The Road Ahead for Stocks 5/30/25
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I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Okay, Carl, thank you very much. Welcome to the Halftime Report on this Friday. Front and center this hour, the summer setup for stocks. We will discuss that with the investment committee today. Also, big heads up any minute now, J.P. Morgan, CEO, Jamie Dimon's going to be on stage today.

out in California with our own Morgan Brennan, that at the Reagan National Economic Forum. It's at the Reagan Library. We're going to take some of that conversation live and see what Mr. Diamond has to say about the current environment in the markets. We'll take you there as soon as we see them. Our investment committee, I said they're here too. Josh Brown, Stephanie Link, Jim Labenthal.

and kevin simpson we'll take you to the markets you just heard sarah say best month since november of 23. nasdaq's pacing for its best month since november of 23 as well to get pte in line with expectations the president accusing china of violating the trade agreement the summer set up for stocks that's really what i want to focus on today and steph you get the first crack the summer setup for stocks looks what

I think we could be sideways for a little while because we just rallied 18% from the April lows. But I think it'll be short-lived, and a lot of it is because the economy continues to chug along. Just before the show, the Atlanta Fed tracker came out at 3.8%.

That is a huge number. I'm not saying that we're actually growing that, but that has everything to do with better income numbers, better spending numbers, and a little bit lower inflation data today. But also the weekly jobless claims and the labor market in general remains very strong. So the economy is chugging along. That has led to better than expected earnings at 12%. I think you're going to do 8% to 9% in total for the full year. And then there's $7 trillion of cash on the sidelines.

And while retail were, they were buyers from the April lows, institutions were not. And so I do think you're going to see a catch up because I think you're going to see a lot of people, I bet a lot of people are behind their benchmarks year to date. Josh Brown, fill in the blank. The summer setup looks what?

So I would lean on the technicals. And as bad as everything looked at the lows, obviously the biggest comeback has been in the stocks that have gotten us here over the last, I don't know, eight or nine years now. The MAG7 names, I think, is the most interesting place to start. Understand that at the very bottom of the market, an equal weight index of the MAG7 was negative 30%.

If you take that same equal weighting of the Mag 7, the most important stocks to the index, they're now 8% below all-time highs. So they're not quite all the way back, but close enough for horseshoes and hand grenades, as they say. And then if you look at the overall market and you think about the internals, it's all over the place.

The top three sectors with the most constituents currently at four-week lows, it's exactly what you would think. It's materials and energy, literally the worst names. And when you look at where the strength is, it's exactly where you would want it if the narrative is what Stephanie just said, the economy keeps chugging along.

87% of technology stocks in the S&P are above their 50-day. That's the best sector. Industrials is right behind it. 86% of those names are above their 50-day. And then financials, 81%. So if I didn't have that data and you said, Josh, which sectors do you want to see with the most stocks in an uptrend? Those are the three I would give you. And that's exactly what we have. Last thing.

within the overall S&P 500, 68% of constituents, more than two-thirds, are above their 50-day moving average and about half

or above the 200 day. So we're back at the old highs, stalling out a little bit. Goldilocks inflation number this morning. Unemployment is okay. It's not, you know, it's not great, but it's not bad. And it kind of makes sense that the market's taking a little bit of a breather here and allowing some of these trade headlines to cool us off.

Big picture, though, I think Stephanie's exactly right. This is a pretty good setup for, let's hope, a less eventful summer than the way the spring has gone. I'm going to remind everybody that we are waiting for Jamie Dimon and Morgan Brennan out in California. Looks like they're getting a little bit closer to that. And as soon as we see those two on the stage, we're going to go there and take some of those remarks live. I will send it to Jim Labenthal for his view. We are feeling better. We've obviously rallied a lot. Best

best month since November of 23 for stocks. We've, if not become fully desensitized to trade

headlines. We seem to be reacting to them better. Chris Harvey, Wells Fargo today. He says the tariff bark worse than bite. Constructive second half for stocks. That's his outlook. Jim, your thoughts on that? And I may have to grab it from you back here if we see the events unfolding in California. Understood. Stephanie and Josh just listed some positives. I'm going to come at it from a different angle, the opposite, which is that the bark, the tariff

Spark hasn't shown up. Remember all the bad things that just eight weeks ago we were talking about? How the shelves were going to be bare in stores, how layoffs were going to happen? This just simply hasn't come to pass. So when we talk about desensitize to trade news, it's because we understand that there is a potential path forward, a likely path forward in which trade deals are realized.

Those egregious tariffs that were announced on April 2nd come in quite a bit, and that they're offset by the tax bill. Okay. I'm going to take it from you here because the conversation is beginning at the Reagan Library. We'll go there. It's a privilege to be sitting down with you, Jamie. There's a lot to get to in this conversation. So I figured we'd start small, and then I would ask you a really, just a really basic, straightforward question, and that is, what's your biggest worry right now? Yeah.

So first of all, thrilled to be here. I'm glad you're doing this. I hope we may join the defense forum you guys do every year too.

Look, the way I look at it, the big picture is the tectonic plates are shifting. We gotta get our heads wrapped around that. Those tectonic plates are the geopolitics with these terrible wars, terrible proxy terrorist activity around the world, North Korea, the potential proliferation of nuclear weapons over time, which is the greatest threat to mankind. And then you have another, the other tectonic shift is the global economy. So the global military umbrella of America and then the global economy, where trade is a part

You know, the other parts are, do people want to partner with you? Do you have your alliances? Do you have investment agreements? And all those various things. And they're changing. And then our debt, which you just heard a bunch of folks talk about eloquently, it's large. And it's not just us. We added $10 trillion in five years. You had Reagan up there talking about deficits. The debt to GDP was 35%, and the deficit was 3.5%.

