Closing Bell - President Trump lifts markets from Davos; KKR’s Henry McVey on top opportunities 1/21/26

Episode Date: January 21, 2026

President Trump lifted markets after rolling back threats of tariffs on Europe and saying he had a deal with NATO over Greenland. Stifel’s Brian Gardner breaks down the key aspects of the President���s speech at Davos and interview on CNBC. The market reaction with Partners Group CIO Anastasia Amorosa. The playbook for 2026 amid global volatility with KKR’s Henry McVey. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing an end to the Trading Day at the NYSA, the New York Boat Show, bringing the closing bell at the NASDAQ. Stars of the traders on NBC Universal's Peacock are doing the honors. Welcome to closing bell overtime live from Studio B at the NASDAQ market site. I'm Melissa Lee along with Mike Santoli. A big late-day spike for stocks after President Trump says there is a framework of a deal on Greenland, meaning no additional tariffs. The major averages all up more than a percent.

Once again, the Russell 2000 now performing up nearly 2%. Apple turning positive this afternoon, but still on pace for its eighth straight down week. Microsoft and Oracle both lower today will have much more on the underperformance of the mega caps. Netflix falling after its results, Wall Street disappointed with the company's guidance. Now the attention turns to Intel, which reports tomorrow it has been one of the hottest stocks in the market of 45% in 2026. The only thing or one of the few things hotter than Intel is Sandisk. It has doubled this year, higher again today, along with all the other memory names. And of course, we're watching commodities. Gold rising, silver down 2%.

Nat gas, a huge gainer. We'll have more on that ahead. But we begin with President Trump in his big interview with our own Joe Kernan on CNBC this afternoon. As his comments boosted the markets, Amon Javors has a full wrap up. Amen. Melissa, that's right. Joe had the opportunity to press the president for more detail on the announcement that he had just made moments before the interview on social media that he was backing off that threat to put tariffs on a number of European countries because of their actions in NATO related to Greenland. Here's what the president had to say. Well, we have a concept of a deal.

I think it's going to be a very good deal for the United States, also for them. And we're going to work together on something having to do with the Arctic as a whole, but also Greenland. And it has to do with the security, great security, strong security, and other things. And Joe also asked the president whether this deal involves ownership of Greenland by the United States. didn't want to say, though. He said it's a little bit complex. We'll talk about it down the line. Whatever this deal is, though, Melissa, the president said it lasts forever. So that was that on Greenland. On the Fed share, an interesting comment from the president about Powell. He continued to criticize

Powell, said he's down to just one potentially selection for Fed share, which he's been saying for a while now. But he also had this to say about the prospect that Jay Powell might stay at the Fed. Take a listen. You know, in this world, we live with the cards you dealt. And if that happens, his life won't be very, very happy, I don't think, by doing it. I think he wants to get out. He has not done a good job. He's done a horrible job on buildings. So that sets up the interesting prospect of what would happen in the Trump-Powel relationship

if Powell remains on the board of the Fed, even if he's not chairman, and the president has selected somebody else to be chairman of the Fed. That's a fascinating dynamic. And, of course, the president also talking about Scott Besson, saying once again that Scott Besson doesn't want to leave Treasury, almost wistfully, Melissa, as if he was saying, you know, maybe I'd rather have Besson than any of the people that I'm interviewing for the job. So we'll see where he lands. Amen, it was interesting to see how quickly this whole thing escalated and then how quickly

the whole thing de-escalated, especially given, you know, overnight there was a lot more reaction from various European officials and reports that Christine Lagarde, walked out of a dinner where Howard Lutnik was making some comments. There was some real reaction there. Yeah, absolutely. Real pushback from, you know, Emmanuel Macron of France. We saw Mark Carney of Canada having a sort of a keynote address yesterday pushing back on the president and what he called this rupture in the global order, saying that the middle powers that is Canada

and other smaller military powers have to stand for a rule of law. I mean, you saw this sort of reaction of sort of horror and defiance in Europe. up and the president sort of scaled it back in two steps today. One, he ruled out during his speech to the World Economic Forum this morning. He ruled out the use of force to conquer Greenland militarily. He said, I won't do that. And then later, just before his interview with Joe, he said on social media that he won't put in those tariffs that he had suggested that he would. He also talked about those tariffs on Iran that he had threatened last week. Remember, Melissa, he threatened 25 percent tariffs on trading partners of Iran, including China, last week on social

media. He's talked about those tariffs as if they are already in effect, but we can't find any indication that anybody's collecting those tariffs right now from any companies that do business with any of those countries. So, you know, the president is continuing to use these things as threats. How much actual money ends up being collected is a whole other question. Amen, thank you. Amon, thank you. Amon Javers in Washington for us. It was interesting to see the market reaction. You had the best line of the day. We were in the green room. The news crosses about the framework of a deal. And you said, of course, a frame, because a framework actually happens.

