Closing Bell Overtime: Taylor Morrison CEO on Homebuilder Weakness; IPO Outlook with Hamilton Lane’s Erik Hirsch 2/24/25

[0] Well, that bell marks the end of regulation.

[1] American Advertising Federation ringing the closing bell at the New York Stock Exchange.

[2] Sandisk Corporation doing the honors at the NASDAQ.

[3] Stocks losing steam in the last few minutes of trading.

[4] The Dow giving up decent gains, closing about a little better than flat.

[5] The NASDAQ losing more than a percent as Palantir sees more losses and chips fall as well.

[6] That's the scorecard on Wall Street, but winners stay late.

[7] Welcome to Closing Bell Overtime.

[8] I'm John Ford.

[9] Morgan Brennan is off today.

[10] Coming up on today's show, breaking earnings results.

[11] from Hims and Hers Health, Zoom Video, Cleveland Cliffs, and Diamondback Energy.

[12] And plus, the CEO of HomeBuilder Taylor Morrison is going to join with her outlook for housing stocks after a rough week of data in that space.

[13] And we're going to talk to the chief investment officer of TIAA, which has got more than a trillion dollars under management, about why he's bullish on U .S. growth versus the rest of the world.

[14] But now let's begin with the market action.

[15] And there's a late session draw for equities after Friday's sell -off.

[16] Joining us now is Invesco Chief Global Market Strategist Christina Hooper and Henning & Walsh Asset Management President and CIO Kevin Mann.

[17] Guys, welcome.

[18] Thanks for being right here, keeping me company here on set on a Monday.

[19] Christina, what happened, you think?

[20] You know, beginning early this morning, stocks were indicating higher.

[21] I don't know.

[22] Is it tariff comments?

[23] I think that had to play a role.

[24] Maybe if...

[25] Tariffs had been set in the French word.

[26] We would have been able to avoid that.

[27] But the reality is the last few days have really been characterized by nervousness and jitters.

[28] And we saw that on display with Walmart earnings last week.

[29] They handily beat expectations, but that outlook.

[30] wasn't incredibly positive.

[31] It was sober and rational and said, hey, there's a lot of uncertainty.

[32] That was followed up by University of Michigan Survey of Consumers, which also rattled markets.

[33] We had inflation expectations going up and sentiment going down, the opposite of what we'd like to see.

[34] OK, so, Kevin, given that rates are probably going to stay higher for longer anyway, and then we've got these indications that consumers sort of expect, you know, inflation.

[35] to be there, which is kind of like the Stay Puft Marshmallow Man and Ghostbusters.

[36] Then it happens, right?

[37] Can stocks break out of this range, go higher, as so many seem to expect by the end of the year?

[38] Yeah, I think we should expect more short -term bouts of volatility ahead.

[39] In 2024, the market moved lower by 1 .5 % or more less than 4 % of the time.

[40] That's incredibly low, and that shouldn't be expected to continue.

[41] But just because volatility has returned, and we're now over two years into this bull market runs with valuations that are above their 5 - and 10 -year averages, doesn't mean the markets can't or won't move higher.

[42] We just have to be a lot more selective to find those pockets of growth opportunities.

[43] And we're starting to see signs of changes in market leadership beyond information technology.

[44] Value is now outperforming growth.

[45] International is outperforming U .S. I don't know how long those rotations last, but it does serve as a reminder to investors of the benefits of diversification and not loading up just into one area of the market.

[46] OK, so, Christina, China.

[47] Talk to me about China and some markets outside the U .S. I know there's a lot of preference out there for U .S., but Europe has actually done OK over the last several weeks, beginning of 2025.

[48] Should investors look there?

[49] Should investors look at China where really the demographic story and the consumer economy story seem to have turned against it?

[50] So I think all of the above.

[51] Investors should be looking outside the U .S. in places like Europe, in places like the U .K., in places like China, because what we're talking about is an outlook of about 12 to 18 months.

[52] And so, yes, you can worry longer term about things like demographics.

[53] But the reality is right now these markets have a very supportive economic backdrop.

[54] We have the potential for in the European Union very significant.

[55] rate cuts from the ECB, I think we'll also get more rate cuts than are priced in from the Bank of England.

[56] We have an accommodative environment, a supportive environment in China, primarily fiscal stimulus that's quite significant.

[57] But we also have a lot of the recent technological innovations.

[58] For example, DeepSeek is a perfect example that I think is a catalyst for a re -rating of Chinese equities in general, at least Chinese tech equities.

[59] So I think there's a lot of opportunity outside the U .S. And chances are most investors are underweight those areas.

[60] I guess we'll see if she means it about, you know, allowing more flowers to bloom entrepreneur wise there, too.

[61] So, Kevin, back sort of closer to home in overtime.

[62] Cleveland Cliffs, Diamondback Energy.

[63] Yes.

[64] Are those interesting places?

[65] What are you watching in those results?

[66] Cleveland Cliffs, I want to hear from their CEO.