Today it's 100% debt to GDP net and a deficit of almost 7%, highest peace time ever. And when the CBO does their numbers, which I don't really trust by the way, they should do the stress test. Like what happens if we go into a recession? That 7% will be 10%. And so we have problems and we've got to deal with them. And then the biggest one underlying both that is the enemy within.

I'm not as worried about China. China is a potential adversary. They're doing a lot of things well. They have a lot of problems. What I really worry about is us. Can we get our own act together, our own values, our own capability, our own management? What you heard today on stage was the amount of mismanagement is extraordinary.

by state, by city, for pensions, for, and that stuff is gonna kill us. And you know, I always get asked this question, are we gonna be the reserve currency? No, you know, if we are not the preeminent military and the preeminent economy in 40 years, we will not be the reserve currency.

That's a fact. Just read history. You know, I think we will be. You know, Warren Buffett here would tell you we're enormously resilient. I agree with that. I think this time is different. This time, you know, we have to get our act together and we have to do it very quickly. That was a big answer. There's a lot to dig into there. The takeaway is geopolitics, right? I have a great quote for the first thing, too. Someone said, the government spends like a drunken sailor. And someone else said, no, a drunken sailor spends his own money. I forgot who said that one.

So you're talking about a total realignment of the global order. We're talking about a restructuring and simultaneous reassertion of American hegemony in the middle of all this. Huge gamble afoot right now with some of the policies that are coming out and how they're taking shape. What does it take for it to pay off?

I mean, just a list of stuff. We have to acknowledge the grievances that have put us in this position to start with, and they're real. Immigration, what the hell are we doing? The bottom 20% of our population, their wages didn't go up for 20 years. They're dying seven years younger. When administrations, the Biden administration is giving all this money to EVs and cars and wasting a lot of money on green stuff, which isn't gonna work.

And all that. Do you think people in rural cities, do you think people in inner cities thought they were getting anything? Do you think that those people think that the American government is fair and competent and that this was in their best interest? Their schools don't work, they're not getting the skills they need, and you heard that just now. So we've got to acknowledge, and I also call it blue tape.

Because, you know, Republicans, you generally don't like red tape. You understand the devastation of it. But, you know, most Democrats, they love it. They want more of it. And they want to make it so confusing you can't even meet the rules. So you get punished and fined afterwards. And so, you know, we and then you have in permitting and, you know, I call the government the Leviathan. That's too weak. Can't get stuff done and too strong. It imposes things on the American public that they're getting sick of and they should be getting sick of it and acknowledge that.

Celebrate our virtues, freedom of speech, freedom of religion, freedom of enterprise, equal opportunity, family, God, country, you know, and you can acknowledge the flaws that we have which are extraordinary. We did to the black population for years. Don't denigrate the great things of this country because those are two different things. If you have a, in any team, if you put a team on the field and the team's torn apart, they're gonna lose.

And that's kind of us right now. You know, we're not a team anymore and we don't collaborate, we don't talk that much to each other. Deal with our policy, and this is the enemy within. We've got to fix our permitting, our regulations, our immigration, our taxation, which I think they're on their way. We have to fix our inner city schools, our healthcare system,

If we fix those things, we can grow 3% a year and all these problems will disappear. But the most important is maintain those military alliances, spend whatever you gotta spend to have the strongest military in the world, and keep, and I think the goal, I'm hoping the goal of the Trump administration is this: keep the Western military alliances together.

If the world cannot rely on America's military umbrella, we may have paid too much, we have not done enough, if the world can't rely on it, they are going to be looking for alternatives, there's only one other real alternative out there, or getting a nuclear weapon. And then maintain and expand and grow our economic alliance. We have tons of treaties, economic treaties,

We do a terrible job in development finance, but expand that. The goal, like beating up Europe, the goal should be help Europe get stronger. We know what their problems are. Keep them closer. Do the trade agreements, the investment agreements. They'll keep the Western world together. Those two things will keep the world safe and free for democracy. If we don't do those things, the world is not safe and free for democracy. And so that's what we have to do. And people know what they are. We've all written about it. We just have failed to actually do it.

So tariffs are obviously in the mix right now, but we also know that a number of countries, the game plan here is to get to trade deals. How do you think that shakes out? Do you think this ultimately, maybe looking to the end of this year or the end of this term for this president, that we actually end up in closer alliances with some of...

- Our trading partners, then we have. - We did a little bit of too much everything everywhere all at once, so it's hard to step back from that and finish. I think the best we can hope for, and we should hope for, and I think I see them doing this, which is to finish, maybe there's 15 important ones, finish them. There'll be agreements in principle. They will not be trade agreements. But agreements in principle, at least give you a framework

to get things done, and hopefully they could do some in July, August, September, October, November. I would engage with China. I just got back from China last week. They're not scared folks. There's no reason they're going to come bow to America. I wouldn't count on that. And when they have a problem, they put 100,000 engineers on it, and they've been preparing for this for years. But we should engage. And when we do these trade agreements, the most important part is not...

making TVs or making furniture or T-shirts or sneakers, it should be the stuff that relates to national security, okay, that's rare earths, medical, pharmaceutical ingredients, penicillin, and it's things which relate, closely relate to national security, maybe AI,

narrowly done, you know the chips you hear reading about and then things which I think are very unfair trade where they might be using Merkul's behavior to dominate global industries. That is the stuff of war by the way. If you read all of history that is what started it. And that might be cars, batteries, solar panels, stuff like that. That we should do with our allies.

It's not going to do America a great job if we come and hold it off, but we don't stop them, you know, beggaring thy neighbor or beggaring Europe. So we have to be very, we should be doing some of that with our allies.

What you're getting at is... And our allies need our help, by the way. They know they need to do some of these things and some of them won't be able to do it without us. There's this expanding intersection between industrial policy in this country and national security, which sort of gets at what you're talking about with some of these different industries. And it's spanning the last couple of administrations. Everybody devils in the details in terms of how the policies shake out across administrations. But...