Yes, because that's been the phrase we've used toward all the sort of trade agreements that maybe were going to be in place and maybe weren't. I think it's fascinating. You mentioned it escalated quickly. Three weeks ago, there was a joke. Hey, remember Greenland? Wasn't that funny when we thought we were going to do something on Greenland? And now it became a crisis of proportions that the market had to really contend with, and then

it's essentially kind of drained away. And, you know, I think that best case scenario, it was one of these kind of empty, shaking out moments, empty threats for the market that allows people to kind of reposition, step back from risk, and then you go on as normal. But we'll see, because we've had a lot of these. But it was interesting to see that the markets didn't recoup all of the losses that had suffered yesterday and that there are some key areas that still suffered despite the sort of pullback of the escalation. Software still a big laggard. Microsoft, as you mentioned at the top, really underperforming. Most of the mega caps really do remain under pressure.

The headline part of the index is definitely not out of the woods. I would point out silver actually slipped today. I would say the speculative stuff like Palantir were weak all day. So there's a lot of, you know, a lot of churn. And with it all, I think you could probably take some heart in the fact that banks were up 2% and all the real economy stuff that everybody came into the year wanting to own has held up. Yeah. Well, of course, the market reaction was an interesting one.

Once the president indicated a Greenland Framework with NATO had been reached, calling it off a new round of tariffs on Europe. Joining us now is Brian Gardner, Steffel Chief Washington Policy Strategist. Brian, great to have you with us. Thanks, Melissa. Good to be with you. What stands out to you? I thought what was interesting

about the announcement of this framework of a deal is that the framework of the deal was made with NATO and not with Denmark and not with the EU. And so what's your take on whether or not this deal is real and what shape this deal takes?

Yeah, I think we need a lot more details on it. You know, we're still in early moments of finding out what's involved here. I think we got a sense during the speech to the World Economic Forum that he was backing away a little bit, and so that something was on the way, further backing away. What a framework is and who is with, the fact that the Danes so far have been pretty quiet. The Europeans themselves have not confirmed this. So I think we need a lot more information before we know. what exactly is involved and how it's going to play out.

EU officials are slated to meet in Brussels tomorrow to discuss anti-coercion measures. Do you think that still goes through? Do you think that this is enough to actually sort of derisks this situation, make things a little bit calmer? If I'm the EU officials, I think I'd probably leave that threat on the table. It's a new world order. I mean, the old rules are out. Mark Carney alluded to this yesterday. day. So I think the Europeans, going back to a year ago, I put a note out last March about the

evolving world order and the North Atlantic alliance. And I think today and the last couple of days, just as re-emphasizing that. So I think the Europeans are going to keep all tools on the table until they get more comfortable with exactly what's going on. There's no reason to rush into taking it off the table right now. Maybe they've toned down the red, but keep the tools on the table. Brian, you know, investors came into this year not really wanting or feeling as if they needed anything new out of the administration in terms of policy, right? We got the tax bill, went through, you've got some deregulation in order.

Everyone's kind of geared up for the stimulative effects this year. And what we've had in the last few weeks is in the guise of some affordability measures, the 10% credit card cap that supposedly was supposed to be happening by the 20th. You got, you know, the president even said, hey, we're going to raise the defense budget by 50%. We're not talking about that, right? I just wonder, at this point, if you can project ahead as to what this administration's kind of near-term objectives might be and where investors might look out for the next volley of unexpected proposals.

So I think all of this has to be viewed through the prism, the filter of the midterm elections. Coming out of the November elections, we saw Republicans did better. badly. The reason why they did poorly, why the Democrats did well, was affordability. And so the administration for the last couple of weeks have been trying to figure out their options. And with a party, the base of which is now a more working class blue collar party, working class party, they are leaning into the affordability issue. So we're going to see more of this. You know, the credit card idea is tough to implement, but it's not going to go away. The headline risk is going to stay there. I think we're going to see more on the housing side. I don't

know exactly what's in mind yet, but I don't think today's executive order on single family rentals is the end of it. There will be some proposals on allowing borrowers to tap into retirement funds to fund a down payment. So there's going to be more of that. It's interesting. I mean, just the populist error that we're in, you have a Republican president who is, you know, in some ways, aligned with Elizabeth Warren and Bernie Sanders. So there is risk. Now, you know, I've been listening to the show for the last, and the previous show for the last hour, and, you know, it's about the fundamentals. And I agree with that.

But I think as we look at from a political standpoint, from a policy standpoint, you're always trying to look at the tail risks, right? Even if they're not the likely outcome, you're looking for the tail risk and policy. And, you know, there is a risk that the administration can further double down on this, depending on what the polls look like as the year goes. But we are in messaging time right now, and it's going to pick up as the year goes along. And the message is going to be that Washington is looking out for the little guy and the big guy, big business, the establishment is at risk. Yeah. All right. Get used to it against.

