Closing Bell - Netflix Earnings; Fed Chair Race Shakeup 1/20/26

Episode Date: January 20, 2026

Eamon Javers reports on President Trump’s moves and their market implications. Geopolitical deep dive with Evercore ISI vice chairman Krishna Guha, who warns that a potential U.S. seizure of Greenland would represent a geopolitical earthquake for Europe. Earnings from Netflix, Interactive Brokers and United Airlines. Interactive Brokers founder and chairman Thomas Peterffy gives his view of his clients and markets. Morningstar analyst Matthew Dolgin with immediate reaction to Netflix earnings. Wells Fargo Investment Institute head of global market strategy Paul Christopher argues for focusing on “trendlines over headlines,” pointing to rising global bond yields and fiscal concerns abroad as more durable drivers than daily political noise. Steve Liesman on escalating Federal Reserve drama, as Fed Chair Jay Powell prepares to appear at a Supreme Court hearing viewed inside the Fed as an existential test of central bank independence—alongside growing speculation around potential successors and what that uncertainty could mean for markets. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And the bell's bringing an end to the trading day at the NYSC off the Hokiaz, ringing the closing bell at the NASDAQ, Bonn Blocks, doing the honors. Welcome to closing bell overtime live in Studio B at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Stocks tumbling as President Trump turns his push for Greenland into an economic fight with Europe. The Dow losing nearly 900 points. The S&P 500 and NASAC seeing losses of more than 2%. We'll dive into today's moves straight ahead. On our radar at the close, big moves in bond yields in the U.S. and around the world, especially in Japan.

New all-time highs for gold and silver and earnings coming away this hour, Netflix and United Airlines. Our reporters all over today's move, stocks, bonds, and commodities, and on those after-hours earnings reports. But first, let's get to Washington because that is what is driving today's action. President Trump speaking with reporters before his trip to Davos. Amon Javers is in D.C. with the latest statement. Melissa, we just heard from the president for about an hour and 45 minutes in the press. briefing room. He was asked how far he's willing to go in order to acquire Greenland, and he said, you'll find out. The president continuing to stress that he needs

Greenland for U.S. national security, and he's expressing some frustration over the past hour or so with the United Nations saying that the United Nations has never lived up to its full potential. The president also talking a little bit about the Supreme Court here, where those tariffs of his are kind of hanging in the balance as we await the Supreme Court decision on whether they're constitutional or not. President's saying he doesn't know how the Supreme Court is going to decide, but he hopes that they side with him, obviously. So we go into this meeting in Davos tomorrow with great anticipation, Melissa, because there's a real question here about how the president's going to approach this. We saw a downbeat, sort of very even-keeled,

very long-winded President Trump here in the briefing room in Washington over the past hour or so. What Trump will we see in Davos tomorrow? Will it be a conference? confrontational Donald Trump going eyeball to eyeball with his adversaries in Europe, or will it be somebody who's more amenable and more willing to make a deal? We don't know, and we'll watch for that tomorrow. All right. Amen, thank you. Amon Javors in D.C.

Do not miss Joe Kernan's interview with President Trump from Davos. That is tomorrow, 1 p.m. Eastern time right here on CNBC. But what a day, Mike. We started off with what was going on to Japan with the bond sell off there, JGB selling off. And then we had the Greenland threat. And then we saw that sort of snowball throughout the day until about noon or so. and that's when you really saw the pressure. It did give way.

I was saying in the noon hour that the market tried to get off easy and have these minimal haircut-type moves. The VIX was capping out at 20, and the S&P was down to its 50-day average and bounce. We did go through those levels. And I think what you saw today was investors forced to rethink this very popular idea that 2026 was going to be a clean year in terms of the interaction of policy, the economy, and markets,

when you were going to have a helpful Fed and tariffs were last year's issue, and we're going to anniversary it. So I don't know that it's totally a change. the game, but it's definitely a bit of challenge to that view. That being said, the average stock outperform the S&P, the complicating factor, aside from yields going up all over the world, is that the MAG 7 has just lost its leadership spot. And it's, you know, basically gave it up three months ago. The S&Ps that levels at first got to three months ago, but the equal weight is where we were two weeks ago. So it has broadened, but it hasn't necessarily added to the headline

index. It is interesting to see the AI trades for being rethought out, and we saw that starting prior to this sell off. even more pronounced today. And then you see the memory names, though, outperforming still. So the notion that you want to go picks and shovels, but you want to go picks and shovels where there is a scarcity element, that was the trade today. It's narrowed down to that at this point. So we'll see if, you know, if it actually can re-broaden out from there. Yep. Meantime, United Airlines earnings are out. Philabo's got the numbers here.

