Power Lunch - Dow slides, S&P 500 fights to stay out of correction territory 3/18/25

Episode Date: March 18, 2025

Stocks are pulling back some today, as a sell-off that’s engulfed Wall Street in recent weeks resumes after two straight winning sessions. We’ll tell you all that you need to know. 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, everybody, alongside Kelly Evans. I'm Aiman Javers, and we have a lot to talk about over the next hour. Jensen Wong's keynote speech at Nvidia's big event taking place right now. We're 24 hours now from the Fed decision on interest rates, and Google is trying to make its biggest acquisition ever. But will the Trump administration allow it? That's the $32 billion question today. But Kelly, we've got to start with another down day for stocks. Let's have a look at that, Aman Thanks.

after a strong two-day bounce back, we're giving back some of those gains. Dow's down about 275 points right now, and you're seeing about a 1% drop for the S&P. 1.7% for the NASDAQ and Nvidia is falling. More on that in a moment. We're also seeing declines in Tesla and App Loven as those momentum names continue to struggle. Tesla is down more than 5% today. And we're paying particular attention to Reddit. Something else going on here for sure.

The stock spiked late yesterday on a Reuters report. They're expanding their partnership with Google, a short time, later the stock began to slip, and Reuters eventually retracted the article, saying it was based on old news from February of 2024. Those shares are down almost 13% today. Also, check out gold, another new all-time high above $3,000 an ounce there. And copper at its highest level in two years, traditionally seen as a positive economic bellwether. We'll see whether that's actually the case this time around, or if it's up for other reasons. Is today's stock market sell-off simply because we had two big days in a row or are concerns about tech remaining? We've got the

Fed tomorrow as well. Here to talk about more. Let's bring in Keith Fitzgerald of Fitzgerald group. And Key, the great person to check in with today, as you've loved some of these big momentum names for the past couple of years. So how are you thinking about the market more broadly? Well, I'm still very favorable on the names, but admittedly, I'd be lying if I said I wasn't frustrated by the action. But this is all computers, algorithms, and equity beta at work. The average investor needs to take a deep breath, focus on the fundamentals, focus on the things that Jensen Wang and others are talking about. And move forward. forward. So you say move forward. Does that mean you're taking the entire sell off in stride here, Keith? Are you adding to any of these positions or changing the portfolio around it all?

Well, I may live to regret it, but I'm adding to every single one of these names over the last week. I hope I'm going to be doing it towards the end of this week. Because to me, I have a three, five, even a 10-year horizon with these names because I think these companies are dramatically undervalued right now, as hard as that is and as unpopular as that opinion may be. Yeah, yesterday, Keith, we're talking about. stocks that were oversold, and I guess undervalued is the flip side of that. And I wonder as you go shopping here amid some of the wreckage, how do you suss out which ones have some more downside and which ones you think might start to turn around here? Well, that's a, I mean, that is the question of the day, right? And so the way around that is to change up your tactics. Maybe you slow down and you're buying a little bit. I'm not so concerned about picking the bottom as I am picking a bottom or just an entry point. So the worst is selloff, the more attractive it is to me, because I know that technically what the computers are doing behind the scenes is pushing many of those

same buttons. So if I can fight back against that, quality CEOs, quality products, customers running to them as opposed to away from them, those are points of interest to me. But none of the reasons for the sell-off have gone away, right? I mean, the Trump tariff picture is still very confusing. The situation in AI is still unsettled, right? All the things that cause the market to start to sell off earlier in the year, those factors are still here.

So as you go shopping and as you say, you're looking for those sweet spots, how do you reckon with the fact that the overall pressure on the market hasn't gone anywhere? Well, you nailed it. Uncertain. I mean, that's the key, right? Traders hate uncertainty above all else. So if they have certainty, it doesn't matter which direction you're talking about up or down. They can make a move. But they can't right now because they don't know. Now, I think we're going to have a solution to the tariff problem within two, three weeks maybe, maybe by early April, because we're going to see some certainty return to the markets. We're going to find out who's bluffing, who's not. We're going to find out what the administration wants, what other administrations want. And then again, the companies, the best business cases in the world, AI, automob full service driving, any of the things Nvidia is playing to, those trends are not going away. Neither are those themes. So trillions of dollars are still going to be spent. So as I sort this out, I'm looking at where is it going to get spent? Who's likely

to benefit and whose wallet's on it? What about Tesla, Keith? Oh, my goodness. I love to hate that stock at the moment. That's not the reaction other Tesla shareholders wanted to hear. The guy screams when you ask him about the stock. It's generally not a good sign.