Brian Gardner from Stieffle. Thank you very much. With some of the geopolitical tensions calming for now, will the attention now turn to earnings and the economy? Joining us now is Partners Group Chief Investment Strategist, Anastasia Amarosa. Great to see you. Good to see it too. So everything we've been talking about that Brian said means you need a pretty good filter, I guess, on what you pay attention to, what you think is going to be a continuing issue and what we can ignore. So how does that net out to you?

That's right. I think that's exactly right, Michael, which is you sort of need this discard pile of things, of headlines. So you just put into that and say, this is likely not going to happen or is going to require such an act of Congress that is unlikely to happen. And there's other stuff that actually does move the needle. I mean, just to go back to the Greenland issue for a minute, you know, I will say that I think this was always the predictable and the expected outcome is that some sort of negotiation was going to take place. I don't think either party really wanted to risk the long-term rift of NATO. I don't think either party wanted to go back to the trade war and certainly not President Trump, who's trying to win the midterm election. So I think it is a very predictable market development,

which means, to your point, we can focus on what we can observe, and that is their earnings season. And the fact that we're still early innings of the earnings of the earnings but we have 78, 79% of companies that are surprising to the upside and they're beating earnings by close to 6%. So that means what is an 8% number could end up being a 12% number when it's all said and done if the same trajectory persists. So that's the stuff you pay attention to. Fundamentals, of course.

But of course there are policy efforts that you can invest alongside. And that's one of the areas that you like home builders. Brian had mentioned it. The administration seems to be hell bent on, making home affordability a top issue here. That's right. And we saw the ITB today do very well, not just today, year-to-date, with these efforts. Look, I think it's going to be a big deal in possibly an investable topic, a theme for the rest of the year.

Because first of all, look at the move lower in mortgage rates. We went from 8% a year and a half ago to now 6.2% or on a day-to-day basis, maybe it's even 6% or below, which means when you look at the mortgage-to-income ratio, it is now dropped to about 30%. It is close to potentially converging with a 25% rent to income ratio. And if we get there, that's what really moves the needle on housing. Now, I do think this is not the last time we hear about housing. I think there will be a number of efforts, maybe trying to steer the Fed in that direction, maybe trying to steer the federal agencies in that direction.

But not only will Fannie and Freddie will be buying more and more security, but could you see something like a QE twist? Could you see some of the reinvestments going back into everything? MBS to pressure those mortgage rates lower, I think we might. Yeah, I mean, you're actually even sort of seeing that, right? There are small treasury buybacks on the long end. They're issuing mostly on the short end. They're doing what they can in that regard. You mentioned that the earnings growth rate, you know, looks like we're going to get up into

maybe low mid-teens again. We also did that last quarter. The S&P 500 is kind of trading in the same zone as last earning season, right? So it's sort of one of those things where, yeah, there'll be beneficiaries. Parts of this market are going to be able to take that and run. with it, but on a total basis, we're not actually seeing aggregate progress. Right. I think what's happened in the last month or two, you've had some concerns about the durability of the AI trade, and then, you know, you start the year with a number of geopolitical

concerns, and that's why the market sort of stalled out. But I do think we can get through geopolitics. I think we can persevere through that. I do think that the artificial intelligence trade is far from over. I think we're early innings, and yet the adoption of AI is actually accelerating. The productivity that AI is driving is tangible. So are the cost savings. So as long as that's the case, I do suspect that AI will still be a pillar for this market. And we've seen semiconductors, for example, rebound quite significantly today. And then on the other side, you know, Melissa, to your point, I do see a broadening in the market. I actually think the U.S. consumer may be front and center this year, not only because of the housing market, but also

if you look at various categories of inflation, they're coming down. Gasoline prices. coming down and you've got the tax refunds, which should add close to 1% of GDP. So that's a very constructive backdrop for the consumer. But just because we're early innings of the AI trade doesn't mean you want to be in all these stocks for the entire game. And that's what it seems to be happening right now. We're questioning where you want to actually place your bets on the AI trade. We're seeing semiconductors, as you had mentioned, do really well, particularly memory.

Stocks do really well, but the rest is just sort of lagging and languishing. So do you stick with that? Or do you say, you know what, we revisit that in the fourth or fifth inning? Yeah, well, I think it's a great time to sort of reassess where you want to place your bets, so to speak, for the year. I think you do that with an AI trade. I think there's some risks in software, for sure. So I'm not sure this is something you step in more broadly. I do think semiconductors, as long as the cap-x cycle is there, are supported.

But I will say more broadly, as we look at our opportunities that within private markets, Melissa, for example, we're thinking more and more about defense as a theme. Because the outcome of all of these geopolitical developments is that NATO as a whole is going to have to spend a whole lot more on defense. There is a 5% of GDP commitment. We've got a trillion dollars or more to go to get there. And only three NATO countries are in compliance right now. So that is a massive tailwind for years.