I guess to that point, do we need to rethink what constitutes national security? I wouldn't rethink it. We know what constitutes national security. We need, you know, I was saying we shouldn't be stockpiling Bitcoin. We should be stockpiling guns, bullets, tanks, planes, drones, you know, rare earths. We know what we need to do. This is not a mystery. Did you say stockpiling Bitcoin?

I said we shouldn't be stockpiling Bitcoin. - Oh, it shouldn't be, okay. - We should be stockpiling bullets. - Okay. - Like, you know, the military guys tell you that, you know, if there's a war in the South China Sea, we have missiles for seven days.

Okay, come on. I mean, we can't say that with a straight face and think that's okay. So we know what to do. We just got to now go about doing it. Get the people together, roll up our sleeves, you know, have the debates, do some privately, do some publicly. You know, J.B. Moore is going to publish a, we call it the Defense Action Form, something that shows we don't leave excess surplus production capability for missiles or bullets or bombs.

We don't have a military that you can flexibly move money from. You see how quickly the software and hardware they need changes. So the military can't have a 30-year program. They've got to be able to cancel that drone program, build up that drone program, hire this person to do the software. We have to allow them to do multi-year budgeting. We essentially don't. The military tells me it costs them $50 billion a year. And we have to spend more. I mean, so I can go on and on and on. We're going to lay out all these things and hopefully help

Just get going there. I think they know, by the way. I think all of us in this room know about this. It's just now we have to do it. - When you talk about spending more, a lot of focus on the-- - I'll add one other thing 'cause it is important. I know, I mean, Jason, I don't know if he's in the room, has done a great job getting this one big bill through.

The American people, okay, you know, they know that when they see money going to Washington, D.C., and you could be a Democrat or Republican, my most liberal elite Democrats, I always ask them, do you personally believe that sending another trillion dollars down to D.C. is going to make the country better?

Do you think it's gonna be used for good stuff or just gonna go to the interest groups? And but my criticism and they don't by the way almost no one believes that my criticism is there are 13,000 lobbying groups in DC. There's only like 10 or 12 bank ones by the way people think banks are big. We're not actually that big. Now you have private equities bigger or stuff. And yes we absolutely should be taxed. I don't know if Gary's here. Taxing carried interest and all that. But

Nor should we allow many much salt deductions, even though it costs me a lot of money. But those groups are so selfish.

Cotton, corn, sugar. And when they go to D.C., they're fighting for interest groups, unions, teachers. And it's really damaging our country. So you need leadership like a Ronald Reagan type. They have to explain to the American public why you have to sacrifice your own personal interest. And if you do, by the way, and we can go with 3 percent, you'll still be far better off.

So, you know, to me it's okay to sacrifice a little bit and, you know, to get all these groups, and all these groups, you know, a lot of CEOs, they don't even know what their people are asking for in D.C. And their people are going to see people like Gary Cohen every day begging, you know, for a little special thing here, a special thing here, why this should not be discontinued. The government should get rid of all that crap.

The American business community doesn't need any special tax breaks at all. They should have rules of the road, good regulations, and let the world compete. And so there's a lot to do. We know what to do. It has been done before. It's just going to be hard. So how do you see, I guess, what is your takeaway then on this tax bill as it makes its way through Congress right now? Because on the one hand, it looks like it increases the debt load. On the other hand, there are stimulative aspects to it as well. Yeah, so our debt-to-GDP is 100%.

It's gonna grow to about 115% over the next 10 years or something like that. Then it's a hockey stick. And the hockey stick is Medicare and Medicaid.

Maybe a little bit of Social Security. So we see that train coming down the tracks. We know how bad it is. But my view is get the tax bill done. You heard the folks on stage. Certainty, business, growth, and then focus on other things that grow the economy. Permitting, red tape reform, all the stuff like that. Education, skills, which are all doable. There are a lot of places that do quite a good job at this. Read Our Towns.

You know, Jim Fallows writes for Atlantic, he's got this book, Art Towns. You go to Omaha and St. Louis and Bozeman and Austin and they're innovating, they're growing, they're collaborating. Small D works. It's big D that's failed. And I put California in the big D state, the big D category too, by the way. And so we know what things to do and we just got to get people to do them and...

And it works locally. There are schools locally that do a great job training kids in cyber. A teller can make $45,000 or $50,000 a year with full medical, dental, Pilates, massages. We take care of our people, and then the jobs go up, and we have to stop denigrating jobs. Oh, and I don't know if Paul Ryan's in the room. I would double the earned income tax credit.

I would take that individual who's making $14,000 a year and they now get a tax credit if they have two children of 6,000. If they have no children, they get 600. I would give them 12,000 whether or not they have children. That money would cost about $60 billion, would go directly into their communities, directly to help their families, directly to help their homes, and I would pay for that by getting rid of carried interest.

Take it from those rich. And if we don't do these things, we're gonna continue to have a problem. And I think that'll grow the economy too. There's no question they would spend the money. It has the virtue of bringing people into the workforce. People who work, less recidivism, less crime, more household formation, less depression, less suicide, and that first rung in the ladder leads to the second rung, and pride. And we have to get back to that and not denigrate any job. All jobs are good.

I want to go back to this notion of cost- Even journalism. We have our place. I want to go back to this idea, this notion of government efficiency and cost cutting and tackling spending by the government. Today's Elon Musk's last day working with the government. Is Doge and the efforts of Doge at risk here? In my, you know, when they started that, should the government try to be more efficient? Well, of course they should. Should the people doing that follow the law? Well, of course they should.

