Power Lunch - Market Pessimism, and Trump’s Arraignment 4/4/23

Episode Date: April 4, 2023

Stocks are pulling back today after a strong recent run. But despite that good start to 2023, market pessimism is running high. We’ll ask legendary investor Mario Gabelli what he sees ahead for the stock market and the economy. Plus, Fmr. President Donald Trump is about to be arraigned in a New York court. We’ll bring you the latest details as they happen. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome everybody to Power Lunch. Alongside Morgan Brendan, I'm Tyler Matheson coming up. Stocks pulling back today after a strong recent run. But despite that good start to the year, especially for technology, market pessimism, well, it's running sort of high. We'll ask legendary investor Mario Gabelli what he sees ad for the stock market and the economy. Plus, former president Donald Trump about to be arraigned in New York court. The proceedings expected to begin shortly. While cameras are allowed in the buildings, the arraignment itself will not be broadcast live. Here's a live shot outside right now, though.

We're going to bring you any news as the situation develops, either inside or outside of the courthouse. As he goes through processing right now, ahead of an appearance in front of a New York state judge. First, a check on the markets as we're down across the board right now. Christina Parts in Evelace in the house with a look at today's big movers. Christina. Thank you, Tyler.

So markets are now are currently fixated on the spike in oil prices, and what that could mean for inflation and the global economy, especially after we saw a drop in U.S. jobs for February in terms of U.S. job openings, I should say. But don't get me wrong, there's still a lot of job openings out there, but the market is very sensitive to any changes in narrative. The S&P and Dow are on track right now to break a four-day wind streak. Industrials, energy, the two worst-performing sectors thus far. Caterpillar, we had Seema just on before, down about 5 percent,

the biggest dragging on the Dow, after we learned from the ISI number yesterday that U.S. manufacturing hit a three-year low. So when that happens, of course, you've got concerns about construction spending, and that's being reflected in the 5% drop that we are seeing today. The usual safe haven bet gold futures hitting the highest level in over a year.

The precious metal is often seen as a hedge against inflation, and prices now are well above $2,000, trading at $2,37 an ounce. Miners like Barrett Gold and Newman both higher, 4% at least, well, Newmont, almost 4%. And it's quieter on the corporate side, given the shortened week and the upcoming earnings cycle that we have. But Wall Street takes are moving some names like Etsy, for example. Piper upgraded the name to a buy with a price target of $140.

Right now it's trading at $110. They think the e-commerce stocks valuation is compelling. And so that's why this name is one of the biggest movers on the NASDAQ right now. Tyler? All right. Thank you very much, Christina. J.P. Morgan's CEO, Jamie Diamond, dialed back his tone on an impending recession. Remember how dower he was about six months.

ago. Well, now in an annual letter to shareholders, he says he thinks the economy is in, quote, pretty good shape. But not everyone feels the same way. Listen to what billionaire investor Barry Sternlicht told CNBC earlier today. So I think Jamie's wrong. I think we're going into a serious recession. And the government has an interesting problem, but not for the reasons he stated. They have a massive deficit, and they keep feeding the deficit. Well, so what can we expect from the economy this year? Let's ask our next guest. We always are happy to see Mario Gabelli.

chairman and CEO of Gamco investors, Mario, great to have you with us. So who's right here, or who's more right here? Is it Jamie Diamond or is it Barry Sternlich? You got to... Great question. Good way to start. And basically, from my point of view, the economy over the next couple of months is going to have a challenge. Clearly, the banks with regards to hold to maturity accounting with regards to what's going on in the commercial real estate, what's going on with regards to funds flowing out are a challenge. But we've gone through bank crises. This is my seventh since I've been investing in business. But the banks are stronger. So Jamie is right about that, and we'll figure this one out. With regards to the economy, if you have the

consumer, the consumer sector, I think car sales will hold up. I think the consumer's an okay shape. You'll just look at the balance sheet of the consumer. On the other side, the industrial side, because of the IRA and the IIA, those are the two government programs. Certain sectors of the industrial sector will do well. But the major event is China. China is 20% of the world GDP, and they're going to activate their economy, and it's going to do and provide some ballast through cross-country trades in the second half of the year in the first quarter of next year.

So on balance, the stock market, however, just don't think it's going to do very much. I think you'll go up and down, but the economy will go through. So I'm kind of more borderline on Jamie Diamond's case. What about 2024, Mario? Do you see that as a better year than 2023? Because, for example, some of the things that are stumbling blocks potentially right now may have been passed. And number two, China really may be back and humming again. Yeah, I think you've articulated and highlighted a lot of those dynamics. Look, I'm, you know, sectors of the economy that I like, like defense spending, sectors that are also somewhat not as tied to the economic sensitivity, historically the housing,

but housing, which is down sharply, they have an enormous backlog of demand coming up. Automobiles. We're materially underspent over the last several years, and there's no lower-cost cars available. So that's another pent-up demand. In addition to that, depending on how the dollar reacts and what we do on our exports, clearly that will be an important part of the U.S. economy. But the most important thing is allow the free market to function and allow us to take advantage of these global opportunities. That's the other challenge that I see. Mario, it's Morgan.

