Power Lunch - Investing in the PGA Tour, The Global Market Trade & Dodge Job Cuts 03/12/25

Episode Date: March 12, 2025

CNBC’s Tyler Mathisen and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. “Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch alongside Kelly. I am Brian. Tara fears. They're back on the shelf, at least for now. The markets are holding up. But Citigroup says, hold up. You got to own this instead of that. We'll take a swing at what that is and take a big swing with the head of the PGA tour. See what I did there? Very nice. I'm looking forward to that. And welcome back. Thank you.

Let's get a check on markets, though, with the Dow turning slightly higher and then giving up its gains once again, it's down about two-tenths of a percent. The SMP is up 20 points. now. And the NASDAQ's been leading the way all day long. Nearly 2% gain earlier up a little less than 1% right now. And some of those really hard hit names seeing a bounce back, including in the Mag 7, big gains for Nvidia and Tesla. Meta also retracing some lost ground. Invita's up 5.5% today. And check out the rallies in these Momo names. App Loven, Palantir, Reddit, and Carvana, all up 4 to 6%. But remember, they've lost a quarter of their value or more in the past month, even including today's bounce back. We'll take a closer look at momentum versus the safety.

trade coming up. The inflation data giving investors a temporary reprieve from the selling pressure, the headline number is better than expected. But compared to last year, prices still rose by almost 3%. 2.8. Key staples, those are even higher. Eggs up 12% month over month and nearly 60% year on year. Meat up 7% from last year. Shelter up 4%. Vehicle insurance up 11%. We're also seeing consistently higher prices across discretionary spending. So, you know, sporting events, 12% higher. DVDs, physical media. Who's buying DVDs? Anyway, that's up 20%. What about eight tracks? Yeah, the popular subscription and video rental, yes, that's up 9%. So you're even seeing some

inflation in your streaming services, dry cleaning up seven, haircuts up five. We're all feeling it. So is inflation really tamed just because one month isn't as bad as expected? Or will these higher prices remain a threat to consumers' ability to keep spending? Let's bring in and discuss with Carson Group's Ryan Dietrich and our very own Rick Santell. welcome to you both. Ryan, let's just start with you. What do you think is going on with the consumer here? Yeah, first off, thanks for having me in early St. Patrick's Day, Sully. I know that's a big day for you there. So listen, I'm glad to be back. And the consumer, are they slowing down? You know, there's some cracks out there. One thing we've been saying for a while at Carson Group is still incomes are still strong.

Inflation, I know today's data, we can pick it a little bit. Don't forget last year in January, February, came a little higher on inflation. Then it rolled over. We think that's probably going to be the case. but I just want to touch on this. There's so much uncertainty out there. What are we certain of? Well, five years ago today, the S&P fell 10% in one day. So happy anniversary on that one. I know we're down ballpark 9% or so.

On average, we know most years have a 10% correction. We haven't seen one since late 23. You know, I mean, we can list all these things, but I know the scary headlines are there last comment on this. The S&P is down ballpark 4% on the year. After gaining 20% two years in a row. We get it. high yield corporate bonds are up on the year. If there is a monster under the bed, to me,

I think there would be more stress in the credit markets. We're not seeing that. This is very uncomfortable. To get me wrong, the uncertainty that's out there. At the same time, maybe we were just due for some early seasonal weakness that you tend to see in a post-election year, you tend to see after 20% gain. And we've seen, honestly, the last 20 years, we bottomed right around now the last 20 years on average. So, you know, it's not easy, but I think there's some positive still out there. Yeah, I mean, listen, Rick. Santhali. First off, I will be in your city for St. Patrick's Day. I just emailed you. I'll be in Chicago. I'd love to, the river's green. I'll be with Rick. Maybe. We'll see what happens.

Rick, how do you, as you gave the bond auction this morning, a B minus, not an awful grade. The bond market, you just heard, you know, Ryan talk about it. How do you, vis-a-vis the bond market, Rick, view the economy, view the stock market? Well, first of all, I gave it a B-plus. I thought it was a good 10-year auction. Here's the way I view the fixed-income market, specifically sovereigns. You need to look towards Europe at this point. All those hundreds and hundreds of billions of euros that are going to be put forth in a stimulus effort, they're all going to result in more supply.