Phil, what's the latest? Melissa, this is a beat on the bottom line for United Airlines earning $3.10 a share. Street was expecting 294, so they'd beat by 16 cents a share. Revenue coming in, in line with expectations at just under $15.4 billion. Look at the metrics in the fourth quarter, and we're going to point out some areas where you're going to say, yeah, they're continuing to make hay in certain areas. Revenue per seat mile down, 1.6 percent compared to the fourth quarter of 24, cost per seat mile up fractionally compared to the fourth quarter of 24, an operating margin of 9 percent, roughly in line with analyst expectations.

cash flow, negative $597 million. But then the revenue segments in the fourth quarter, listen to these numbers. Domestic revenue up 2% year over year. International revenue up 9.5% year over year. Premium revenue up 9% and main cabin revenue up 7% year over year. Then there is the guidance for the first quarter. United expects to earn between a buck and a buck 50 a share. The street's at a buck 13 right now. For the full year, of 2026. United expects to earn between 12 and $14 a share. Currently, the consensus is $13.16. We talked about those revenue numbers, especially when it comes to premium and international markets. We'll talk more about this with United CEO Scott Kirby. That's coming up exclusively on fast money, Melissa.

Lots to discuss with him. And also this question about whether or not there is a potential headwind again due to tariffs. We saw it in the first half of 2025. Could we see a repeat in 2026? We'll talk with Scott at 540 this afternoon. Guys, back to you. Yeah, we do look forward to that. Phil, on the fiscal year and the full year EPS guidance, it sounds like you said 12 to 14,

so the midpoint is actually lower than what was forecast with the consensus. Is that correct? Yeah, yeah. It is a little bit lower. The midpoint is 13, and the street right now is at 13, 16. And then when you're looking at the first quarter, they're going for between a buck and a buck 15. and where's the street at right now for the first quarter?

They're at a buck 13. So the midpoint's a little bit higher in the first quarter. All right, Phil Lebo, UAL losing a little bit of altitude here up by about 0.4%. Let's get straight to Julia Borson. She's got the latest from Netflix earnings just crossing. Julia. And Netflix earnings crossing the wires, the headlines showing a beat on the top and bottom line.

The company reporting of 56 cents in earnings per share, that's a penny better than expectations, while revenues of $12.05 billion just ahead of $1.5 billion, just ahead of estimates of $11.97 billion. Now, if you take a look at the stock, it's down. That seems to be based on some of the guidance. Wires reporting that the company sees first quarter earnings per share of 76 cents versus the 81 cents that analysts had been anticipating.

And revenues, just a hair below expectations guiding to revenues of $12.16 billion, pretty much in line there for revenues. So we see shares are down nearly 4% right now. One other key headline to note here, the company which stopped reporting, quarterly subscriber numbers a year ago, reporting that it has crossed 325 million paid memberships in the fourth quarter. The last time the company reported a year ago, they had about $302 million. Back over to you. All right, Julia, thanks. Julia Borson, again, we're watching the stock drop here in response to earnings. Again, light on the EPS here in terms of the guidance.

We're seeing the stock down by 3.6%. Yeah, obviously, it's a deal stock, right? So the acquisition has been part of the distraction. I think that what investors didn't want to see is that Netflix was stretching to do the Warner Brothers Discovery Deal because maybe growth was slowing a little bit. I would though caution that Netflix is often known for very conservative guidance, especially after the fourth quarter. So maybe we can kind of run it through that filter as well and see how the stock settles out. Yep, of course, we'll be keeping an eye on that. Let's get to the bond market meantime. We saw a lot of action both here and overseas. Rick Santelli is in Chicago with all that, Rick. Yes, and it's fascinating how it affected one part of the yield curve way more than the rest of the curve.

Look at twos and tens just since Friday. The 10-year-up seven basis points right now on the session, and the two-year virtually on change. And that was a global dynamic as Japanese rates just continued to soar. Look at a one-year of our tenure, the German tenure, which is the sovereign of Europe, the EU, and the Japanese government bond. And what you see in a one-year chart is that our tenure is lower in yield. If you look at boomed yields, they're up, what, about 15%. And if you look at what's going on with the Japanese yields, they're up nearly 100%. And you want to really sharpen the pencil?

If you look at a 26-year chart of 10-year yields in Japan, just a whisker below 2.4%, you won't find a higher yield. 26-year high and continues to move up. and it also affected the foreign exchange market. That chart is the dollar yen, the pound yen, and the euro yen. The dollar yen, well, it's up maybe in one year a little less than 2%. The pound yen is up about 9%. The euro yen is up 12.5% and it continues to lead the way at levels we haven't seen since the 90s. Melissa Lee, back to you.