Well, it isn't. But again, you know, I think if we look at FSD, we look at autonomy, we look at all the things that Tesla is involved in. If you take Musk himself out of the equation for a few minutes, you can't deny that that company continues to change the planet. So this is one of those moments where I'm going to hold my nose. I'm going to continue to wait in anyway. I hope that I have enough shares at the end of the day. Keith, just a final comment then. Do you think that nothing fundamental has changed for the company?

I mean, we talked to James Chukh, last hour, who used to be a big shareholder, but he said he just doesn't. see the growth there anymore. Well, if I viewed Tesla as a car company, then I think that's a fair statement. But I haven't viewed it as a car company for a long time. I think the parallel for Tesla, in my mind, is more akin to where Apple was in 2014 when it introduced services. And all of a sudden we have services at $100 plus billion a year run rate now for Apple. I think with full service driving, robotics, robotic taxi, there's obviously a lot of challenges ahead. But that's the parallel here, not the fear of deliveries that everybody else is so focused on. All right, Keith, thank you.

Appreciate you joining us. Keith Fitzgerald of the Fitzgerald group. I love what Keith said about uncertainty, right? You always hear that, but uncertainty is the human condition, right? There's never certainty. Right. That's the problem. Yeah, it's tough.

Invidia shares, meanwhile, under pressure as Jensen Wong is delivering his keynote at the GTC conference in San Jose. Joining us now is our own, Christina Partsenevolos, live from the GTC event. She's got more details. And also with us is Daniel Newman Futurum Group CEO. Christina, let me start with you because I saw you earlier in the day out there with Jensen himself. He was handing out hot dogs. You were trying to get him to talk. Did it give you anything in terms of what to expect here?

What's he actually saying? He was handing out some sausages with his pancakes and it was the full stack as they like to joke around here. A technical term. But yeah, I get it. Get it? Yeah, okay. But what he did say is that there's going to be a lot of surprises that Wall Street wasn't expecting. And to be frank, so I've been listening.

to the speech for the last hour. And if you don't follow this company closely, it is very technical, a little bit more difficult to understand for somebody that's just maybe trading in and out of this name. Jensen Wong, the CEO, did say that he is doing this entire speech, unscripted, no prompter. One of the pieces of news that he just came out with is saying that they are creating an autonomous vehicle with GM. So he, and I quote, he said, the time for autonomous vehicles has arrived. And so that's why you're seeing mobilized. Their stock is at actually dropping on that news. Mobile Eye. Intel has a big stake in Mobile Eye. MobileA makes a lot of the autonomous design automation systems in the cars. And so that's why you're

seeing a negative reaction because they've just announced a partnership with GM. Yeah, that's a bit of news right now. Yeah, I wonder what that means for Tesla as well. And we're just talking about Tesla in the last segment. Daniel, give us your sense. I mean, Christina's describing a technical insider type of speech here. Is that what the market wanted to hear today? The market was. The market was was going to look for some reassurance that the Nvidia trade, the AI trade, expanded beyond the data center. So over the last couple of years, it's been all up into the right, even though the stock has sort of moved

sideways for a little while. Invidia had clear momentum, clear market share for the data center. But over the last couple of keynotes, you've heard Jensen pivoted posture. We're seeing over the last few days, AWS, Google, and others talking about their own AI chip ambitions. We've seen OpenAI do the same as well as meta. Jensen needed this keynote to come out and talk about

automotive. It needed to talk about physical AI. And he also had a big part where he talked about partnerships with companies like Cisco and expanding into the enterprise because right now they have the data center market. It's growing and they certainly have a big position there. But I think that's going to change with these new XPUs. And he needed to show investors and customers that their technology is sticky and they're going to continue to lead the market. So you say they need to expand beyond the data center. Christina just told us they're expanding into the automobile with the GM deal that they just announced. Is that enough of a hook? Dan, annual for investors?