[67] Is he as optimistic as he was that there was going to rebound in steel demand during the first half of the year?

[68] And what's his overall outlook for 2025?

[69] Cleveland Cliffs has had a tough go over it over the last year, but they're off to a good start this year.

[70] So I'm going to really be looking into their forward -looking guidance.

[71] On the other hand, Diamondback Energy, they got a good yield, 5 .3%, 12 -month yield, trading at just nine times current earnings.

[72] That seems good on the service.

[73] But oil and gas distribution in this current environment, not knowing the supply -demand bounce for the bounce this year.

[74] I don't know if that's a name I'm going to look to pile into.

[75] Cleveland Cliffs, I'm going to wait to hear what their CEO says.

[76] But I still think there are many other opportunities outside of those areas on U .S. shores that are going to provide growth opportunities in the new year.

[77] And I think on Wednesday afternoon, we're going to be reminded that the AI revolution isn't dead just yet.

[78] And CapEx spending into AI is going to only intensify.

[79] Big day with NVIDIA.

[80] Big overtime session for sure.

[81] Christina, finally, yields.

[82] Right.

[83] We'll just start off talking about inflation expectations higher for longer.

[84] What's the danger zone there?

[85] How close are we to it?

[86] Are you worried at all?

[87] So I think what we're seeing is yields reacting to a variety of different factors on the long end.

[88] And so the 10 year yield has come down, I think, on growth concerns.

[89] But just a few weeks ago, there was a lot of fear that we could see the 10 year yield get up to that psychologically disturbing 5 percent level.

[90] So I think what we're seeing is that the risks are.

[91] quite balanced.

[92] It's not just concerns about a resurgence in inflation.

[93] It really is concerns about a slowdown in growth.

[94] In fact, we heard from Chair Powell last month at the FOMC press conference that what we're seeing is low job growth, but luckily there hasn't been a lot in the way of layoffs.

[95] And so it's been quite balanced.

[96] But if we were to see an increase in layoffs, that could be problematic in terms of driving up unemployment.

[97] So I think there are just risks on both sides.

[98] Yep.

[99] And a lot of factors.

[100] Buffeting yields on the long end.

[101] All right.

[102] Christina, Kevin, thank you.

[103] My pleasure.

[104] Well, hims and hers health earnings are out.

[105] Brandon Gomez has those numbers.

[106] Brandon.

[107] Hey, John.

[108] Yeah, look, you can see shares of hims and hers.

[109] They're moving lower despite the fact that they were a beat on the top and bottom line down just about 10 and a half percent now.

[110] Now, again, this is a stock that's been moving based on these GLP one headline headline and news updates.

[111] However, I will point out the fact that the company says total revenue.

[112] excluding GLP -1, was about $1 .2 billion.

[113] So that makes it about $280 million for last year in 2024.

[114] They did say guidance for 2025 was coming in above consensus estimates.

[115] Again, a lot of that has to do with their expectations for not just their GLP -1 offerings.

[116] They just acquired a peptide facility.

[117] They're going to be expanding into blood work at home for some of their users.

[118] We're going to hear more on the earnings call at 5 o 'clock.

[119] I did just get off the phone with the CFO.

[120] He said, you know, we're not in the business of circumventing regulation.

[121] You have that FDA news out on Friday, which is...

[122] the stock because now this company is not going to necessarily be able to offer some of those semaglutide compounded drug offerings.

[123] Again, perhaps that's what's weighing here on the stock, down 15 percent.

[124] Yeah, 43, 44.

[125] That's about where it was two weeks ago.

[126] Give an idea of how fast this thing has been moving.

[127] Brandon, thanks.

[128] Well, Diamondback Energy earnings out as well.

[129] Pippa Stevens has those numbers.

[130] Hey, John, it's a top and bottom line beat for Diamondback during Q4.

[131] EPS coming in at 364 adjusted.

[132] That was ahead of the 335 that Wall Street analysts were looking for.

[133] Revenues of $3 .71 billion also ahead of the 3 .52 that the street was looking for.

[134] The company also did increase its base dividend and said.

[135] that for the fourth quarter, average production stood at 475 ,000 barrels of oil equivalent per day.

[136] Stock is unchanged right now.

[137] John?

[138] All right.

[139] Pippa, thank you.

[140] We've also got Zoom video earnings out.

[141] Seema Modi with Go.

[142] Seema.

[143] Hey, John, for the quarter, the company reporting a nine cent beat on its bottom line while sales came in line with what Street was expecting.

[144] But it did surpass analysts' forecasts on some key metrics like enterprise revenue and operating margins.

[145] I would point out operating margins of 39 .5 % versus a 37 .9 % estimate.

[146] And looking at the stock, it was down as much as 5 % when the earnings came out, but have now narrowed those losses down just about 3 .8%.

[147] We know there's been this active bull versus bear.

[148] debate, John, about the return to office, whether it's the pressure coming from Washington or what JPMorgan CEO Jamie Dimon recently said, but what that could mean for these virtual conferencing call apps like Zoom.