And look at in the public markets, you see some of the defense primes that are performing really well. They're up 19, 20%, But in private markets, we can look at so much more. And we can look at the components and subcomponents and the assembly lines. And that's the level of granular detail we're thinking about for defense. Anastasia, thank you. Good to see you.

Thank you. Thanks so much. Well, Nat gas spiking this week as a massive storm is expected this weekend. Coming up a closer look at the market impact plus, KKR's Henry McVeigh will join us, why he says it is time to raise the quality and resilience of your portfolio. And the best way to do it. Over time, be right back. Welcome back to overtime. Take a look at shares of Moderna, leading the S&P 500 today and hitting a 52-week high.

The stock lifted by positive data from a study showing a combination of Moderna and Merck's drugs, reduced the risk of death and recurrence in patients with high-risk melanoma. Moderna now up 65% this year after being up 16% today. Well, Energy is today's best-performing sector as natural gas. Once again, makes a huge move higher ahead of a massive winter storm expected this week. Brian Sullivan joins us now with more. and we know winter's cold. Why such a big spike on a storm that's been predicted already?

Yeah, there's a few reasons here, Melissa and Mike. And I know you guys are really into sort of the technical setup, but there's a lot going here. Yes, it's going to be cold. Yes, it's going to be a brutal storm and pay attention in the south. They're going to just get walloped and up north. My friends in Wisconsin, negative 25 degrees on Friday. But we know this.

So why is natural gas up 30% today on top of big gain yesterday? Well, it's a few reasons. Number one, it's going to be cold. You know that. Number two, there is some risk that some of the natural gas output will be frozen. Basically, literally the pipes freeze a la Texas a couple of years ago. And then you've got traders just being on the wrong side. It's been pretty mild for a couple of years.

We haven't had super hot summers, super cold winters, a lot of positioning on one side. All of a sudden this hits. And you've got a lot of short covering thrown in there. So the traders having to make that up. And that gas at 507. So you've got that, but also the stocks are on the move. Now, the question's going to be, and I'm going to channel my inner Michael Santoli here for a moment, will this be a one or two-day phenomena or a meaningful follow-through?

Look at the natural gas stocks, the producers, the EQTs, the accelerate energies, the Devons, the range resources, those stocks up three and four percent today. And then you look at some of the export-led stocks as well, the ones that would buy natural gas. So actually they could be a little more negatively impacted because you have to buy it to sell it to Europe. You've got the LNG, cheneers, the venture globals. Then you throw in some shells, they're big traders, and Exxon mobiles of the world as well. Either way, very good day, very good last couple of days for natural gas stocks, for a lot of the oil and energy stocks as well, at least here, Europe may be a different story. Yeah, what is the story there?

We saw when Nat gas spiked very sharply at the beginning of the Ukraine War, there was a lot of huge impact, excuse me, on Europe. Yeah, we were there. We talked about this for about four years. Should be no surprise to see NBC viewers and listeners, Melissa, that natural gas is a challenge. Now, Europe has gotten very lucky with the weather. Again, fairly mild, fairly cool summers in most places, fairly decent winters, and that has enabled them to build up storage. However, Citigroup is out with a note today about how much natural gas is still in storage or available to some European countries. Remember, they store natural gas and tanks and also in some cases underground.

Citigroup's analysts admit that running out of natural gas is not a risk for some countries, but others are at risk. Look at this. This is basically days of natural gas covered. The more yellow, the higher the bar chart, the better. Latvia, no problem. Plenty of natural gas. All the way, zoom in, guys, all the way in the far left is the UK.

Germany, France, Poland, they're kind of in the middle of that. Not saying that Europe is going to run out of natural gas, but their inventories are depleting, which could be very bullish for companies like Schneer, like a venture global, that sell that stuff there. And very quickly, Nashville will have more snow than Denver on Saturday. Unbelievable. Yeah.

I'm sure they're ready for it. No problem, Brian. They love snow. They're great at it. a drive and it's wonderful. All right. Well, look for look for the video and wish them the best. Brian, thank you. It has been a hot start to the year for the Russell 2000, up 8% with the S&P 500 about flat. In fact, today was the 13th trading day of the year. And on all 13, the Russell has performed better than the big caps. Now, it may be a good sign. The market is

broadening. But coming up, I'll explain why it might be a bit of a double-edged sword. Stay with us. Big problems for big tech lately. Let's start off with Apple turning higher this afternoon along with the markets, but still down 3% this week, which would make eight straight down weeks in a row dating back to Thanksgiving. Microsoft, the only Mag 7 stock, which didn't turn positive today. Today's losses make six out of seven sessions in the red. It is down 14% over three months. And now take a look at Oracle that day in September when it spiked 35%. That is a distant memory. That is long gone. It's lost nearly half its value since then. So a major rethink when it comes to why people are invested in some of these mega-cap stocks.