So supply will be an issue. As far as growth versus inflation, well, there's a perception out there that we have slower growth. And I say perception, because as Ryan just pointed out, just because you have a few cracks, doesn't mean the yoke and the whites of the egg are on top of the table at this point. We are far from that. And the general perception of slowing leads to a natural hypothesis of less pricing pressure. Now, I don't necessarily agree with it, but I find it pretty ironic that so many bring up the term stagflation. But if you really look at what's going on in the market, our January release of CPI on the 12th,

of February resulted in some hot numbers that weren't revised. A path for 1% on headline, 3.3 on year-over-year core. That was hot. And we settled at 463 that day a month ago. Rates have gone down. So I think you want to concentrate on growth, but stagflation will remain an issue because pricing pressures really haven't gone away. Rick, take a listen to the soundbite from Jamie Diamond, speaking at a Black Rock Retirement Summit, asked about the consumer. Here's his latest take. Obviously, if you look at the economy today, you see a weakening. You know, the consumer is still spending money.

Jobs are still plentiful. Wages are still going up. CPI is kind of leveled off a little bit. But you do see a weakening and sentiment, certain spend, certain type of spend that people are considered more discretionary. And, you know, what changes that is hard to tell. You know, I don't think the average American consumer who wakes up in the morning and goes to work, which are like 175 million of them,

changes what they're going to do because they're reading about tariffs. So I just questioned that a little bit. Yeah, and that was showing up in some of the survey data, Rick. And again, he mentions there some of the weakness that he's picking up a little bit on the consumer front as well. Yeah, no, I completely agree with Jamie Diamond. I'll even take it a step farther. I think that his bank and many banks, they monitor credit purchases. If you look at who's doing the consumption, his Treasury Secretary Bisset set on her own channel.

An enormous amount of that is coming from a certain demographic. Older that doesn't really need credit. And to take that a step farther, like me, many people have been paying in cash when they go out. I think the consumer is doing pretty good. What you're seeing that's being anticipating slower growth is the de-leverging domestically and globally. The uncertainty causing that de-leverging is showing up in big time in equity prices, which I consider all to be a temporary move. Well, let's go more into that because I think a lot of people do care about what happens

to the stock market, especially if they're watching or listening to this fine network, Ryan. And listen, when I looked up and I saw App Lovin was down, you know, whatever it was, and Palantir was down whatever it was. My first thought was, what the hell do they have to do with tariffs? Absolutely nothing. People were selling what they could sell to raise money. these were sky high valuation names. I'm not picking on them.

But I think to your point, and some of your competitors' data as well, Ryan, I'm not saying it's just a garden variety sell off because I know it's scared, scary. But the reality is we've had far worse than this over the last few years and almost every time if you bought, you made money a year later.

You're right. And you know, one of the things there, Brian, is as a Friday, right, for the year. I know we had a big sell off Monday, But as of Friday, nine sectors are up on the year, right? Technology communication services, we're down. I've come on your network for a while saying we're more neutral technology because it is pricey. There's a lot of growth coming there, but there's a lot of other areas. I mean, I know it sounds almost boring to say. But if you're diversified, you're having an okay year right now, right?

Bonds are up a couple percent. Gold's up double digits. Europe's up double digits. We know China's making three year highs. I mean, there really are. Diversification can be a dirty word because it hadn't worked because everybody just in Mag 7 and that war is great for everyone. but we've been preaching stay diversified here, especially in a post-election year. You get that volatility early. I think, Brian, that makes sense. One more comment on this member, I know everyone remembers on this network, early August, right? We had that 8% correction really quickly.

Yen-carried trade on wind. If you look at, you know, triple B spreads, corporate spreads, they were more stressed than they are now. We've pulled back ballpark about the same amount approximately, yet there's less stress in the credit markets. I mean, it can change in a hurry, but again, I just think this is more of your, I don't doesn't feel like it. Garden variety, pullback. It sure scary when it happens. No one likes it when it's your money when it does this. But listen, prepare for volatility and a double-digit correction. We said that all year coming into this year. And now it's here. And we don't think

it's going to get all that much worse. It's probably going to be an opportunity when we look up six to nine months from now. I think it is the 15th worst sell-off in the last 12 years or something. And it feels like the worst one, right? Because they always do. They all. And maybe it'll keep going down from, we'll see. By the way, we do have some break, guys sit tight. Going to get back to you. We've got some breaking news on Treasury data with Megan Kisela in D.C. Megan. Hey, Brian, so for all the talk in Washington recently of cutting federal spending, we have yet

to see any of that show up in the official data. Treasury's latest statement shows that overall spending hit a record high for the month of February, and spending and the overall deficit are both now at all-time highs for the first five months of the fiscal year. So the deficit today is about 17% bigger than it was this time last year. And that's due to spending up at nearly every agency. One of the biggest drivers is the growing cost of interest on the debt. We've spent almost half a billion dollars on interest so far this fiscal year.

