Closing Bell - Closing Bell Overtime: Tariff Relief Lifts Stocks; FTC vs. Meta Kicks Off 4/14/25

Episode Date: April 14, 2025

Brenda Vingiello of Sand Hill Global Advisors and Jose Rasco of HSBC break down the market action as investors weigh the impact of ongoing tariff developments. Our Megan Cassella reports on the latest from the White House on tariffs. Gil Luria of D.A. Davidson shares perspective on how tech names like Apple and Nvidia could be affected by trade tensions. Monica Guerra of Morgan Stanley Wealth Management joins to discuss how she is advising clients amid the policy uncertainty and its implications for portfolios. Craig Johnson of Piper Sandler breaks down the market’s technical setup. Former Richmond Fed President Jeffrey Lacker talks Fed policy and recession risks. The FTC’s antitrust case against Meta kicks off today, with reporting from Eamon Javers and reaction from Bradley Tusk of Tusk Ventures. 

Our INQ ringing the closing bell for New York Stock Exchange, first on Capital Bank Corp. doing the honors over at the NASDAQ. The gains for the major averages, of course, after what was, well, mostly an up session, but not quite as up as we certainly saw earlier. We faded, and even in the last few minutes we faded a bit. Investors, of course, trying to make sense of that steady stream of tariff headlines out of D.C. That's the scorecard on Wall Street, but the action just getting started.

Welcome to Closing Bell. Over time, I'm David Faber. Morgan and John are both off today. Coming up this hour, the confusion around the tech trade. DA Davidson's tech analyst is gonna tell us how he's thinking about names such as Apple and Nvidia after of course a weekend of tariff headline whiplash. Plus former Richmond Fed President Jeffrey Lacker

will be with us. We'll talk about warnings from Janet Yellen and Ray Dalio about the potential economic toll of tariffs and uncertainty as well. And Metta's moment in court, we're gonna get the latest on the start of the company's ending trust trial that has the potential, certainly if the government were to win, and it goes on,

to shape the tech landscape. Let's get straight to today's market action though. Joining me is Jose Rasco, HSBC Global Private Banking CIO and Brenda Vangelo, she's Sandhill Global Advisor CIO as well as a CNBC contributor. We've also got CNBC's Megan Casella who's tracking of course the latest out of DC on those tariffs. Let me start with you if I can, Jose. Just give me a sense in terms of the action today, your expectations coming in.

Of course, on Saturday I think a lot of people were very bullish about what we might have seen. Then we got sort of a bit of a reversal on Sunday given we're told, well yeah, we're exempting some tariffs on Apple and the like, but of course then we're going to reinstate others under national security concerns. So what do you make of the action today in response to those headlines? Well, and then there was the headline, David, about autos, right? So in auto part. Yes.

So it's a little bit later in the day. Yeah, and even if you have a direct target that you're shooting for at the end of the day, the strategy, the whipsawing of the markets is what's dangerous. And from our perspective, it makes it hard to be very constructive on US markets given that volatility in just political planning. And more of, if you look at the business environment, how can you plan for the next three, four, five years in an environment where you don't know what the rules of the road are? So that's really one of the things that's beginning to concern us.

It's not necessarily the tariffs. We road are. So that's really one of the things that's beginning to concern us. It's not necessarily the tariffs. We still are hopeful. Trump administration is going to use them as a tactical tool to exert other companies to give us better trade, bilateral trade agreements. But even if they accomplish that, they could kill the goose that laid the golden egg, which is a secular trend of the tech revolution and the reindustrialization of the US requires capital and we need stability and planning to get that done.

No doubt, and I hear from many CEOs as well, certainly at least when I'm speaking to them on the phone, not necessarily on television. They're concerned and they're sort of, as you say, kind of in a wait and see mode. So what impact do you think that has? When are we gonna start really seeing companies remove guidance, for example?

And what does that mean overall for your view sort of the macro environment at this point? Me? Yeah, you. Yeah, okay. I'm sorry. That's okay. Well, I think we've already downgraded the US two or three times this year. We're at neutral. And definitely, if you look at the 10.5% numbers we're getting from Faxit on earnings, we think those will be revised down. We don't think they'll be revised materially lower because we still are hopeful that the Trump tariff scenario will not be as adverse as Waller pointed out this morning. We are hopeful it's not 25% recession, that whole scenario. We can avert that.

And if we can avert that, you will get some downgrade in earnings. But at the end of the day, you still have a functioning economy. And if you get the second half of this, which is lower tax rates on the corporate and household side and you get some sort of deregulation, it could be enough to keep us afloat, especially when the Fed put does come into play. June might be tough, but we expect three rate cuts this year. You're still looking for three, huh? Yeah, June may be tough.