It's great to speak with you again. The fact that this is your seventh bank crisis that you have experienced, are there certain ways that these types of crises play out? And what does that mean in terms of being an investor when you're seeing cost of capital go up, when you're seeing credit tighten right now? Are there opportunities in financial sector in terms of investing? Well, I always worry about shadow bank, I always worry about private credit, I always worry about the unregulated sections that have sprouted. But let's go back. 1973, four, five, six, when inflation hit, you had unforeseen bankruptcies, whether it was

Continental Illinois Bank, the Herschat Bank, the Republic, blah, blah. In the 1990s, you had the and L crisis, and that laid the foundation of an accounting change. FASB financial estate standard number 157 came in, which allowed the banks to hold to maturity, and that, as a result of the Fed, not raising rates because they thought it was transitory, that is inflation. And then they're raising rates sharply caused that part of the balance sheets. The good news is that certain DART-Frank regulations were put in place. They just got to re-examine those. The 07, 8, 9, don't you remember the statement,

let's dance until the music stops. I mean, you know, that's why the bear and leaving, you know, the leverage was unaccountable for, you know, it's just not acceptable. So what do I see? Nothing different. I think in 2024, you'll have an election in the United States. And you basically try to get the economy strengthened by that time. And I think the comparisons will be a lot easier.

for companies in terms of reported earnings. Yeah. I mean, we've seen deposit shift from smaller banks to the bigger banks in the weekly data. We've also seen a record number, I think 300 billion in the past three weeks, inflows into money market funds. Is that a good place to be parking cash, given the uncertainty and what could be a flatlining of stocks this year, according to your viewpoint? Well, you're going to make four and a half percent on 100 percent U.S. treasuries.

You don't have to pay taxes to California, New York, or any state because of a Supreme Court ruling in 1818. And so as a result of that, yeah, it's okay. I mean, you know, I basically think about the following, though. How do I pay long-term capital gains taxes? And that is at whatever the rate is, of 23.8% today, as opposed to ordinary taxes. I want to own good businesses run by good management and the prices are going to be reasonable. And how do I make the money two or three years from now?

That's why I have these T-Stox, Tegna, Textron, and so on, to talk about. One of which is baseball, which I'm going to recommend again, Boutra. So those are the kinds of things that we look at. How do I earn a return three or four years out if the market's flat and with volatility and generate long-term capital gains for tax or accounts? And tax-free accounts get the benefit of that. One of the things I love about having you on, Mario, is that you talk about stocks that I've actually heard of, and I actually

partake in. A lot of them are in the entertainment or media area. Earlier this year, you liked Warner Brothers Discovery. You have been so vindicated, I can't even say it, but now you like media plays like Paramount, Liberty Braves, I assume that's a reference to baseball,

MSG Entertainment, the Nixon Rangers, Cesar's, Tegna, the TV station. Now, what are you seeing in these companies, apart from your usual quote, value play? All right, Tyler, I'll do it very quickly. Let me start off with baseball. I think, you know, you saw, man, you, you saw what just happened to WWE and Endeavor. You saw what's going, UFC, you saw what's going on in the commanders, a football team.

I think the notion of two and a half to three billion dollars plus the value of the land around the truest park down in Atlanta. With a 70, you know, the company has 60 million shares. You're selling at 35, $2 billion market cap. I think you can make money. So play ball. And the pitch clock is not going to hurt. It's going to help. Secondly, from my point of view, we have a controversial owner, but there's a lot of controversial owners. And you've got to be careful. We think that the Nixon arrangers doing well will help New York City, and they need a shot in the arm in light of everything else that goes on politically and other dynamics, which I don't need to get into. So, you know, let's cheer Jimmy Dolan, not for some of the sidebars, but for the main event, that is that we're bringing sports and excitement back to New York.

The stock has a discounted that. But Tegna, which has a deal at 24, that for the first time in the 40-odd years, they've moved the deal from the FCC, and they got clearance. They moved it into the media bureau, which is going to procrastinate this to death. The stock is 16. It's going to earn $3 next year because you have political dynamics. You have companies that I talk to in the food and service business that are bringing in new products, that they're basically going to start advertising more. the car dealers are going to start advertising. So I think 2024 is a good year.

They're going to earn over $3. The stock's going to sell it $24. If they don't get a deal done in the next X number of days from Sue Kim and the company's standard charter. In addition to that, you take a look at a company in Europe that bought a company that we were large holders of, Navistar, the Class 8 U.S. big truck manufacturer. They're putting that in overdrive now. They're doing a better job.

I talked to two car dealers, including one that's a big car dealer on. Friday, they like what they're doing. By the way, he's a truck dealer, I mean, for a freight liner, which is a competitor, he says, watch out for Navistro. Trayton, T-R-A-T-O-N sells it 18 euros. They're going to earn $4 in two years. And there's 500 million shares of which are only 50 million float. Another T-R-Leyt would be Textron. Now, Tex-Rond is part of what I'm doing in the defense area. There's a contract that they got from the government to replace the Black Hawk and that's being challenged by Boeing and Sikorsky, and that will come up for renewal, for clarification on Friday. So the stock's $70, they earn $5 to $6. You know, I got so many of these, Tyler.

Yeah, and of course, that's the Flora contract, which has been valued at something like $80 billion over the lifetime of that program, a huge win for Textron and a key decision we're going to get. Yeah, exactly. A key decision we're going to get about that, but I guess I'll say perspective win from the GAO this week. We've talked about this before, but it's worth discussing again, the geopolitical landscape, the world seems to be getting more dangerous, not less right now. What does that mean in terms of the flow of defense dollars and the defense of defense stocks? Well, it's clear to me that if they allow Finland, which they did into NATO, they're going to up their defense spending. Turkey's got to resolve it with Sweden, but the whole NATO defense system is on alert.

The notion of China, which China won, the notion of what Russia did in. in the Ukraine, the notion of what Iran might be doing. You know, it is, reminds me, you know, we had this problem back in the 70s when we were just in conflict with Russia and came out of Vietnam. So we have those challenges, the amount of money that we have to put into hypersonics and put into other defense dynamics. That's why L. Harris is making the right decision to buy a aerojet. Hopefully the, they, never mind.