Rick Santelli, thank you. Our next guest says today's market moves indicate that the sell America trade is back as investors try to minimize exposure to what he calls a volatile and unreliable U.S. joining us now is Krishna Guja. He's the vice chairman of Evercore ISI. Krishna, great to have you with us. Likewise, great to be with you. We've certainly been in different market moments where there is immense investor skepticism

about where the U.S. stands, what the U.S. is doing, and those proved to be buying opportunities. Where are we here? Is this time different? So, look, I think investors reasonably continue to have a baseline. in which we will end up finding a compromise and off-ramp, and we will not go through the proposed trade escalation. I think that's the right base case. More than that, I think it's not a 55% probability.

I think it's higher than that, right? It's a good, solid base case, but it's not a certainty. And I think what we're seeing in markets is a clear indication, directionally of what happens if we continue to push down this route. It is risk off, but dollar lower, not higher, because of increased global aversion to U.S. assets requiring a higher compensation, some U.S. risk premium to invest in the U.S. And, of course, as you noted earlier, yields moving up, not down. We saw a rally in hard assets, gold and silver, most notably, Krishna. Is that the way to go?

I mean, if you want to go risk off, is it going to be anywhere in equity? or is it better, a better risk off trade to be in metals? So look, medals are crowded. Metals are very richly valued, but I think it is a sobering point to consider that the U.S. Treasury is not performing the normal safe haven role in this moment, just as it didn't in April last year

when we had the Liberation Day tariff shock. Now, to date, the moves right in this latest episode are much more muted. And again, you'd expect that if you think that investors are putting a 70, 80% or more probability, this Greenland business gets wrapped up. But if the Treasury is not acting as the safe haven asset, something else has to. Golden precious metals, Swiss franc, the list isn't very long. Krishna, Canadian Prime Minister Mark Carney got a lot of attention today, a lot of words about

just sort of a long-term program of disengagement with the U.S. and finding other kind of partners and connections elsewhere. Is this something that the market, markets even have the capacity to price, or should we be? I mean, ultimately, you know, we still have the biggest and deepest markets. Treasuries are basically the water and the plumbing of the global financial system. We're making the AI trade here. I just wonder if it behooves an investor to actually start to think in these tectonic terms. So you raise some really interesting points there. So first of all, we continue to believe that U.S. fundamentals are unparalleled in the world. U.S. economic fundamentals, productivity, innovation, AI.

The U.S. fundamentals are incredibly attractive. But you now have this overlay, which we've had on off since April of last year, but back in force of policy uncertainty, policy volatility, but not just volatility, actions that are systematically alienating, trading partners, and providers of capital into the U.S. So I think investors have to be able to do two things at once. The first is to be level-headed about the probabilities of hyper-escalation at this point. It's not the base case. It is a risk case that you need to factor in, but it's not the base case. You've got to be careful, you don't oversteer here.

On the other side, even in a baseline case where we ultimately are able to move this on to a de-escalation path over the next few weeks, I think Carney is right that there's no turning back here. There are some fundamental tectonic plate shifts underway. that the U.S. is no longer providing the so-called global public goods that it used to provide to the global system. The U.S. is exerting its leverage over allies and partners, who, of course, are more vulnerable to this than countries like China, who've always been positioned against, prepared against U.S. pressure. This is going to lead inexorably to significant structural changes in the global economy.

doesn't mean everyone's going to dump their U.S. assets, but we need to start thinking about what may be different in that world on a secular basis. Krishna, great to get your thoughts. Thank you, Krishna Guha, Evercore, ISI. Let's get back to Julia Borsh. She's got more on Netflix. Julia. Melissa, Netflix announcing that it will be pausing its share buybacks to accumulate cash to help fund the pending acquisition of Warner Brothers, saying we remain committed to maintaining a solid investment grade rating. In the letter to shareholders, the company also, explaining its philosophy behind the acquisition of Warner Brothers, saying they believe the

purchase will allow us to accelerate our business strategy. Together, we see two main areas of opportunity. First, Warner Brothers Library, development, and IP will allow us to provide an even broader and higher quality selection of content for members. And second, the addition of HBO Max will allow us to offer more personalized and flexible subscription options, better meeting the diverse preferences of our global audience. They go on to talk about how Netflix and Warner Brothers are complementary. As to the question of engagement, they note that the engagement remains healthy, and they say in the second half of 2025, view hours increased 2% year-over-year, driven by a 9% rise in viewing of branded originals. They also note that they see sustained overall growth

with 2026 revenue representing a range of 12 to 14% growth year-over-year with ad revenue, which of course is a new category expected to roughly double back over to you. All right, Julia, thank you, Julia Borson, Netflix stock. Close after our session lows at this point. Coming up on overtime, much more on the big moves in today's session. But we've already got a lot of news in the overtime. In addition to Netflix, UAL, with a small gain following its numbers, and interactive brokers down after beating on earnings.