You know, so people make doge, not doge. So, you know, and then I think Ronald Reagan had an effort like doge and Bill Clinton actually did have a surplus and did cut a lot of stuff. Absolutely, but my view is, you know, running a big company, if I set up a group at the top and then, you know, I tell you, oh, be more efficient, that doesn't work particularly well. You know, if I meet you each individually, I ask you who your CFO is, who your this is, who your that is, come back, report to me what you're doing, your head count, that'll work.

And so, yeah, they should do it, but that's what the OMB supposedly is for. And so I would embed it in every department. Chris, thank you for being here. You have 40 departments? I mean, I don't even know. I would, every department that takes money from the American people should publish a short, understandable annual report at the end of the year. You gave me so much billions. I told you I was going to do, and here's what I did.

Every one of them. And these programs never die, you know. There's death taxes and the thing that never dies, which is the government program. So yeah, we need to be more efficient. And the government has to demonstrate its competency. If government doesn't demonstrate its competency, the underpinning of being a civil citizen doesn't work. They think we're stealing their money. Going back to the Reagan years, you think bond vigilantes are back? Yeah. You know, these are very large numbers.

You've seen it a little bit. You had the crack in the bond market and COVID a little bit. The government did the right stuff, then they massively overdid both spending and QE. We borrowed and spent $10 trillion from 2020 to today. Okay? That...

and you heard the numbers before, we also bought 4 trillion of your securities. On top of the 4 trillion we bought in the first go-round. Those numbers are true globally, not quite as big as ours, but the QE of us was 8 trillion, the QE of the rest of the world is another 8 trillion or something like that. You're talking about huge sums of money, and we don't really know the full effect of that. And the bond dealers, which Gary mentioned, inventories are much smaller than they used to be, partially because of rules and regulations.

and you are going to see a crack in the bond market. Okay? It is going to happen. And I tell this to my regulators, some of you who are in this room, I'm telling you it's gonna happen, and you're gonna panic. I'm not gonna panic.

We'll be fine. We'll probably make more money and then some of my friends will tell me that we're, that we cause, we like crises because it's good for JPMorgan Chase. Not really. I, you know, I tell people in credit suites when bank went bankrupt with the First Republic, it was terrible for the banking industry. I think we can make everything better, including that, by just changing and modifying certain rules and regulations, letting market makers intermediate more in the market. But to give you a number, like just JPMorgan alone buys and sells $3 trillion a day.

And we move $10 trillion a day of money. And we're probably a tenth. So the money moving around the world is $100 trillion a day. The money moving around in the investments, you know, this is stocks, bonds, corporates, governments, derivatives, credit, you name it, FX, sovereign debt around the world, $30 trillion. The people who set those long-term rates are those people, including you in the room. It's not the Federal Reserve.

They can try to manipulate the long-term rate. They can do the, what's it called, you know, they do the twist or whatever. It doesn't work for that long. So if you look at economic history, bad things happen. When those tectonic plates shift, it's very hard to see in real time. It is shifting, and this is one of them. I just don't know if it's going to be a crisis in six months or six years.

And I'm hoping that we change both the trajectory of the debt and the ability of market makers to make markets. And also remember, there are a lot of people, you know, going down to Washington who actually like bad markets.

You know, and the problem with the bad markets isn't that it's bad for the big banks who make markets, it's bad for the people who raise money. Small businesses, asset-backed securities, middle market companies, corporations, United States government. And that volatility scares people. And then also it happens, markets close. And you saw that happen multiple times in the last, you know, 12 years where you couldn't sell a high-yield bond. If you're going to sell, you know, a lot of treasuries, you know, you could have had a little bit of an issue. So, yeah, it's coming.

It's just part of all the stuff we talked about. And unfortunately, it may be that we need that to wake us up. It's an unfortunate thing. Yeah.

We do have some Fed officials in the room. So I do want to touch on the Federal Reserve here because the message has seemed to be we're going to be patient, we're not going to let politics sway our decision and policy, and we can afford to be patient here given all of the uncertainty with tariffs and the fact that the economic economy, while slowing, does still seem to be holding up somewhat. That seemed to be the message yesterday, too, coming from the Federal Reserve with the release we got on the heels of Fed Chair Powell meeting with President Trump

Is the Fed right to give time time here? Yes. You know, the Fed has a tough job, OK? And I have enormous respect for Jay Powell and a lot of the other Fed folks. But they're not, you know, here we say the Fed sets short-term rates. We always say that, right? The Fed sets short, and they actually do set short-term rates. But what happened when inflation went up? They followed. Are they really in charge? I just told you $30 trillion a day.

They're not really in charge. They're trying to navigate it so that we have the best possible economy. And so they were late raising rates. You know, they also told all the banks in the world that interest rates aren't going to go up to, you know, won't go higher than 2% when they have these ridiculous stress tests we have to go through, you know, which are a complete waste of time. And we do 100 stress tests a week. You think I care about that one? And I knew that rates weren't going to stay at 2%. So we were quite prepared for rates going to 5%. Then they caught up.

And now they have to wait and see, 'cause it's hard to tell with the effect of, is the economy slowing? I don't know, is it soft landing? I don't know. The other thing I should have mentioned about as we enter this environment, asset prices are still high. That would be very different if asset prices were still low. - That surprised you? - A little bit, yeah. But I mentioned how much money's been thrown out there. When you do that kind of giving money to the American citizens through QE or fiscal, money is like water filling every crack.

Some of you bought stuff, some of you saved stuff, some of you went into venture capital, some of you want private credit, some of you bought a Rolls Royce, but it fills the cracks. But it definitely lifts up asset prices. And so, you know, there'll be reversal of that at one point. You know, asset prices come down, you know, that may cause some stress and strain for people. So they're right to wait now. We have, you know, I think inflation may be going up, I don't know. I think there's a lot of stuff in the future, in the future,

which is inflationary. So if you're the Fed, you can't just say, well, what happened today to consumer prices? Which, by the way, if you're digging into consumer prices, you would throw out the calculation.

