Power Lunch - Dow jumps 600 points as White House optimistic China wants deal, wrapping up historic week 04/11/25

Episode Date: April 11, 2025

Stocks climbed higher Friday, extending their gains as the White House signaled it’s open to a trade deal with China, as Wall Street wrapped up a wild week. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunch on this Friday afternoon alongside Kelly Evans. I'm Dominic Chu, and there are just two hours left in a historic week on Wall Street. Stocks are jumping right now to session highs, as you can see there this afternoon, on reports that Boston Fed President Susan Collins says the Fed is absolutely ready to help stabilize markets. And when you look at the weekly numbers, the S&P and the NASDAQ are still having their best week since November of last year. Kelly, it's pretty amazing right now. Yeah, 7% on the NASDAQ, 5 on the Dow and the S&P. And, of course, check out the yield on the 10-year.

We had lower than expected inflation readings on PPI this morning and a horrible reading on consumer sentiment from the University of Michigan. And those inflation expectations jumped to their highest since 1981. You can see the 10-year yield, though, 447. So we're off-the-session highs. We're still not back anywhere near where we were about a week ago, Tom, and we were below 3.9%. Also seeing gold leaping,

to another all-time high. Dennis Garman, by the way, telling me he thinks this move is extended. So watch out. The gold stocks are higher as well. Newmont is up 25% this week. Well, let's get to Steve Leesman now for more on some of these headlines around the Fed and Susan Collins, specifically, Steve. I just thought it went without saying that the Fed would be ready. It's an interesting question. It's whether there is really any new information here. Let's provide the information and debate the newness of it on the back end of that. Susan Collins, the Boston Federal Reserve President, talking to the F.T, said the Federal Reserve would absolutely be prepared to deploy its firepower to stabilize financial markets should

conditions become disorderly. Here's a quote. She says, the core interest rate tool we use for monetary policy is certainly not the only tool in the toolkit and probably not the best way to address challenges of liquidity or market functioning, she said. She's not seeing liquidity concerns overall. Guys, it's not clear to me that she's adding any new. information. I'll tell you why, because we've been talking all morning, and then just in the last

hour with Kelly about this idea, what distinguishes what's happening right now from other situations, what we've had, is the Fed has a series of standing facilities that are already in place to which the market can turn for liquidity if it needs it. It has a standing repo facility, it has swap lines with several global central banks. There is the discount window, which has always been there. I do not believe that Susan Collins is saying the Fed is ready to go further at this time, only that the Fed is ready to do it because it's prepared. I have a list here of things the Fed might do if it gets to that situation. Fed has several existing liquidity facilities. It has opposite to take additional liquidity actions. I think the market might be

thinking more along those lines. You could do global coordinated central bank action if other central banks felt like under the circumstances working with us. And then in the last instance is monetary policy, right? And what the Fed wants to have happen is all of those things happen before it has to do anything for monetary policy. It wants to address liquidity with liquidity vehicles and the economy with the interest rate. Surgically, that's how they want to do the right tool for the right job. I guess maybe in the past and certainly in recent memory around potential financial crises, things that have happened in the last 20 years, Steve. There's always a lot of been a sense sometimes that when you break out the bazooka, I'm going back to the great financial

crisis days, that you imply or signal that things may be worse, that there's a panzer coming. Correct, that there's something else behind it or that things are getting bad. Is there a fear right now that if the Fed or any other central bank were to embark on something that is more forceful in nature, that it would be signaling to the market that maybe things aren't as go okay as people thought It is always a danger, and what you've just done, Dom, is underline the beauty of standing facilities. Because the standing facilities exist without the whole pageantry of creating the facility and saying, here it is, we're panicked, we're creating a facility, right?

If you have them existing, which is why this is a very technical point, the Fed does repo operations once in the afternoon, there's a lot of guys in the market say, hey, guys, do it in the morning, too, because people, you know, people. need liquidity overnight. And if you did it and had a standing morning operation, it wouldn't be a panic if you did it in the first instance. The Fed knows about this. They're thinking about it. I don't know what they're going to do with it. But that's the idea is that you have the facility there. We will learn about the use of the facilities during the Fed's reports. The H-4-1 comes out on Wednesday at 430. There's another report about custodial holdings on Thursday. We'll learn about it later.