Revenue grew thanks to higher commissions as its customers traded more. Coming up, we'll talk with Interactive Brokers Chairman Thomas Petterfee. will get his take on the retail investor before he shares it with the analysts on the earnings call. Stay tuned. Welcome back. Let's get a check on shares of interactive brokers. Q4 numbers crossing just moments ago. The company reporting adjusted earnings of 65 cents a share.

That's compared to the estimate of 59 cents. Revenue coming in at $1.67 billion. We are not comparing that to the estimate, but it is an improvement from last year. Its commission revenue grew on higher trading volumes and net interest income also grew as customers at higher margin loans. Joining us now in a CNBC exclusive before the earnings call is Thomas Petterfee, Interactive Brokers, founder and chairman. And it's Mr. Pedderfee, always great to catch up with you.

It seems as if your customers were highly engaged going into year end 2025. How would you characterize what they're up to and how the business is doing so far this year? Well, you are right. They were highly engaged and they are very, very happy because they beat the market. All together, they beat the market. Our individual customers beat the SMP by 1.3% after all expenses, which is very significant. And the same metric for registered investment advisors on the IBCR platform was up 2.67% after all expenses. And finally, the more than 2,000 hedge funds on our platform that had more than $1 million dollars at the beginning of the year,

with the index by 11.01%. So they had a total return of 28.91%. That I think is extremely significant, and we are very proud of that. Because, you know, this outcome clearly demonstrates the overwhelming advantage that our customers enjoy on our platform, and the reason why the best informed investor chooses Interactive brokers, as we say that all the time.

Well, certainly, obviously, it's a bull market, and I mean, there's some leverage, right? Obviously, there's on a net basis, there's borrowing. But what do you attribute that to otherwise? Aside from just, okay, having lower transaction costs, I mean, you know, who are they winning against? Well, they are winning against all the other customers, right? Are the customers of other brokers? That is the amazing thing, right? And other hedge funds.

Right? So few hedge funds had at 28.91% return. And our hedge funds did. So you should start an ETF, Mr. Petterf, to track your traders there on your platform. I wanted to ask you about the prediction markets, because that is an area that every other trading platform is eager to get into. You do have forecast trader, which allows customers to predict things like climate, economic events. but not sports. How are you looking at this? You're very bullish on this area of the market. You have said in the past that you think that this area could be more popular than stock trading. So how are you going to expand this? I'm extremely bullish on this thing because basically the prediction contracts all to take and all together. They describe the consensus opinion about our lives in the future. And as the markets develop, the picture will be ever sharper and more detailed.

and more precise and they'll be used by people to plan their lives. I think it's a very, very important thing, and it is going to be a huge success. And by the way, sports, we just had bad news today because I think it was Massachusetts, where the judge came out against sports. Yes, a judge gave the state of Massachusetts the right to prevent folks from betting on Kalshi. sports. Now, I'm interested in this view, though, on prediction markets because, yes, it would be very useful to have the wisdom of the crowds feed in and know about the collective wisdom and the predictions of various issues of the day. But what you're actually needing to get there is you're

inviting your customers to come in in critical volumes and play a negative sum game, right? They're just trading against each other, and then you have fees. So you were just talking about what a great deal it is that your customers in aggregate outperform. Prediction markets just offset one another now? Within our brokerage firm, that is true. The customers altogether inside our brokerage firm will lose money, namely half a percent of what they put up. But that's not a lot, right?

So 49.5 percent will make money and 50.5 percent will lose money. That's true, but I mean, you know, we have to make a living and we have to be able to bear our costs, right? All right. Fair enough. We'll let you get to the conference call. Mr. Pederfee, thank you. Thomas Petterford. Thank you very much.

We've got a developing story out of Washington on the Fed. Emily Wilkins has got this story. Emily. Hey, Melissa. Well, now two senators, Senator Dick Durbin and Elizabeth Warren are demanding that the Department of Justice provide any documents and communications around their criminal investigation. into Jerome Powell, as well as that same information for their investigation into Lisa Cook. Now, of course, this letter doesn't have the force of law to it, but it shows that senators are still focused on this issue, and it could lay the framework for a potential future investigation.