Brenda, let me come to you. And I think the expectation coming in this morning, even with some of the walkbacks of Sunday, was that we'd see tech have a pretty strong bid. Apple does end up 2%, but Nvidia's down, Amazon, Microsoft, none of them really showing much gains this morning. Is that concern you at all?

Excuse me, this afternoon, I'm thinking I'm in the morning still. Yeah, I think it's not surprising. This has been a wild ride over the last several weeks with a lot of confusion, even intraday changes, so not surprising. But I think in our view, it's good that at least we have a postponement of some of the tariffs, because I think it will provide time to really fine tune the focus rather than having these blanket tariffs

across the board. And that's if you look back at what Trump did during his first term, it was much more the tariff implementation was much more targeted. And I'm hopeful we're hopeful that that will be the same this time around, because I don't think the end goal is to hurt US companies and harm the economy. And so when we think about how we've taken action in our portfolios, we've done it in a way that has been incremental, but we have been adding

when the market has been down, that we've done it in an incremental way with a long-term focus, knowing that we're not sure we've seen the bottom yet. I'm hopeful that we have. But we do think that on days like Tuesday of last week, that was an interesting day and one that we felt was for long-term holders was a good entry point to add a little bit more exposure to the equity market. Your expectation and hope, I guess, is that things will become a bit less haphazard when

it comes to the implementation of tariffs. Fair to say. I mean, I assume you can't be, you know, I don't know how much conviction you have in that, Brenda. Yeah, I think nobody knows. But I do think this, in our view, we cannot imagine that the goal of this administration is to come in with a bulldozer and hurt the economy for the longer term and to hurt U.S. companies. So I think the way it's been implemented thus far has certainly been more disruptive than we would have expected. But I do think with the postponement that we've seen on retaliatory tariffs and now

with these various categories, that that does provide some time to fine tune things a little bit, but still isn't a period of uncertainty, of course. We won't really know until 90 days from now or potentially earlier and have more clarity. So I think when it comes to earnings season, we're just going to hear a lot of uncertainty with regard to some companies, certainly not with some like the banks that we've heard from so far, but uncertainty with regard to some companies, certainly not with some like the banks that we've heard from so far, but uncertainty with regard to the broader economy, yes. So I don't think we're gonna have a lot of answers

after this earnings season, other than that Q1 was probably pretty good. Yeah, yeah, it's probably a quarter that doesn't matter that much in terms of how years go at this point. Brenda and Jose, thank you both, appreciate it. Thank you, David. All right, I want to go over to Megan Casella now in DC. Of Jose, thank you both. Appreciate it. Thank you, David. All right, I want to go over to Megan Casella now in DC.

Of course, when we spoke this morning, Megan, we were, or I was asking you certainly about exemptions and what the national security tariffs might look like, but we did get some news later in the day from the president as well involving, I guess, tariffs on automobiles, correct? Yes, a little bit of a surprise there because it came in spite of all the pushback

from the administration this weekend that the tariff exemptions issued on smartphones and laptops weren't actually exemptions. They tried to throw cold water on that, but then the president took things a step further today. He suggested that more relief could still be coming. Trump was asked in the Oval Office earlier what additional products might see exemptions and he replied he was quote looking at

something to help the car companies. Remember they still have that 25% auto tariff. His comment then pushed the big three automakers, all three, sharply higher to end the day. Trump was also asked about Apple specifically and whether that company might see even further relief than what they got this weekend. Trump replied that he's a quote, flexible person. So no certainties there, but it did fuel some hope that this list of exemptions might not be the last one. But of course, David, what we still don't know after today is how long relief could last or how widespread it would be. It was just this morning that Kevin Hassett, the economic adviser, said that most imports will still see some sort of tariff at the end of the day and the White House is also warning that the semiconductors

investigation that's still yet to be formally launched, that could be so broad as to hit any items that use semiconductors with tariffs that of course would be a major impact really for the entire electronics industry. David. Yeah, given they haven't even begun that, do we typically know how long that investigation might take? What we do know is a White House official told me today that the Commerce Department has actually started laying the groundwork even though it hasn't been officially launched.

There's been no executive order signed just yet. I can tell you that the statute allows for up to 270 days. That's something like nine months. But I would expect the administration this time around wants to move much faster than that. Maybe I would guess a minimum of 14 to 30 days, as long as nine months, maybe somewhere in the middle there before we actually get to the tariffs being implemented. And just real quickly, Megan, a reminder of viewers and myself again, in terms of the

auto tariffs and parts and things of that nature, where do things currently stand? They're all in place. The 25% tariff on autos and parts. There are some exemptions allowed for Canada and Mexico at this point, but for every other country the 25% remains in place. So an exemption there, any relief for the car companies would really be a major step forward. All right, and as you say, of course they did react to those comments. Tesla was a negative territory as well. It did end very slightly positive. Megan, thank you. Megan Casella in D.C. Let's talk a bit more about tariffs and the impact on investors overall. Flurry of headlines, of course, over the weekend that I've referred to. Joining me now is Gil Lurie. He's managing director at D.A. Davidson. Gil, good to see you.