The XYZ doesn't turn them down like they did when they were trying to be bought by Lockheed. So that's what we need. We need to look at what is the efficiency of our defense system? And obviously, you all shoot down all these balloons. All right, Mario, thank you. There is nothing I enjoy more than spending 10 minutes with you. That was fantastic. Tyler, we'll do it again.

Thank you. And, you know, the other tea, obviously, is televise. We'll talk about Trump first. Take care. Yeah, that's the last tea. and that's where we're going to go now. Mario Gabelli, thank you very much. We are awaiting former President Trump's exit

from the courtroom where he will be officially arraigned if he has not already been officially arraigned. We're joined. He has not been arraigned yet, we're told. Contessa Brewer is outside the building and Amon Javers is down in Washington. Contessa, set the scene for us, paint the picture of what it's like

in downtown Manhattan. There are hundreds, if not thousands of people crowded into a few city blocks here, Tyler. Outside of the criminal court behind me, you have anti-Trump protesters, pro-Trump supporters. We've seen a few clashes this morning. We saw Congresswoman Marjorie Taylor Green get here, and she had publicized a protest. She came. She spoke very briefly, and in the mad crush of people, she was quickly escorted out of here. We also saw the Long Island Congressman George Santos, who again encountered a big crowd and ended up scrambling through some shrubbery nearby.

But the moment everyone here is waiting for, not just the protesters, but of course media from around the world is this historic moment of the former president walking into this courthouse. He is now under arrest. He will go into this court and face his arraignment on multiple charges. We're waiting to hear what those are. Inside, though the judge has said he will not allow the hearing to be recorded on video camera, there will be briefly cameras allowed to record the former president inside the courtroom. And in the hallway, the question is, will the former president stop and talk with reporters? There's a pool camera available there.

We did see sort of a triumphant gesture of the former president when he was leaving Trump Tower in Midtown Manhattan with his brief fist bump in the air. And then down in the courthouse, he went inside the courthouse here. And there was a cheer that went up from a nearby crowd. So now it's all about this arraignment. And all our eyes are on what's in that arraignment. What did the grand jury decide should move forward as charges against the former president? The toppers are overhead. A lot of people out here pressed up against the iron bars and waiting to see and hear any news from inside that courthouse.

We are keeping our eye on that indictment coming down the docket. Contestas, do stay with us. Amen, not only notable is the fact that this for the first time a former president or any president is being charged criminally. But one of the things that is going to come out presumably today will be what is actually in the indictment that is charging President Trump with crimes associated with hush money payments, we presume, to the porn star. I use that term advisedly, Stormy Daniels. We're going to find out what the counts are, aren't we? Yeah, and of course, that makes all the difference, Tyler, in any criminal case. As you know, I mean, this is going to be a moment, dramatic reveal, so to speak, from Alvin Bragg,

the Manhattan DA, who we just saw a couple of minutes ago walk through that door that you have live on the screen here right now and head into another side door on the right-hand side of that hallway. He has a big reveal here. He's got to reveal what these charges are, but also more importantly, what the evidence is, and tell the world whether there's anything new in this case, or whether this is his legal interpretation of facts that we have all known for several years now. Did he uncover anything additional in his investigation that is going to be news to the world, or is this his legal take on the hushed money payments to Stormy Daniels of about $130,000?

back in 2016, and at that there might be business records fraud or federal election fraud associated with that, according to the Manhattan DA. We'll wait and see that. At this moment, Tyler, we don't actually know the format for how we're going to see that. So I've got a couple of laptops in front of me right here, an iPhone, a couple of cameras, a couple of monitors. We've got every possible way of receiving this information when we do get it. It could be handed out on paper, though, inside that courtroom that we're looking.

at right now. So a lot to be determined here in terms of the significance of the charges against the former president of the United States. But I can't stop, but for a moment, and just point out the historic nature of what we're seeing right here is you see those, I believe, NYPD and court security officers on screen right now. The former president of the United States is in custody. He's in police custody right now. He is not free to leave that building until he goes through the court process. And that's something, Tyler, that we have not seen before. American history. It's certainly an unprecedented moment, Amon, and that was actually the question I was

going to ask is when we were going to and how we were going to be able to find out what some of these charges are. There are reports circulating ahead of time that could be something like more than 30 counts that are going to be brought forward this afternoon, but we just won't know. It sounds like until that information is provided. However, it's provided. It's worth noting that what we're talking about here is a former president being arraigned, being arrested, formally charged after being indicted last week.

And what that simply means is that according to a majority of that jury, that grand jury, that there is enough evidence to proceed with a case, any sense on the timing of such a case, when it could actually go to trial, what that court process could look like, and how long it could extend. I would expect that this will be a long time. And you're right. Start with the very important first principle here that an indictment is simply an allegation made by a prosecutor in this case an allegation that a crime has been committed the grand jury voted that there was enough information visible to the grand jury

to move ahead with this case and now the former president of the United States is going to have uh... the presumption of innocence until proven guilty in a court of law that process could take a long time Morgan we're gonna see a blizzard of motions back and forth uh... we saw the former president of the United States on social media today suggesting that he wants to move the venue from Manhattan where he feels it's an unfavorable political climate to

Maybe Staten Island, where he had more political support in one of the boroughs in New York City there. So all of those things will be contested in motions over the coming weeks and months. This could be a year or more before this case is resolved. And we'll be watching to see if now the former president is fighting legally on multiple fronts. Because remember, you have the January 6th investigation. You have the classified documents investigation. You have an investigation in Georgia in terms of election improprieties. All of those could enter the criminal sphere at some point as well.