Social Security, Medicare, Medicaid, they are all spending more, both because they have more beneficiaries than ever and because of the higher cost of living. Defense spending, that one was also up across the board. And guys, the Treasury official was asked specifically whether they were seeing any impact yet of the Doge effort to cut spending. They told reporters that one of the only areas seeing spending decline as of February was the Department of Education, which had spent $6 billion less than the same month a year ago because of lower spending on elementary and secondary education. We might see more impact in future months, but for now, one of the only areas so far of real impact. Guys. So is it fair to say, Megan, that there was a big burst of spending

to end the last fiscal year that we had a lot of spending. And so we're not seeing any cuts so far in the data. That's right. So this is the first five months of the fiscal year. That's the end of the Biden administration and the beginning of this one. But spending is at an all-time high for those five months, but also for the month of February. It's the highest it's ever been for the month of February. So it's not just that we can blame all of this on the Biden administration.

And again, there could be cuts in the future. They did acknowledge March, April. We might see more on the cut side. We also might see more on the tariff side. We're not seeing much of that yet. For now, we're still just seeing a whole lot of spending carrying through the early part of this administration. All right, Megan, Cassela, in D.C., Megan, thank you very much. You know what, Kelly, very quickly, we've got to get to the tease.

I think that's very newsworthy. Indeed. That there was this huge burst of spending to end last year and that the cuts that we're getting have not shown up in the data yet. Not just that. The January numbers, which were already astounding, also included some shift of payments from February into Jan, because the Fed one fell on a weekend. So the fact that we're not seeing a big rebound and improvement in Feb, and maybe the data adjust FFB, I'm not sure.

It tells you that even with that taken into account, these numbers are still high. It's the spending number that's up double digits. And the 10-year, for what it's worth, it was already at around 430 today, but pressure like this is going to kind of, reports like this will keep upward pressure on those long-end yields, for sure. And we'll see where the data goes from here.

But as of now, not only no sign of cuts, signs of just massive amounts of new spending. On that happy note, on deck, Citigroup, telling clients to maybe sell this and buy that, what those are coming up. All right, welcome back. America's time is the world's favorite place to invest, maybe over, at least for now, according to Citigroup. A firm cutting its overall rating on American stocks to neutral. That's all basically a national view, citing, among other things, a quote, pause in U.S. exceptionalism.

Instead, Citigroup says you may want to own China. It upgraded China stocks to overweight. China's, by the way, already outperforming many American equities this year. Let's talk more about this call and bringing the person behind him. That is Dirk Miller. He is the head of macro strategy and asset allocation at city research. Dirk has most of the money in the American market already been made. Great question.

We call it a pause in US exceptionalism. And the reason is not that we are necessarily that bearish on the SMP. I mean, we downgraded equities overall, actually, on a global level in February, and we thought there should be a correction on the back of the tariffs. But not a recession. We're not in the U.S. recession camp. We are in the correction camp. And so we do think the U.S.P has a bit more downside.

But the main question to us is, will the S&P keep outperforming the rest of the world? And we think over the next three months or so that's unlikely. And the reason is really coming from both sides. I think you had very positive news out of Europe in terms of the huge fiscal package out of Germany and the rest of Europe potential, of course, for ceasefire and the Ukraine. You also had really quite positive news out of China, both in terms of the technology sector, but also in terms of government support, broadly speaking, at the same time when the U.S. data is turning soggy. And it will remain soggy for quite some time.

You know, that's how, Dirk, go into that. what you called government support. We've seen this in Germany recently. It's not a done deal, but they're proposing this stimulus bazooka in Germany, in the German stock market, European stock markets. They've done better. The U.S., we spent trillions of dollars during COVID, so did other countries, but we spent proportionally more than most.

