drive up interest rates in the short term, tariffs, chaos within the Federal Reserve, whatever, is going to increase the cost of that borrowing. And that, I think, is what's driving

or should be driving a lot of decisions coming out of the White House. It's such a key point. I don't think we can talk about it enough. What do you think the role is of Congress in all of this? Yeah, it's a really good question. I mean, you go back to the Federal Reserve Act of the 1920s, face it, I don't think Congress is going to do anything right now for a variety of reasons. Mostly they're aligned with the leader of their party, as one would expect.

Democrats were aligned with Barack Obama and then Joe Biden. Republicans are aligned with Donald Trump. But even if there was a sort of an undercurrent to maybe take back some congressional authority that been delegated to the presidency, we've heard a little chatter of that, for example, on tariffs. That means you'd not only have to pass a bill, but probably have to pass it with a veto-proof majority because the president would have to sign a legislation. And that's simply not going to happen. So the lay of the land right now, that sort of the balance of power in Washington, D.C.,

is not going to change with legislation. This is going to be a fight between the executive branch and the courts. All right. And finally, you sort of touched on it a little bit before. This is not the first time in history that we have seen a president who's been very outspoken about the monetary policies coming out of the Fed. We've seen it quite a few times actually through history, call it over the last hundred years that I can think of

off the top of my head. That being said, is this the politicization of the Fed by the White House as some folks are framing it, this narrative, or is this a White House that's having a political response to what they see as politics by the Fed, which you could probably point to Trump 1.0 as well as an example of that. You know, look, I'm not sure there's much value in trying to figure out, you know, who

started the fight. Again, I can go back to the simple fact that Janet Yellen went from the supposedly independent position of Fed chair to Treasury secretary and one of the most political Treasury secretaries of recent memory, should sort of give you a hint that maybe the Fed chair is not as independent as everybody wants to sort of pretend. Did Powell do some things that might have helped Joe Biden towards the end of his term, arguably? Does he like Donald Trump? Probably not. Does that all factor into it? Look, we're all people. This is a human nature type of question, but that's probably not productive. The productive question is what's legal, and then what's practical? I don't know the legalities, but I get that strong feeling that if Trump does anything drastic,

bond yields are going to spike, and that is going to undercut not only his tariff position, but he's got to figure out a way to get his tax bill passed this summer. And if everything he's doing is jacking up the cost of borrowing, that's just going to make a tax bill even more difficult. Mick Mulvaney, great to have you on on a day like today. Thanks Morgan. And we will keep focusing on those bond vigilantes. Up next, the CEO of railroad operator CSX on how tariffs are impacting his company, and if he's worried

about a recession on the horizon and Netflix call with analysts begins in just a few minutes. We're going to bring you any stock moving headlines as they happen. Welcome back CSX shares closing higher today up more than 1%. Now I spoke this morning with CEO Joe Henrichs exclusively on the back of earnings. Now, he has described first quarter as, quote, sloppy, messy, but investors are looking past that noise because a lot of the issues from the first few months

of the year should improve during the rest of the year, like natural disasters and commodity price declines. CSX also said it expects to grow volumes this year. I asked Henrik's how rapidly evolving trade policy and the tariffs are impacting the railroad. So what we've seen recently is steel production in the US has increased. Our demand over the last few weeks of steel has increased, so that's encouraging, probably impacted by the tariffs.

We had a strong first quarter international and modal so the things coming into the ports. We'll see if that was pull ahead. We're not hearing that from customers but of course it could be that way. You don't sound like a CEO who is worried that we're going into tipping into recession here. Well if you look about me obviously we're always concerned about what may happen but we can only tell you what we're seeing in the present demand. And at present, our demand order rates are pretty stable and pretty good actually across our line.

Now again, there are things that we do that necessarily aren't as impacted by recessionary type fears in the near term like export coal, like the grain and ag business for example. But we're watching those customer segments that are more impacted by things. Housing continues to be in decline and that sector continues to be under pressure. But we're encouraged to see what happens with autos and steel and aluminum. And then again, we'll see what happens with chemicals. That's a big sector and they do a lot of export plastics. But right now, demand is pretty stable and that's what we're seeing.

Now, he did stress that uncertainty is still the word here and they're navigating it just like every other company. But interestingly when I asked him whether they expect to see more manufacturing come back to the US amid all of this trade policy, he said they're already seeing a significant increase in activity in industrial development project work. That they started the year with 500 projects along the rail line and that that jumped to 600 by the end of the quarter. And the expectation is that could continue here. So something to watch.

Shares of CSX finished the day up more than 1 percent. Up next, a top analyst weighs in on whether you should be buying today's more than 20 percent sell off in shares of United Health. It's a rough day for that company. Plus, we're monitoring Netflix's analyst call, which just began. We're gonna bring you any highlights later on Overtime. Take a look at United Health today, plunging 22%. That stock weighing heavily on the Dow.

