Power Lunch - S&P 500 falls after first-quarter GDP contracts, raising recession fears 04/30/25

Episode Date: April 30, 2025

Stocks fell on Wednesday, spoiling an April rebound, as data showed the U.S. economy contracted in the first quarter. The result heightened fears of a recession in light of President Trump’s flurry of trade policy moves. We’ll cover all of the angles for you. 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 Evans. I'm Dominic Chu, and stocks are lower across the board right now. But we are way, and I mean way off the worst levels of the session. In fact, we're kind of drifting towards session highs right now. The Dow was down nearly 800 points at one point this morning near 10 a.m. The Dow and the S&P are now both seemingly likely to snap their six session winning streaks, although we do know a lot of things can happen, Kelly, in the last couple hours of trading. Oh, for sure, but we'll still look at the NASDAX still down one. But keep an eye also on bond yields. The 10-year note fluctuating throughout the morning as we got kind of differing economic data.

On the downside, we got the ADP report, much worse than expected on the jobs front. GDP was also negative, but actually running hotter on final sales and on inflation. So where things settle out now, 416 on the 10-year yield. All right. And then we are all still in the midst of, of course, the busiest earnings week of the season. Meta and Microsoft are on deck reporting today after the closing bell. Apple and Amazon are coming out tomorrow. And after that, Kelly, the only Mag 7 left is Invidia later on at the end of May. All right, closing it out. Speaking of which, today marks 100 days since President Trump took office.

And it's been a rough stretch for the markets. The NASDAQ faring the worst, down about 12% during that time. 7% drop for the Dow, 8% for the S&P. Jeffrey Hirsch is CEO of Hirsch Holdings and the editor-in-chief of the Stock Traders Almanac. Welcome to you, joining us here on set today. Great to be with you guys. And maybe, you know, if we're going to take a... How would the market stack up the Trump first 100 days compared with his predecessors, including himself? It's the third worst. The worst was when Jerry Ford took over after Nixon resigned.

That was like the final plunge, the end of that two-year bear, 74 bottom, you know, October for the S&P, December for the Dow. And that number two was 73 for Nixon, which was the beginning of the two-year bear. So not great company. And then just after that was 01 with W and the midst smack dab in the middle of that, you know, dot-com bust there. We've heard the administration itself. I think Bessett has made the Reagan analogy frequently where he says, you know, in the early part of that administration, the economy tank, interest rates were soaring. I assume the market was doing quite poorly. And then by re-election, he won by a landslide.

Now, Trump doesn't have re-election this time around. No. And he's got a short time until the mid-term. to get some things done. I think that's part of it here. So I'm just curious how that analogy stacks up for you. It stacks up very well to the Reagan transition, you know, after Carter. And, you know, that one year was down about 9% or so. So there was some issues there as well.

But, you know, I think there's a lot more going on here, a lot faster. There's, you know, I see the administration a little bit out over at skis. There's a lot of uncertainty, much different than the Reagan era. And we were coming off some seriously high interest rate situation, you know, back in the 80s there. So a bit different. You look at the numbers, right? We look for, you're a person who has with the stock traders almanac carrying on your family tradition and whatnot. You look at the numbers and you look at what they could tell you, even if history doesn't repeat, it might rhyme.

That's the whole idea. So if you look at the numbers and you look at the first hundred days and you compare it in the context of what we just got from you with the other times it's how. happened or close to happened. What exactly are we in store in the market for, on average, in your estimation, given what we've seen, historically speaking? There's a lot more than just the first 100 days from my view. We had, you know, our best six months, which is something my father invented back in 86, the November through April period, by in October, get yourself sober side to sell in May, which is what I like to say. And that's negative. So, you know, when bullish seasonality is, is negative, there are other forces that are more powerful.

And when that seasonality period is over, the bullish season is over, they can really have their state. So that's one thing. We head it down. Q1, that's troublesome. We've got it down April unless we get something here before the close, you know, that'll be interesting. What happens here to the close. So then there is my post-election year seasonal patterns and the history of Republican administrations. We have a page in the Stocksarder's almanac about performance by party during the post-election year.