How much does this idea of stimulus, whether it's China or Europe or whatever, how much does that matter to overall equity market? market outperformance? I mean, it mattered a lot for growth differentials, I think. The fact that the US went all out during COVID and maybe more than some other countries clearly more supporting growth. I mean, sending checks in the mail to that extent was clearly very, very helpful for the US consumer, and that was part of the story initially.

And the US has other things in its favor, no doubt. I mean, earnings growth, which is linked to growth, but it's not just GDP growth. It's more than that has also outperformed the other market. tremendously. And that's why, to be honest, we call it a pause. We just think for the next, you know, three months or so, the job numbers will remain quite poor in the US. The consumer might pull back a little bit. And because of the fiscal stimulus and other stimulus measures, that might not be the case in China. So we are upgrading our growth estimates in Europe. We're upgrading our growth estimates in China. We're downgrading, or actually we have already

below growth estimates in the US. So that is where that is coming from. In the very big picture, I do think the U.S. will eventually come back because it's really partly about the quality of the companies. And in particular, it's about being part of the AI story, which Europe is just not. China is as well, right? So eventually, I think when we get through the soft patch in Q1, Q2, at some stage, AI will again be the leadership in the market, which benefits both China and the U.S. and not so much Europe. But I think just right now we have at the very same time when the U.S.

hitting a big pocket on the back of tariffs and on back of the doge cards. At the very same time, we have a lot of stimulus in other places, which makes it a better bet. So, Dirk, the only thing, you know, could I see money rotating out of, you know, the Mag 7 and going into European, supporting international stocks for sometime? Sure. But in the longer run, I mean, where's going to be the ecosystem of startups that bring the next great companies that are going to be trillion-dollar market cap names in Europe or in China?

I mean, and maybe China is showing more capability. on that front with some of its breakthroughs in AI lately. So we can grant it that. But then again, it has a big broader economic growth and demographics problem. So is this just a three to six month move or is this something more? We call it pause in the exceptionalism for the US. So we think of it on a three to six month basis maybe. I agree with you that in the end, the peak of the equity markets and the onset of the

bear markets will only happen when the AI story has played out. And until then, the U.S. is strategically still very well placed. I would not disagree with that. And we don't think that the AI bubble has already popped. So we see it really as a tactical call at this stage. I would say the amazing thing is that the countries that have the biggest targets on their back for tariffs, meaning China, Europe, Mexico and Canada, all of them outperform the S&P quite strongly. And the interesting thing is that in 2018, the opposite was true.

So basically, countries that, I mean, back then it really was mostly China. There was only one country the US really went after. It was China. China underperformed tremendously. This time, the US goes after all of the countries, really. And that is leading, actually, to the US underperforming, because it's much, much more difficult for the US economy to keep performing well with tariffs if everyone is tariffed rather than if it's really just one.

one country and then you can always get supplies from other countries. So it's a big difference. And that's part of this pausing call for U.S. exceptionalism, which eventually may well come back, as you point out. I mean, the AI story can only be rivaled by China, but probably not by Europe. All right. Dirk, we'll leave it there. Thanks so much for your time today. Dirk Viller, with City Research, third shop to downgrade U.S. equities so far this year. Well, forget about, set it and forget it. Volatility here in the U.S. is fueling some 401k trading. We'll break down the numbers and whether this is a good thing next. Welcome back to Power Lunch. After two great years back to back, it's been a rough start to 2025.

The NASDAQ down 8.5% even with today's 1% rebound. That has some people making changes to their 401ks, but should they? Sharon Epperson is at a retirement summit in Washington, D.C., with more on that topic today. Hi, Sharon. Hi, Kelly. You know, there's been a lot of discussion at this summit that's being sponsored by the Bipartisan Policy Center and BlackRock about President Trump's trade war and market turmoil and the impact on retirement savings. Here's what BlackRock Chairman and CEO Larry Fink says could happen next. I would not be surprised to see elevated inflation over the next five months.

I would not be surprised to see, and across every CEO I talked to, we're starting to talk about a more fearful economy going on right now, and a lot of it is that fear. But I do believe this is going to be more short term once we understand the policy. once we become more accustomed to it. Now, more than half of the $11.6 trillion that BlackRock has in assets under management are in retirement savings. And many investors right now are still fearful about market downturns. Some are actually making moves rather than following a buy-and-hold strategy. It's only a small portion of overall balances, but net trading activity in 401K plans has doubled in the past three weeks.