After the company missed earnings and cut its full year guidance. Meantime, Eli Lilly moving the other way, jumping after its new weight loss pill succeeded in its first late stage trial, finishing up 14%. Another big move for that stock. Joining me now is Jared Holtz, Mizuho Healthcare Sector Strategist. Jared, it's great to have you on. I've got to start with United Health because that was just a huge move for a blue chip name. How much of this is indicative of what we're gonna hear from others in the healthcare insurance space?

How much of this is company specific? Morgan, thanks a lot for having me. I appreciate it. You know, so far it seems a little bit more company specific. We don't really know until, you know, we get a few more of these names to report, but Elevance, which is a close competitor, pre-announced right after United when they kind of saw all of the damage that was happening across the sector. And those numbers looked a little bit better. So I think for what we have now, these, you know, two variables of many, it looks like it's more united than not. This is before we start getting any kind of changes to Medicaid

and Medicare entitlement spending, which it does seem a lot of folks expect there's going to be pressure there. Yeah, definitely. I mean, the interesting thing about united is that I think a lot of investors own it because

they believe it is defensive. They essentially own it for they believe it is defensive. They essentially own it for reasons that have totally been countered by the amount of times the company has negatively reported over the past couple of years. Now this has been the most pronounced move downward in the stock that we've seen.

But in some respects, the reason you own the stock is for the opposite to be taking place. So I'm just not sure investors rush back into it. It raises the question, is healthcare more broadly still a defensive sector or do you have to pick your spots like perhaps for example, Lilly, given what we saw in that name today? I don't think it's defensive at all.

I mean, there's always gonna be political and regulatory instability. Some of the moves that we saw, particularly in large cap pharma and some other spaces in the beginning of the year, in my view, are essentially performance reversion, dogs of the Dow, things of that nature, where you have a sector that underperformed for two years.

So it finally got a little bit of the love with other sectors trading lower, predominantly tech. But yeah, I think Lilly, the data today, very good. Best in class, first in class, potentially in oral obesity. They already own the market. So to kind of bet against them in weight loss, I think is not very smart. Do they cannibalize here with an

oral pill or do they grow the market? I think it's going to be both. I think they'll cannibalize some of it. You know, obviously some patients that are on the injectable will opt for the oral

option. But I think the bigger opportunity is probably in this maintenance setting for patients that have already lost, let's say, 15 or 20% of their body weight, they can now take a daily pill to either, you know, potentially lose a little bit more or at least maintain their weight.

And I think that's been the big, you know, one of the bigger topics of conversation within this market is what if you stop taking the injectable GLP? Well, now you have a pill that you can take that I think at worst will keep you at whatever weight you're at. So I think the maintenance market alone is a massive opportunity, $20, $30 billion potentially, but we'll have to see where the drug is priced. Wow, okay. Jared Holtz, thank you.

Thank you. Coming up, breaking headlines on trade just coming out of the White House. We've got the latest when overtime comes right back. Welcome back. We have breaking news out of the White House. President Trump making new comments on trade. Let's get to Megan Casella with the details.

Megan. Hey Morgan, we just had another opportunity to hear from the president in the Oval Office. He was signing a couple of executive orders and reporters started asking questions. A lot of them were focused on trade and they really began pressing him on whether and how much the U.S. and China have been in discussion since these tariffs have been

announced. The president confirmed that yes, the U.S. and China are talking. He was very non-committal about whether he and President Xi have officially spoken. As you know, we have no knowledge that any conversations at that level have happened, but he says yes, in some capacity, the U.S. and China are in touch and in regular touch since tariffs have gone up to 145 percent. He also said when they kept asking whether he had spoken with the Chinese president specifically, he said it's not that important because obviously we're going to have a deal. I believe we're going to have a deal with China. So for the second time today, really showing some optimism there to have a deal. I believe we're going to have a deal with China. So for the second time today,

really showing some optimism there about making a deal there, even though as far as we know, the talks aren't moving forward quite at the pace, perhaps that this administration at this point would like to see. He also then was asked about TikTok, especially in the tariff conversation capacity.

And he said they have a deal for TikTok, but that it will be subject to China. He says we'll delay the deal until the tariffs get worked out one way or the other He says if we're making a deal already, I guess we'll spend five minutes talking about tick-tock He said it shouldn't take all that long He also continued to say I do think we'll make a deal with China because we've had some very good talks and we'll have Some very good talks remaining will have some very good talks remaining. Finally, Morgan, just at the end, he said something about the path forward and he said over the next three or four weeks, maybe the whole thing could be concluded. It wasn't very clear whether he was talking about a deal with China specifically or with

all of these countries that the US is negotiating right now. But either way, showing that three or four weeks from now, it could all be done, some hopefulness there from the White House. Okay. A lot of constructive comments from the president entree between that and Italy and Europe and Japan last night. Megan Casella, thanks for bringing us the latest on this. That's going to do it for us here at Overtime.