You know, Apple does end up two and a half percent. I think people on Saturday certainly were expecting it might get a much larger jump. Is it enough what you've heard to give you some optimism when it comes to the future for the company? Well, it's a little better than where we were Thursday, Friday in the sense that it looks like Apple will continue to avoid the crossfire between the US and China. If Apple isn't a matter of national security to either side, maybe they can escape some of the tariffs.

So there's still going to be a lot of uncertainty. Apple is still going to have to do a lot to mitigate the impact of the tariffs that will happen one way or another, but it looks like it may avoid the really significant consequences of the very high tariffs that the U.S. and China started talking about as they started threatening each other. Yeah, I mean, it got to 145 percent. It's still 20 percent.

And of course, as Megan just reported, we've yet to see what the impact conceivably will be after the semiconductor investigation concludes. What can they do, though, Gil, to truly mitigate it? I mean, I think 80% of their key products are still made in China. Yeah, so they're going to have to accelerate the move to countries that are friendlier in terms of the new tariff regime and the new world that we're going to live in. That starts with countries like India and Vietnam, but it continues to Mexico and other countries that Apple is going to have to move much of its production over the next few years.

It started the process of diversifying, but that's a multi-year process. So that's why we're hearing of urgent flights of planes full of iPhones out of India is because Apple has to move away. If we are going to decouple from China, which is still the likelihood, Apple has to move away from producing in China. It has to produce as little as possible. There may be just for domestic consumption in order to navigate the longer term. In the short term, it has some levers, pushing expenses to suppliers, eating a little margins,

passing some price increases to consumers. It's gonna be a rough year for Apple one way or another. Yeah, I mean, getting the specialized tooling out of China, as I've reported, is difficult, particularly if the Chinese want to stand in your way, not to mention the engineers who know so much about it as well. So how do you go about valuing Apple at this point?

I mean, what are you working with in terms of a margin, in terms of an EPS number for this year? Well, for Apple, the reason it will likely remain defensive in spite of all this uncertainty is that when we think five years ahead, what companies are still going to do well, I'm going to be buying more from Apple and I'm going to be buying it at higher prices. It's very unlikely that somebody is going to disrupt that.

The same thinking we have for your Walmarts and your Costco's is going to make Apple defensive. So a noisy year, but we and others are going to look past that because Apple, as you've been pointing out, will adjust to any environment. They will adjust to this. And eventually again, we're going to be buying more devices, four more, paying more for services in the even in the two to three year time frame.

This year will be rough but longer term investors will continue to pay high 20s up to 30% for earnings that they believe will be there five years from now or they believe will be higher five years from now or they believe will be higher five years from now. Finally on Nvidia, just to quickly turn you may have heard, I mean they put an announcement out today that really was simply a consolidation telling us again what they're planning to do in terms of the manufacture of the highest end chips here in the United States. But we're waiting for the semiconductor review. We yet to determine as anybody anybody has, of course, what the ultimate outcome will be. What do you do with Nvidia as well?

Forgetting, of course, the whole concerns to the extent there are any about data center demand just in terms of tariffs. How are you viewing it, Gil? Yeah. So Nvidia will not be able to avoid the crossfire between the US and China because their chips are a matter of national security. And part of the reason we put a hold on legislation and tariffs around semis is that we have to have

a comprehensive policy that includes, how do we limit China from beating us in AI? And part of that has to be further restrictions on Nvidia chips going to China. The restrictions that we've had to date were not enough. The Biden administration had an idea of how to change that. That's now gone away. So the Trump administration is going to come up with a new plan for how we're

going to restrict sales to China, which let's not forget, is could be up to 20 to 40% of Nvidia's sales. And that's if, per your request, we're ignoring the other aspects, which is do their large customers, Microsoft, Meta, Amazon, Google, continue to buy the same rates if their core business is dealing with an economic slowdown?

Do some of their customers like CoreWeave that have to borrow a 10 to 14% to buy GPUs, do they have access to the capital markets to buy these GPUs? So there's a layer of, there's layers of issues for Nvidia, but the big current one is, what is the US going to do to limit sales

of advanced chips to China? Yeah, a lot of questions and very, very few answers at this point, of course, which does create that uncertainty we talk about so often. Gil, thank you. Gil Luria joining us. We've got some news on Lowe's for that. Let's get over to Pippa Stevens.