Now, no Republicans signed on to this letter, but we know from talking to them last week that there are many of them that have concerns about this investigation into Powell and want to see the Fed remain independent. Melissa? Emily, thank you. Emily Wilkins. Coming up, instant reaction to those Netflix results with the stock down around 5% in overtime. We'll talk to an analyst about the numbers and the pending Warner Brothers deal. Plus the stocks tumble investors turn toward gold, not Bitcoin as a safe haven. We'll discuss the crypto trade when overtime continues. Welcome back to overtime. Take a look at Bitcoin today, down 3% falling back below 90,000 posting its worst day since December 15th. And what we learned here once again is that this is not.

a risk off asset. This is not a safe haven. No, that's not how it's behaved at all. Essentially, it's been broken the trend since October 10th or so. We had that big liquidation event. That also is roughly when kind of Mag 7 peaked relative to the overall market. So it has been a ride-along asset with big tech more than anything else. And I just think it's interesting as a test case of like what people thought they owned. I have a bigger picture view that it's just not the next new thing anymore. It's been around. too long. It's in all these institutional portfolios. It's very normalized. And I'm wondering if that takes some of the energy out of the kind of speculative part of it. There's no friction to getting

in and out of this trade anymore with all these ETSs. Fair enough. Yeah. Netflix meantime, the shares are at session lows here after reporting earnings moments ago. It was a narrow earnings beat, but the guidance coming in light of estimates with us now to discuss is Matthew Dolgan, senior equity analysts and Morningstar Research Services. Matthew, great to have you with us. Your first take on the numbers. Well, as you said, the fourth quarter, quarter was good, it was fine, but guidance is the problem. It looked like revenue is probably in the range of what consensus was expecting, but margins are a little bit light and free cash flow is a little bit light. Now, I was going to say, Matthew, it seems to me that clearly investors

when they were in Netflix before the effort to buy Warner Brothers Discovery were really enamored of just, you know, how clean this story was, right? It was just very much a kind of long-term growth story. They have pricing power. They're going to layer. in ads and buying another big asset just changes that equation to some degree. To what degree do you think that's the overhang, or are we talking about a little bit more maturity showing up in the growth numbers? Well, I think it's both. It does seem, and the stock has sold off quite a bit since the deal is announced, and so it seems the market does not like that. However, we have thought that this is a maturing story that is going to have a really difficult time

keeping up the growth that the market has gotten accustomed to. And so, with, or without it, we've kind of thought the stock is overvalued. Still at this level, we think it is, although it's getting much closer to fair in our view. But it seemed to be an acknowledgement maybe that this organic high rate of growth was going to be bound to slow. And so I think we're seeing that, and that will be the case if Netflix doesn't end up acquiring Warner. On the other hand, if it does, it seems to us like it's paying a lot for that growth, and that to us might be a little bit value destructive also. So either way for us, I think the move in the stock has made sense.

Do you think investors should sort of take this quarter with a grain of salt, Matthew, in that Netflix doesn't want to present a very strong front, particularly if a deal could, you know, attract some regulatory scrutiny. You don't want to be seen as the dominant force in this industry. They've got to sort of walk the line here. It doesn't seem to me that neither the guidance nor, the results really is going to have any impact on how regulators look at this deal. Netflix did announce how many global subscribers they have now, just over 325 million at this

point. Either way, we knew it was a lot. It doesn't change things at the margins that Netflix is the dominant player. And that's the thing. It's a dominant player either way, even if these numbers are a little bit light and lighter than what the street would have liked, it is still growing at a good rate well ahead of all of its peers in terms of its size. And so to us, this does not change the regulatory view at all. And I wouldn't think that Netflix is damping the numbers in order to make that look better to regulators. Matthew, thanks for your thoughts. Matthew Dolgan.

You know, as much as clearly Netflix stock's been pressured by the deal effort, it's been almost tick for tick with Spotify over the last year. So Spotify also had this little bit of crisis of faith among investors. Did they still have the pricing power? So you see there over one year, it's like the same chart. Yeah. And Spotify is not really trying to make any big deal. That's true. It's kind of fascinating.

If Netflix talks about any sort of price increase, that was expected in the second half, maybe they move that up. You know, that's certainly key commentary on this call. Meantime, time for our CNBC News update. Kate Reney's got that. Hey, Kate. Hi, Mel. The Justice Department issued subpoenas today to a handful of Democratic officials in Minnesota, including Governor Tim Walts, Minneapolis, Mayor Jacob Fry, and the state's attorney general as well as other leaders.

The subpoenas come as the federal government ramps up its investment. into their response into the controversial immigration crackdown in the state. Meanwhile, Supreme Court Justice's rather seemed skeptical of a new Hawaii law that requires gun owners to get advanced permission for concealed carry on private property, including gas stations and stores they suggested during arguments today that the law may violate the Second Amendment, right to bear arms. That decision is expected by the summer. And finally, ChachyPT is rolling out an age prediction tool globally as it faces criticism about potential dangers to to minors. The AI chatbot will turn on extra safety settings if it detects an account may