Well, they've been in automotive for a while, and then they started to see market share to companies like Qualcomm, but over the last couple of keynotes, especially at CES and now here at GTC, we're seeing Jensen shape his story a little bit differently. And here's the important thing for investors is while we're in this kind of panic inflection moment with tariffs and everything else is the AI trade is rock solid, this trillion dollar of expanded Kappex spend, and it could be all AI chips. This is a massive opportunity. And even if Nvidia seeds a little bit of share in both data center and beyond, it has a big opportunity.

My take is it's cars, it's humanoid robots, its edge, and its enterprises. Jensen has been clear that that is there to be taken. The question is whether investors are buying it. I'm still looking for those proof points to show in the revenue, but right now it's looking good that he's getting that story out there. Christina, anything you'd add to that? I would say that you've almost seen a shift in tone from the CEO of Nvidia and it's become more defensive, that their chips are going to be more relevant than the next step of large language models

that encompasses reasoning and as you go up and it gets more and more complicated in terms of how they're training with synthetic data. He wants the audience to know that they are going to be used for those processes. Why? Because there's a concern that all of the hardware, there's so much money being spent at the moment and that eventually there'll be a digestion period

and then that's when you'll have the cyclical nature of the chips world, you know, following through. But to the point that was just made, agentic AI, this is a quote that's coming up from Jensen Wong, as a result of reasoning, is easily a hundred times more than we thought we needed this time last year. If you don't understand even that sentence, all you're saying is that there's more compute required than initially thought,

and then that means there's going to be more demand for those chips. If you believe that narrative in a few years, that there's going to be a return on investment, that everybody's going to keep buying every iteration of chip coming out each year. Christina, what about these humanoid robes? We just heard Daniel talk about that market and, you know, as another potential leg up for the future. You know, I'm waiting for my own personal C3PO. If it can fold laundry and empty the dishwasher and all that stuff, I will buy one.

But is that a real market? Not within the next five or ten years. The same thing with quantum computing. I'm sure he's going to talk about that. We know that last time he said it was about 15 years out, and that created a negative reaction. This time around, I'm sure the choice of words will be a lot more positive. but these are longer-term goals. And so for people that watch our network,

they're focusing on more unfortunately the near-term and how is this going to keep the magnitude of the data center beats, the earnings beats going and keep gross margins in the mid-70s, which is still incredibly impressive for a company. But I don't know if the humanoid robots will be an immediate source of revenue within the next even five years. And Daniel, given that, what do you think of shareholders are going to focus on in the near term. Yeah, I think they're going to continue to focus on how this

data center transformation takes place. I think this XPU-GPU conversation, I think Sundar Pichai's comments yesterday about the TPU and the New York Times, I think AWS cutting its pricing aggressively on its newest chips. Everyone wants to see return on AI investment. That means consumption, Kelly. And right now, the spend in CAPEX, it's pretty safe. And I actually think InVIDIA will continue to benefit from it. But I give it another 12 to 24 months, and if people aren't able to start to measure these returns on investment, and this is where I think Jens is really focused on enterprise, really focused on new revenue streams, because this KAPX thing could slow down. But I think this deep seek moment, this 100x, I think it's 1,000x.

And I actually think it will continue to grow. It's a good buying moment, in my opinion. Christina, I'm going to ask you an unanswerable question, which is part of the value of having reporters who are at these things is that, you know, you pick up on the vibes and the mood in the room and sort of what the feel is at the place. And, you know, you've been circulating around that event all day. How is this event different from what we've seen in the past? Are you picking up any change in the mood of people who are there? I would say that there's more people this time around and just based off of the difficulty of me

trying to book a hotel room being priced at $1,200 bucks, way more security, hence the reason why we're outside as opposed to being inside. in terms of celebrities. Last year I got a great video of Kendrake Lamar, George Lucas, Ashton Coucher, all of them walking out of the stadium in a line. And unfortunately, this year I'm not going to capture it. I've only been told so far, Will I Am is here in terms of celebrities. In terms of the actual excitement from the people, yeah, I had some meetings last night.

People are excited. I just, for those that are watching our network and maybe trading on the name, I think there's a little bit less excitement about how much can, you know, really change. And with CES, there's a lot that's already been fed into the market and possibly a lot that's already been priced in. You can see the share down on a 3% now, unfortunately. Well, Christina, if Ashton Coucher does show up, I'm sure you'll be the reporter who gets the exclusive. Thanks for all of your intelligence on the ground there. Christina Parks and Nelblos. And Daniel Newman, thank you to you as well. And coming up after the break, we turn to the Fed.