Pippa. Hey David, well, private equity company, the Sterling Group has agreed to sell Artisan Design Group to Lowe's for $1.325 billion. ADG does designs and installations for interiors and in a release said that it will be part of Lowe's Pro, that is an expanding and new distribution channel within the company that they peg

at being worth $50 billion. So the stock here not moving too much on the news. David. Pippa, thank you. Up next, we're gonna talk to Morgan Stanley's policy expert about how to cut through the noise in Washington and where to put money that could ride out this volatility. And we'll also have Piper Sandler's chief market technician joining us.

He's thinking by his 6600 year end price target for the S&P and he'll tell us why the next few weeks could mark a shift in sentiment over time back in two minutes. All right, stocks were higher on the day. This after tariff headlines, of course, have kept Wall Street on edge for weeks, including this weekend's fast-moving technology exemption news, kind of exempted. So how should investors navigate this stream of headlines? Joining us now is Monica Guerra. She is the head of policy at US policy, the head of US policy at Morgan Stanley Wealth

Management. Good to have you. You know, it's good to be relevant, Monica. I couldn't imagine you're more relevant than right now for clients. We're trying to figure out every utterance we get, whether it's out of Trump or Lutnick or Navarro or Besant. What are you telling them when they come to you and say, okay, what do we really think the policy is gonna be? Yeah, when we're trying to decipher all of these messages,

it's really important to stay focused on Donald Trump, on the president and what he's saying. We're getting a lot of sort of mixed messaging and that's adding to the volatility that we've experienced in the last week and a half. We started today on a high note, we ended a little bit up, right, about what, 0.79 up today. And that isn't the end of the story. And that's important to remember, because even though we've gotten this 90-day reprieve, like was mentioned earlier, there is going to be a study and there is a study ongoing on semiconductors and that could

create additional pressures when it comes to tariff news and potential volatility. Yeah, but even listening to the president is not exactly that straightforward, is it? I mean, I could just reference today's press conference in which it wasn't about tariffs, but he mentioned Apple, but you couldn't really figure out what he was really going with or might, and then the automakers as well, giving them some relief. I mean, it's not exactly that easy to follow a roadmap, even if you just listen to Trump, is it? The roadmap is difficult to decipher, and that's why it's important to stay focused on his comments,

even if they're vague. The important thing here is that we are likely to get some certainty as the congressional budget is finalized. Now, that is a ways off. So we do have about until August, where we get some clarity on policy, but they are looking to use those tariff revenues

as a pay for for some of their tax cuts. And this is a little inside base fall on budgeting, but it's critical when we're thinking about when market volatility could come down and policy certainty reenters the mix. So listen to the president and then also watch what Congress is doing on the budget front. All right, but I got another almost 90 days

before the rollback that took place on the tariffs might go back into effect. I mean, what do you think is going to be the next tell here in terms of how this is going? Is it going to be potentially getting some deals with some of our trading partners? That could be a tell. There are over, what, 70 countries today that have gone to the president to try to renegotiate the the 10% universal tariff and the reciprocal tariffs already. What's important here is that we have to remember that even if we get to a place where there

are no reciprocal tariffs and we're at that 10% universal tariff anything additional to that is could be quite inflationary. So if we're looking at the 145% on China as it stands plus that 10%, our effective tariff rate has gone up from 3% to 18%. Add in any reciprocal tariffs, that goes up and it could fan inflationary pressures. So for us, what we're telling our clients

is to not have knee jerk reactions, right? It's easy to want to have a response, especially on the investment front when you see news like this. So stay away from those knee jerk reactions have knee-jerk reactions, right? It's easy to want to have a response, especially on the investment front when you see news like this. So stay away from those knee-jerk reactions. Stay focused on your long-term investing goals, but also look to ultra-short and short-term fixed income

while essentially the hedge away from some of this volatility. Yeah, I mean, even if you get what you want, let's say as an investor, we get a lot more, let's call it cohesion in terms of the policy. Right now, you can be creating a low on demand that leads us into or close to a recession, which would have its own impact on the market.

You sure you wanna tell people just to sit by and watch? Well, that's not the only place to look. I'm saying you wanna keep cash on hand to then deploy. Especially around that budget time period so when you think about the ninety day pause. That actually lines up perfectly for when they're at going to be pursuing. A vote on

the budget and we'll have a clear picture not just on. Individual tax incidents corporate tax incidents. As well as those tariff revenues in which companies are likely to be hit the hardest. Now as an inflationary hedge right now individual tax incidents, corporate tax incidents, as well as those tariff revenues in which companies are likely to be hit the hardest. Now, as an inflationary hedge,

right now we like private investments, and we're also looking to other parts of that real assets and private markets as a way to position for potential inflation pressures. Yeah, although private markets could get tricky if we do hit a recession. Monica, thank you. Appreciate your time.