That's according to a light solution, 411. In the first week of March, nearly 60% of outflows in 401K plans came from large-cap U.S. equity funds, while one-third came from target date funds. And more than 40% of inflows went into stable value funds, more than a quarter into bond funds, and 18% into money market funds. Now the question is, if the market continues to tumble, will we see the NASDAQ fall another 8% from here? Black Rocks Larry Thinks said that's a possibility, but it's also a buying opportunity.

in the long run, Kelly. Right. Interesting. Yeah, and obviously, Sharon, you are in Washington, the hot topic of conversation, are budget and job cuts. Last week, we spoke with Glenn Yonkin. He's the governor of the great state of Virginia. You had a chance to speak with the governor of Maryland, Westmore.

What did he have to say about the cuts and what the concern is? Well, Maryland's governor, Westmore, is also working to create jobs in his state. and place federal workers into positions where there are openings here in the state. But it's a tall task for Maryland. Maryland has over 160,000 federal workers. It has the highest percentage of federal workers than any state in the nation, including about 23,000 veterans. And the doge cuts have impacted jobs in the state, but also key programs.

These are not glancing blows to Maryland's economy. These are direct shots that are happening to our state. It's having a massive economic impact. And it's having a massive economic impact, you know, both because we are watching people in many cases just arbitrarily laid off agencies being shuttered without any demonstrable evidence as to how that actually is serving the people better. There's also uncertainty, of course, swirling around President Trump's trade war and it's impacting investors, but also many aspects of Maryland's economy. the on again off again tariffs and the numbers that move every other day seemingly as so what product we're going to put a tariff on and what number are you going to put it on like this is having a significant impact even just on the psyche of investors the psyche of business owners the psyche of our society and our community who are wondering if they're going to be next now governor more is also working to increase state residents access to capital he says it's important to do this through entrepreneurship through home ownership as well as investment He talked a great deal about Maryland saves a public-private partnership in the state to help small business workers save for retirement as one initiative that he's going to be focusing on very clearly in the coming months. For more strategies, of course, on retirement savings and investings, you can go to the Money 101 newsletter series.

Use the QR code there to sign up or go to CNBC.com slash Money 101. Back to you guys. Sharon, thank you very much, especially timely with everything going on in the markets right now. Sharon Epperson. Up next, speaking of which the rotation debate is red-hot again. We'll discuss what to do in three-stock lunch next. Welcome back to Power Lunch. I'm Bertha Coombs with their CNBC News Update.

An immigration and customs enforcement officials said today that immigration detention in the U.S. is now filled to capacity at 47,600 detainees. He added that ICE is now expanding its bed count to house more with help from the defense. Department, Marshal Service, and Bureau of Prisons. The revelation comes amid President Trump's vow of mass deportations for undocumented immigrants. Former Philippine leader Rodrigo Duterte has surrendered to the custody of the International Criminal Court after touching down earlier

today in the Netherlands. He is facing murder charges linked to his anti-drug crackdown. The ICC's warrant for his arrest claims he funded and armed death squads, that carried out murders of purported drug users and dealers. And Billy Joel is postponing his tour until July because of a medical issue. The piano man said on Instagram that he's recovering from a recent surgery and has to undergo physical therapy. The post says that he is expected to make a full recovery, but he didn't go into any further detail. We wish him a speedy and total recovery. Over to you. Yep, Bertha, thanks very much, Bertha Coombs. It's time for three-stock lunch,

and today we're trading stocks caught in the middle of a growing debate, growth versus safety. Courtney Garcia is here to settle things for us. She is senior wealth advisor at Payton Capital Management and a CNBC contributor. Courtney, welcome. And this is the trillion-dollar question. Right now, let's start with Robin Hood. Down 10% this week, although popping back nicely today up 8%. Would you jump in here or no? I would actually stay away from Robin Hood here. for a couple of reasons. So this is a company that's done really well. I mean, they're up over 130% over the last year. And a lot of that has to do with cryptocurrency. So trading activity specifically in crypto is a lot of their revenue source. That was about 22% of their total