Their decision is now less than 24 hours away. But what's the right call and what money? we hear from the chair himself. We'll ask this month's mock Fed chair about that next. Welcome back to Power Lunch. The FOMC begins its two-day meeting today. So that means tomorrow we get the decision. Of course, no change is expected. We convened our mock Fed panel, and there were six votes for that. Don Peebles remains the loan dissenter, saying the economy needs a half-point cut. Claudia Somm says not enough progress is being made in the fight against inflation to cut at this point. Representing the panel is Paul McCulley. He's the former Pimco chief economy. You get to be the Fed chair today, Paul. Welcome. Only on TV. You just play one on TV. So what kind of tone

do you think he'll strike in the presser? Because that's where the market's guessing game is really going here. I think he's going to strike the same tone that he did Friday a week ago, which was on the eve of the blackout period, when he said the economy remains in a good place, still in a good place. But he also said we have, as everyone knows, very elevated uncertainty. So his conclusion was, we're in not a hurry. There is no hurry for us to do anything and that he wants to, as the incoming data comes in, both on the macro side as well as on the policy side, to try to separate the noise and the signal and that they will react in the fullness of time, but time is not yet.

full. So I think tomorrow he will basically reiterate what he said 10 days ago eloquently, but also not try to provide a whole lot of new information because he really can't at this juncture because this uncertainty is not just a cliche. It's real. Paul, let me ask you this. Our Steve Leesman was on Squawk Box this morning and he was talking about the idea that the Fed just kind of has to tread water, as you're saying, because they have to wait to see what the impact economically is of the tariffs, which is so difficult to game out in advance. And so they have to wait and see what the impact is and then react to that impact. So you're looking past April 2nd, maybe weeks, months to analyze what the impact is. As we wait for that to happen, what does the

Fed look at? How do they tease out what that impact is as that process is playing out as they make their decision? I think they're looking at the same thing that we are in the marketplace. And right now I would zone in on the divergence between the sentiment data, which is also called soft data and the hard data. The sentiment data has turned very negative, but the hard data is still in a good place. So essentially, I think what they're looking at for signal is the soft data, going to get into the hard data put differently,

are people's foul sentiment going to lead to negative action in the real economy? Or will they just remain in a foul mood but keep on getting on? That's what he's going to really be focused on. Does it usually lead to that? I mean, have you ever seen in your career situation where people are in a foul mood, sentiment turns south, and yet the economy, continues to chug along and shrug that all off? We saw that in the last couple years where it seemed like the entire community was putting out

the landing lights for a recession, but like, you know, it just didn't happen. So, yeah, you can have divergences in sentiment and hard data, and we've had them historically. they tend to come together when you have a shock of some nature. And that's a fat-tail risk that we have right now, that you have negative sentiment, and then you get a policy shock that confirms the negative sentiment. And then it quickly turns into the hard data going south. I just described a recession by the way. Maybe those recession calls were just a little early.

There is that risk, but it doesn't have to be the case. And it goes back to Paul Samerson's one-liner of, you know, decades ago that the stock market is forecast nine of the last three recessions. So I think there is that, you know, sort of notion that sentiment is what it is, but the real world is different. But there is the possibility that they come together if you truly get noxious and toxic. type of policy, not just the uncertainty, but the policy itself. But you're June for a cut potentially, Paul? Yeah, I wouldn't think before then, because we really won't get enough information on this sentiment to hard data until then. And I think it's also when I look just at the pattern of how

the Fed behaves, June will be the next SEP and dot plot. We have it every other meeting. So we will have that tomorrow. Then you won't have it in May. And then in June, we'll get more information, but they'll have to put pen to paper and put out a new dot plot. So that's when I'm thinking in terms of the soonest. And it will depend. I'm not pounding the table.

They're going to ease in June. But that would seem to be logically the time. If the data confirmed that it needs to ease, that it would actually ease. In fact, I think probably Chair Powell spent a good chunk of tomorrow explaining the SEP and the dot plot. He said before that he has a love-hate affair with the dot plot. Sometimes it's useful and sometimes it's a real pain.

I think he would probably be in the hate camp tomorrow. Because the Fed's got to put down numbers on things where we all have no conviction about the short-term numbers. All right. Sometimes we hate it, too. No, we love it. I'm not in the hate camp. I'm never in the hate camp.