Thank you. When we come back, forget the volatility. Piper Sandler says the S&P could end the year more than 20% higher than current levels. Firm's chief market technician's gonna join us next. He'll explain why. And a bit later, the FTC's antitrust lawsuit against Mark Zuckerberg's empire,

otherwise known as Metta, that's getting underway today. We're going to take you to the courthouse, we'll get the latest developments. And we're back and we have some more breaking news on what else tariffs. Megan Casella has those for us. Megan. Hey David, the president and the administration has been saying that this could be coming today and now it's official. The Commerce Department is officially launching two new national security investigations. They'll be examining imports of both pharmaceuticals and semiconductors to see whether imports might threaten national security. Now as we've been talking about, this is just the first step.

They'll be looking at things like current levels of demand for these products, current domestic levels of production where most of the supply chain is, and then making a determination ultimately in this report that again could take up to nine months to come that would say whether or not imports of these products threaten national security. If they find that they do, then they can impose tariffs. Two details to flag here. In both investigations, they say they're launching a 21-day comment period. So three weeks from tomorrow companies and industry and anyone else who wants to will be able to submit comments saying yes or no, I do want tariffs or I don't for whatever

reason. That's fairly short, just three weeks. That again is one indication that they want to move quickly. The other thing I'd flag is as we've been talking about for semiconductors, they do lay out in this formal notice that it's not just the semiconductors themselves that they'll be looking at, but also upstream and downstream. Things like wafers and legacy chips, leading edge, all the different types. And then downstream also products that contain semiconductors such as those they say that make up the electronics supply chain. So again, could be much bigger than tariffs just on pharmaceuticals and semiconductors, could be a little bit broader than that.

David. But Megan, in nine months, or let's say if it takes nine months, I mean, the world could be a very different place as well. So very difficult to understand exactly what the landscape will look like then, when and if they come to some conclusions. That's right.

It's sort of up to the Commerce Department entirely. That's how the statute is written. But we do know, as I said earlier, that this that officials have been laying the groundwork already so they could move quite quickly. I would also say the Trump administration has been known to lean on past investigations to sort of impose new tariffs. The steel, aluminum and auto tariffs that we have in place now that were just increased in the last couple of months. All of those were based on national security investigations done in the first term. These items at least will get a fresh look. We'll see what the world looks like and whether or not they decide to impose tariffs after

that. All right, Megan, thank you. Megan Casella in DC. Who knows when we may see her again. All right, the S&P getting a lift today, closing above 5,400, still far, of course, from record highs that were reached earlier this year. My next guest is sticking by his bullish outlook, reaffirming a 6,600 year end target for the S&P.

Joining me now, Craig Johnson, Chief Market Technician, Managing Director of Piper Sandler. All right, Craig, why? Why are we going up as much as what could be 20% from here? David, it's happened in the past. If you go back and you look back through history, you have found periods of time, 20 plus times, where you've seen over 20 plus percent moves from here to year end. What's going to be the catalyst from here? There is a lot of uncertainty, even in this market.

I don't think anybody questions any of those uncertainties around tariffs or any of those other points. But David, when you come back and you look at markets that get this screwed down, this beaten down at this point in time. We have gone through here at Piper study after study after study showing people that when we get to these sort of breath readings in the market technically, these bullish percent readings at very very low levels, RSI levels, this is when the market usually finds its footing and this is sets itself up for a very nice

move for the overall broader market. And we think that's what lays in front of us here in the year end, despite the uncertainties. Yes, we do think we can get to 6,600, and we are sticking with our year end objective. Is there anything along the way or from here that you need to see to even embolden your conviction? Well, I think there's a couple things. One, if you think about trump one point over sister point out there was a weaker dollar

there was weaker ten year bond yields and combination of those things of definitely a weaker ten year bond yield could be a positive from here the expectations are also uh... that the fed likely could be cutting rates two times later this year and if that is indeed the case uh... they also could be cutting rates two times later this year. And if that is indeed the case, that also could be another catalyst for,

especially mid and small cap stocks, ultimately to move higher too. Craig, appreciate it. Thank you. Thank you, David. Craig Johnson. Let's get a news update now. Julia Borson has that for us.

Julia. Hey David, a group of businesses sued President Trump today looking to block tariffs that he has imposed in recent weeks. The lawsuit in the US Court of International Trade alleges that the president illegally took Congress's power to levy trades by claiming trade deficits with other countries constitute a national security emergency. The White House has yet to comment. Federal authorities arrested a New Mexico man in connection with arson attacks on the state's Republican Party headquarters and a Tesla dealership that had graffiti targeting Elon Musk.