No indication of when that would be, but that would be a political and legal, significant, significant challenge that would certainly knock out any other presidential candidate, but this presidential candidate has proved immune to scandal in a way that very few other political figures in American history have proven. And not merely the cases you just mentioned, Amon, but two others, a defamation and rape allegation brought by the journalist E. Jean Carroll, I believe that goes to trial sometime later this month. And the New York State Attorney General Letitia James has a civil fraud suit pending that I think is slated to go to court next fall in October over asset valuation.

So whatever happens here, there is legal jeopardy on multiple fronts, whether civil or in this case, criminal, that could mean that the former president will be spending a lot of time in court. Yeah, this is his first brush with the criminal justice system as a defendant. It may not be his last. That is to be determined. But as you say, there is an array of potential legal jeopardy out there for this former president that we have not seen before for any former president. You know, the immediate past precedent, you might think Richard Nixon, but of course he was pardoned by Gerald Ford for any crimes he may have committed during the Watergate scandal.

so that example not applicable here. And the remarkable situation of all of it, Tyler, is that he's running for president. Again, he's running for the Republican nomination in 2024. We have never seen a presidential candidate with that much legal baggage run. But this is a candidate in the past who has shrugged off scandal after scandal, and you would imagine he might be able to do that again here. So it's certainly not clear that this is the end of his political career, although it might be for any other political figure.

And I'm going to pick up on that thread, Amen, and bring Ben White of Politico and a CNBC contributor, sitting here with us at the desk back into the conversation. That is what I want to pick up on with you, the fact that we're talking about this particular case moving forward. The other cases that are being investigated potentially brought against the former president as well. But it has no legal bearing on Trump's 2024 presidential candidacy either based on the Constitution. and what even if he were to be found guilty, what that would mean in terms of his ability to continue to run for president? That's correct. As far as we know, you can run from prison, as I think Lidun LaRouche did back in the day. But, yeah, the point is he is open to various legal challenges, some of them carrying more serious sentences than others. This set of charges that we're going to get read out today are relatively minor in the scope of all of those things.

And so far, all they have done are increases poll numbers, fire up his base, allowed him to me. to raise a ton more money and been pretty much exactly what he wanted. Now, this experience of being in custody for this time is not going to be a happy one for him. Politically, it's been fine. There are much more explosive charges in the Georgia case, in the January 6th case. These are things that could, in fact, preclude him, not preclude him legally, but destroy his political career. He is so far approved immune to everything.

He's immune to this thus far, and he could be immune to it even if convicted. But there is stuff on the horizon here on January 6th. on Georgia on the cases that Tyler mentioned that could be more threatening politically. Right now, this one is a bonanza politically for him, which maybe doesn't speak too well about the nation, but it is the answer that we're getting. Contessa, you're outside there. I'm curious. Are there more media people there than there are ordinary citizens?

No, that was true when I first got here early this morning, Tyler. But the park on the other side of my camera and facing the courthouse is full of demonstrators. Both those supporting the former president and those who are fiercely opposed to him, and there were some clashes here today. And when we heard the crush of the helicopters overhead and heard some action happening over on the side of the courthouse, there was a big rush of all those people up to try and catch a glimpse of the former president. There is clearly still a palpable sense that he motivates people politically out here, those who cared enough to come down to lower Manhattan today and be outside of this courthouse.

And he's still drawing a crowd. What do, Amon, turning to you, presumably the former president is going to walk out of the courthouse, released pending trial on his own recognizance, and there's probably no one who has higher recognizance than President Trump does. And then he goes back to Mar-a-Lago where he is expected to give some sort of spruce. to a crowd either at Mar-a-Lago, I'm not exactly sure where, maybe you can fill us in. Yeah, we do expect him to make a speech tonight in Florida once he returns to Mar-a-Lago. We'll wait and see what he has to say, of course, based on his experiences today.

But he'll be embarking on a very strange presidential campaign from here on out, in which he is fighting criminal charges at the same time running for President of the United States. I can think of one other precedent for that where we saw Eugene Debs, the so. socialist candidate in the early part of the 20th century running from a jail cell, actually, and winning millions, I believe, historians are going to check me on this, but millions of votes as a socialist in the early part of the 20th century running from jail. So that has been done before. What we have not seen before is a former president facing criminal charges, as we're seeing here. And the man who is the frontrunner for the Republican nomination in 2024, not a fringe candidate,

not a minor party candidate, but somebody who is a former and potentially future president of the United States. You can imagine there's a group of supporters for President Trump who will look at this and say, this is Democrats in a blue state out to get the former president of the United States. This is political. It's trumped up. It's not fair. And we'll see how many of those supporters there are. Or if we start to see core Republican support peel away from the former president here looking for an alternative candidate. someone out there who can be Trump without the criminal charges now? Is there someone like a Ron DeSantis who can give you some of the same Trump energy politically, but not some of the legal drawbacks?

Will Republicans start to look for that alternative? We'll just have to wait and see. I don't think even polling at this point can give you a good sense of where that's going to land, Tyler. Want to get your thoughts on that, Ben? It's a good question that Eamon asks whether there is a non-Trump, Trump candidate. I think, you know, to bring it to your viewers and people on Wall Street financial markets who would like to see a Republican emerge who is not Donald Trump, but can be an alternative to Joe Biden. It doesn't seem clear that that's going to happen. It's not happening now. This indictment, this set of charges, has done nothing but help him financially and politically. And there's not a quick alternative to him. There may be one.