belong to someone under 18 and will limit content around sensitive topics such as graphic violence, sexuality, and unhealthy dieting. People who are incorrectly identified as minors can turn off the settings by verifying their age guys. Back to you. All right, Kate, thanks. Kate Rooney. Big losses today for stocks after the president's Greenland comments spook the markets, but our next guest says follow the trend lines, not the headlines. And more, More record highs for the medal. Silver has tripled in a year. Can it still go even higher? Overtime's coming right back. Welcome back to overtime. A big selloff on Wall Street today. The Dowdown, 870 points, the S&B 500 and the NASDAQ both lower by more than 2%. The Russell 2000,

once again outperforming down a little more than 1%. Let's get to see Moni with a look at today's big stock mover. Sima. Melissa, as you mentioned, tech really led the sell off today with the NASDAQ 100 lower by about 2.1%. We saw this unwind in the AI trade, right, from hyperscalers. like Google to chip maker and video. Every time Treasury yields rise, the cost to build and finance data centers goes up, and that's created less appetite for risk. In fact, here are some of the more momentum-driven names like a Tesla, Apple Oven, Palantir, trading down on the day.

Speaking of software, the broader IGV software ETF, just posting its worst five-day period in nearly a year. Sentiment continues to sour. But guys, it wasn't just tech. 3M shares under pressure today. Earnings beat street expectations, but tariffed. Talk got Wall Street worried after the industrial player said President Trump's latest tariff on Europe could be a potential $40 million hit to its bottom line. Now, there was some green today. Memory

Player Sandisk continuing its epic rise, now up an impressive 80% this year. This as the market counts down to Intel's earnings results on Thursday where investors are eager to get an update on whether our nation is getting closer to manufacturing high-performing chips. Mel and Mike? All right, Seema, thank you. Despite today's sell-off and the geopolitical tensions, our next guest sees a silver lining for investors sticking with the idea of trend lines over headlines. Let's bring the Wells Fargo Investment Institute, head of a global strategy. Paul, Christopher. Paul, good to see you, and that certainly sounds like a wise strategy.

What do you do, though, when some of those headlines are causing, it seems, government bond yields to go up, which maybe could impact the overall trend lines? Yeah, we are concerned with the move in bond yields, but we think it's all of a, piece. In other words, bond yields going up, the equity prices falling, the dollar falling. These are all responses, or let's call them, reactions to a couple of events that happened overnight that were unexpected. One in Japan, in terms of the government budget deficit there, and investors balking at that, and the other being the president's remarks about Greenland and tariffs. And, you know, we've seen this multiple times already in the last 12 months where the president comes out with an initial opening bid, maybe a max bid, and then he proceeds to

negotiate it lower. We think these yields will move back in the line and stocks will have a chance to rebound here. We want to stay focused on the trends that we think are really going to be reliable and are already in place again for this year. As much as it does seem, Paul, we had, you know, three days to stew over the implications of some of these Greenland tariff headlines and all the rest and it's spilling into the market. You might want to fade that reactive move. On the other hand, I wouldn't say the markets are priced for perfection. I kind of hate that phrase. But we do have valuations pretty elevated. We had bond and stock volatility very low.

You have equity exposures are already very high. So how much of this is perhaps kind of a needed gut check or rethink to what we've been seeing for a few months here? Yeah, that's a good point. I mean, look, markets, especially the S&P 500, NASDAQ, had a nice end of December. Volatility has been very low. And these events sort of coming out of nowhere, a little bit like riding the bumper cars, are going to wrong foot some investments. here early in the year. And it's just a reminder, I think a good reminder, a timely one, that you've got some trends like tax refunds, deregulation, the Fed cutting rates, and the Fed

expanding its balance sheet again. These are going to be durable, reliable trends. And this other stuff that's going on in the background, headlines, negotiations being conducted publicly, all of that sort of lives in the tails of the distribution. Now, maybe the chances of some, you know, a very adverse event in Greenland, Europe, the U.S., maybe those probabilities have gone up from say 5% to 10%. And maybe that caught some investors and wrong footed them. But that doesn't mean that the bulk of the probability isn't still where we think it should be

on those more durable trends. Where do you think the trend lines are pointing, Paul, for the AI trade? And specifically, it seems like the trend line that is continuing is the reversion to picks and shovels not to the parties who are spending the money, to the parties who are receiving the money, basically, and to the areas of the market where there are scarcity.

So, for instance, memory, Sandisk, and Microns seeing some big gains today. Yes, exactly. And that's a strategy we took early last year after the NASDAQ really started to take off, is to say, look, you know, no one really knows ultimately what the adoption rates will be in AI. So you can't really say for sure what the earnings are going to be for some of these companies going forward. So when evaluations get extended, you know, $35 per $1 of future earnings, that's excessive. you should look for other ways to play the trend that aren't so expensive. For much of last year, that was utilities and industrials.