For sure. Anything that's kind of spending heavily in the Open AI orbit is in the penalty box right now. I would be, you know, Oracle and Microsoft, they're sacrificing free cash. So outside of Alphabet, nothing has really worked in that cohort. Biggest negative contributors to the S&P this year, Apple, Microsoft, meta, broadcom, Nvidia, in order. So it shows you that's kind of the flip side of the mega-cap dominance that we had last year. other end of the spectrum, small caps, and specifically which small caps. We talk about the Russell 2000 being an outperformer every day this year versus the S&P.

Take a look. That's a one year. So it's now outperforming on a one-year basis, but look at where it's coming from. The same Russell 2000 versus S&P 500 on a five-year basis shows you the massive spread that is still there. We're actually not that far in the Russell above where we were in late 2021. So arguably, maybe that creates more upside. I really like watching the relationship, though, between the Russell 2000 and the Small Cap 600. Small Cap 600 is profitable companies, a lot less low quality and speculative names.

And so the Russell has been outperforming. You see that on a one-year basis. However, today and recently, the Small-caps catching up. Small-caps 600 up 2.6% today. The Russell up 2%. Russell really does have a lot of the speculative kind of story stocks on the upper end of it. You were mentioning Bloom Energy is one. Blue Energy is a single largest hold.

More than 1% of a 2,000 stock index is one stock called Bloom Energy. Wow. So it shows you what you're really buying when you buy the IWL. Exactly. All right. Time now for a CNBC News Update with Contessa Brewer. Contessa. Hi there, Melissa.

A federal appeals court this afternoon suspended an order that restricted immigration officers aggressive tactics in Minnesota. That freezes the judge's ruling that had banned officers from using tear gas and other steps against peaceful protesters. the administration and Minnesota are in this court case regarding the surge of federal agents in that state. Russian President Vladimir Putin said today, Moscow is reviewing the invitation to join the Board of Peace and it's prepared to commit a billion dollars for it as long as it comes from frozen Russian assets. The Board of Peace is President Trump's idea of an international body, chaired by him, to oversee governance and reconstruction of Gaza.

Meanwhile, the Vatican said today, the Pope is still considering the invitation to be. to join. And Jeff Bezos, Blue Origin, announced today it plans to deploy more than 5,000 satellites in space to build a communications network to take on SpaceX and Amazon. The network called TerraWeave will target enterprise data center and government users. Blue Origin says it expects to start deploying satellites by the end of next year. A lot of news packed into one minute there, Melissa. Yep. Great job, Contessa. Thank you. Contessa Brewer. A huge intraday spike for the markets. President Trump backtracks on his Greenland threats after saying there is a framework of a deal. So now that the brief international incident has calmed down, can markets get back to focusing on earnings?

KKR's Henry McVeigh will join us next with his take on the market. Stay tuned. Welcome back to overtime. A big day for the markets as President Trump says he will not put new tariffs on Europe, saying a framework of a deal on Greenland has been reached. The major averages closing higher by more than 1%, the Russell up 2%. This year's hot stocks remaining hot today. Intel up 11%

Sandus up at 10% and Moderna up 15%. And take a look at the numbers for those three so far this year. It's only been three weeks. Intel, of course, reporting results tomorrow right here in overtime. And one, after hours, earnings mover, we are watching today. That would be night swift transportation the stock falling after missing on earnings

and earnings guidance of 28 to 32 cents a share for next quarter compares to current consensus of 32 cents. Revenue guidance also disappointed to see the stock there down by about 4%. All right. Well, thanks. may look good. Our next guy says it is time to reach for some stability because things may not go back to normal ultimately. Joining us here on set is Henry McVeigh, KKR partner and head of global macro and asset allocation. He is the CIO of KKR's balance sheet. Henry, great to have you.

Thanks for having me. I go back to, I think you've been saying for a while that the global economy has like a higher resting heart rate. The metabolism's high. Maybe it means inflation stays higher. There's a lot of fiscal going on. There's a lot of building that has to happen redundantly. And de-globalization. What does that mean right now for an investor where you're looking to deploy capital? Look, I think our premise since coming out of COVID was this time is different and that this kind of regime change, right? Bigger deficits, more geopolitics, messy energy transition. And as you said, kind of higher resting heart rate for inflation. So what do you want to do? We think you want to own more things kind of linked to nominal GDP. So in the private world, that's been a lot more around infrastructure or if we're lending.

we actually want to own a hard asset that does well when there's a little inflation in the system. I think globally people are off sides. I go to Asia all the time. Japan continues to go up. You look at Southeast Asia. All those markets are moving and they're underowned. And that's happening at a time when earnings inflected upwards. And so I think there's a lot of consternation about geopolitics.