[149] We'll see stock now down about 4%.

[150] That earnings call does begin at 5 p .m. and we'll be on it.

[151] Back to you.

[152] Thank you.

[153] Let's take a breath now.

[154] Get to see markets commentator Mike Santoli for a look at the global divide in economic sentiment.

[155] Mike.

[156] Yeah, John, the actual economic numbers are coming in better than expected in Europe, but not so much in the U .S. at the very latest stretch of this chart, which goes back a few years here.

[157] So what this really is, economic surprise index, right?

[158] That's how the data come in relative to forecast.

[159] And they've crossed over.

[160] This is kind of unusual, especially for Europe, to kind of have a bout of outperformance on the macro numbers when the U .S. is settling back.

[161] It doesn't mean that the growth rate.

[162] in Europe has surpassed that of the U .S. It just means versus expectations.

[163] This helps explain why markets are doing what they're doing.

[164] By the way, I'd also observe how it's gotten to be a narrower range here as we get past and beyond the pandemic by year.

[165] It sort of shows you the economy is in a more normal, predictable state.

[166] That's also a net positive.

[167] Here's the way the S &P 500 in the U .S. has performed relative to the Euro stocks 600.

[168] Now, this is a one year.

[169] So it shows you the massive lead that the U .S. had built up against Europe and then the very pronounced comeback move by European stocks.

[170] Banks are participating there.

[171] You got the ECB is going to be a little more easy, perhaps, than the Fed. And there's this fiscal impulse, basically, for political and policy reasons.

[172] The governments over there are expected to do more spending on defense and other things.

[173] So for now, we're seeing these come together.

[174] It's probably a lot to ask to say that this becomes a real enduring trend, maybe just a mean reversion, John.

[175] And I wonder how much policy.

[176] plays into this out of Washington.

[177] I was looking at that first chart and trying to figure out exactly where November is because Election Day, we saw that big run up in stocks and crypto and some other things and some optimism around the Trump administration kind of tearing down some barriers to business doing business.

[178] But tariffs were also a big part of that narrative, which would be bad for economies in Europe, one would think.

[179] But then there's been a bit of a reversal.

[180] Any sense of what that might mean, especially given the news today?

[181] and Trump meeting?

[182] It's probably, well, first of all, there was in the U .S. a post -election kind of release of spending.

[183] You did see very strong November, December consumer and business spending.

[184] So that probably was just more of a reaction to decisive electoral victory than maybe expectations of a policy could do.

[185] That has now settled back, right?

[186] We have a little bit of a hangover effect in some of the consumer spending numbers and some business confidence metrics.

[187] in the last couple of months, whereas in Europe, they're coming off a very low base.

[188] I mean, parts of Europe were in recession.

[189] And so I think they're benefiting from the fact that we're seeing finally a cyclical turn.

[190] And then, as I said, you know, we got the Fed maybe having to go to the sidelines while the ECB, in theory, remains in the game of perhaps cutting some more.

[191] Interesting.

[192] Always more to learn.

[193] Mike Santoli, thank you.

[194] See you in a bit.

[195] And after the break, much more on the U .S. versus the rest of the world when we're joined by the chief investment officer of TIAA Wealth Management.

[196] He's going to tell us why he's bullish on the U .S. and where he's putting money to work now.

[197] And later, is the IPO market about to break out?

[198] We'll talk to the co -CEO of private markets investment firm Hamilton Lane about the sectors he says are ripe for deals.

[199] Overtime is back in tune.

[200] Welcome back to Overtime.

[201] The U .S. underperforming much of the rest of the world to start 2025.

[202] iShares ETFs for Europe and China are both up double digits, while the S &P 500 is up about 2 .5 percent.

[203] Our next guest says he still prefers domestic stocks to international.

[204] Joining us now is Neil Mukherjee, TIAA chief investment officer who oversees $1 .4 trillion in assets under management.

[205] It's a lot of money, Neil.

[206] It's a lot of money.

[207] So tell me about how you're thinking at this time.

[208] Well, we got we're under 6K on the S &P.

[209] There's been some broadening in this market away from Apple, Google, Microsoft, Nvidia, which I guess would be a good health sign for the market.

[210] But a lot of uncertainty over what policy is going to be.

[211] And with rates stubbornly high, whether stocks can move higher.

[212] Why do you believe in the U .S. still?

[213] Well, the growth story, John, first of all, thanks for having me. It's always great to be with you.

[214] The U .S. growth story, I think, is still a very good one.

[215] There's some nervousness in the marketplace with respect to loss of momentum and U .S. growth.

[216] I just think we might be going through a bit of a soft patch.

[217] We pulled in a lot of that growth momentum into the fourth quarter of last year.

[218] We saw a massive spike in consumer spending over the holidays.

[219] So a bit of a soft patch is to be expected.

[220] But it's still a 2 percent economy, which is pretty good.