We can sometimes learn about it when it happens. But you're right in the sense that we don't need to create these facilities. They exist. It's probably significant that a Fed official is reminding people that the Fed has these abilities. Also significant, and I have been on the phone for, I don't know, 10 days now with what I called Kelly, the guys with the overalls and the wrenches, the guys in the plumbing of the financial system. They have not seen a need for this now. Not yet. It could be there, but they've not seen.

One guy said to me, we're not the story yet, but we're closer. That was a couple days ago. So we're not seeing that kind of dislocation. It's significant, I guess, that a Fed official is telling them we have these tools. I don't know that they're being needed right now. Market likes to hear it. It's up 665 right now. Let's see what our next guest thinks.

David Zervos is the chief market strategist at Jeffries. So, Dave, you might think all of this is unnecessary, and markets just kind of have to shake themselves out of it. And do you think the events of this week are significant in terms of the falling dollar, rising bond yields and so forth, or no? I think they're very significant, Kelly. I mean, this is a highly unusual risk-off period where the dollar weakens and bond yields rise or at least don't move significantly. They obviously moved a lot lower and then came almost all the way back. So they didn't offset equities like they usually do. But the weaker dollar is a really different phenomenon. And most of the crises where these types of funding facilities would come in that Steve would. was just talking about. They're almost always in an environment where people are running for the safety of the dollar. And you know what? This is maybe, you know, worth thinking about the only

other one that we've seen was in October of 22 with the LDI crisis with the UK, where we've seen the long end have some issues like it's having largely because the marginal buyer is a leveraged buyer and there's risks of trade battle-related selling from our trading partners. So I think the facilities aren't 100% set up exactly in the past for a weaker dollar risk-off scenario, which is probably confusing the markets a little and maybe even confusing the Fed and Treasury. So, David, that's really interesting because I had this weird thought this morning. The swap lines are to borrow dollars when dollars are short. Absolutely. And I try to run through my brain could the fed borrow euros i mean they are by the way by directional it's like we made

the lng export terminals or they import terminals we had to flip around and make of around it same idea i don't know david is there is so i don't i don't think i don't think that's uh i don't think that would be the way i would think about it i think the way i would think about it is the currency policy is probably largely going to be set by the administration and right and the treasury department that's not the Fed's lane. And really, Steve, what I think we're seeing, and what I've been arguing with speaking to our clients about this past week, is there is a cogent effort to kind of take down the mercantiless trading structures

that have been in place for many decades. That's what this last week was about. And part of that involves likely a weakening of the dollar. So I don't know that you want to be changing that. You want to do that in a way that doesn't completely disrupt the bond market or trading partners who have a match. large amounts of dollar securities, which is a difficult needle to thread, no doubt. I don't think we're 100% in that heat of the battle in the trade war where it gets there,

but we should have the facilities there to make sure that something like that doesn't happen. And I imagine that that has been discussed because it did happen in the UK. David, I want to establish a couple facts on the ground as you may or may not know them. Is there a shortage of quality collateral? that's the kind of thing that's caused market disrupts before. Is there a dollar shortage? My read is both no, but do you have any inkling at all? Because that changes the game, if that's the case.

I don't believe that's the story. There may be desires to raise money and sell, but I really think what we're seeing, Steve, is much more of a reallocation away from U.S. dollar assets as the trading landscape is changed. And the trading landscape is that we're, going into a kind of battle, a la what we did in 1985 with the Plaza Accord to say, hey, this is imbalanced. We have huge trade imbalances with Western Europe and with Japan. This time it's with

China. And part of that involves, part of that involves changing the way the currency is manipulated by our trading partners. I don't know if this is hyperbole or not, but somebody described this to me as equivalent to Nixon coming off the gold standard. Okay. So I don't, I don't know if it's that big. I don't, I mean, let's hope it's not kind of in this kind of realm of things. Changing the whole trade patterns in the world. So that's my point. So that's what I want to talk about, David. This appears as though it is a fundamental almost paradigm shift in the making

with regard to how the markets around the world view U.S. dollars and dollar-denominated assets, specifically treasuries. We're talking about the deepest most liquid market in the world for credit and rates here in the United States. yet there is all this talk right now about the luster coming off some of those assets. So all of a sudden we have the dollar index dropping by about 9, 10% over the course of the last two to three months. You have less of a shine for the attractiveness of U.S. treasury debt. It used to be that when the going gets tough, the tough and everybody else get going to the U.S. dollar and U.S. treasuries, is that still the regime we're operating in right now?