The justice department said today the suspect faces two federal counts of malicious damage or destruction of property by fire or explosives. And if convicted faces up to 20 years in prison for each count. And the FDA is warning doctors and patients to check that their ozempic prescriptions are legitimate. The agency said it sees fake versions of the drugs earlier this month. The FDA said it's aware of six reports of adverse effects linked to the lot and that it's working with ozempic maker Novo Nordisk to test if the counterfeits are safe.

Back over to you. Thank you Julia. Julia Borsten. Up next, former Richmond Fed President Jeffrey Lacker will join us. We'll of course talk about how the Fed is going to react to what else, tariff uncertainty. And Goldman Sachs getting a boost.

This after earnings this morning. Tomorrow we get Bank of America and Citigroup. And that'll more or less wrap up the biggest of the banks in terms of their earnings. We're gonna preview what to watch from those reports. Welcome back. We do get news. Just this hour, the Commerce Department has officially begun an investigation into national

security effects of pharma and semiconductor imports. Earlier on CNBC, former Treasury Secretary Janet Yellen said trade policy is putting the Federal Reserve in a tight spot. I think that the tariff policies and the uncertainty they're creating create the most difficult possible situation for the Fed because the Fed is going to focus squarely on its two congressionally mandated objectives, price stability and maximum employment. And inflation's come down, it's not quite at the Fed's target, but there's good reason to believe that we're going to see a surge in inflation

At least for a while Joining us now at Jeffrey Lacker He is the former Richmond Fed president currently a senior affiliated scholar with George Mason University's Mercatus Center. Good to have you Mr. Lacker first of all, do you you know you heard Janet yell in there? I assume do you agree with her characterization of where the Fed is in terms of being in a very tight spot? Great. And it's going to be tight for the rest of the year, I think.

I think the inflation risks are serious. And I think the overhang of the episode we went through from 2021 through 2022, in which their missteps and delays allowed inflation to surge is gonna weigh heavily on them. They got inflation back down, inflation expectations at a longer time horizon remained stable while they did so, which allowed them to get inflation back down.

But I think having the public having seen that just recently is gonna be wary. And I think you've seen evidence in the Michigan survey, for example, and the New York Fed survey that came out this morning that inflation expectations aren't quite as anchored as they were. And I think that's gonna weigh heavily on the Fed. I think they're gonna be very concerned

about preserving their credibility through this next surge in inflation. And they're going to be very hesitant to cut rates into that. How long do you wait? I mean, obviously we're sitting here every day talking about we really don't know where the tariffs are going to end up on so many countries and in different industries. Not to mention we don't know the impact of this uncertainty and what it's creating in terms of the lack of decision making or perhaps capital allocation from a lot of businesses

around the around the country. So how long do you wait if you're the Fed to sort of see what the end game looks like? I think they're going to wait into the second half of the year for sure. I don't see anything coming before later this year. One way or another, I think they're going have to, it's gonna take a few months of data. They always say, you know, don't make policy based on one month's data. I think it's gonna take a while.

And I think the uncertainty overhang is gonna be serious. Remember that 2008, 2009 recession was a combination of two things. One is sectoral reallocation, resources, labor, and capital moving out of residential construction-related industries and into whatever was next, and a huge overhang after Lehman Brothers and the testimony of Bernanke and Paulson, a huge sense that no one quite knew what was going on in Washington, and it wasn't clear Washington knew what was going on in Washington and it wasn't clear Washington

knew what was going on either. I think that's, you got both of those now, the order's different, you've got the uncertainty about what the rules of the game are and whatever the rules are, if they involve substantial tariffs, they're going to involve a lot of sectoral reallocation, it's sort of the purpose of them. So you got both of those things going on now. So the potential for an economic down draft is very serious. What is your sense in terms of business

investment right now and just the overall climate? Do you expect that we're going to have a significant slowdown? I think it's pretty likely. Not for sure. We could cruise through this if tariffs end up on the lower end of the range of possibilities and there's a very large range of possibilities- we could have investment hold off but- muddling through- without a

downturn- it looks like gross going to be under 1% maybe close to zero on real GDP this year- so we could get by without falling off a cliff into a recession- but- I think it's more likely to not that on real GDP this year. So we could get by without falling off a cliff into a recession, but I think it's more likely than not that towards the end of the year,

an actual downturn will come into play. And then the Fed actually will be moved to act. I mean, we do get some rate cuts next year perhaps. Yeah, but it's gonna be difficult. So it's not obvious with a supply shock whether the optimal policy is to ease or to hang tough and fight inflation. It depends on a range of circumstances, essentially whether demand falls more than supply. And if the supply disruptions are serious enough, you want to get on top of inflation