[221] The labor market seems resilient.

[222] It's slowing down in a controlled fashion.

[223] The high income consumers spending, they're being supported by a high level of net worth.

[224] They're earning good returns on their cash on the sidelines.

[225] But also we're watching some key risks in this economy.

[226] So you think about the policy uncertainty.

[227] You talked about the higher interest rates.

[228] Small businesses are under pressure because of higher funding costs.

[229] The housing market is a bit stalled out as well because of affordability issues.

[230] But net -net, this economy still seems to have a 2 % -like growth built into it.

[231] And don't forget the prospect of deregulation.

[232] reshoring, et cetera, and business confidence, which is rising, that can support this economy going forward.

[233] So we remain optimistic on the U .S., but there's some catalyst coming through for international as well.

[234] So I hear you about the U .S. economy overall, 2 % being pretty good.

[235] But at the same time, the U .S. stock market, these indices, the valuations are pretty darn strong.

[236] Why is now a good time to be in and put more into domestic stocks versus other places?

[237] We just heard Christina Hooper making an argument for Europe and maybe even China.

[238] Yeah, it's a great question.

[239] So we remain invested in the U .S., but we do feel that the market is ripe for a little bit more rotation.

[240] So at the index level, there may not may not be too much excitement in 2025.

[241] But below the surface, because of this profit.

[242] broadening story and the prospect for deregulation means that the non -MAG7 names may have a better year than the MAG7 names.

[243] So think of areas like value and banks and utilities, even travel names, which are doing quite well, utilities as well, which could do well for the rest of this year.

[244] But I agree with you.

[245] We're keeping a close eye on international.

[246] Valuations are quite cheap there to begin with.

[247] Sentiment was quite bearish at the beginning of this year.

[248] And there are some catalysts that are coming through.

[249] So, for example, the potential ceasefire in Ukraine.

[250] ECB could ease going forward.

[251] There's a resurgence in enthusiasm for Chinese technology names as well.

[252] So we're watching this closely.

[253] And I do feel that in the next few months you could see this continue a little bit more.

[254] But I wouldn't remove your chips from U .S. equities as of now because the prospects are still pretty good.

[255] A lot of disagreement out there about the Department of Government efficiency and whether it's good, whether it's bad.

[256] But at what point, at what level would federal layoffs create a macro factor that you would pay attention to?

[257] Yeah, we're watching this pretty closely.

[258] I think this is important.

[259] But I do think the negative implication on the labor market could be subdued compared to what the headlines are suggesting.

[260] So if you think about the number of people who are employed by the federal government, about 2 million, 2 .4 million people, it's less than 2 percent of the entire labor force.

[261] But if you look at the state and local governments, I think that's where the big concern could be, because.

[262] Take state and local government, that could be about 12 percent of the entire labor force population.

[263] And that employment is quite cyclical, in my opinion.

[264] So the economy is resilient.

[265] That's still OK.

[266] But if the economy weakens further, you could see some layoffs pick up in the state and local governments.

[267] The other thing is that if you do see Biden era policies being reversed substantially, so you think about the Inflation Reduction Act or you think about the CHIPS Act.

[268] that could impact the state budgets as well.

[269] And then there's a lot of confusion right now.

[270] So, for example, a lot of folks regularly retire every year.

[271] So it's not very clear of the people who are leaving and those who are impacted are the people who are going to retire anyways.

[272] So keeping a close eye on this is important.

[273] We're watching jobless claims right now.

[274] They haven't moved that much, but that is where the impact will show up a lot more going forward.

[275] But I do feel like...

[276] Broadly, the labor market remains quite resilient.

[277] Okay.

[278] We will, as we do, watch the data.

[279] Neil Mukherjee, TIAA Chief Investment Officer, thanks for being with us on Overtime.

[280] Well, after the break, the CEO of HomeBuilder Taylor Morrison joins us after a rough week of housing data.

[281] We're going to get her take on spring selling season and beyond.

[282] And later, Hollywood has a China problem.

[283] And it could be emblematic of a wider breaking of ties between Washington and Beijing.

[284] We will explain when Overtime comes back.

[285] It has been a rough week for the housing sector as recent data shows weak builder confidence and slowing activity.

[286] And joining me now in an exclusive interview is Taylor Morrison, CEO Cheryl Palmer.

[287] Cheryl, is there a silver lining out there for the home builders?

[288] Hi, John.

[289] It's really a pleasure to see you.

[290] It's such a good question.

[291] You know, we just reported about 10 days ago and we wrapped up the year really quite nicely above all of our expectations and the streets.

[292] And we talked a little bit about what we've seen so far this spring selling season.

[293] You know, certainly the beginning of the year, John, the first couple of weeks of January, there was a lot of trepidation in the consumer.

[294] As we've reached about the 15th of January, we've actually seen quite a nice pickup in sales.

[295] We've seen it mostly across all our geographies and most consumer groups.

[296] first -time buyer is still stretched.