So this is not a risk-off scenario where people run to the safety of treasuries or the dollar at this stage. I think treasuries more likely will come around to that if it gets more extreme. But the dollar is a new phenomenon, Dom. And this is really where I think investors have to think about what this particular risk-off scenario is like relative to the ones we're used to in March of 2020 or in 2008, 2009, or even going back to the dot-com crisis where everybody runs for dollars. There is a concerted effort, I believe, to change the global trading landscape. And that is one that has had a weaker remi and to some extent a weaker euro or a weaker, you know, hidden Deutschemark, if you will, underneath the euro, behind it.

And if that's really what we're about to do, which, by the way, I think is a huge home run in the long run for the U.S., the transition is a little messy, the forcing of that. trade will be a little messy. But in the end, if you look at what happened, even with the plaza court, you look at what happened in prior trade rebalancings, this is a very positive sign for U.S. growth and U.S. real returns on capital. Stocks go up in that environment, big. And the dollar does weaken, and it's managed weaker. So I don't know if that's exactly where we're at, but I'm sniffing that more as the trade that the market is focusing on. And as we get closer to understanding how this game is going to get played between China and the U.S. and everybody else will be able to

make a better assessment. David, the Collins comments on the one hand can be seen as bullish in that she's saying the Fed has tools can come in. On the other hand, you could read them as slightly bearish in the sense that we don't want to be cutting rates in response to this. We want to provide liquidity. How do you read it? Does it sound like something that was out there? Was there a reason to do it or was she just stating what we already know? Well, I have to say, Stephen, and you watch this as closely as I do. I'm shocked that since last Thursday, with all the dislocations, what happened in the swap market, days that felt like 2008, some even worse with what happened in swap spreads, basis, and all of the other inner plumbing workings of the treasury market, that we didn't hear anything, anything from senior Fed officials.

A little shocking to me. Thankfully, Susan stood up and said something. I'm excited for that. And I do think they're watching. I think the political charge is just so high between the administration and the Fed at the moment that it's just hard to see more cooperative Fed action early to stem this. I do believe it will be there. I think everybody will come together and know that it's for the right, greater good of our credit markets.

I mean, right now we don't want a high-yield credit market that's completely shut with no new issues. We don't want an IG market that's shut. We want to make sure these things function and that our businesses can prosper inside of the biggest capital market in the world, the U.S. market for debt. So I think it was great that she stepped up. I think the market needed to hear that.

It probably needs to hear a little bit more and needs to hear a little bit about what this is going to be, Steve. Because as you pointed out, and I think it was really good and instructive that you went through that with listeners earlier, a lot of these facilities are built for strong dollar outcomes, not weaker dollar outcomes. And it'd be nice to hear Fed officials talk a little bit about

what do you do when there's a trade imbalancing, rebalancing story that gets a little bit messy in the financial markets. Have they gained that? Have they run that through their risk management and how they think about different shocks that can get the system? I've thought it through, David, and it's very tricky because you could have a situation where the Fed comes in, it is printing money, that depreciates the dollar,

which makes the run on the assets even more. So that's a bad loop you could be in, which means the fed to very carefully. We have to go, David. I'm sorry to reject that last thought. I have so many questions. I didn't even get to talk to Kelly. You didn't need to.

There was nothing left for me to ask. This was exactly the conversation we needed to have, don't you think? Next time, Kelly. Exactly the one. David, thanks. Really appreciate it. David Zervos joining us today. All right.

After the break, nearly every Mag 7 name is set to snap a multi-week losing streak at this point. Is this just a brief reprieve? These names have been mostly negative over the last 10 weeks or so. So keep that in context. We'll be right back on Power Lunch after this. Welcome back to Power Lunch. It's been a wild week on Wall Street, but will it end with gains? That's what we're seeing right now.