We always want more information. Paul, thanks very much. Good to have you on today. Paul McCulley, former Pimpcoe chief economist. And coming up, an industrial revolution. Our next guest says to play it safe

due to recent volatility, market navigator. And welcome back to Power Lunch. Quick check on the markets right now. We are down 229 and change. So trying to get a little bit of rally here in the 2 p.m. hour, but not much going on there. With all the volatility in Wall Street in recent weeks, many investors are looking for a safe haven and a place to ride out the storm.

Now, my next guest has some thoughts on that. Joining us now is Katarina Semenetti, a senior VP and private wealth advisor at Morgan Stanley. Katerina, you like the industrial sector. Is that right? Yes, we do. Industrials is certainly an interesting sector to watch. It is one of the few sectors that can actually benefit positively from this tariff regime. And as investors are desperately looking for safe haman amid the tariff news, the immigration enforcement, Dodge, this is one of the sectors that performed well throughout the year, where companies have positive cash flow, strong balance sheets. And what we're going to see as the tariffs are actually implemented

is higher pricing power and more demand. And specifically within the, industrials, the HVAC, electrical equipment, and lighting companies stand out. And as the infrastructure build out continues in this country, this is regardless of tariffs, regardless of economic policy. This is absolutely one of the top sectors for us to focus on this year. Give us a couple names. What would you be buying here? Well, while I cannot really comment on individual names, you know, the factor that I'm going to share with you is that industrial companies are one the few companies that actually showed positive earnings revisions this year. And this is not something that you can say about a lot of names in SNP. You also like a couple of other areas, though,

utilities and energy, I read, are hot for you. Explain that. Well, absolutely. We're playing defense. And as we're looking at this market, the game that we played last couple of years, focusing on the high-tech names, focusing on AI and the productivity, not that it's going away, but the leadership in the market is changing and the market participation is broadening. So in order to give investors that protective portfolio that is going to get them through this volatile market, and by the way, our base case for the market towards the year end is $6,500. But before we get there, we have to get through a lot of volatility. And that's where the names in energy, in infrastructure, in industrials, that's when that defensive positioning makes a lot of sense with the portfolio.

So no specific names, but give us a hint, types of companies in utilities and energy that you might look at. Type of companies that are competitively positioned, types of companies that will do in the variety of economic environments. When you're looking at the business models right now, the most important part to consider is how these companies are going to be affected by tariffs and also whether there is a dividend yield component when you are buying the stock. Because for the portfolios right now, is that quality, diversified portfolio that makes sense. And soon enough, there is going to be plenty of buying opportunities. We're already seeing them there. And as growth is coming down, we're going to be building up the growth exposure in our portfolios in time, but we're not quite there yet. Katerina, good stuff.

Thanks so much for being here today. Appreciate it. All right. Amen, thank you both. Alphabet making a deal to acquire a cloud security firm, Whiz. All it took was an extra $9 billion. a new White House, and maybe a total shift in regulatory policy. We'll discuss with the DOJ's former antitrust assistant AG Jonathan Cantor next.

Welcome back to Power Lunch. I'm Angelica Peebles with your CNBC News Update. The White House said this afternoon that President Trump and Russian President Vladimir Putin agreed to a limited 30-day ceasefire in Ukraine on energy and infrastructure. The Kremlin says Putin immediately gave the Russian military the order, but it's not clear yet if Kiev will accept the terms. President Trump and Putin also said talks to achieve a permanent peace deal would begin immediately in the Middle East. The Israeli military says it intercepted a missile launched from Yemen today, hours after Israel resumed airstrikes against targets in Gaza that local officials say killed more than 400 people. Israel's foreign minister says the fresh attacks are not a one-day operation and that the military operation in Gaza would continue in the coming days. Paid music streaming subscriptions hit the $100 million mark in the U.S.

for the first time ever last year, according to new data from the Recording Industry Association of America. Despite hitting the milestone, the RIAA said streaming growth actually slowed in 2024, continuing a trend over the past five years. Amen, back to you.

Angelica, thanks for that. Now to a big deal in the tech space, Alphabet, agreeing to buy cybersecurity startup whiz for about $32 billion. That would be the company's biggest deal ever, the all-cash buy outcomes, after WIS rejected a bid from Alphabet last year due to concerns that the deal wouldn't get approved. Will it be different under the Trump administration?