I think that peak tariffs are in. So I think that's an important point. And I also think that we're going to see stronger currencies outside the dollar. And if you get a tailwind from currencies, earnings are going up and the stocks are cheap. That part of the market's going to move. We've been incredibly active in India. We've been incredibly active in Japan. And I think those markets do well.

And in Europe, we've really focused more in kind of what I would say, the peripheries. If you think of a Spain relative to some of the core of Europe, that market remains very attractive for us. Is part of the appeal or what's working in, let's say, Asia, in particular, that it's earlier in whatever cycle than we are here, because I know you feel like, look, whatever you say about the good conditions we're in in the U.S., it's somewhat later cycle, and maybe you want to kind of go up in quality. So I think what's, I mean, there are two kind of big things. One is there's so much liquidity in the market right now relative to the issuance that

things are crashing, like credit spreads. You can move up from triple Bs to triple A's, and it doesn't cost you much. The quality index in the S&P, you can buy cheap. quality. So you should be doing that. I think longer term, what we're seeing, though, is we're in a productivity boom, and everything linked to that globally is going to do well. We just had 5% productivity in the U.S. The cheaper way to play productivity may actually be through Korea or Taiwan, and in Japan, where a lot of those markets are trading at less than book value. So we've been in a, kind of, the Mag 7s had a stranglehold on the market globally, and so most people are overweight

the U.S. I think they're going to do okay, but I think you're going to see health care do better, financials do better, and Asia do better. And so I think that's going to cause people to chase a bit. That was a story in 25. I think it'll be the story in 26. What we've been doing from our standpoint, because there was a lot of money that flooded in the private markets in 21, is we've really turned our playbook to focus more on corporate carveouts. I mean, you guys report on this all the time. Activism is coming after companies. There's a huge amount of activity in Japan, Europe, and in the U.S. around corporate carve-outs. That's a big area. Infrastructure is a big area. And then in credit, there's been a lot of noise around direct lending. We don't think that that's the beginning of a

crisis. We think it's the beginning of a credit normalization. But we've also been tilting the portfolio towards owning more real assets, more things linked to nominal GDP in our asset-based finance business. And the spreads there are still very attractive. How do you think about rates and how it impacts the environment? You mentioned Japan, what we're seeing with JGBs and yields there. it's basically pulling yields up around the world. So how does it impact how you view where to put your money? I think it's a great question. I think that Japan is the epicenter.

Most people come in and they want to focus on the U.S. Treasury and that's what we're, you know, being in the U.S. That's what you focus on. The area of most negative real rates globally in the big, large markets, by far is Japan. So that's where you need to focus. I do think there's a governor where the central bank and the prime minister can't let rates go up too fast, but I've been going to Japan for 30 plus years. They're going from deflation to inflation. And it's one of the reasons the market is so interesting because you can

borrow very cheaply in a higher nominal GDP environment, but that bond market does need to normalize. So we're going to have that tension, but I think this government is really committed to corporate reform, return on equities going up. If you talk to our founders at KKR, they would say, put me in, you know, as an analyst in Japan right now and help me do some of the kind of the strategic buyouts that may have been more akin to what they did in the U.S. Like going back 40 to 50 years here. Yeah, a little bit back to the future. Quickly, you mentioned all the liquidity and it's sopping up all its sort of credit paper, things like that. On the equity side, do we have a ton of water behind the dam here in terms

of all the AI IPOs that are going to supposedly come out? SpaceX. Do we have the appetite for that? I think their very healthy thing happened, which is, you know, when the meta deal was announced, it was like, oh, it's going to be a one-way trade. Credit spreads were super tight. The market is actually starting to discern. I think as investors, we should view that as a very good thing between the haves and the have-nots. You both were just reporting on this as cash flow matters. That's a good outcome. And so I think there'll be some, you know, if you can show cash flow visibility, those companies are going to do fine.

But I think what you're going to find is that large investors globally are going to start to diversify a bit. And so they'll have a little bit in that portfolio. But I think given everything that you've been reporting on on what happened in Europe, you know, Venezuela, people are going to want to get a cash flow. And so I think if we were thinking about where we're focused at KKR is like, come in with a cheaper evaluation, don't over lever, focus on free cash flow conversion, and that's probably going to be the same thing in the public market. So I think that speculative stuff that we saw, it's not back to 2021 or 2006 or 2000, but

it was getting a little bit frothy, and I think we should all be rooting for that discerning credit investor to help us out. Yeah, hints of that today. We'll see if it continues. Henry, great to see you. Thank you. Much for having me. Absolutely. Intel shares jumping ahead of its earnings report tomorrow after the bell.

The stock is now up nearly 50% just this month. Up next. Fast money is Dan Nathan on whether there is even more upside ahead for Intel. Stay tuned. Welcome back to overtime. Check out shares of Intel up sharply today as investors get ready for its fourth quarter earnings report, which we will have released during overtime tomorrow. Sima Modi joins us for more on Intel's recent rally.