The NASDAQ is up nearly 7% over the course of the past week. And Amazon will snap its nine-week losing streak as well. Its last winning week was way back in January. InVIDIA, by the way, is also up 15% this week, but still down 20% this year to date. As investors surveyed, the reality of a trade war, our next guest is looking at which big tech names are the most exposed and which could be

and actually hold up better in this kind of environment. Patrick Moorhead is the CEO and chief analyst over at More Insights and Strategy. A person will talk to about kind of the tech landscape as it's unfolding. And Patrick, I guess the question I have for you is, given everything that we've seen with regard to the damage in certain parts of the technology sector,

Is there any reason for medium to long-term pessimism? It just seems like this could be a blip on the radar right now. Yeah, I think there's a great reason. I don't think the full force of the tariffs from China or sorry, our tariffs on their goods have completely hit home yet. And we're looking at it from two vectors and really fundamental, right? Increased cost of goods from tariffs and increased capex amortization that hit the, hit the bottom line. and then a decrease in consumption from higher prices. And the companies that the tariffs have really not been fully factored in are Apple, right?

If you truly believe that the price of an Apple good could go up by 150% from a cost basis as it comes across the border, that's catastrophic to a company like this. And then you have companies that make notebooks, all companies who are making notebooks, It's built in China, and we'll get hit with the full weight of that. There are some certain sectors, though, that I think midterm to long term are very good. I think the entire AI trade up and down is a good bet at this point. That is not going to change. You will have continued buildouts of hyperscalor data centers and enterprises,

and thankfully, most of those goods are covered by USMC, as they are manufactured in Mexico. But if we see some tariffs on semiconductors, literally all bets are off, and you will be seeing a lot of red in all of big tech. I like the way you put that kind of so binary, Patrick, just to help us all capture this moment. So you say you think you could buy everything in the AI trade right now unless tariffs go on semiconductors and then all bets are off.

That's exactly right. And the reason you're not seeing all the hypers get clobbered is most of their goods are at zero percent tariff because their servers are manufactured primarily in Mexico, which is covered under USMCA. But yes, it will be a very big and deep red scenario if semiconductors are tariffed. Most at risk you think could actually be a company like Apple right now. Is that right? Right now. That's right. Even without a tariff off semiconductors, if you look at, the way that their business is structured and how much of their manufacturing they do in China, we're not talking about a short term, hey, I have to make this shoe in a different country. It might take me six months to get set up to significantly move volume from China to, let's say,

Vietnam could take three to four years. It takes a million workers in China, which, by the way, Foxconn has to import workers, from Malaysia to have enough workers to create those iPhones, it would take years. And the other element of this is it's not just planning a factory. You need the entire supply chain to plant their flags and build their sub-assemblies around that. And that takes years with a product like an iPhone. So Apple is one of the most at risk, both because of the supply chain, also because of there's recession risk here. Least at risk, Microsoft, we've talked about that. The semis, like you said, if they're not tariffed, and then a lot of the SaaS companies you think can kind of skirt this.

That's exactly right. And I keep reminding people that SaaS and software are not tariffed yet. Europe is threatening that they could put a tariff on U.S. services, which, again, would be adding cost to it. But I think now that we're at least talking, with the EU, that's low likelihood. But if you look at the service now, the SAPs, oracles, IBM, Netflix, and Zoom, they aren't going to get, they aren't going to get touched here. And I do like Microsoft a lot. It is the minimal exposure because it has minimal products that it pulls over. It's about 2%. And let's assume all of those are made in China. And they have business services that companies can't turn off, right? You're not going to turn off Microsoft

365. You can't just turn off an application that you've developed to put on top of Microsoft Azure. That's just not going to happen. So it's very durable, even at times like this, in a worst case scenario, that we go into a recession. All right. Patrick, with the playbook, at least for what we know at, you know, 2.20 Eastern on a Friday. Thanks so much. Appreciate it. Thank you. Patrick Moore had, more insights and strategy. After the break, we'll get you the very latest on bond yields with everything we've had to digest the past few hours. But first, as we had to break, this market's not fun in games, especially when it comes to those companies, literally. Mattel, hitting a new 52-week low today, Hasbro yesterday, both down significantly since the tariff announcement last Wednesday,

even with the pause that's since been announced, but also higher tariffs on China, will run through some other key movers and three-stock lunch coming up. Welcome back to Power Lunch. There are stocks, which are still hanging on to about percent and a half gains this afternoon. We've seen things calm down in the bond market, too. Let's talk about whether we can trust that or not with Rick Santelli. He's out in Chicago with the traders. Hi, Rick.