Let's ask Jonathan Cantor, former Assistant Attorney General for the Antitrust Division and a new CNBC contributor. Jonathan, welcome to the team. You are the second best guy to have on this topic today. Maybe somebody in the Trump administration would be at the top of the list, but you are as close as you can be to this question without being in the administration, given your experience. The $32 billion question here is why does Google think they can get this approved by the Trump administration? What do you think? So that's a lot of billions. So let me say this.

I think if this hit my desk at DOJ, there are three fundamental questions I would ask. First is why. Why are they spending $30 plus billion with over 30x multiple? What's the strategic rationale? And the DOJ is going to dig into that along with foreign regulators. They're going to try to understand documents, data, and talk. to witnesses. Second, data, and I think this is where the rubber is going to meet the road on this deal. Google's mission is to organize the world's information, gauge user engagement,

and then sell ads. But from my perspective, the regulators are likely to ask whether this is a Trojan horse for Google to get access to data that is increasingly becoming out of its reach. The open internet was really easy to organize the information. The cloud-based internet was a little more difficult and now are moving to an AI-based internet. A company like Wiz has the ability to look under the hood and surveil and take inventory of what's happening in competitors' clouds. And because Wiz is multi-tenant, it's going to give Google a really interesting look at the data of rivals, which could affect a lot of its core businesses.

You mentioned size. Yeah, I was going to say real quick, you mentioned size. We've got a graphic here showing the size of Google's previous acquisitions, and this WIS deal dwarfs all of those at $32 billion. It's much, much bigger than any of the previous deals. You see them all there, you know, 12.5 billion, 5.4 billion, 3.2. You know, this is way off the charts in terms of the size of the acquisition. I interviewed Andrew Ferguson, the new Trump head of the FTC, last week on CNBC.

And he said that size is one thing that they're going to look at. It's not determinative. It doesn't mean that you can't do a big deal, but it is. one factor here. What's your guess about whether this deal can get through the Trump administration? Well, I don't think the Whiz deal is going to ease on down the road to quick approval. I see what you did there. I did, yeah. It's going to be a long road. They're going to have to look at a lot of documents, a lot of data, and understand whether it's really going to entrench Google's market power in a lot of different markets, not just in cloud, but also in its data and its

core search markets because of its access to data. The irony of some shareholders are a little frustrated, Jonathan. They go, look, they're their third place in the cloud. They're at 12% share. Is this a move of desperation? Would they have been better off buying something in the AI space? I mean, look, I used to use Google all the time, and now I've switched a lot of my usage over to chat bots,

to Grock and to chat GPT. So it's interesting that the regulators will look at this from a sort of, what are they up to point of view, and shareholders are like, please tell us what they're up to. Yeah, I think the reality, is that Google's still dominant in search and it's still dominant in advertising, a lot of different advertising segments, among others. And so really, again, I think regulators are going to understand the impact on its cloud business, where it's lagging. And I suspect Google thinks that if it can

keep this focused on just on its ability to compete more aggressively against Microsoft and Amazon, then it should have an easy path to approval. But if the investigation turns into an assessment of whether it's going to have data that entrenches its position in some of Google's core markets, including advertising, including search and others, then I think it's in for a long investigation and perhaps it could take quite a while to get approval, if at all. We should be clear for everybody that, you know, you were a former Biden administration guy, so you're looking from the outside in now on people who are doing a job similar to the one that you did.

But you and I have talked on the phone about this in the past, you know, this idea of conservative populism not landing in terms of M&A and antitrust all that far from where the Biden team was on this. Talk about conservative populism in the context of Google. It seems like if anything, big tech is right at the top of the list of suspects if you're a conservative populist. It's amazing, actually. Here in Washington, it seems like the parties can't agree on anything. But the one thing that seems to create this sort of unity is antitrust and antitrust around big tech and antitrust around big tech and Google. It seems to be. seems that Republicans and Democrats have all converged on the importance, the need to do something

strong here. It's in many respects seen as a backstop to companies getting so big that they have the power of governance, governments. And that's a concept and a premise that really resonates with conservatives who are fearful of concentration of power. Yeah, Andrew Ferguson, the head of the FTC, told me last week that he sort of had this moment of clarity on antitrust when he was working on Capitol Hill and he saw what in his view was a unified corporate response on things like masking and vaccines and the election during