And if he gets hit with worse charges, then that would give the opportunity for somebody to emerge. But DeSantis, since all this broke, his numbers have gone down, Trump's have gone up. Yeah. And of course, we're continuing to await, as we see on, on your screen with that video, we continue to await more information, more news as it's coming to us in real time here with Trump being arraigned in this historic and unprecedented moment. There is former President Trump exiting the courtroom. Let's see what's just watch and take in the scene. He has obviously exited our view moving down a hallway or corridor to his left, our right, obviously clearly cordoned off by a phalanx of New York State court officers as well

as barricades there. We're not exactly certain where he will be headed next or whether he will be taken to an area where he could speak to media. Oh, he's gone into the courtroom now, we're told. Apparently that is the step. This is not the conclusion, it would seem then. He has gone into the courtroom for a formal arraignment that obviously were doors that led from a processing area where he had been earlier where various information was collected about him, fingerprints were taken, and so forth. Now he has moved into the courtroom. So obviously the timeline here, which originally had him in court in the courtroom at sometime around 215, is running about 15 minutes behind or so. if that is what is indeed happening here. So not to be, shouldn't be surprised that things are taking a little bit longer.

So we will keep watching what's going on and keep discussing this. You know, I think Ben and Amon and Contessa, one of the things that is concerning here is the precedent that is being set. Many people have talked about it's not an original thought with me, certainly. The precedent that is being set that a president can be charged for active in this case, it appears actions taken not while he was in office. Prior to office, that's one thing. But there are other things that are pending that are actions taken while he was in office. And that this could unleash a cycle in American politics where virtually all former presidents can be charged by someone. by an attorney general in Texas or Indiana or California with some offense.

It's a legitimate concern to have that it covers acts while in office and could be used as a political weapon in ways that we would not like to see. I would say in Trump's case, these are allegations that are very serious, not necessarily this set of charges. This is hushed money and it is in a case that is real and the charges can be real and the penalties can be real. But when you're talking about the undermining of an election, the attempt to get the Georgia elections official to find votes that don't exist. When you talk about firing up your supporters to attack the capital, which he arguably did and undermine the nature of our democracy, that's a different animal. Is there a precedent setting that could be a dangerous and abused?

I'm not sure that there's not. You have a point. At the same time, it's simply impossible for the American Republic to go forward without the full airing of charges against this man. This is not it. This is not the reckoning that is coming for him. That will come from the Georgia case and from the January 6th investigation. You can make the case. They should have, or this Manhattan DA should have waited for that to happen because this is kind of a sideshow. But those things, you just have no choice but to go after them in every way you possibly can. Okay. We're going to continue to monitor the situation. But in the meantime, we're going to get a market update with Bob Pisani with a Dow down 283 points. Bob. Well, I think the important thing is considering how controversial the jolt's

numbers are. A lot of people don't think the numbers are up. It has had quite a bit of impact on the stock market. The most important thing you want to look at today is the cyclical stocks simply collapsed when those numbers came out. So Caterpillar, for example, some of the big material names like New Core and the steel stocks moved down rather dramatically. And that's had quite an impact on the market because those stocks had some real momentum in the prior week. The other thing that happened is Treasury yields moved down rather dramatically on top of that. So utility stocks, which compete against Treasury, held up comparatively well. And we had defensive names, for example, Procter & Gamble that have also held up reasonably well in the stock market.

So again, two sectors there that moved rather notably as the yields moved to the downside. The other thing that we saw was gold moved up rather dramatic. In fact, gold moved up over $2,000, and it's now at a 52-week high, essentially. And what's moved here is all the big gold names, which normally are not in the top movers on the S&P 500. I can assure you, but Newmont is right up there today as a top mover in the S&P 500. So Kinross, Agniko, Barrett Gold, all moved to the upside. The other thing that happened in the middle of the day is the regional banks started weakening as well. Now, the important story about regional banks is last week.

They had stabilized a bit. And this week, they have now started to move towards the lower end of their recent trading range. So Key Corp was $12, $13 last week at the lower end of its trading rate. You see now here dropping below that. Technically, that's important because even though the volumes aren't anywhere near where they were several weeks ago, the fact that they were dropping and there hasn't been much buying interest at these lower levels is a sign still that there's not a lot of enthusiasm for accumulating regional bank stocks. So again, considering how much controversy there's always been around the Joltz report in general,

I'd say it's had quite an impact on the market today. Guys, back to you. All right, Bob, thank you very much. Let's now go and check on the bond market as the 10-year yield on pace for its lowest close in seven months in the 330s. at last I look. Rick Santelli in Chicago tracking the action force. Hi, Rick. Yes, Tyler. It was a huge number. I was on the air at 10 o'clock Eastern when Joltz hit. Look at the chart. That is the lowest level of job opening since May of 21, and the market's answer was resounding and immediate. Look at an intro of two-year note yields. They were well over 4%. And you could see where the dust

settles. We hover now in the mid-380s. And if you open the chart up, you can see we're hovering at a place where we could be at the lowest yield close in a couple of months. But that tenure is definitely on pace for the lowest yield close in seven months. And the issue here is we don't need to dig too deeply into this. Anybody who's been breathing the last couple months watching the equity markets knows that everybody's on pins and needles for that moment where the labor market shows us there are cracks in it. And today may be that day. And the biggest issue of all is going to be, now that we're there and the labor market might not be as pristine as we think, why is the equity markets going down? Wasn't it supposed to be when the Fed's done, stocks rally?

Well, now stocks have to pay attention to a bigger issue. It's the R word. Yes, recession. Tyler, Morgan, back to you. All right, Rick Santelli. Thank you very much. It's the second day in a row. We've had pins and needles. in our commentary here. So there you go. Important that. President Trump, in the courtroom now for his arraignment. When he departs the courtroom, we will bring it to you live. Stay with us.