Those are still favorites of ours. And right now, financials have slipped to the bottom of the sector deck, and we like those two going forward. So here's opportunities for investors to put some money to work. Paul, it wasn't exactly a wholesale sell America trade starting in April of last year, but it was definitely kicked off the outperformance of non-U.S. markets versus the U.S. Does that continue? Well, we think that those markets have a good chance to continue to make gains.

We don't think they beat the U.S. Right now, we're neutral on both the developed markets and the emerging markets. We don't think, again, that they outperform the U.S. The U.S. just has too much stimulus front-loaded into this economy that we haven't really begun even to see the bulk of yet, that stimulus. And so we would stay favorable on the U.S., but we would take emerging and developed X-U.S. up to long-term strategic weightings here. Yes. Paul, thanks. Good to see you, Paul Christopher.

Thank you. Gold hitting another record high today, now up to 73% in the last year. Can the metal continuance run higher? Fast money's Guy Adami gives us his precious metals trade when overtime returns. A big day in the commodities markets. Pippa Stevens joins us with all the numbers. Hey, Pippa. Hey, Mike. Let's start here with Nat Gas, because that was the big mover today, expecting 26% as a cold blast hits the central U.S. and North Now, not only does this increase heating demand, we're also at temps where we could see production

freeze off. OTC Global Holdings puts it at nearly 10 billion cubic feet per day, saying that greatly constrains gas supply. Short positions were also at a 14-month high ahead of this Arctic chill. The gas-focused drillers expand Kotair and EQT getting a lift today. And on WTI, that is back above 60, with Brent approaching 65 amid disruptions out of Kazakhstan with some 900,000, bearer than barrels per day in exports impacted from Ukrainian hits on Russian infrastructure, which Kazakh exports do depend on. Now, over in metals, another record high for gold and silver. Now, silver is both a precious and industrial metal meaning in theory there could be an upside limit thanks to demand destruction, but both are benefiting from an erosion in U.S. dollar confidence.

Take a look at this chart from Joe Kalish at Ned Davis Research, which shows that foreign gold reserves are rapidly approaching foreign holdings of treasuries, As he put it, nobody trusts anyone's fiat currency. Mel and Mike back to you. Does seem to be the theme. Thank you, Pippa. Let's say on the metals trade here is a commodity, the best way to play this rally or should you bet on the stocks.

The gold miners' ETFGDX up for the eighth straight day hitting an all-time high. Let's bring on CNBC contributor and fast money trader. Guy Adami. I'm so excited for both of you. I know I'll make this quick. Michael, welcome to the NASDAQM. Congratulations to both you. This is very exciting.

Thank you. Now, what was your question? Gold miners. Because nothing changes from fast money to now, as you know. I think the gold miners still have some move on the upside. And I'll say, Newmont mining is trading at levels we never saw before. Look at the GDX. And what the miners are telling you is investors finally believe the underlying commodity is here to stay.

So as much as I like gold, as much as I like silver, I think you can still be long in these commodity stocks, specifically Newmont, Agnico Eagle, Mines, and even Pan American Silver, which made an all-time high today. If it was making the point that silver is an industrial metal as well with industrial applications, and so there could be demand destruction and get to a higher price, and people don't want to use it anymore or can't use it anymore for whatever the reason. That's one of the, there will be demand destruction at a point. I don't think we're there yet. And we've set on fast money for a while. We thought triple-digit silver, and we're basically there.

So you're going to get an over. The fact that we got through those prior all-time highs, they tried to keep a lid on it for a long time. You actually had an engulfing pattern day where silver went from 85 down to about 68, closed it 74 a month or so ago. Historically, that would have been the reason to hit the exit signs, and nobody did. So I think there's still gas in the tank here in the silver market, and I obviously still love gold. I mean, gas in a tank. You're not a believer. I can hear it in your voice. I see the facial expressions. A couple of observations. The 200-day moving average of silver is

41. I know. It's crazy, right? Okay. So like, a pullback is not going to probably be some gentle affair. I mean, one would think. But you, I think, you probably saw that day as, well. It was about a month or so ago. We had that new all-time high, closed on the lows. You engulfed the prior day's market activity. That historically would have been the reason for everybody to hit the exits. And nobody did. Now, you're right to point out we're two or three standard deviations away from that 200-day moving average. But as you also know, over time that moving average is going to go higher. So you could have a leveling out in the mid-60s at some point very easily. Since you are here, quick thoughts on Netflix, which is down

5% right now. Surprise. You know what? I said on the show. I said if I'm wrong, I'll come on. I thought when Netflix said they're going to go to an all-cash bid, I said, hmm, maybe they know something about the quarter. Maybe you're going to see it bounce into stock. You're obviously not seeing it here now. We'll see what happens as we get later on in the afternoon into our show. But I think Netflix is the level here.