the pandemic. To him, that indicated a consolidation of corporate power, a lowering of individual freedom, and that's something that he's on the watch for now. Yeah, and I think the interesting thing is it's now mobilizing Democrats on the other side. I think seeing the site of seeing the tech CEOs, you know, warm and cozy inside the Capitol or aetunda during the inauguration really energized and concerned Democrats about the concentration of power among tech. And so again, I think this is one area that's not going away. And whether or not it manifests itself in a deal like WIS being blocked, I think is to be

determined. But I do, I was not surprised, I heard your excellent interview and I was not surprised to hear Chair Ferguson talk about the increased scrutiny on big tech, which I expect to continue you both at the FTC and the DOJ, and in addition, at regulatory authorities abroad, including in Europe. And so that leads me to the following question, which is, does Google know something that you and I, sitting here right now, don't know about this deal? Do they have some indication or some theory of the case that this deal will get approved by the administration, given, you know, the cozying up that we've seen a lot of industries, particularly in big tech, try to do with the Trump

administration since they came into power. Is there some indication that they're picking up on that maybe you and I can't see here that this deal might go through? Almost certainly not. So I think the idea that they got a wink at a nod is probably just not realistic. I think more likely as going back to Kelly's point, I think they probably view themselves or this deal as being about the cloud where they are behind or they perceive themselves as being behind Amazon and Microsoft. I would also point out that, and this is, I think, relevant to the entire deal economy, that risk tends to be greater for sellers than for buyers. Buyers, if a deal doesn't go through, especially a company of Google size and significance, it'll be just fine. And if anything, it won't have to pay.

The entity that suffers the most is often the seller or the seller shareholders who are put at risk when the company has to sit on ice for a year and a half. It's distracted. It often prevents it from growing. And in a case like or a company like Wiz, it might forego the opportunity for an IPO. So I think there's a real seller risk here that exceeds the risk of a company like Google. If you're Google, yeah, you might have to pay a big breakup fee if the deal doesn't go through, but why not take your chances? Yeah, I have a feeling that we are not done talking about this. Jonathan Canter, former assistant attorney general. Thank you for your time. Kelly, all I can think about with this one is maybe I should have launched a company back in 2020 that's worth

$32 billion now. What have I been doing with my time? You're not the whiz, you know? Yes, right. The whiz kids. Congrats to them. Treasury yields are slipping today as the street digest retail sales data. We had a strong 20-year bond auction at the top of the 1 p.m. as well. We'll get a full read on the bond markets with Rick Santelli right after this. Welcome back. Stocks are still lower on the session today led by the NASDAQ, down 1.5%. The S&P down 8%. The Dow's down 238 points. And we are seeing a bit of a rally in bond yields as well. Following the auction last hour in particular, Rick Santelli has all the latest from Chicago. Hi, Rick.

Hi, Kelly. Indeed. You know, this morning we had solid data in the form of housing starts and permits, of extremely solid dual manufacturing data points in the form of capacitalization and industrial production. And despite those solid data points, yields have moved lower. And the real catalyst, as you look at an intraday of 20 years, bond yields, the real catalyst, was the one o'clock eastern ending of a 13 billion 20-year auction. And it went spectacularly well in terms of demand. And it really is somewhat abnormal for a 20-year to have this type of effect on the market. But that solid auction was the catalyst for a significant

second-tier drop in all yields. As you look at twos, tens, and 30s, it's still the gift that keeps on giving as we continually made lower yields all session. Finally, you know, the last Fed meeting was Jan 29 and since that last Fed meeting if you look at two-year and 10-year notes what you'll see is at 403 we're down 19 basis points in two-year yields from where we were at the last Fed meeting and we're down 26 basis points in 10-year yields since the last Fed meeting so we want to really be cognizant of the fact that the market in a way is easing so we want to see how the Fed not only reads some of that activity but

also, of course, some of the volatility because one of the reasons yields are down is because there's a lot of red in the equity space once again. Amen, back to you. Rick, thanks for that. And as we had to break, could this mystery stock, which is down 30% in 2025, be due for a big bounce? Three-stock lunch is coming up next. And welcome back. It's time for today's three-stock lunch. One of these days, we're going to do this with martinis, but not today. We're going to hit three different names and why they matter to you. Eva Ados joins us today. She's C-O-O and chief investment strategist at ER shares. Ava, welcome. Let's start with the name we discussed earlier. It's Alphabet. It's lower on the news of that $32 billion deal to buy cybersecurity startup whiz. It's Google's biggest deal ever. How would you trade it?