revenue back in 2024. So what you're seeing is with this new administration, people were very pro-crypto. You're seeing more trading going in there, which has benefited them. But a lot of that, I think, has already been priced in. What you're seeing is they trade kind of with that risk on trade. as people are more optimistic about the markets, you're seeing more risk on trading, you're seeing more cryptocurrency. That's what's going to benefit of Robin Hood. But as you're seeing some of these growth scares, like we saw earlier this week, this is actually down even more so than like across the banking sector. This is actually seeing more volatility. And I think you'll continue to see that. So I think a lot of the crypto optimism is probably priced in. It's going to affect

this stock a lot like you saw back in 2021 and then 2022 with a big sell off. So I would actually stay away from this for the time being. What about AT&T, huge debt load? Everybody was running one way, and this year, AT&T is actually higher, Courtney. Yeah, I think a surprise. I don't think any of us thought we'd be talking about AT&T, a lot less stock. But it is one of your kind of typical value stocks here. It pays over 4% dividend.

And even with their debt load, I mean, you're seeing that they're having optimism that they are going to bring down their debt. Plus, they have $10 billion in share buybacks later this year, which is just showing optimism in their cash flow and how the company is doing. in order to sustain their dividend moving forward. But this is also just a turnaround story. They just posted year-over-year revenue growth for the first time since 2023. They're really, you know, kind of a pure play after they're divesting their direct TV exposure here later this year.

And they had over $17 billion in cash flow last year. It's expected to still be over $16 billion this year, even without direct TV. So I think this is a company that, yeah, I don't think we thought we'd be talking about, but it's a good play here. All right. Then that brings us to Johnson and Johnson. And I have a feeling I know which camp this one's going in. But let's see, it is a dividend play. They got that acquisition of intracellulotherapies to look at.

The shares are down about 2% this week. Do you like it? I do. I'm more of a hold here, kind of neutral. Now, this is a company that, honestly, anytime a client asks me, what's the difference between growth versus value? This is like a company I always use my example of a value company.

It's not going to change the world overnight. It does pay a good dividend. It has over a 3% dividend. it trades about 15 times next year earnings, which is about in line with its historical average. So it's not a discount. It's also not expensive. This is a company that does tend to weather economic downturns, which is why you're seeing this year, people are trading out of growth and into value. This is one of those good diversifying plays as something to have in your portfolio. But there's a few headlines that you want to kind of keep on track of later this year. So the first, for example,

is they have their loss of exclusivity with Stellara, which can affect their earnings. But they also have, on a positive note, They have an acquisition with intracellular therapies, which should be a positive, though, that is going to still be pending regulatory approval. So I think you want to keep an eye on those, but I think this is something if you have it, I would continue to hold it. All right. Courtney, thanks very much. Appreciate it today. Courtney Garcia. Thanks for having me.

Remember, you can recap every three-stock lunch. Anytime you want, just scan that QR code on your screen right now. But up next, a very cool TV event between us and the golf chain. channel. It's coming up. All right. I've been crazy markets. Let's get a power check. See where things are. Right now, we are higher across the board. The NASDAQ, a big pop. In fact, NASDAQ, up 1.4% energy. Also, along with tech, a big winter today. Oil is higher at just under $68. You got names like Valero APA, Marathon Petroleum, all higher today by a couple of percent. Those volatile names, though, which got

heated up along with, you know, and then got cooled off. They're now heating up again, Vistra, Constellation Energy Nuclear Provider, Aklo, Town Energy Corporation. They're all higher. A special CNBC Golf Channel Simulcast is coming up next. Dom Chu, we'll sit down with the PGA Commissioner. All right, welcome back to a special CNBC and Golf Channel simulcast. The Business Channel and the Golf Channel are teaming up this time around from the Players' Championship at TPC Sawgrass in Pondavitra Beach, Florida with a very special interview right now. We are thrilled to be joined by PGA Tour Commissioner Jay Monaghan.

Jay, thank you very much for taking the time to be here with us on this simulcast, simul segment edition of CNBC and the Golf Channel. Dom, it's great to be here with you, and it's great to be part of the simul segment here. A first. We're making a first. It's a lot of pressure on both of us. I think on both of us right now, a lot of eyes watching for sure. So, Jay, maybe I'll start right now with a quick question with something that you led off with.

It was important enough for you to lead off with. with regard to your state of the tour and everything just yesterday in the press conference. And that is the ongoing negotiation with the Saudi private investment fund, the parents of LiveGolf with the PGA Tour, PGA Tour enterprises. CNBC audience often knows that the biggest sticking point for a potential merger or acquisition deal is oftentimes valuation. Terms can't be established. People can't come together on the value of an asset or a company. how much do valuations factor into the discussions that you're currently having right now with Yasser al-Ramayan and the folks over in the Saudi side of the equation for PIF?