[297] I mean, there's just no denying that.

[298] But yes, I actually do believe we've seen rates come back just a little bit.

[299] I think this is the fifth week in a row we've seen rates drop a tad.

[300] All those things will continue to help us.

[301] I think last time we were asking you about potential tariff impacts.

[302] Now, we still don't know when or what exactly, but do you have any different modeling or clearer sense of what your options are?

[303] You know, very similar to what we talked about last time, John.

[304] I mean, we just don't know yet.

[305] I think it's too early to tell.

[306] We've seen a lot of movement from the day they got announced to the day they got pulled, obviously, over the next couple weeks.

[307] I think we also talked a great deal about how we've worked at Taylor Morrison to domesticize most of our product offerings.

[308] Having said that, it will have an impact and it would be unfortunate because as we sit here today, you know, affordability is a stretch and this certainly won't help.

[309] What are you doing with land acquisition at this time?

[310] I mean, I know things overall might be relatively slow for the industry, but I suppose there are strategic moves that you can make to put yourself in a better position when times change.

[311] Yeah, you know, it's a great question because the land we buy today has nothing to do with the market today.

[312] Most of the land we're looking at today is going to come to market, you know, late 27 and 28, and the environment will be quite different.

[313] It's interesting because there's always been a correlation in our industry that the last 90 days of sales kind of creates builder appetite.

[314] But that's not it doesn't really make sense because we're working on our 2028 book of business.

[315] Another interesting stat I actually just saw this morning is where we're seeing the greatest pressure on pricing for land.

[316] tends to be where there's the most competition, and that's to address the first -time buyer.

[317] That tends to be a little further out, what we might call some more of the peripheral markets.

[318] And that's a smaller piece of our portfolio.

[319] So when I look at where we really focus our efforts, our core locations, we've seen actually a stabilization of pricing, which I think bodes well for the future.

[320] Now, you are on CNBC's Changemaker list, and I want to ask a question related to that, because as some might imagine, women in power in the home building industry isn't exactly common.

[321] Lately, there are renewed questions about why a diverse workforce matters.

[322] Home building strikes me as an interesting case because shelter is universally important.

[323] But what advantages do you get?

[324] What pitfalls do you avoid by having more women in decision -making roles at Taylor Morrison?

[325] Well, you nailed it, John.

[326] When I look at our consumer, it's a very diverse consumer.

[327] And actually, if I think about primary buyers today and the movement we've seen in women decision -makers, if I look at just the overall buyer.

[328] portfolio and the difference we've seen in just the ethnicity of our buyers.

[329] If our workforce doesn't mirror or come close to mirroring, how do we begin to understand what our consumers need?

[330] The whole concept of, you know, buy, build it, and they will come, I don't really subscribe to that.

[331] So we spend a lot of time understanding our customers, and it starts with our workforce.

[332] So thank you for the honor, I feel.

[333] I'm unbelievably blessed that I have a team of people that appreciate the need to understand the consumer and to serve the consumer experience.

[334] And it takes a village to do that.

[335] All right.

[336] Somebody's got to build that village, I suppose.

[337] Brick by brick.

[338] Cheryl Palmer, thank you.

[339] Thank you.

[340] Well, coming up, we will hear from another of this year's CNBC changemakers, Reddit's chief operating officer.

[341] And you can see the entire changemakers list by scanning the QR code, that little one on the screen.

[342] It'll take you to CNBC .com.

[343] Well, it's time for a CNBC News update with Bertha Coombs.

[344] Bertha.

[345] John, the Department of Government Efficiency will use AI to assess responses from government employees who were asked to justify their roles in an email from the Elon Musk -led department over the weekend.

[346] Sources, though, are now telling NBC News that the Office of Personnel Management told federal agencies that responding is voluntary and it's unclear which model will be used to process the information.

[347] The Trump administration is reportedly repealing a Biden -era directive that sought to ban American allies from using U .S.-made weapons to violate international humanitarian law.

[348] The Biden administration first issued the national security memorandum over concerns of civilian deaths in Gaza amid Israel's war with Hamas.

[349] According to The Washington Post, national security adviser Michael Waltz rescinded that directive last week.

[350] And New York City collected $48 .6 million in revenue during just the first month of its congestion pricing plan.

[351] At that rate, the Metropolitan Transport Authority would bring in about $500 million a year.

[352] Despite a Trump administration order ending the toll, the fee is still in place as New York State appeals the order.

[353] John?

[354] Bertha, thank you.

[355] I do want to mention that Cleveland Cliffs results are out.

[356] We are going through them.

[357] Well, meantime, Apple also says it's planning to invest half a trillion dollars in the U .S. in coming years.

[358] The latest example of the massive amount of money being spent on A .I. We're going to look at how the current cycle of spending compares to another boom in the late 90s.

[359] Why it might be a warning for the A .I. players.

[360] And as we head to break a quick check on some of today's overtime movers with.

[361] Kim's and hers still down sharply.