It's a buy. I like Google. I think it's here to stay. Google is not going anywhere. They have a huge mode. I like the fact that they're down 20% in the last month. We like also the WIS acquisition. That's a strategic move for Google. It's a vertical integration. They've been their customer for years. And that's a company in the cloud cybersecurity space. So they're addressing a major national security issue here.

It's not a nice to have. It's a must have for Google. We really like this news. Again, it's not going anywhere. And from a relative valuation point of view, Google is now priced at half the price of their peers. So what's not to like here? Again, we have a long-term price.

So that's a buy for the long term. It's like a raging buy from Ava there. Ava, so let's see about Ralph Lauren. Those shares are also lower. They got an upgrade to buy at Goldman. Bank says its effort to gain market share and luxuries paying off. Do you like this one? It's down about 18% this month.

I do like them. It's a hold, though. I'll explain why. This is an established company for years. It's competing in a very competitive environment with e-commerce companies like Amazon. The stock has come up four times since, COVID and the growth margin has come up 6% the last five years. Their EBDA margin, 4% in the last two years.

Most importantly, the revenue growth is now at 5% when the rest of the category is actually negative. The only reason why I have them as a hold is, first of all, from the relative valuation point of view, they're appropriately priced. And secondly, there's some concerns now when it comes to the economy and consumer spending. So it's a hold. So the final name here is Block. It's getting an upgrade to outperform.

forum at KBW, citing attractive risk reward for the shares following that recent sell-off. What do you make of that one? It's a buy. Another buy. Another buy. I'm bullish today. The company is down 80% since their COVID highs. It's attractively priced, we believe.

And the major catalyst here is that the company is preparing, the company is actually preparing for a major catalyst. We need to remember that Block bought after pay, the Ostearrow. Australian buying out pay later company a few years ago. That was a major acquisition for block size. It was a $29 billion acquisition. And we're tracking this space very closely because we own their competitor Klarna in our XOVRUTF. And even in this company is private, but they just announced they're going public. So once this happens, that's going to be a major catalyst for the fintech space in general. And most importantly for the buy now pay letter category. So and in addition to that,

in the last year, their EB-Dum margin quadrupled, more than quadrupled. So we like them from a fundamental point of view. And also we think there's going to be good news that's going to benefit this category in the short-term future. This is the most bullish. I've heard Ava in. Really? Yes. By the weakness.

Yes. When the market was flying, she'd come on and be like, sell, sell, sell, friends. This is what is. It turns out the secret to the stock market is to sell high and buy low, right? Indeed, and it's hard for a lot of people to do. Who knew? Ava, thanks very much today. Ava Ato's.

We appreciate it. And remember, you can re-can, you can go back and listen. You'll see what I'm talking about. Recap every three-stock lunch any time you want. Just scan that QR code on your screen or go to CNBC.com for more. Power lunch will be right back. Welcome back. The markets are off session lows when we were down more than 400 just a couple of hours ago.

The Dow's only down 253 right now. The NASDAQ up one and a half percent. Let's not get carried away. and see if NVIDIA has anything to do with this as the CEO's keynote has been about two hours long and AIMA the shares, you could say they're off the lows, they're still down 2 and a quarter percent, so a lot still to figure out here.

Yeah, Christina Parsnevlos is on the ground in San Jose, and she's going to bring us some headlines right at the top of 3 o'clock out of that. She told us earlier in the hour about this GM self-driving car possibility for NVIDIA. We'll see if that's enough for investors to buy the stock given the announcements that we've seen coming out of NVIDIA so far.

Yeah, but I would not say it hasn't been a fast and furious pace of kind of announcements coming out of the event. So, again, whether investors got enough of what they wanted, the market in a little bit better position now than it was at the session lows. The only thing is kind of to serve. We had the Trump-Putton call, you know, somewhat constructive. So we seem to kind of be checking those boxes. Maybe some positive vibes starting to have. Right, maybe. We like positive.

Yes. And, and Aeman, thanks again for being here. Thanks for having me. And thank you. Thanks to all of you for watching Power Lines.