It's a lot of mud in there, okay? So it makes, it's kind of consistent, you know, month by month by month, but year over year, three years from now, the adjustments they make, I'm not blaming them, I just, it's hard to really tell. And you know when you look at certain things like gas and milk and eggs and things like that, so, but the future, what I see is inflationary, which is huge fiscal deficit around the world. The whole world is remilitarizing.

infrastructure and green economy, we're gonna waste a lot of money in the green economy and we should do some of it but it's gonna cost a lot of money. Demographics may be inflationary. I don't see the deflationary stuff.

Yes, AI may be that but not next year. I mean, people are spending a lot of money in AI and you see the projections of data centers spending hundreds of billions of dollars. And we have 600 AI use cases and it's very efficient, very effective, but it's not going to be the def-- and technology is always deflationary. It's kind of like a cosmological constant. And this one may be faster than we've ever experienced.

That I think is possibly true. - You touched on permitting, the idea of deregulation or at least cutting red tape, can that help to offset that? - Totally, deregulation, permitting, getting rid of the cobwebs, the barnacles in the boat, absolutely. Permitting, we can't get a gas pipeline from Appalachia into New York. We can't get a hydroelectric wire from Canada into Massachusetts.

We can't build the grids we need. We can't, I mean, it is extraordinary. There's a mountain pass, which I know you're aware of it. I think it's called Mountain Pass Company. It's a rail, they've been waiting for 10 years to get permits. They can make rare earths and they can make magnets in size today. They need a little bit of, you know, subsidy to do it because the Chinese will come in and just undercut. So if you're buying it,

And you're gonna say, well, I can't buy it from you 'cause it's twice what it is over here. So we do have to have a little something to make up for that. But absolutely, D-reg, pro-growth attitude, getting skills right, getting permitting right, not wasting money on fake things, all would accelerate growth. I think we could be growing 3% a year. That's the other thing I would say. We should aspire to grow.

And you hear that, which I think is a very positive thing out of the administration today. We want to grow. And if you had 3% growth and you did all your CBO numbers, that's a dramatic difference. A dramatic difference in how much you collect in normal tax without raising them and how people feel and their incomes are going up pretty dramatically. - We do have the SEC commissioner sitting in the room. What are you seeing in terms of the IPO pipeline and what it takes

to go public? Are public markets broken? Because I've spoken to some investors who would make the argument that yes, they are. You know, this is a great frustration of mine. And we've gone from, in 1996, with 8,000 public companies, we now have 4,000. And I'm talking about operating companies. And that's apples to apples. There are a lot more of these REITs and investment companies. I'm talking about companies that make stuff, sell stuff, buy stuff, et cetera. And the private equity, I'm not against private equity, has gone from owning 1,000 to 25,000.

and private credit's growing like this, and the mortgage business has left the banking business pretty much. All of that was all done, and this really without any forethought on the part of our regulators. Like zero. None, nada. Not one conversation about the effect of requirements with a capital, liquidity, a C-card, what it's gonna do in these markets.

There are some good things about those markets. There's some bad things about those markets. I'm not against private credit, but the one that bothers me the most is, you know, we used to have a very active small business IPO thing. But if you're a small business and, you know, I'm talking about, you know, you make $100 million in profits and you might be worth, you know, a billion five or something, the cost of

of registering, the litigation, the disclosure requirements, the cookie cutter board, instead of having a board of five with people you really like who've been with you your whole life, the registration requirements, the compensation requirements, the press loves to beat up companies. We need to create an active small market and then we need to get rid of people like ISS and Glass-Lewis. How they seeped into our system, they are like a...

They are a cancer that, and it snuck in, and I'm to blame for this too. I didn't realize it, I'm going back years ago, that these guys, and who do they go to first?

All the pension plans, CalPERS, CalSTRS, New York, all the do-gooders around the world. And then they started to use that to look at green stuff and comp stuff and social stuff. And we were filling out forms. And I've told people, I'm not filling out any more forms voluntarily. If you want to fill out a form voluntarily, J.B. Moore Chase, you need my permission. And we were filling it out for this ESG thing and that ESG thing and this DEI thing and the ISS thing. And that thing seeped up. And now 30% of the votes, and the people lie. They

They automatically vote by Isis and Glass-Lewis, which by the way, violates their fiduciary responsibility. And when they say to me, well, we don't have the manpower, you have the manpower to read some proxies. It's not a big deal.

And so people should take more self responsibility. We should change how we do no broker votes. We should change how people have to do it. And those people should be held to fire. They can say whatever they want, do whatever they want, put whatever numbers on. They have no requirement to be accurate. So Jay Clayton had passed something saying if a company disagreed with their numbers, they have to respond and stuff like that. But they have no liability. You gotta bring that back. And then we can have active markets.

There are, one of the benefits about JP Morgan Chase is if you go to Sweden, they set up a small account. This is a great thing where you could put in, not all the money you want, but up to millions of dollars. You pay 1% a year, no capital gains. You can take the money in and out at will.

Their stock market is growing like this, and they made it much easier for small companies to register. Less disclosures, less requirements, more flexibility, and they've added hundreds of companies. So you guys should look around the world and say, what do we want to do? And we did this all thoughtlessly. And, of course, some people think it's a good thing. My view is healthy public markets are probably better than having moved all that into private markets, but we're going to find out.

I'm going to bring this back to the beginning of the conversation. I'm going to ask, what are you seeing? Because you do. You have so many clients, small business, large business, global investors, consumers, and you have a global footprint. So what are you seeing and how are you counseling your clients? And is it different with those in the U.S. versus those who are non-U.S. given this global realignment we find ourselves in? So the U.S.,

Europe's done a pretty good job crippling itself. So the US stock market's worth 60 trillion. I think Frankfurt is three. The UK is three. Paris is three.