After a big rally yesterday, oil prices just slightly higher today. Pippa Stevens joins us now with a look at the numbers. Pippa, those numbers have gone up from the what, mid-60s, about 10 days ago? Yeah, $60 level feels like a really long time ago at this point. Although oil did move between gains and losses. Today, with OPEC and its allies,

surprise production cut, lending support, but that's been partially offset by renewed demand concerns following weak economic data. Still, WTI ending the day here at $80.72. Now, at gas, meantime, jumping into the close, still, the commodities been under pressure following high production and soft demand with warm winter temperatures. And inventory is now elevated as injection season begins. The prices here are $2.10. Now, turning to energy stocks, they've rolled over alongside the broader market. Today's losses are being driven by the refiners, with Phillips 66 Marathon Petroleum and Valero, the worst performers. Now, Bank of America said it a note to clients that the backdrop is

actually improving for energy equities, and while higher commodity prices will lift the sector broadly, they did say to focus on individual names and their top ideas include APA, Conoco, Exxon, and Oxy. Morgan. Pippa Stevens, thank you. For more on the outlook for energy prices for the rest of the year, we turn to Ed Morris, City Global Head of Commodities. Ed, great to speak with I am going to start with oil. Is there an OPEC put in the market here? There has been an OPEC put in the market, and yes, there still is. And OPEC, you know, surprised the world by announcing a cut after saying no more cuts, no more changes for the rest of the year. And it probably is in response to the weakness that we're seeing on the demand side.

So, yes, that's what they're looking for, $90 oil probably, and not something in the 60s. So how do you balance that against the possibility of, recession as we are seeing increasing data showing signs of at least in the U.S. economic slowdown. We're seeing economic slowdown, so to speak, not only in the U.S. but else we're in the world. China's expected jump in demand is just not materializing. China's recovery has not been led by goods, but by services. So we're now questioning whether the $7 or $800,000 a day jump in Chinese demand that we had been forecasting is going to come through.

And meanwhile, yes, U.S. demand is down year on year, and it looks like it's going to be even weaker than we saw. So we think the prospect for prices is going to be on the downside rather than on the upside. We have to talk about the other energy market that's been seeing wild moves as of late, and that is natural gas. We had an unexpectedly warm winter season, not just in the U.S., but in Europe and other parts of the world, too. Prices basically around $2 right now, year ago we're at what, close to $10. 10? Do we go, do we have farther to fall from here? We don't have much farther to fall, but it could fall well below $2. We have too much drilling, too much supply, and not enough demand.

The U.S. is being poised for phenomenal growth in the LNG export market, but those LNG export facilities are not going to be ready until sometime late, probably in 2025. And therefore, you know, the producers are primed for a market that's yet to materialize. So we're looking at weak market prices for the next quarter or so until maybe the drilling falls even further, and we can get supply demand back into a proper balance in the U.S. So what could happen with natural gas prices over the rest of the year, both in the U.S. and in other markets in Europe most particularly? Could they go up dramatically?

Yes, they could. And we actually expect that European and Asian prices are likely to be, you know, twice as much this time next year as they are now. That doesn't affect the U.S. market so much because we are kind of maxed out at how much we can export. We can't export more, so whatever we produce has to stay in. And that'll be the case until we get this phenomenal increased ramp-up in our ability to export out of the United States. But meanwhile, not only are we not increasing our LNG capacity to provide Europe with more supply, but nor is anyone else in the world. So the global market is seeing supply curtailments. They're not seeing more LNG, and we expect demand to be

growing across the planet over the course of the year. And with that, this artificially low price that we've seen in Europe is bound to get higher, doubling or even tripling potentially, depending on the weather. As the head of commodities research, how closely you're tracking oil, which is back above or is above, well above $2,000 an ounce right now. It's really having a moment. Gold is having a moment. And yes, that moment is going to come and go, but mostly come rather than go. Gold responds to interest rates. Gold responds to the value of the U.S. dollar.

We expect, you know, after the next couple of increases in rates by the Fed, that they're going to be curtailing. And we also have a forecast of a much lower dollar, DXY, the average of index for the U.S. dollar has been above 100. We think it'll be below 100 next year and the year after. and that speaks to gold going up above 2000 on a more permanent basis and even reaching 2100 before 24, excuse me, 2020, it might be over. Oil is up about $15, $14 a barrel in the last 10 days or so. Where do you see it topping out?

And is that a sustainable top or is the oil market likely to do what the oil market often does? And that is a over-react and then fall back. Well, so on that where we oil prices were in the 60s, that was an overreaction to what was happening in the U.S. financial sector and the global markets. And it went down more than the supply demand balance warranted. And now we've jumped up above where the supply demand balance warranted. And there are people saying, hey, you know, around the corner is $100. I need to cut you off right there. We've got some breaking news as we are getting our first photos from the courtroom.

Amon Jabbers has the details. Amen. Morgan, that's right. Right, they did allow still photographers into the courtroom, and I believe we can call up the first pictures that we're seeing now. I believe these are from the Associated Press. There you see Donald Trump in the courtroom flanked by his legal team. Of course, no video allowed of this court proceeding, this arraignment that's going on as we speak, but these still photos released to document the events.

And Morgan, these photos will now enter the pantheon of sort of American news coverage of court scenes, and now a former president of the United States in a courtroom. That's just something that we haven't seen before. So as we consider the historic impact of what we're seeing today, these images are likely to be seen again and again in years to come. One point of note, the politics of all this are playing out simultaneously. Even as this arraignment is going on, the former president entered the hearing room at about 2.29 p.m. East Coast time by my account.