[362] Let's see.

[363] Almost 19 percent.

[364] Be right back.

[365] Cleveland Cliffs earnings are out.

[366] Pippa Stevens has the numbers.

[367] Pippa.

[368] Hey, John, a miss on the top and bottom line here for Cleveland Cliffs during Q4.

[369] Earnings coming in at a 92 cent loss per share.

[370] That was wider than the 61 cent loss that analysts had been looking for.

[371] Revenue is coming in at 4 .33 billion, also short of the 4 .43 billion that Wall Street was looking for.

[372] And this does come after the company had already lowered expectations after giving some preliminary figures on revenue earlier this month.

[373] Now, the company said that their results in 2024 were a consequence of the worst.

[374] steel demand environment since 2010, excluding COVID, but then said that since January 20th, President Trump has made clear that in proper enforcement of trade laws in the support of industrial policy, prioritizing manufacturing in the U .S. are being implemented, which they said should benefit them more than others.

[375] And they said as of late February, Cleveland Cliffs is well on the way for a dramatic rebound in 2025.

[376] You see the stock down there more than 5 percent here on the top and bottom line miss for Q4.

[377] John.

[378] Pippa, thanks.

[379] And don't miss a first on CNBC interview with Cleveland Cliffs CEO.

[380] That's tomorrow on Overtime.

[381] Well, earlier today, we got some data center headlines from two big tech names.

[382] Microsoft shooting down a TD Cowan note, claiming the company is cutting AI data center spending.

[383] In the meantime, Apple announced $500 billion of U .S. investment over four years, part of which will go toward a new advanced technology factory in Texas.

[384] But is the AI spending boom in danger?

[385] Mike Santoli's back to answer that, perhaps.

[386] Mike?

[387] Well, John, I'm certainly going to answer by saying the market itself is showing a little bit of apprehension around just how long the growth in data center AI infrastructure investment might last.

[388] And last week, the latter part of last week, Bank of America strategists sort of showed why, because in the back of a lot of investors' minds is the fact that we had a previous Internet, next new thing, massive hardware build out in the late 90s, early 2000s that actually did come to fruition, but also killed the economics of those doing the building.

[389] Selex stocks, that would be competitive local exchange carriers.

[390] It's basically a proxy for the build out of fiber optic and broadband stocks back then.

[391] It was sort of the whip end of the the building of the Internet.

[392] And this goes from mid 1999 to 2000.

[393] That's the peak.

[394] And they've overlaying that with the S &P 500 semis just from the beginning of last year.

[395] Now, the scales are different.

[396] It's not exactly the same in magnitude, but they're trying to point out that the rhythms, who knows, might be somewhat similar.

[397] So I think that this is sort of.

[398] this shadow over this boom.

[399] But there are big differences, one of which is back then it was financed by debt, not by the richest companies in the world paying cash for all this capacity.

[400] Take a look at the market here for AI related stocks directly.

[401] That's the AIQ ETF.

[402] And then this is data center plays as well.

[403] And you see obviously a very similar angle and just a quick reversal lower.

[404] But it doesn't really change the overall trend.

[405] It essentially says maybe we got a little overexcited in the short term and we have to rationalize expectations for a little while here, John.

[406] And was there really an NVIDIA of Select stocks?

[407] No, that's a good point.

[408] No, it wouldn't be of Celex stocks, but Cisco or EMC was probably the NVIDIA of that time.

[409] So it was kind of essentially the companies that were the vendors to the Celex as they built everything out.

[410] Indeed.

[411] I remember it pretty well.

[412] Pretty well.

[413] Mike Santoli, thanks.

[414] Quite a time, yeah.

[415] Yes, it was.

[416] Up next, Hamilton Lane's co -CEO, Eric Hirsch, on why he thinks the IPO market could be on the verge of a comeback.

[417] And later, why a surge in Chinese patriotism is having a huge impact on China's box office at the expense of Hollywood.

[418] We'll be right back.

[419] Welcome back to Overtime.

[420] The IPO and deal -making bonanza many predicted would be unleashed under Trump 2 .0.

[421] It has yet to materialize, but one big name long anticipated to go public, Turo, pulled its listing entirely last week.

[422] On top of that, new FTC chair Andrew Ferguson saying the commission will retain stricter merger guidelines finalized in the final weeks of the Biden administration.

[423] So what does all that mean for private markets and investors?

[424] Well, joining me now is Eric Hirsch, co -CEO at private markets giant Hamilton Lane.

[425] Eric, good to see you.

[426] So what are the signs you see, despite those things I mentioned, that the IPO market's coming back this year?

[427] John, good to be with you again.

[428] I think we've got two sides competing with each other right now.

[429] The one side that's winning is the sign of just general market uncertainty.

[430] That's really the issue.

[431] On the other side, I think the positive factors are twofold.

[432] One, there are a number of very high quality businesses in the hands of the private markets that are ready, they're mature, they're cash flow positive, they're growing and they're looking for an exit.