Listen, Dom, I think if you look at where we are right now, and I've talked about this yesterday, and, you know, we've had over the last few weeks, we've had two visits to the White House. We had a meeting that the president facilitated with Yasser and attendance alongside. Tiger Woods and Adam Scott. It was a constructive and productive meeting. You know, we continue to go down the path and good faith of having, you know, those negotiations and those discussions. And you, more so than anybody else, understand all the different variables that come into any negotiation. Certainly, valuation would be one of them. But right now, we're continuing to focus on two things. Number one, making certain that we're doing everything.

thing we can to, you know, drive to reunification for our fans. At the same time, you know, we are continuing to focus on making this incredible tour stronger and stronger every single day. And as I talked about yesterday, there's just tremendous momentum behind the PGA tour. So we're, again, we're committed to those negotiations. And as more progress is made, we look forward to sharing that progress. But at this point, that's, that's where things stand. There was news also out earlier today involving Brooks Keppka, very talented top golfer in the world, who's now part of the live tour. He was asked a question about whether or not he would be looking to come back to the PGA tour. He maybe demurred a little bit and said, I have a contractual obligation,

I will serve that out, and then we'll see. It doesn't seem like any kind of a strong endorsement or denial one way or the other. I guess the question there is, if there is a pathway for golfers who are on live to come back to the PGA tour, what could it potentially hypothetically look like in your eyes. Well, I'll tell you what it looks like at my eyes. Right now, as we sit here on the eve of the players championship, and as the leader of the PGA Tour, my focus 100% is on this organization, making this organization stronger. And we've got 144 players that come here trying to win this prestigious championship,

their championship, with Scotty Sheffler being in a rare position to try and three feet here at the players. So you look at the quality of player on a PGA. tour and you look at the quality direction that we're heading and that's got a hundred percent of my focus and I really can't comment on what other people are saying outside the PGA tour from a business perspective outside of the Saudi involvement strategic sports group which is a consortium of sports-minded private equity investors is now a big part they certainly are of the for-profit PGA tour enterprises the private equity component of this with SSG has brought a new business-focused dynamic to a non-profit

organization that was the PGA Tour prior. In your mind, how exactly does that involvement change the landscape for how you operate as a business and what kinds of return profiles you need to generate for those investors that are now part of the PGA Tour? Well, if you go back to last January when we announced that Strategic Sports Group was investing a billion and a half dollars into PGA Tour enterprises, that did two things. It allowed the PGA Tour to create a for-profit company and it also allowed us to in turn make our players owners of their tour roughly 180 of them and so when you look at SSG to have the likes of Arthur Blank and John Henry and Sam Kennedy and Steve Cohen in our boardroom alongside our other other our other independent directors puts us in a

position where we get the benefit of their expertise both in sport and outside of it and listen we've got with investment capital we've got the ability to leverage the strength of our brand to be able to look at opportunities in real estate look at look at look at opportunities hospitality tourism look at enhancing the investments that we've made in technology to continue to improve the tour but their involvement and their experience has certainly already had a significant positive impact on the tour and their expectations are high because they should be because right now you look at the game of golf the game of golf is boomed You look at the audience of the game of golf.

We've got 8 million core fans. We've got roughly 40 million casual fans. 47% of golfers both on and off course are under the age of 35. So you're going through not only a talent regeneration here in a PGA tour, but also within the game itself. And we've got a lot of opportunity now as we look forward. From a commercial standpoint, you and the tour have just announced that you've inked another $4 billion worth of commitments and sponsors.