Yes, indeed, Kelly. And very quickly, before we get to CHEM, look at a few charts. Two-year boom versus two-year U.S., and you can clearly see that European flight to safety seems to be more in their own backyard. And two-year or higher, 10-year closed at 4% last week. That is a big move. But the flight to safety that caused it to be in. in the neighborhood of three and three quarters to four percent to begin with made the move that

much more exaggerated finally the dollar index you see that chart starting in o three the reason i started at o three from basically o three to 22 the dollar spent very little time above 100 covid made the dollar expensive okay i'm done chem how you doing buddy all right it's been a wild week okay i know you have thoughts on the vix and its range but if you had to tell your your grandma your mom, to stay calm or be crazy? Like, how are you looking at this volatility? And what would you tell an investor to take away from this crazy week and a half? Look, the biggest deal is what's going on with the long end of the curve.

The reality is we've been talking for quite some time about a stagflationary environment. Why is that populism? If we're going to go out and do protectionism and try and prove median outcomes, which I think we need to. I like where we're going, but I just want to say that I would look at it. that is reversing globalism. You can call it populism, patriotism, protectionism, but what we're really doing is trying to disentangle from some of the global tendons. We can put whatever marketing spin on every one. The reality is... One's negative and one is it?

Sure. I'm not saying a negative or positive, but if we're going to stop going out and globalizing more and we're going to reverse that trend, right? That is inflationary. By definition, because globalization is more efficient, supply chains. Oh, yeah, yeah. Now, everyday low prices was because of low. labor outside the U.S. Every day low prices may not be best, though, for the median person in the U.S. median outcomes for people in the United States have gotten worse relative in the last 40

years. We've had 1.75 percent GDP. You had zero interest rates for 10 years. That didn't put a lot of wealth in their pockets. Well, that was one of the problems. That's what supply-side economics is. If you take interest rates to zero, if you globalize you some money to corporations, what do they do with it, right?

They go send it to China and anywhere else. Now, when you look at the board, you see a full. and a half percent tenure. Does that seem outrageous? Like when you look at that, you go, oh my God, the world's coming to an end, the 10 years at four and a half percent. No, we don't need to be bombastic about this, but the reality is it has gone from half a percent to four and a half. Exactly. And my view is that it's going to go a lot higher, eight and a half, ten, not today, not tomorrow, it will take years. But if you looked at what happened in the 60s and 70s, it was a very similar setup. It was protectionism. It was populism, right?

We had a great society program. We had global conflict, the Vietnam War. And we had China. People couldn't even spell China in 60s and 70s. But the Cold War and the Vietnam War, these things were of results of more protectionism. So if we're going to go to de-globalization, there is a cost to it. But that might be better for us as a country, right? If we're looking to improve median outcomes, the higher tenure is a cost to doing that.

Higher inflation is. What do you think the chances are that in the next year, we're going to make a new all-time high in any one of the stock indices? In the next year? In the next year, if we do it, it will be very short-lived. I think the odds are 10 to 15% percent. Okay, so you basically think the best stays of equities are in the rearview mirror? Not forever, but for the next year, yes. Do you think China should have been challenged by any administration?

Forgetting the politics. Were they in a situation? Simple answer, yes. If we care about our people, you know, the America first policy makes sense. We are a country. We care about our people. That said, globalization is more efficient, and it's better for everybody, maybe not the best for us alone.

That's a perfect place to stop. Really, it's best for everybody, but not necessarily for us. I think that sums it up. Dom Chu, back to you, and see, we are friends after the bell rings. Back to you. Listen, we love Chem and we love you, Rick, obviously. So thanks for the conversation. Chim, Rick, have a great weekend, guys.

We'll see you again soon for the bomb report there. Now, as we hit out to a quick break, a power check here. Oil is actually turning positive on the day. The Spider-XLE energy ETF is turning around as well, coming off its lowest levels since October of 2020. Now, it's been a rough go for the group overall. Occidental Petroleum is 48% off of its recent highs. Devin Energy down by 49% from its recent highs, even oil giant Chevron, 20% below its highs. Power Lunch will be right back after this.

Welcome back to Power Lunch. I'm Pippa Stevens with your CNVC News Update. A federal judge refused to block immigration agents from conducting enforcement operations at churches and other places of worship today. The judge said the more than two dozen religious groups that sued to block these operations failed to prove any legal harm that would justify a temporary injunction. Prosecutors and defense lawyers say former Abercrombie and Fitch CEO Mike Jeffries is unfit to stand trial. They say he has Alzheimer's disease and Louis body dementia. Jeffries has been free on bonds since pleading not guilty last October

to federal sex trafficking and state prostitution charges. Prosecutors say he lured young men for sex in exchange for the false promise to model for his company. And President Trump, through his support today behind a push to adopt permanent daylight savings time and end the changing of the clocks. In the social media post, he called the twice annual adjustment an inconvenience and a costly event for the government. The president is now calling on Congress to debate the topic. Kelly, back on over to you. All right, PIPA, thanks.