before you fight the weakness. Yeah, hence the tight spot that Yellen described as well. Jeffrey, appreciate it. Thank you. Appreciate your time. Sure. My pleasure. Take care. You too. Metta and the FTC are facing off in court. That's today over whether the social media giant

is a monopoly. We're going to give you the highlights next. Plus, Tuck's TUSK's venture partner, CEO Bradley Tusk, is going to join us on what the trial could mean for Meta stock price. We'll also talk about some of the other Mag-7 names. She's antitrust lawsuit against Meta kicked off in court today. Eamon Javers is at that courthouse

and he has the highlights for us. Eamon. Hey there there David. Metta CEO Mark Zuckerberg is on the stand right now and he's been testifying for a couple of hours at this point. The FTC's lawyer has been going through Zuckerberg's internal messages and public comments back in 2011 and 2012 to gauge his mindset about the acquisition of Instagram. Now the stakes here are high.

Metta could be forced to spin off Instagram and also WhatsApp, but the company is complaining that this is a case that defies reality. And the behind the scenes lobbying campaign has been intense here. We know that Meta CEO Mark Zuckerberg has visited President Trump several times in person. So far this morning, FTC lawyers have been making the case that Meta should never have been allowed to buy Instagram for a billion dollars back in 2012 or to buy WhatsApp for 19 billion dollars back in 2014. The FTC revealed this internal message from Zuckerberg in 2012 which they say shows that he bought Instagram because it was

a threat. Zuckerberg wrote at the time, Instagram was growing so much faster than us that we had to buy them for one billion. That's not exactly killing it. But Metta's attorney argued in court this morning that the FTC's case is just a grab bag of theories that are at war with the facts and the law. Now they're expecting Zuckerberg may have to testify for as many as seven hours total. So that could mean he's gonna have to come back tomorrow to finish up David. Back over to you.

Okay, Aiman, thank you. Aiman Javers joining us now is Bradley Tusk. He's the CEO and co-founder of Tusk Ventures, founder as well of Tusk Strategies. That's a political consultancy that advises technology companies. You think the government's got a shot here? I mean, they're asking, you know,

for a judge to look back 13 years and 11 years about deals that are obviously long done. It's an argument that some would argue is a tough one to make. Yeah, I mean, I think it is tough. To me, the hardest part of the government's argument is, you know, Metta did receive approval from the FTC to buy Instagram and to buy WhatsApp. And so, you know, to then say, well, that those FTCs were wrong and therefore met as guilty

of violating the law, that seems like a tough case to make. But, you know, given that we live in a world right now where things change incredibly quickly for so many different reasons, there are a bunch of variables here, right? So one would be Trump, who knows what could motivate him to weigh on either side of this, to the judges actually at war separately

with the Trump administration, that might have an impact one way or the other. Third, we're also dealing with the sale of TikTok right now at the same time. Clearly what happens to TikTok has a huge impact on Metta. And so this thing probably won't happen just in a vacuum. Yeah, I didn't know that. Did you just say the judges that were with the Trump administration?

Yeah, because it's the same judge that said that they shouldn't have deported that guy to El Salvador. Oh, it's that judge. I didn't know that. Yeah, same guy. Same guy. Yeah, so like you can't make this stuff up. Now you really can. And to your point on Trump, it's obviously, you know, you never know at this point. I mean, I don't know, you think that is a monopoly? I mean, clearly they have massive power, right? But I kind of look at it from the perspective of my kids.

I have a 16 year old and an 18 year old. They live online, they're both digital natives and they both use Instagram for sure, but they also use TikTok and they also use Snap. And so at least for them, they would say that it's one of multiple products in the marketplace. On the flip side, I always find that when I travel abroad, I don't know if you've seen the same thing,

but everyone but the US is on WhatsApp. That one to me actually in many ways seems more like a monopoly because basically every single other country that I go to, that's how everybody communicates. Yeah, no, it is as you're right. Whenever you go anywhere as well, everybody asks you if you're on WhatsApp. They got that easy way to send your contact information as well. Let's talk a little about the market action today, Bradley, because I think we could have

come in certainly on Saturday, I think there was an expectation and even yesterday, even after we got the comments from Trump on the Truth Social post, that we might have a pretty significant technology rally. We didn't really get it. We had a decent day, but nothing great. What are your thoughts? I mean, I think that just people don't know what to expect.