And that's gotten much worse over time. Their GDP per person has dropped. It used to be close to ours and now it's 25, 30 percent less. That's how important these things are for the people. And all these things I talk about, they hurt lower paid people more than anyone in this room. I mean, that's the amazing thing when you have these debates about policy. You hear this constant refrain, you're just talking your own book. I'm saying, no, we're talking the book of all of our citizens. You want to lift them up, change these policies. So I think

I think if you are a company and you want to raise money in high yield, and the markets are wide open for certain types of IPOs and high yield, get the money. You just heard me talk about the moving tectonic plates. Markets sometimes will do what they have to do to screw the most people. You got to get prepared. Don't assume. And in credit markets in particular, you know, and Gary, is Gary in the room? Do you know what the credit derivative spread is to guarantee American debt now is?

It's 50 basis points or 45 basis points. It's the same as guaranteeing Italy or Greece, okay? So credit spreads could gap out dramatically. So if rates go up, so can credit spreads. And they're historically low. So, you know, take advantage of that if you're going to need the money. So if there is some kind of crisis, you know, down the road, you can handle it. All right. Before we wrap this up, I do want to ask, almost two decades at the helm at J.P. Morgan, $4 trillion bank.

One of the most successful CEOs of modern times. What are some of the lessons or advice that you would share with this room of policymakers and business leaders? So get out, get out, get out, get out, get out. Talk to people, talk to clients, talk to, I talk to everybody. I think our government should, you know, Eisenhower had at lunch or dinner every week with the opposing side leadership. Absolutely. You learn a lot. You learn to respect a lot. You learn to respect

opposing views. You learn about complaints. You learn about competitors. Don't put your head in the sand. Observe, observe, observe and have all your people do it. And it's a never-ending process because we have competitors from around the world. And they're smart and they're tough and they're coming.

I gave a speech recently with our own senior people, bureaucracy is extraordinary. If you look at companies Sears, Kmart, digital equipment, Nokia phones, Blackberry,

They all went bankrupt, you know, and so did half the financial companies in my short tenure, you know, and it was almost always arrogance, greed, complacency, bureaucracy in almost all cases. And it just festered. People look at the numbers, they bullshit themselves about how they're making money or why they're making money or, you know, and then they had these political things, you know, make the boss feel good, don't embarrass someone. You know, when people say to me, you know, put a good foot forward, I always say, don't put a good foot forward, put the truth forward.

100% the truth. And tell us, then we'll deal with it. It's OK. And so a deep, honest assessment. I'd say you have to grit.

You gotta, like, every day, man, put your jersey on and just go with the fight. Get involved with governments and regulators. You know, we see them, I see them just as regularly as I see anybody else. And I'm gonna say humility and curiosity. People don't want to work for jerks. They don't want to work for people who blame them. They don't want to work for someone who can't get on a road trip. You know, we do bus trips. We do trips around the world. And we go to the branches, you know, and shake hands.

clients hands and you know take a complaint or two people want to know they have a little heart you have a little humility you care a lot and you know and when leaders it's about them people know and that's a different kind of now companies can do quite well at that because sometimes those people are quite capable for a while they will not build a great company that will that that's a different issue so um

Anyway, I did a thing you can get on YouTube. We actually put it out there. It was 90 minutes about some of these learnings I've had in my life. I had a little fun doing it. But to put it on YouTube, we had to edit out the 30 minutes where I say things I shouldn't say. And I also went around the room and said, I don't mean to embarrass you, but I've got to tell them this thing that you did. But I had to give real examples. Because you don't give real examples, people don't understand it. And the real examples are just real.

and funny and hard to watch sometimes. Final question for you. I'm not going to ask you a succession question. I know you hashed that out at your investor day last week. I will have a succession one day, yes. Yes. But I am going to ask you this before we get off the stage, and that is, what would it take, what would be the scenario that you would entertain to consider public service? All right, ready? I'll tell you. If I thought I could really win, which I don't think I could. Jamie Dimon. Thank you very much. Appreciate it.

JP Morgan CEO Jamie Dimon out in California with our own Morgan Brennan. With about as sharp and pointed commentary as I dare to say we've ever heard from him.

nor anybody, frankly, in the position in which he currently sits. Taking on a number of topics today, the trade war, quote, we did too much everywhere, everything all at once. He said he was in China. They're not scared, he said, when asked how he thought all of this would play out. He also went after what he sees on the domestic front.

front as well. Quote, we're not a team anymore. We need to fix immigration and health care, schools, taxation, regulation, among other things. That this time is, in fact, different. That his biggest worry, in fact, is us, he said. Can we get our act together? Also said it was not a foregone conclusion that the dollar would remain the reserve currency of the world. Doesn't think it won't, but said it's not a foregone conclusion that it will.

if we don't get our act together, as he suggested. He also was asked, are the bond vigilantes back? To which he said, yeah, you're going to see a crack in the bond market. I don't know if it's six months, six years, but you're going to see one. He commented on the Fed as well. They're not really in charge. He said they were late raising rates. They're right to be patient.

and their right to wait now, also commented on private credit, too, which he has in the past gone after. That's the backdrop of Jamie Dimon, maybe as animated on all of these topics as we've heard him in a while, always entertaining, clearly. But I don't know, guys, that he's been this provocative in

on this many topics. He may throw out a there's a hurricane coming here or there's a storm brewing there, but one after another on all of these important topics, he put it out there. So the markets, as we all were acknowledging, sold off.