Earning season is officially underway with some of the big banks reporting before the bell. J.P. Morgan, who shares are up 4%. Morgan Stanley, both beating on the top and bottom lines. Wells Fargo, fractionally, and the red missed on revenue estimates. And with all the uncertainty we're now seeing, our next guest is identifying which financial names more exposed, maybe more vulnerable than others. Joining us now is Commerce Street Capital CEO, Dory Wiley. Dory, it's good to have you, and maybe you can position this in how you're thinking about the markets more broadly going into the weekend. Sure.

Thanks, Kelly. nice to be here. Obviously, the flagship is J.B. Morgan, and we've got a great number out of them. They had a nice beat. They had a one-time extra deal for the first Republic acquisition. That interest income was up. Investment banking was up 10%. Equity trading up 48%. And the big positive was they were up on loan provisions, which makes the bank safer. One of the things I really haven't talked a lot about is tangible equity in the public markets. I want to bring it up now because I'm very happy where J.P. Morgan is at a 7.8% number. Just as a reminder, that number was closer to 5% in March of 23 when we had the bank failures. So I think the big

banks are looking really good. It's a good trim for all of them. And they're well positioned to move forward. Is it weird? We're talking about how well positioned the big banks look while also talking about recession risk, awful consumer sentiment, whether the Fed needs to do more to support a falling dollar than a strong one, all of these things that are usually more symptomatic of weak economy and weak financial markets. Well, you know, as a bank analyst, it's pretty easy to get negative about things, but I'm not sure where all this recession risk is really coming from. You know, banking is the plumbing and wiring of the economy and the banking looks really good, big banks, and small banks. Now, we all have this question mark about tariffs and what that's going to do.

And the market decides, hey, the tariffs equals inflation equals, you know, problems. And so I'm not sure, that we, I'm going to buy that. The market seems to remember only one thing with tariffs, and that's smooth holly. And I think we need to just go back as recent as 2018. Trout puts in 25% tariffs on China. The market adjusts for a little bit, gets a little wacko, and then it's up 31% in 2019. I think we're going to be just fine. China's having obviously a rough reaction here, which tells us a whole lot about the real intentions here versus all the rest of the rest of of the world. And Dory, it's Tom, I'm an optimist as well as you know. We've talked over the years a lot. I wonder in this kind of an environment, where is the opportunity being optimistic about where the

markets are? You know, there are opportunities. Let's start with data, right? Anytime you get a fix of 40, your odds of making money really go up in a one to three year period. Short time, it's hard to time the market. But if that bix goes over 40, you buy your favorite stocks. And when you do that, your chances of recovery really go up. Over a year period, you chance of return is a 20 to 70 percent. I like to think three years just to give me a cushion, and 50 to 80 percent returns are on average. So I think 1998, 2000, 2011, 2020, those kind of markets. And so unless there's something fundamentally wrong with the economy or the end or that company, buy your favorite stock.

So a perfect example is Navidia. Right? You know, we've done the analysis. You've probably had people on about the effect of tariffs on NVIDIA and they're less than 5%. Some are saying less than 2%. That stock drops down where it is now and back even in the 90s, you step up and buy that thing. All right. Dory Wiley at Commerce Street Capital. Thanks very much for the thoughts. Have a nice weekend, sir. You too. All right. Coming up on the show, our trader has three names to ride out the tariff uncertainty. Three stock lunch coming up after this. Welcome back to Power Lunch. It's time for three stock lunch. We asked our trader for three names that investors should buy right now amid the recent volatility in the markets and tariff turmoil. Let's bring in Matt Maylee, Chief Market Strategist over at Miller-Tayback. Your first buy is a beaten down one, Chevron. Those shares have fallen 19% just since April 2nd. Matt, why Chevron? Well, it's interesting, too, because the stock was downgraded today. I know on the street, but, you know, the stock is getting very, very oversold on a technical basis. And so is crude oil. And I just think that, you know, the stuff that's going on with OPEC has been largely priced in.