I mean, markets like predictability, markets like stability. We are in a period of massive instability right now. And so yes, we got some good news on Saturday and that's positive, but you know, you get conflicting messages all the time. Trump is capable of changing his mind at any moment for any reason, including what he sees on TV

or reads on true social or anything else. And so I think people aren't really sure what to do. Yeah, so what are you doing? Well, luckily for me, I mainly invest in early stage technology companies that are private. Yeah. It's not an easy environment for them either, though. Not at all.

A few things here. One is, so we've had, as you know, basically four years of no liquidity in venture capital at all. And the thought was that the combination of the election of Trump and the reduction of interest rates was going to make 2025 the year where liquidity finally started to happen, both the IPOs and M&As.

That's not really the case. We had two portfolio companies, StubHub and Circle that had announced IPOs that now have them somewhat on hold. And that's just two of a lot. So, that's number one. Number two, I haven't had a single conversation about investing in a new startup or working with a startup even really early stage companies

Where tariffs now doesn't come into play where their supply chain doesn't come into play before this I usually did not spend that much time worrying about Where my portfolio companies were getting their raw materials from or what kind of metals they needed or anything else? And so, you know usually speaking you're trying to figure out what are the most innovative companies And so, you know, usually speaking you're trying to figure out what are the most innovative companies Tariff shouldn't be a big part of that equation, but they now are yeah who knew right Bradley appreciate it. Thanks for time. Thanks, David. All right Still ahead we're gonna have what to expect from Bank of America Citigroup both the big banks report tomorrow When we come back

All right, we've got a deal that is not getting done in the semiconductor arena. Pippa Stevens has those details. Pippa. Hey, David. Well, OnSemi has withdrawn its proposal to acquire Allegro Microsystems. OnSemi previously submitted an all cash proposal back in March worth $35.10 per share. In a statement, the company said, while it continues to believe the two companies would have brought together highly complimentary businesses, At this point, they no longer see an actionable path forward on semi-up better than 4% here in Allegro Microsystems, down almost 9% on the news.

David? Yeah, hadn't been trading anywhere near, of course, the $35 bid as well. Pippa, thank you. Up next, what to expect from Bank of America and Citigroup when both report earnings tomorrow. This of course follows a strong report this morning from Goldman Sachs. All right, once again, it's just one hour, but let's get back to Megan Kasella for the third time because we've got more news on tariffs.

Megan. Just a little bit more David, Treasury Secretary Scott Besant was just on Bloomberg News, talking tariffs and many other things. Just two topics to bring to you. First, on China, Besant was asked about how China's Commerce Ministry called these tariffs a joke because of how high they are. He really defended them. He said, these are not a joke. They're big numbers. No one thinks they are sustainable

and no one wants them to remain, but it's far from a joke. So giving some room there to make a deal. He also was asked if he saw a decoupling between Washington and Beijing. And he replied, there does not have to be. There is a big deal to be done at some point. He also spoke about the dollar. He was asked whether he thought that foreign countries were dumping US assets, dumping treasuries. He said he does not think that there has been any dumping.

He says foreign ownership he sees in the data has picked up. And he also said that, yes, he believes the dollar is still a global reserve currency. So projecting some confidence there that Secretary Besant down in Argentina today. David? Yeah, always want a strong dollar for Treasury Secretary. At least that's the way it used to be when I was growing up, Megan. Thank you, Megan Casella. Looking ahead to tomorrow, Bank of America and Citigroup round out the big bank earnings.

That is, of course, before the bell. Leslie Picker joins us. She's got a preview of course before the bell. Leslie Picker joins us. She's got a preview of what we can expect. Leslie. Hey David. Yes. Citigroup and Bank of America, the best performers today, even though their earnings don't come out until tomorrow.

These two have seen outsized volatility amid the trade war headlines and the uncertainty about the direction of rates, which of course impacts the bank's balance sheets and loan making profitability. The market will be focused on what the earnings say about the consumer and whether these two retail-oriented firms are setting aside more for potential bad loans. Color from the firm's executives will also be crucial in terms of whether they're seeing an impact on consumer spending, on credit quality, and loan demand from the ongoing trade war. Their peers, JPMorgan, Goldman Sachs, and Morgan Stanley

were able to garner top line gains in the quarter thanks to a sizable jump in their respective equities trading divisions. That unit comprises a smaller portion of revenue for the banks reporting tomorrow though. It was a boon for Goldman, which reported its third best quarterly revenue ever earlier this morning,

despite declining investment banking activity. Goldman also announcing a buyback plan up to $40 billion, which helped jolt the stock a bit higher today as well. David. All right, Leslie. Thank you, Leslie Picker, of course. And by the way, Programming No Bank of America's CEO, Brian Moynihan, he's going to help us break down the quarter tomorrow at 1030 Eastern on Squawk on the street. That does it for overtime.