during the speech. And I'm glad you said that because the markets are at the lows of the session or they're about. Because this was a reality check in many sorts, Jim, and I'm glad you said that. Yeah, well. A reality check on kind of where he thinks we are, whether it's domestically or globally and what the implications could be across a whole swath of markets. So the

the bond comments were pretty darn provocative. And if you want a reason for the markets in general to sell off, that's a good one. The comments about stockpiling bullets instead of crypto, well, leave out the crypto part of it, but stockpiling bullets, there was an apocalyptic tone there. And I'm sorry to use that word, but that's,

That's the word. Now, I don't think that's what he's predicting. He is definitely being provocative. I don't feel we're on the cusp of any, you know, falling apart of the government or society. But there were some pretty apocalyptic comments there. And I'm not surprised the markets sold off. I think the markets will regain their footing because, as you pointed out, Scott, he wasn't saying, hey, the crack in the bond market is going to happen Monday. Could be six months from now. Could be six years. Right now, the bond market's pretty sanguine. Ten years at 440 last I checked.

That's not a distressing level. But he is putting it out there that we got to get our act together, governmentally, societally. We got to come together. The tectonic plates, Steph, are shifting, is what he said. And then he went down that list, as I described to all of you, on each topic and what he currently feels is taking place. Yeah, I mean, I...

He has had a negative tone for a very long time, Scott. But you're right. He was very detailed in a lot of different topics, which was surprising, actually. The dollar comments about being the reserve currency, I mean, that's not an overnight problem. The debt issue, that's not new news.

The private credit and private markets versus publics was, I think, very, very interesting because we know that we've seen a massive shift into private markets versus publics. And we don't know what the implications are going to be, especially if he's right in terms of the bond market.

It's always worthwhile listening to him. I don't think I will do anything in my portfolio, especially in the near term, because of the comments that he said. But obviously, you have to respect, affect the knowledge and the details that he has. Kev, the other thing he said is what I see is inflationary. He added everything up and came out with the sum of inflation for a variety of reasons in which he documented there on the stage.

Well, I expected an impressive commentary, and that was a little bit more thought-provoking than I had even planned on. I took a slew of notes, and I noticed some of the inflationary numbers that you pointed out. And I think it really is relevant when you look at the eyeball test for inflation. I think we did a study in-house that was really only gasoline, milk, and beer that were at about a 3% return.

So inflation is real. It's not going away anytime soon. The comments on the Fed and then not being in control was pretty compelling for me. All in all, a little bit more emotional than anything else. You know, we sit here on the floor. I've done it for a long time. And to watch the markets move, there's not many people that can do that.

You know, Josh, in the context of some of the commentary from the street today, which I wanted to bring up anyway, as we had our discussion about kind of where we are and where we're going from here, there are a number of firms out today asking whether investors are too complacent, whether stocks have come back so far that we're ignoring a lot of the risks, risks in which Jamie Dimon just brought front and center for investors.

Yeah, so I don't actually think we're ignoring the risk. I think the risks are taking place and they're actually coming to fruition and the related stocks are having these blowups.

but they just pale in comparison in terms of their importance to the markets, to the companies that are weathering this okay. So let me give you a for instance. Yesterday Best Buy came out and they said the tariffs are causing pricing issues which are affecting consumer demand. The stock got hit hard. Best Buy is selling everything from vacuums and toaster ovens to flat screen TVs, cell phones and computers.

The market's not ignoring it. Look at the stock chart. Today, another example, Gap Stores. This is schmattas, okay? They're selling $39 sweatshirts. If it's Old Navy, it's $19. Blown up. It's down 20%.

How could we look at that and say the market's ignoring it? Josh, the stock was up 55% from the April lows. It doesn't matter. It's an example. The turnaround is for real. It matters. Expectations were very high. Well, I care because I own it, and I think it's wrong of what you're saying. I do. I'm sorry. I do. The results were actually quite good. Well, I think there's a big difference between best buy and gap. That I'll tell you.

Okay. Look at the share price today. That's what we're talking about. I don't care about the stock. The point is, how could you look at these one-day events in these individual companies and say the market's not paying attention to the risks? I think we're pricing in the risks really in a really healthy, in some cases, really aggressive way, the way they did it with Target.

The way they've done it with lots of other stocks I can sit here and reel off. So we are doing that. But, Judge, the bigger picture is that add up the market cap of Best Buy and Gap and Ross Stores, and nobody cares.

because what's going really well is the AI revolution. All of those CapEx numbers were just reaffirmed. And that's where the market cap is. I opened up the A block talking about the Mag7. That's what matters more. So you ask me like, why is the S&P within four or 5% of its old high from February if we have all these risks? That's the reason. And I've talked about this before. We have businesses like Netflix, which got two upgrades today.

It's a utility. You know how bad things have to get for people to abandon their streaming service, for people to cancel Netflix? Do you know how good Sirens is? No one's canceling it. You're seeing analysts upgrade names like that and Spotify and some of the names that just have a more subscription-heavy component to what they do versus I need someone to go to the mall and buy a...

an item. And so that's why the market is looking through this. It's not because we're not paying attention to the risk. It's because the more important companies by market cap, they simply aren't as affected by the price of bananas going up 50 cents a pound. There also is the fear

you know, as we and he, he being Mr. Diamond, talked about what's happening in China and that how he was just there and, quote, they're not scared, there is concern now in the market, too, about escalation once again. And that could be weighing on the market, too, not just the commentary from Jamie Diamond. So let's do this. Let's take a quick break. We'll continue to watch the market. And we'll come back and I'll tell you some exclusive comments I got

From Third Point's Daniel Loeb, it's at the company's Investor Day. I'll tell you what he said about the markets right here, AI, that every investor should hear. We're back after this. On WhatsApp, your personal messages stay private between you and whoever you send them to. So things like the passport numbers for your honeymoon stay between you and your fiancé.