And at 231, the former president's presidential campaign released an email to supporters entitled My Indictment asking for campaign contributions, the former president's campaign staff writing, I simply have to ask for your support during these unprecedented and dark times as the radical Democrats attempt to bury our campaign in never-ending witch hunts. The former president's campaign has buttons here in the email to contribute $24, $47, amounts up to $250 for his supporters. So the former president has been successful, raising money off of this event since his indictment last week, even now as he is in the arraignment process in the hearing room where we're

seeing these first still photos, his campaign now raising money off that as well, which is a reminder to all of us that politics never stops, guys. I believe that those individuals sitting with him are the familiar attorney Joseph Takapina, who has appeared on television. frequently on the former president's behalf, as well as Susan Nishelles and Todd Blanche, who is on the far left there, just added, if I've got that individual correct, a former prosecutor, just added to the Trump legal team within the last 24 hours. He has pleaded not guilty, by the way, not surprisingly, Amen. That is correct. There are also some political aides in the

room as he walked in. I saw Boris Epstein and also Jason Miller political aids. to the former president with him as he walked into the courtroom. So some familiar faces and then at least one new face here on the president's legal team as he expands his team that's going to be defending this case and potentially we'll see about any others that might come to fruition and what he wants to do with legal teams in those cases as well. But the president clearly burning through some hourly billing fees here with this legal team and you can see why they are sending out that email solicitation for fundraising.

And of course, and we're showing this on your screen as well, that Trump has pleaded not guilty to 34 felony counts of falsifying business records. Any sense? And I ask this, realizing that this entire situation, even, is unprecedented and we're in many ways in uncharted waters here. But any sense of just how hefty that number is versus a case that you would see with a politician involving something even remotely similar in the past? Well, what we could be looking at here, and we don't have the indictment yet, I'm just refreshing my screen here to make sure that that has not been released in the past couple of seconds. But we do see now 34 felony counts of falsifying business records, Morgan. And so it could be that each of these counts is one of the falsified documents or allegedly falsified documents in this case. So if there are 34 instances perhaps in which there was a filing or a record that the DA is saying was falsified here, that could get you to 34 separate counts. right. We're going to have to wait and see what's in this indictment, though, before we say for sure, whether that number is, you know, undue or outsized or in any way. It is within what had been reported and what was expected, though. Do we know whether the indictment was presented by the DA,

personally by the DA, Mr. Bragg or by someone on his team? Do we even know that? Maybe the control room knows or Amy and you do? We don't know that. Yeah, we don't know that, Tyler. The plan going in was it was possible that the Trump legal team would be given an opportunity to review the indictment and step outside the room into a separate facility where they could review the indictment document, put this hearing on hold, and then go back in the room. We haven't seen any indication that that has happened yet. I'm watching that door that we were all looking at just a couple of minutes ago. Nobody has emerged from this hearing room while we've been talking. So it doesn't appear that they've taken a hold on this process to go out and review the indictment. But presumably the Trump legal team now has a copy of the indictment.

The president has pled not guilty to it. So we will all be getting a copy of that. Fourthwith, I would imagine. How forthwith, I can't tell you. Contessa, let me turn back to you and ask whether people in the crowd are learning about the indictment, the not guilty plea in the way we now seem to consume our news via cell phone. Has there been any reaction that you've seen to any of this? The crowd has become very subdued now.

There is a level of calmness that has sort of descended across all of these people. And when I look around the media, the journalists who are here, stretch from this block all the way down to this block, and they're busily working. I will say that because there are so many people jammed into such a small area, what we've seen is that there are communication issues. technology issues, people are having trouble getting information in and out by cell phone in the way that you often see when you go to an arena for a sports event or something like that.

This is a crowd where when I look out over it, I can see the flags that say Trump 24 and lots of American flags out here. But we've also seen a solid presence of those who say that the former president should face justice and that they want to see him, held responsible for the things that he's been accused of. So going into this courtroom, and again, I think that Amen and Tyler and Morgan, you have done an adequate job of really conveying the fact that you have a former president sitting in a courtroom having his picture taken while the charges against him are laid out, and he's in a position to plead anything to criminal charges.

I think this is a momentous moment in history. And for a lot of the people who are out here, I think it's really about just taking part in a historic day, no matter what side of the political aisle they fall into. A historic day, one that the market is largely shrugging off right now, I would mention with all the major averages trading lower. But basically in line with the levels that we've seen even before we've been getting these most recent headlines. Ben White from Politico, CNBC contributor, you're back on set with us. I want to get your reaction right now to Trump pleading guilty, not guilty, excuse me, to 34 felony counts of falsifying business records. Yeah, exactly what we expected to happen, the number of counts and his not guilty plea.

He plans to be completely, you know, in war mode against these charges. He will later at Mar-a-Lago go out and appeal to his supporters and say that this is a witch-hunt, that this is politically motivated, that this is their attempt to not allow me to win the presidency again. I don't believe any of the things that he's saying are true. These are legitimate investigations of legitimate charges and things that he allegedly did and broke the law. So it's perfectly reasonable to prosecute him for those things. But he will be emboldened by this.