deals through the year 2035. This is a big number for a lot of folks out there for the game of golf and for professional golf overall. What exactly do you think is the draw for corporate sponsorships to want to spend money on the PGA tour as opposed to maybe other places in the media market? Listen, I think if you look at, as I said, the game itself, the game is booming, the game is thriving, the game is getting younger. The way people interface and play the game has changed significantly over the last five to ten years. And when you look at the PGA tour and the strength of the individual 72-holes, stroke play competition on iconic venues with tournaments that fans are familiar with

and the meaning of every single Sunday and the stars that are coming through the pipeline, I think our sponsors see tremendous value today. And if you would, Don, I would just say this is when you look at having great partners like NBC and Golf Channel, having international media reach like we have with the Players' Championship and with the Tour. And on top of that, to be able to bring your customers here most weeks, to be able to be inside the ropes competing alongside the best players in the world, to be able to come into a community and make a huge impact, both in terms of the charitable contribution,

but showcasing a great place like Pontevedra Beach. Our partners take great pride in that, and that's why if you look at our partners, 40% of our partners have been with the PGA tour for 15 years or longer, and that stat you cited is correct, and I just left a meeting over at the Sawgrass Marriott. It was several hundred of our partners in the room,

and that energy and that sense of momentum and their contribution to it is very palpable. All right. Jay Monaghan, Commissioner of the PGA Tour, thank you very much for taking the time to join us on CNBC and the Golf Channel as well. Now, that was PGA Tour Commissioner Jay Monaghan. For those members of our CNBC audience, we're going to return you to our regular markets coverage after the commercial break. For our Golf Channel audience, live from the players, will return right after this. Welcome back. Morgan Stanley just slashed its price target on Apple. And for Morgan Stanley to do it, caught our attention a little bit. Now, they cited the tariffs. They also, I believe, Steve can correct me if I'm wrong, talked about this delay in the rollout of series AI features, which I'm a little sad about. Steve Kovac is here on set to discuss. And look, the stock is under pressure and it's just one of these things. Is it caught up in the selloff or is there something more fundamental here? Something more fundamental, I think, because it's the only Mag 7 stock right now in the red. All the other, their peers in here are trading in the today, Dallas Green. So what's going on here? This is the thing we've been talking about all week.

That Siri delay is a big part of it. And Morgan Stanley's cut today, they're basically saying, hey, we're not going to be able to predict as many iPhones are going to sell this year. In fact, they're predicting iPhones are going to be flat year over year for this year of 2025 and up slightly maybe about 5 or 6 percent in 2026. Add on to that, the China Terrace, which they say is going to be about $2 billion in input costs for Apple unless they can get some relief. No signs that relief is going to happen. Put that all together, and it's really a tough time right now for Apple to just move these iPhones. And we're not going to get another leg on what the AI story is for Apple until June.

I think you kind of called it, even indirectly, because you don't make calls. But when you were standing outside the Apple store, when was that? Yes. Oh, and the lines are during the way. And you said, and I'm always watching and listening to CBC, and I heard Steve Kovac say, there's usually a line there's not around the block and it wasn't around the block and by the way they missed on their first quarter sales this was the first full quarter uh that December holiday quarter missed expectations what you said was i mean that was a tell that was a tell that was a big tell and the other tell that we're talking about in the days after that were all these uh the pre-orders the pre-order

windows were shortening and that was the sign that we also got that hey maybe they're not selling a bunch of these iPhones everyone is waiting for this big Siri AI update that was going to be the real AI update that made Apple intelligence super cool and super useful compete with chat GPT, what have you. Instead, you're stuck with all these minor features and everyone's saying that catalyst we're waiting for is pushed out probably until 2026, at least until the iPhone 17. What does this tell you about what's going on internally there? And I mean, look, again, as we're all using these, we're talking, there's Sesame, which is a new chat agent you can use, but even just GROC and chat GPT's the leading ones, you can talk to them there. So they're losing

every day the customer that they want to kind of bring into Syria. Yeah, and this really falls on one guy. His name is John Giann Andrea. He is the VP, yeah, you don't know who he is. I was like, whoa, right here. Tim Cook. And all of his name is, you've never heard of him. He is in charge of artificial intelligence at Apple, and this was

supposed to be his kind of coming out party, his debut. He's been there for a number of years. Apple had to meet this AI moment, and they basically whiffed on their biggest update. Now, Google did too. And this reminds me of two years ago when Google was way behind and then it kind of caught up. So, you know, we'll see. There's still chance for them to catch up. But this, for this cycle, for this right now, in the short to medium

term, that's why you're seeing Morgan Stanley cut their price target. Maybe we change Mag 7 to Fab 5 because with Tesla slide and maybe with Apple, it's our cutting. Steve, thank you. Love it. Steve Kovac. Like your buddy may be soon. By the way, the analyst, the Morgan Stanley analyst behind that call coming up on closing bell. And speaking of which, which is next. Yeah, We'll see you tomorrow.