[433] The IPO market is the logical conclusion for them.

[434] And the public markets need more new names.

[435] Too much concentration in the hand of a few technology businesses.

[436] And so for the public markets to also be healthy, they're going to need some new fresh blood in there.

[437] So you've got that on one side, which is positive.

[438] But on the other side, and again, the other side is winning today is just general market uncertainty of what's happening, where are we going, what are all the changes that the administration is doing, and what's the impact going to be?

[439] I was just talking about three hours ago with the founder and CEO of a cybersecurity software name that's the very type that investors should be chomping at the bit, I imagine, to have coming public.

[440] Can the IPO market really have a good year without software?

[441] Because he's kind of on the sidelines watching to see if the market's stable enough.

[442] I think it could be a couple of things.

[443] I don't think it's just one thing.

[444] I think there's room for more software.

[445] There's also more interest and demand for more traditional non -tech businesses to kind of get some of those weightings more balanced out.

[446] So I think it can be an and.

[447] I don't think it has to be an either or.

[448] And what sectors?

[449] So I think you're going to see manufacturing.

[450] One of the sort of the tailwinds is if we're talking about reshoring a whole lot of manufacturing and reinvestment in this country, that is going to be a big tailwind for some hardcore general manufacturing.

[451] Same is true for things around the food supply chain.

[452] Same is true for health care.

[453] So there are a lot of obvious industries that are going to benefit near term and longer term on some of these administrative changes on making kind of an America first.

[454] agenda and what that means for growth in some domestic sectors.

[455] Now, we're just talking earlier on the show about tariffs and the impact, perhaps, on the market action today.

[456] Your expectation is that a lot of President Trump's positioning around that is about negotiating, not actually about having tariffs?

[457] I think we have to wait and see.

[458] I mean, right now, I would say it's been more tactics than tariffs.

[459] But if that becomes all tariffs and no more tactics and no more negotiating, then I think obviously we'll see a market reaction to that.

[460] I think this is why we're kind of, you sort of see the market kind of ebbing and flowing, waiting to see.

[461] what is a negotiating tactic or what is actually going to be a real change same thing is true on what's happening with sort of the government job sector are we going to see thousands hundreds of thousands millions of jobs reduced across government we don't know yet where are those folks going to go into the workforce we don't know yet because we don't know exactly today exactly where all those cuts are coming from who's being cut, what level and what skill set they're bringing.

[462] So I think this is back to my earlier point of this is exactly the root of the uncertainty of why doing an IPO today or doing an M &A deal today feels a little bit questionable because there's a whole lot of items that we just don't have resolution on right now.

[463] We'll see how long it takes to get a little more certainty.

[464] Eric Hirsch, thanks for helping us navigate it.

[465] Thanks, John.

[466] Always a pleasure.

[467] Well, up next, why China's changing box office and increasing nationalism could be bad news for Hollywood and a warning for U .S. companies.

[468] And Nike shares running toward the top of the S &P 500 today.

[469] Jeffries upgrading the stock from hold to buy and hiking its price target from $75 to $115, citing new product innovation and a restocking cycle on the horizon.

[470] Be right back.

[471] Welcome back to Overtime.

[472] Disney's Captain America Brave New World winning the U .S. box office for a second straight week.

[473] But as our Eunice Yun shows us, it's an entirely different story in China thanks to a rise in nationalism.

[474] The highest grossing animated film is a Chinese movie you've probably never heard of.

[475] It's called Neja 2.

[476] It's based on a 16th century Chinese tale about a short -tempered mythical child who battles demons and dragons.

[477] Some viewers described it online as cheesy.

[478] One film critic called the humor cringe.

[479] But it's already earned more than $1 .9 billion, surpassing Pixar's Inside Out 2.

[480] That type of box office number was the dream of Hollywood.

[481] China, with its 1 .4 billion potential moviegoers, was supposed to be the holy grail.

[482] Let me fight with you.

[483] A -listers came in like Matt Damon in the 2016 flick The Great Wall.

[484] Chinese actor Fan Bingbing showed up in the X -Men series.

[485] Today, attempts at collaboration have disappeared.

[486] The Chinese box office has changed dramatically in recent years.

[487] Today, what's playing is more local and limited in theme.

[488] Movies promoting Chinese culture like Nhaja 2 or this one on Kung Fu or war propaganda films.

[489] Control over the arts has intensified under President Xi Jinping.

[490] More subjects politically sensitive and foreign influence a bigger concern.

[491] Last year, the government approved only 21 American films to be screened in China, about half from eight years ago.

[492] In this environment, Nejia 2 has reached new heights, propelled by a surge of nationalism.

[493] People are being egged on to see it to help it break a world record, with some going multiple times.

[494] I want to do what I can to help Nuja 2 get the highest box office possible, she says.

[495] If needed, I'll watch it a third or fourth time.

[496] The flip side of all the Chinese patriotism is that the latest installment of Captain America, now in China, is suffering.