He will continue to plead innocent, and he will use it to raise money and increase his poll standing. And there's nothing that indicates to me that that's going to change or that he will be reduced in his political standing until he is actually convicted of something or multiple things, and maybe not even this, as we talked about before, the more serious charges come from Georgia and January 6th and some other investigations. Everything redounds to his political benefit, it seems, until that day, if it ever comes, when he is convicted and put into prison for something. Amen, let me turn back to you. The Trump legal team, which is big and growing with the addition of

Todd Blanche from the firm Cadwallader in Manhattan, is interesting. He has now become apparently the lead counsel here, supplanting Tacapina and Susan Nishelis. Blanche is interesting because, among other things, he represented former Trump campaign official Paul Manafort and succeeded in getting some charges dropped in that case against Manafort. That may have caught the president's or former president's eye and may explain one of the reasons. And he's also obviously a very esteemed attorney in New York City. And I believe, Tyler, he left his position at Cadwalder in order to take on this job. I saw a quote from him this morning saying it was an opportunity he couldn't pass up.

So clearly very focused on this case, and obviously it's going to take a lot of time. The legal proceedings here are on one level. The scrutiny of this is otherworldly. So the amount of time and effort that this case is going to take, I don't think you can underestimate. So Blanche is going to have his hands full, certainly. but clearly somebody that the former president is turning to thinking he needs to beef up his legal team. He's had some lawyers who've been on television a lot. He's had lawyers now in the courtroom alongside him.

And he's got some former lawyers out there who have been frustrated with dealing with him as a client over the years. So this president, this former president, is extraordinarily experienced in hiring lawyers, Tyler. Clearly he's decided to beef up the team. Ben White, where's Rudy Giuliani? That's a very good question. Absent from all of this, hopefully he's not having his makeup meltdown anywhere on television. But I don't think that he's viewed now as an effective spokesperson for Trump and has been kind of reduced. Marginalized out of the loop. And there will, as this indicates, emerge some new, fresh superpower legal names for him. Trump, his entire career, has relied on armies of lawyers. Sometimes they get paid. Sometimes he doesn't pay them.

but I would get paid in advance if I were one of these attorneys. But there will be new stars, new people to talk about him and defend him. And we're seeing some of that. And figures like Rudy Giuliani, who are associated with earlier periods, may fade away. One thing we can be assured of is that George Conway will not be on his legal team. I would not imagine Conway would be akin to, you know, psych to do that, being not a fan of the former president. We keep talking about the former president being immune so far, thus far, from many of the different controversies that have swirled around him, including legal up until this point, has his business been immune?

Do we know have those investigations into what his earnings and how this has impacted his empire and his real estate empire and everything else, how that has evolved in the midst of all of this? Yeah, I mean, to the extent that he has that much of a business empire anymore, you all would know better than I, the exact holdings of Trump's real estate business, but he is mainly in the celebrity business and has been for quite a while as, you know, an NBC star on the and as a retailer of his own various brands of things. I don't think that there's anything in his business world right now that is going gangbusters that is making him a ton of revenue.

I could be wrong about that. Historically, you know, his controversies have not heard his businesses that much. And as a brander, they've helped him. But he is a marketing man. He is a celebrity personality who profits off of his name, both politically and financially. That's going to continue to happen until, as I mentioned before, something actually comes up and catches him and their consequences to pay. He has paid business consequences over the years, bankruptcy filings, the rest of it for

business failures. But his controversies have not really done anything but made him more politically popular, and he's used that to leverage the celebrity brand. You were pointing out to me earlier that his social media company, the value of it in the marketplace has gone up in recent days? It's a SPAC. It's the SPAC that is looking to merge with. It owns Truth Social.

Yes. It is under pressure. It looks like it's selling off today, and I should note it's a very small market cap. It's very small and has lost a lot of values since it is down in the midst of all of this. This would tend to bring it up because people are now looking at it. I mean, he sequestered himself inside that bubble, which does not have a lot of viewers, does not a lot of people on it. Still, people are on Twitter and elsewhere. This is a reason for a lot more Americans to go look at Truth Social. And so from that perspective, it makes sense that the shares would benefit from him being the center of attention. Amen, at what point does this, and I ask this because, yes, the markets are down today,

but the markets were down today even before this arraignment process started. At what point does this become a situation where Wall Street and where investors take a closer look? Morgan, I don't think it does, particularly when you're not in a general election cycle, where the markets might be looking at two candidates in a general and saying, well, one is better for tax policy or economic growth than the other. And if that candidate takes a hit, then, you know, maybe that might have. have some implications for the market. This early on, I just don't think Trump's legal fortunes matter a whole lot to the stock market. We'll wait and see. One little additional note of

clarity here, we're getting now information that there are 34 counts of falsifying business records and conspiracies. So add the conspiracy element to this for his alleged role in hush money payments to two women, so not just Stormy Daniels, but two women toward the end of his 2016 presidential campaign. That is, again, as expected here, and as previously reported, by many outlets, the conspiracy element here would indicate that he conspired with others, right? That there are other people involved in this effort to falsify these business records. And presumably some of those people will be people who have already given evidence to this grand jury. We'll wait and see all those details.

We do not have the indictment documents yet, guys. Okay. We're going to continue to monitor the situation. But we are nearing the end of our hour of doing so. Amen Jabbers, Contessa Brewer, Ben White. Thank you for joining us here today. Just to get another check on the markets, the S&P right now is down about three quarters of 1%. 4093 is the level there.

The Dow is down 257 points, and the NASDAQ is also down about three quarters of 1%. You have yields across the Treasury spectrum. Significant move in years. Under pressure. And, of course, we saw that weaker than expected, which was good news to the market, jolt's number this morning. Jolt's number. I think people moving into bonds out of a sense of safety, probably a safety play there, also the anticipation that perhaps the economy will slow and that that will stay the Fed's hands and maybe bring sooner the date at which the Fed

decides to start cutting interest rates. Exactly. That seems to be the push poll with investors. Is good news, good news or is bad news, good news, etc., etc.?