And I just don't think we're going to get the drill baby drill here in the U.S. that the president is hoping for it because it's just not profitable for these companies to do it. And then, of course, I'm a little bit worried about what's going on in Iran. And that, you know, that issue is not, you know, it's not getting the headlines that it usually would get. But I still worry that that Israel is going to strike Iran. And if they shut down the straight of our moves, we have problems there. But more importantly, I mean, they've done some great cost cutting this year. I say, great.

I'm sorry people about to lose their jobs. But they're cutting costs. The stock trades at 13 times earnings. And they pay a very nice, juicy 5% dividend yield. So it's something that will pay you while you wait during all this market volatility. All right. Another name you think people can pick up is Pfizer, which is down 18% this year, 31% off the recent high. The dividend yield is nearly 8%.

Exactly. And kind of the same type of thing. As you can see, I'm kind of doing some defensive names here because I'm still worried about all this volatility. And I think the market could fall further here. And I don't know that we've actually seen the lows here. But you mentioned it's down 18, 19% this year, down 65% from its highs, very oversold and an RSI below 19, relative strength index. But, you know, some of their drugs, their heart drug, their cancer drug, doing very well. It continues to do well. or they have continued to do well, I should say, and should do going forward. And not on top of the 8% dividend yield, stock's just trading at 7.3%. So it's a nice, a nice cheap stock. All right, Matt, so we got Chevron, we got Pfizer. The final one is one that you can argue plays offense and defense. And that's Amazon. The stock is actually rallied over the past week up nearly 8%.

And it's snapping a nine-week losing streak. But Amazon's an interesting pick here. Tell us why. Well, I mean, first of all, you know, there's, concerned, of course, about the consumer, and we had another consumer confidence number that was concerning today. However, you know, I think we all know this is much more than just a consumer company. I mean, there's AWS. I mean, the cloud part of the business is, it remains very, very strong. Revenue's going to be up 17 percent this year. And it's one of these companies. I mean,

Palantir is one, but I think this is another one where the return on investment they're going to have on the AI is going to be a lot better than it is for, say, like a Microsoft. You know, the stock is trading it 25 times earnings, which doesn't make it wildly cheap, but it's still a lot cheaper than it was and still very reasonable. But I also think I like the idea right now, something we did in 2022 during the bear market, is going to stocks like these and buy them once or twice a month, every month for the rest, I'm sorry, yeah, every month for the rest of the year. And your average price at the end of the year is going to look really good three years from now. And, you know, it's impossible to catch, you know, get the exact bottom on the stock.

But this is such a great franchise, such a great company, such a great man. I think you play it like that in a gradual way, you'll do very, very well. The DCA play, Kelly, dollar cost averaging. Matt Maley with the three-stock lunch. Thank you very much. And remember, folks, you can actually recap every three-stock lunch that we have out there anytime you want. Take a moment. Check out the QR code on your screen right now.

It's up there for all of those CNBC pro subscribers. Go to CNBC.com slash pro for more. And ahead, CNBC is out with our official list of the most valuable franchises in baseball. If you're sick of the stock and bond markets this week by a sports team. We'll reveal the team taking the top spot next. All right, welcome back to Power Lunch. CBC is out today with our official MLB valuations list, the most valuable teams in Major League Baseball.

Taking the top spot this year, drum roll, please, no surprise at all. The New York Yankees worth a whopping $8 plus billion. They are followed by the L.A. Dodgers, the Boston Red So, the Chicago Cubs and the San Francisco Giants. Joining us now is the man behind our evaluations list, Michael Ozanian, CNBC's senior sports reporter, also Randy Levine, president of the most valuable team in baseball, the Bronx Bombers, the New York Yankees. I'll send it over to you, Michael.

Hey, gang, yeah, it's not even close. The Yankees are baseball's most valuable team by a mile. And I'm with Randy Levineers. the president of the Yankees. First thing I got to ask is, Yankees back in the World Series last year, how important is winning in the playoffs to the business of the New York Yankees?

Great. Good to see you, Mike. Welcome to Yankees Stadium. It's important. It's part of what we strive for every day, you know, from the days of George Steinbrenner to Hal Steinbrenner, the entire Steinbrenner family,

and each of us are work here. You know, the Yankees are about winning. The Yankees are about tradition, a standard of excellence. So we put in everything we can to try and win, try and hang in there, overcome injuries and all the normal stuff that all teams go through.