[497] On China's censored internet, the Marvel superhero is being painted as a nemesis of Nuja.

[498] The U .S. blockbuster has only earned $13 million.

[499] Captain America 4 must die in China, this popular post reads.

[500] Good news for Chinese movies, not great for Hollywood.

[501] Eunice joins me now.

[502] Eunice's fascinating look.

[503] I wonder, though, how much it affects various other areas.

[504] You were talking a couple weeks ago about smartphones and how...

[505] Apple still has a strong base there, maybe because you can run Chinese made software and AI on an iPhone.

[506] How important is this divide and does it stretch across everything or more pronounced in the arts?

[507] Well, you know, despite what's going on with Captain America 4, there are a lot of people here who still really like American pop culture, American products.

[508] You know, but at the same time, the government has been pushing through this clampdown on information, on independent arts, on independent culture, just generally promoting Xi Jinping thought.

[509] And so because of that, you're just seeing so many industries becoming much more locally focused.

[510] I wonder, are there any success stories of how certain American brands are navigating that?

[511] I mean, Tim Cook, for years now, more than a decade, has been making trips to China, opening Apple stores in China, being very China first in China.

[512] Is perhaps that one?

[513] Yeah, I think that is one.

[514] There are a lot of CEOs as well as other folks who are trying to go in, meet with the government, make sure that they are in the good graces of the government.

[515] But at the same time, the parameters keep shifting.

[516] So because of that, it's really difficult to say whether or not the American CEOs and other members of the business community there are really going to be very successful.

[517] Did you watch the whole movie, Najat 2?

[518] Is it any good?

[519] I did.

[520] I did.

[521] I watched it.

[522] And actually, you can, too, because Najat 2 is actually screening in the United States right now.

[523] It's a limited release, but not so sure whether or not the reception in the U .S. is going to be as enthusiastic as it is here.

[524] In fact, companies as well as schools here have been organizing trips just to try to pump up the numbers.

[525] Yeah, probably a bit less enthusiastic.

[526] Eunice Yoon.

[527] China Lens.

[528] Thank you.

[529] Well, Reddit shares more than quadrupling since going public nearly a year ago.

[530] And up next, the CNBC Changemakers list gives us an up -close look at a woman who has had a huge hand in Reddit's soaring valuation.

[531] Also, don't forget, you can catch us on the go by following the Closing Bell Overtime podcast on your favorite podcast app.

[532] We'll be right back.

[533] Welcome back.

[534] Let's check in on some more overtime earnings movers.

[535] Topgolf Callaway beating on earnings and revenue, but the company says it's navigating short -term headwinds, including foreign currency exchange rates.

[536] It's a little higher in overtime.

[537] Check out shares of Tempest AI, the AI health company which Nancy Pelosi has invested in.

[538] That stock is lower after revenue missed expectations.

[539] And another check on him's and hers getting slammed despite solid earnings and revenue.

[540] Investors potentially keying in on the lower end.

[541] of earnings guidance that's down 18%.

[542] Well, today we are unveiling the second annual CNBC Changemakers list.

[543] Our Julia Boorstin joins us now with a look at one of the leaders whose flagship accomplishment last year was a record IPO.

[544] Thanks so much, John.

[545] CNBC Changemaker Jen Wong, COO of Reddit since 2018, has led the diversification of Reddit's revenue, helping Reddit's valuation triple since going public in March.

[546] Having Reddit become a public company was an incredible experience and milestone.

[547] The way I think about personal success is I hope that people think that I've left a business better than when I came, either in terms of the people, in terms of the product, in terms of the whole company overall.

[548] I think to be an effective leader, the most important thing is followership.

[549] Ultimately, you can have an incredible vision, but you need people to help.

[550] believed in that vision and helped make that vision a reality.

[551] Wong has helped Reddit build a new revenue stream by licensing the company's data to the likes of OpenAI and has helped expand Reddit's ad business worldwide.

[552] For more on Jen Wong and the full list of changemakers, go to cnbc .com slash changemakers.

[553] And while you're there, check out the lineup for our upcoming Changemakers Summit.

[554] It's going to be here in Los Angeles on the beautiful Universal lot on April 8th.

[555] We're starting to confirm some awesome names, including...

[556] Paris Hilton and Donna Langley, who runs the studio here at Universal.

[557] Back over to you.

[558] Such an interesting and important brand, Changemakers, coming off of your book as well, which has been out for, what, two or three years now.

[559] Tell me, how has the conversation shifted in 2025?

[560] I think the conversation has shifted towards really understanding the financial advantages of having women in leadership, of having diversity in the C -suite and below.

[561] And I think even though there's been a shift away from official DEI policies, I think that right now CEOs are really thinking about what's effective for their business.

[562] I think it's notable that about half of the CNBC changemakers say that about half of their reports, their direct reports are women.

[563] So a lot of women in leadership, John.

[564] Awesome.

[565] there.

[566] That does it for overtime.

[567] Fast Money starts now.