Just in terms of valuation, I don't think you're going to run from. I was just looking at free cash flow yield now is better than Microsoft. It's better than Amazon. It's almost as high as Apple. In other words, it used to be really expensive relative to those. Yeah, and now we are session lows in the after hours. Do I leave now? like what happens? Like what is like, do I would say you do. I don't think you stay here. No, it's fine.

I can get up and walk away. We can drag you out. Your choice. And now I'll come back. Wheel you out. Huh? We'll try that one day. You don't have to wheel me anywhere. Guys, see you in a few minutes. Bye guys. Thank you. There will be supreme drama surrounding the Fed will tell you about it. And the dark horse candidate gaining traction in the race to succeed Jay Powell when overtime returns. Welcome back to overtime. The drama over the future of the Fed is ramping up. Steve Leasman's got the latest detail. Steve. Yes, Melissa, we have developing stories or drama, if you will, on both the current Fed chair and the search for the next one.

CNBC confirming that Fed Chair J-Powell will attend tomorrow Supreme Court hearing on the firing of Fed Governor Lisa Cook, a decision that Treasury Secretary Scott Besan from Davos today called a mistake. I actually think that's a mistake because if you're trying not to politicize the Fed for the Fed chair to be sitting there trying to put his thumb on the scale is a real mistake. It is worth pointing out the Fed and Powell himself are named in the suit and that the case has significant implications for the Fed, so there's reason for Powell to be there beyond just show. Separately, President Trump's comments last week that he wants to keep NEC director Kevin

Hassett in his current job is catapulted former Fed Governor Kevin Warsh to the top spot, but maybe by default, black. Rocks, Rick Reader has jumped into the second slot with a 26% chance for being named Fed Chair versus 49 for warrants. That's down 10 points for this morning. And 11% or 9%, 13% sorry for Kevin, for Governor Chris Waller. Why Reader is riding a little higher? Well, one thing is Reader had a good meeting with Trump, we are told. He was invited after the meeting to attend the president's meeting with the NHL's Panthers. Reader gets high marks from Wall Street. We keep hearing. Or maybe in the White House is viewed as more hawkish on rates and on the ballot sheet.

Best it's saying this morning, the president could name his choice next week when, of course, guys, the Fed is scheduled to me. Steve, is saying that the president could make his choice perhaps next week, again, pushing it out a little bit? Because weren't we hearing it was going to be during or perhaps right after Davos? You know, Mike, I think that's a smart thought because I took from the president's comments on Friday that he has further from his decision than I thought. And it's kind of interesting having watched this every single turn, right? That the president was sure and everybody was sure that the president was going to pick acid.

And then there was this pushback. And everybody thought, oh, well, maybe not now. And that was a little bit of a scramble. Kind of interesting to me that Chris Waller isn't higher. I think there's a sense out there, Mike, that the president doesn't want to pick somebody who's at the Fed, like he did last time with Powell and feels he made a mistake. Yeah, I also thought that it seemed farther out than previous, right? Because Besson was talking about the four candidates in Davos, and we thought it was down to the two Kevins,

and then all of a sudden Rick Reeder makes his appearance here. It almost feels, Steve, like the administration or Trump is just floating a bunch of trial balloons to see which Fed is most like by Wall Street. I don't think it almost seems like that, Melissa. I think it is exactly that. I think what he's doing, there are these tribal news going out there. somebody gets up at the top and then there's all this campaigning that goes around it. And then we see, I talk to people sort of who have following this process, Melissa, that don't understand it entirely, but they know one thing. It is ultimately going to be President Trump's

decision. And what exactly is going on in his mind right now is only known by him himself. And Steve, we continue to kind of scrutinize the market action to see exactly how the big money feels about one choice or another. It's really tough to tell. Right now, the betting odds are 49% Kevin Warsh and 51% not Kevin Warsh, right? So it's really tough to say that today's moving yields means anything in this regard. That's a good way to look at it, Mike. Look, when this switch happened yet last week, there was definitely a more hawkish tone to the bond market, right? Worth maybe 10 basis points or so, perhaps on the 10-year, but that's been swamped, I think, by what's happening right now.

financial markets with what happened in Japan. So it's a little tough to tease out the Warsh versus Hacid effect from this. I think the reason I'm hearing good things about Reader is because he's not seen as very doctrinaire. Whereas Kevin Warsh has spent a long time complaining about the size of the Fed's balance sheet and talking about the need to bring that down. And that's a concern, maybe not for now, but the next time markets get in trouble, they see at Kevin Warsh, you won't be quite so willing to jump in with the balance sheet. That could be a good thing. Don't get me wrong about that. But Wall Street might see that as a negative.

Steve, thank you. Steve Leesman. All right. Well, that does it for overtime. Fast money. Starts in a minute.