Winning is important. Being in the World Series was about a year for us. And 27 World Series, by far the most in baseball, makes me think of building the brand. The Yankee brand, of course, isn't just the strongest brand in the U.S., but it's known globally. Has that helped you build the business

outside of the U.S. of thinking of brand extensions like legends direct investments in some of the sports teams like a c milan a hundred percent uh you know when uh george slimebrunner hired me way back in 2000 he said i got a great baseball team i want to build a sports and entertainment company and we've been successful we launched the yes network we launched legends hospitality which is now of course merged with uh asm into one of the largest uh hospitality and we've been successful and sales companies in the world, who does business all over the United States. We have attractions business.

We're partners in two great soccer teams. New York City Football Club here with City Football Group and A.C. Milan, one of the great brands in Europe, with Redbird. We have partnerships with the Hard Rock Cafe and many, many other companies because the Yankee brand is very substantial. It shows commitment. it shows excellent and people want to partner with us sometimes i don't think people give the late george steinberg enough credit he was ahead of the times when you think about what he was doing way ahead

uh you know with the yes network for instance you know people always see him on you know remember from being changing managers and all that sort of stuff but can you give us a little insight in terms of what he saw in the future and how he helped the yankees sort of lead the pack on the business side he had the best instincts of any businessman i have a He could see the future, and he would take risks where other people wouldn't take risks. And he was the boss in every sense of the word, but he was not afraid to delegate, and he only insisted on having good people around him. You know, House Lundner is the same way, and he trusts people who he hired to do the job.

And I was very fortunate to be one of those people. Hey, Randy, it's Dom over here. I just want to say thank you for kind of bringing us the story. It's been over a decade since the first time we chatted. And back then, things were very different for Major League Sports franchises. There wasn't the kind of international expansion and moves towards other sports that we've seen. I wonder if you could tell me a little bit about what you're seeing for Major League Baseball and other Major League sports when it comes to America's position in expanding its pro sports leagues across the world and whether or not there are headwinds. now. Yeah, I think, thank you. It's a great question. I think it's basically emerging. You know, you saw recently we played games in Tokyo, the Dodgers and the Cubs. It was phenomenally successful. We were in London a few years ago. Hopefully we go back to London very soon. Very, very successful.

I think the World Baseball Classic has done a good job in making baseball much more known internationally. We have home run derbies that we take to every city. So I think it's important. I think people get adjusted to the game. The world's becoming a smaller place. So I think it's only going to grow, really going to grow. And down the road, who knows, maybe there'll be a baseball franchise outside of North America. Randy, it's Kelly.

Just to build on that, have you seen any upset in ticket sales because of all the economic uncertainty? No, we really haven't at all. I think that, you know, we're doing great. It's very early in the season. This is our second homestand. But I think it'll work out. I have great faith in the president and his strategy. I think he's going to get us where we need to go.

All right. Today's the first day the torpedo bats go on sale, right? How do we think they're going to do? I think the torpedo bats are going to do huge. They've been very successful for some of our players. And I think our fans want to be the first to get in on us. I love it. Michael Ozanian, Randy Levine, I was going to ask about the torpedo bats.

Michael, I'm glad you did it as well. Thank you both for joining us here from Yankee Stadium. Maybe Michael will buy you one and take it back to the stadium. Please, Randy, give Mike a bat for me a torpedo bat. Thank you very much, guys, for you both. You got it. Have a good weekend. Yeah, you too.

And by the way, to see how your favorite team stacks up in these franchise valuation rankings, you can check out the full valuations list over at CNBC.com forward. slash sport. It's an amazing kind of story, the way that you kind of look at the way things have developed for sports all over the world and just the moves that we've made from a major league franchise. No, I think your question, though, is appropriate. Like, is there going to be any blowback or not? But the torpedo bats is also so. The backstory to that is amazing. You're a nerd just like I am. I want to see what the physics are behind it. Not just that, but the fallout now, now that they're introduced into the league and how does everybody else adjust

and the MIT guy who helped come up with it? You know me. I'm focused on the masters right now. I know. Anyway, thanks very much for watching. Power Lunch, guys. I hope everyone has a great weekend out there. We'll send it over to closing bell with stocks pretty much near session high. See you Monday.