Sima. Mike and Melissa, now at a four-year high. Clearly, the market is getting a bit more excited about its core business. The first time in a long time, that's the Panther Lake processor, which it manufactured using its 18A process. Seaport Research Partner analyst Jay Goldberg, who was among the analysts who upgraded the stock today, said he's hearing positive feedback from personal computer manufacturers. Remember, Intel has been losing market share in CPUs to AMD and Qualcomm progress on Panther Lake. That's raising confidence in Intel's manufacturing capabilities as it works to fabricate high-performing chips here in the U.S. investors will want that update tomorrow on new customer wins when the company reports earnings.

And if the backing of the U.S. government and now Nvidia could accelerate its timeline to make a chip that rivals TSM, though the Trump administration, his latest deal with Taiwan, which includes subsidies, does suggest that the hypers remain heavily reliant on Intel's main rival, Taiwan semi. It's going to take a lot for them to switch. Though higher prices, that could be one incentive, and Apple is already reportedly engaging with Intel. Despite the big rally that we've seen over the last 12 months, analysts seem a bit more cautious, about 33 holds and nine buys if you're tracking.

It's amazing because we had so many headlines about people stepping back, working with Intel because they're concerned about the manufacturing process for some of the more advanced microproces for the more advanced CPUs. And now there's all of a sudden enthusiasm. It just doesn't make any sense. And then the foundry business is basically non-existent. And that's what really needs to work, too, for this turnaround story to truly be a turnaround story.

It's not just a PC revival that's going to take this anywhere. Right. There's also a shortage that's taking place in the PC space, similar to what we're seeing in the memory chip market. So maybe that plays into why there's more excitement around what Intel's role is. But to your point, there's been a lot surrounding this specific company. The Trump administration's 10 percent stake. You have Nvidia as well. That's why it's tomorrow when the company reports earnings, that's going to be a crucial update. We want clarity on what those type of deals mean for the company's trajectory.

The CEO's newfound relationship with President Trump and what that could leave. We need to. Seema, thanks. Seema Modi. Let's bring in Dan, Nathan of Fast Money. Hi. On the Intel story. Just yesterday, Dan, you were sitting exactly where you're sitting now.

I was sitting exactly where I'm sitting here. Talking about Intel on the mood that we saw yesterday, which is a huge move ahead of earnings, and you called it the D word. Yeah, so today that's dumb. And today I'm the one that looks dumb. But, you know, when you see this sort of price action into an event like this, you have to kind of get your antennas up a little bit. Expectations obviously are very high.

To have this stock up 45 percent in just a matter of weeks, you know, What are they going to be able to say that's going to make investors feel better about this? And Seema just mentioned the backstop from the government. Well, they bought shares at 20 bucks. And again, they like the idea of a national champion. That's what they do over in China. They subsidize these sorts of things. I mean, this money that they invested was already given there from the Chips Act.

What they did was they got an equity stake. When you think about the foundry business, this manufacturing business, they've been losing billions and billions of dollars. And to your point, there hasn't been any evidence yet that their processes are as good as some of their competitors. When you think about Taiwan Semi, they make up 70% of CPUs. They make up 80-some percent of GPUs, and their ability to kind of compete with them, that's Intel,

is not particularly great. Taiwan Semi said two weeks ago that they're going to spend $50 billion in KAPX over the next couple of years. So Intel is going to have a hard time competing with that. It's just amazing how the market wants the chips that are the most commoditized, right? historically, right? It's kind of like the not so smart stuff, whether it's the pure memory or data storage or, you know, Intel, obviously a little farther away from that. But also the market caps are relatively small relative to the $6 trillion that are in Broadcom plus Nvidia.

Well, that's a really important point. If you just think of the Mag 7X Google, they've gone sideways for months now, right? So these are all multi-trillion dollar market cap companies. And if you're investor, you're looking for other areas of growth, other ways to express this view as far as AI is concerned. And when you see a sandisk, okay, that makes flash and solid state drives, right? They were doing that six months ago before the stock, you know, went up 500%. So investors are finding areas to express this view. But when they're putting that capital out of the trillion dollar gains and they're moving it into $50 billion market.

cap companies, you have the ability for them to double. And that's what's happened over the last few months. And Micron, you know, it's funny because this trade historically has been a boom and bust trade, right? Oh, yeah. You add capacity. Prices come down. It reverts back to North. Here we are. We have Mikeron making huge announcements about investments in the United States, making a very new chip campus. And yet up in my, up in my neighborhood, upstate New York, yeah. I hail from Syracuse. Well, here's the thing about this kind of boom and bust, and I know you guys been following this for a long time. Those are cyclical short of shifts and those are product. This is a secular shift and nobody is going to argue about that.