And that video call for your grand's 80th stays in the family. Even your streaming password stays between you and your college roommates who still ask for it every week in your group chat. Because on WhatsApp, your personal messages are yours. No one else can see or hear them. Not even us. WhatsApp. Message privately.

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That's goldbelly.com, promo code GIFT. Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm

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I want to touch the markets for you one more time and show you an intraday of the Nasdaq. It's a real pain point, down 1.25%, as you see. Names like NVIDIA, NVIDIA's down 4% right now. We mentioned the comments that Jamie Dimon had been making, but maybe more substantially to the market move was a Bloomberg report that said the U.S. plans wider China tech sanctions with subsidiary crackdown. So we started to see the market move lower. Obviously, a decline in some of the mega cap stocks is going to weigh on the S&P.

as well, and then even some of the issues that are in the Dow Jones Industrial Average. So we're going to watch all of that for you here, but we're pretty much lows of the day, maybe a touch off of that. But the S&P there is down 1% too.

We also want to tell you about a story that's new at noon and a milestone worth mentioning today. Daniel Loeb's third point turning 30 this week. Hard to run anything for three decades, no less a hedge fund through the dot-com crash, the global financial crisis and COVID. Loeb's starting third point with $3.2 million cobbled together from friends and family. Today, it has over $20 billion under management and a net return of $1.2 billion.

of 15.5% since inception. Known for being one of the best activist investors ever, he's now grown the firm to include a significant credit and venture business. Loeb called the run, quote, improbable when he addressed the company's investor day yesterday, noting that only 2% of his cohort are still in the game.

I spoke with him on stage and asked about his views on the markets for the remainder of the year. He told me, quote, I think it will be OK. I think we'll start looking towards a better, more predictable 2026. I think there will definitely be winners and losers. The economy will grow at about a 1 percent rate unless something comes out of left field. So I think it's a good environment for investing in growthy companies at good valuations. And speaking of that.

Third Point, as you might know, has some positions smaller in Amazon, Microsoft, Nvidia. Taiwan Semi happens to be a top 10 position. So there are bets on AI. And I also asked Mr. Loeb how AI is shaping the way they analyze companies at Third Point. He told me, quote, it's a pervasive component of our research process. It's a variable in which we benchmark all of the companies that we invest in, both in terms of how they're using it and how they're directly benefiting from it.

You'll either be a beneficiary of AI or AI roadkill. So I think we all need to do our best to not be the latter.

He also addressed several positions that the firm has taken. Some recently said Third Point got back into U.S. Steel a month or so ago in the 30s. Well, there it is at 53.50. He was betting on its path to a deal and that it would materialize. This week's news of that company's partnership with Nippon sending shares surging. He has a new position in Kenview. The J&J spin talked publicly about it for the very first time and said he sees a big opportunity there and also said they recently bought bank debt and

And X, the former Twitter, a liquid and tradable security. So congrats to Mr. Loeb. 30 years and still going strong. Final trades are next. You may get a little excited when you shop at Burlington. What a low price! Did you see that? They have my favorite! It's like a whole new world! I can buy two! I'm saving so much!

Burlington saves you up to 60% off other retailers' prices every day. Will it be the low prices or the great brands? Burlington. Deals. Brands. Wow. I told you so. Styles and selections vary by store. Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm

I'm told it's super easy to do at mintmobile.com slash switch. Upfront payment of $45 for three-month plan equivalent to $15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. See full terms at mintmobile.com.

I just want to show you the markets one more time. Maybe getting a bit of a one-two punch this hour. An uppercut, perhaps, from Jamie Dimon and some of the comments that he made. And then a haymaker of sorts from that story talking about wider restrictions and sanctions on China from the United States. So we'll continue to watch all of that, obviously. S&P is still down about 1%, but it's the Nasdaq. And we could show you NVIDIA, too. Let's just throw that up there because it was such a big week for that name. Intraday stocks down 4%.

We'll continue to watch that. Obviously, take you through the last hour on Closing Bell today with Chris Toomey, Chris Harvey, Kevin Gordon, Aya Yoshioka. We can do final trades, or you can tell me what you're going to be most watching now, Josh Brown, as you head into your final trade.

Yeah, I think I actually want to change mine. I want to talk about J.P. Morgan. This is like the greatest CEO ever in banking and arguably one of the best. And I think what we listened to today was just so helpful for people to understand the risks that exist out there. I'm long to stop staying long forever. No one. Anybody else here on JPM? Yeah, you guys do. You obviously like Wells, the best of the group. I own a ton of financials. A

A TON. BUT HE WAS NOT AS NEGATIVE TWO WEEKS AGO. JAMIE DIMON WAS NOT THAT NEGATIVE AT THEIR ANALYST DAY TWO WEEKS AGO WHEN HE ACTUALLY SAID BUSINESS WAS BETTER, INCREMENTALLY BETTER FROM WHEN THEY REPORTED THE FIRST QUARTER. HE ALSO TALKED UP MET INTEREST INCOME. CERTAINLY TALKED ABOUT RISKS. BUT HE WAS MORE POSITIVE THAN I EXPECTED. THESE WERE MORE SORT OF BIGGER PICTURE RISKS, RIGHT? NOT TODAY OR TOMORROW. HE DOESN'T THINK. OF COURSE.

something to chew on for certain. He said he would only run for public office if he could win. Yeah, I'm glad you mentioned that, too. And he said he doesn't think he could. I think he could. And that was the appropriate place to end it. Yeah. Yeah, I don't know. Maybe we'll never find out. What's your final trade? My final trade is Meta. Over a billion users being exposed to AI now. Incredibly profitable. Tons of free cash flow. Former Jim. Farmer Jim. Abvee. The former Jim. No, no, it was Farmer Jim. Abvee. Thank you. Steph? The cap. All right. I'll see you on the closing bell.

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