If you look at Mike Ryan, yes, this is a low margin business and it's a supply demand situation. If they put too much online, that's going to hurt margins when they have too much inventory in the future. They're sold out through 2026. They have pricing pressure right now. And so when you think about their customers, you know, they need to get double, triple order. They got to make sure they get this product. So that's obviously benefiting their margins. It's going to benefit their earnings.

But how much do you want to pay for that if you know there's going to be other side of this. The other side of it, by the way, is HP and Dell. The stocks are awful because they're having to absorb it. Yeah, yeah. Exactly. 100%. Dan, thanks. I'll see you in a few minutes. Twelve minutes to be exact. President Trump signing an executive order banning Wall Street investors from buying up homes, and he just spoke about it in Davos with our own Joe Cornyn. We'll have the highlights when overtime returns. Welcome back to overtime. President Trump signing an executive order late yesterday designed to keep large institutional investors from buying single-family rental homes

emphasizing that again today in his interview with our own Joe Curtin that helped the big builder stocks. Diana Oleg is here with all the details. Diana. Well, Melissa, President Trump's executive order is designed to ban large-scale investors like Invitation Homes, American Homes for Rent, Blackstone, and Pretium from purchasing more single-family homes. But he exempted investors in the build-to-rent market, a big relief for builders like Linar and Taylor Morrison who sell to investors. American Homes for Rent is also a major build-to-rent player. actually a top 40 home builder. Trump aired his beef with investors and an exclusive interview with CNBC's Joe Kernan.

They were buying up all the homes. People couldn't buy homes, you know. You have these big companies, these big corporations, buying up thousands of homes and renting them or doing whatever they do with them. Some of them are flipping them for a big profit. But it got to be too much.

Too many. It became, you know, it's good investment. And we're not saying, take them away, but we're saying that, We don't want that. We want people to be able to buy a home. Now, analysts say the ban could definitely help in markets like Atlanta and Nashville, where investors make up a very large share of buyers.

But nationally, big institutional's only own about 1% of the rental stock. The president also said in his speech this morning that he did not want to bring home prices down. It seems counterintuitive, but if you look further, it seems like he just wants to lower mortgage rates and lower competition. But we got some rough numbers this morning, a huge drop in. December pending home sales down 9% month to month, even as interest rates sat on the low side. The realtors said that put a damper on this year's housing outlook. So, Melissa, that makes kind of the market itself looking rough due to affordability, and we don't know if what the president is saying is really going to help.

Do we actually know how this will be enforced, Diane, or is this just sort of a framework of the idea of a ban? It was a very long order, and it had, you know, Congress has to do some things. He has to get his agencies to do some things. it's going to have to play out over time and find out what's legal, what's not, and, you know, how it can be working. Really what he wants to do, again, is lower competition. He doesn't want to lower home prices. He made that clear. He said he doesn't want to lower the value of people, you know, whose home is their greatest asset.

So it's going to be tricky, but we could see some changes. Yeah, absolutely tricky, especially when some of the other efforts, Diana, are things that are going to stoke demand, whether it is getting mortgage spreads down and mortgage rates a little bit lower, whether it's allowing people to use, or 1K money for a down payment. I mean, it's just a very, very thorny market to try and engineer outcomes for unless you can somehow incentivize new supply. Yeah, I mean, one of the issues that, you know, he talked about buying $200 billion worth of mortgage-backed bonds, which immediately lowered interest rates just on talk of that. And if you were to do that, and it did lower mortgage rates. The trouble then is when you lower mortgage rates significantly,

you give homeowners more purchasing power, which allows them to buy more, which then pushes home prices higher, which sometimes negates that effect of lowering the mortgage rates in the first place. Yeah. Diana, thank you. Diana Oleg. Diana had mentioned this. A home builder's doing very nicely today in response to this because they will actually

benefit from this. They should benefit from this. Also, Treasury yields did back away from the brink, if you want to call the brink 4.3%, which is where they topped out yesterday. So things did go in that direction. I think that makes sense. And again, it's also one of the economically sensitive parts of this market that everyone's reaching for right now. I feel like it's very crowded consensus. Everyone wants to own the

banks and the consumer cyclicals and industrials. And the median S&P stock is up like 3% this year. Wow. And the S&P's down a little bit. So it's happening. It's just not adding to the aggregate wealth of U.S. equity holders. Do you think the markets tomorrow will all of a sudden be skeptical about this framework? We've been saying this framework of a deal. We don't have any details. I would imagine it depends on what, if anything, we hear from this. the European side. If they feel like, look, we're just disengaging here and we don't think that we got to any kind of a satisfactory agreement unless we have, you know, more assurances. I do think the market's otherwise eager to move on to the next thing, and I'm sure there probably will be

a next thing. Yeah, I wait for Denmark. That's right. Yes, that's all that matters. All right. Well, that's going to do it for overtime. Fast money begins right after this quick break.