Republicans generally don't do well in the post-election year. Democrats do worse in the midterm year. publicans tend to come in and sort of take care of things very quickly, as we're seeing here, you know, even more so than usual, whereas Democrats tend to hem and hame and haeunt hae and take a little more time to get things done in the midterm. We did have the midterm bear in 22 for Biden. So it's tracking some of those old school Republican years like 73, 57, 69, some of these years that show a Republican administration coming in and really changing things quickly and taking a lot of action. And that leads me to. a little bit more cautious stance this year than I initially came out with. Is it as goes that first 100 days, so goes the term generally? Not necessarily, but with the down best six months, four out of five were down further and were bare markets. So the other factors, I think, are equally and even more important than just the first

hundred days in conjunction with all the other things. A lot of moving parts for sure. All right, so stick around here because as we mentioned, markets are recovering throughout the course of the trading days so far after opening very deep in the red. The NASDAQ had dipped 500 points at its lows of the session. So let's take all of that and broaden out the discussion. So joining us now is Fitzgerald Group Principal Keith Fitzgerald, also G-squared private wealth, chief investment officer Victoria Green.

And of course, still with us here is Jeffrey Hirsch from the Stock Traders' Almanac. So now, if we take a look at all this, and I'm going to start with you, Victoria. We bring you often on here to talk from a trader's perspective. is this an environment right now? We've seen a lot less volatility relative to what we saw two to three weeks ago. Does it feel like it's okay to start dipping your toes back in the market? I'm more sell to rip than by the dip. I think we're stalling out here.

Obviously, the next two days with four of the Mag 7 reporting may confirm or deny where this goes, but it does look like we've stalled out a little bit on this relief rally. So if you got uncomfortable, if you wanted to sell on April 8th, we're advising you to raise a little bit of cash now because it's better, better to sell after this recovery here than if we go ahead and retest our lows. So I'm very concerned of a retest of lows. Again, though, I've been talking about how you have to read the tweet leaves. I know it's a terrible fun, but right now we are being jerked around about what comes out on the Mapro, what's getting tweeted, what deals are getting done. And so you can see those big pops like we saw.

So we recommend that you have to be a little bit uncomfortable right now. But if you wanted to panic and sell on August 8th and 9th, we do recommend you kind of bunker down a little bit right now. I don't we're through this. You know, we've got a lot coming through. I don't think the GDP was actually all that bad. A lot of it was just pulling for the imports. You know, the one that scared me more than the import export number was the reduction in federal spending. And that, I think, is a canary to watch. Are we actually going to get a reduction of government spending, which could then chiggle down and slow down the economy? And dare we say, the nasty word, sticulation, if that might be coming down the pipe. All right, Keith, this is a time right now where we were

seeing the initial parts, initial parts of what might be hard economic data, the actual happenings, starting to echo what we've seen in some of the softer survey-related sentiment data over the course of the last few months. Do you feel as though the economy is still in a good enough position, or do you feel as though there are economic concerns that are starting to work their way through the market narrative? I think that's a very prudent question, Dom. And, you know, my guts and 45 years of experience that I like to think accounts for something are telling me to lean in because what I'm seeing in hearing is that there are tariff-proof stocks out there. There are companies that are still very strong, putting up good numbers. So those are the things that I'm actually

going to lean in and go shopping with more of an investing philosophy than a trading philosophy at the moment. Okay, so that's a great tease. My follow-up question will invariably, what are those tariff-proof stocks? Well, take a look at Microsoft for a example, CEO, Sazate Adela, let loose with something yesterday. I think people totally glossed over. He said 30% of Microsoft CodeStack is now being written by AI. Imagine what happens to profit margins when suddenly you've got AI writing AI and you can concentrate on moving forward. Faster product delivery, better intelligence, better Azure, better AI, better monetization. A profit margins, I think, are going to expand considerably in the next 12, 24, 36 months. The market isn't even remotely recognizing

that yet. Jeff, jump in here. So, I mean, what I'm seeing here is that, you know, we're coming into the worst six months and the, you know, situations that I mentioned, we've got some trouble ahead. I think 12 months from now, markets will definitely be higher. We've got some technical indicators flash and green. There's wide breaths, thrust, and other things. I'm saying thrust and verify.

I think we need to get through those levels. We're still, you know, not above that April 2nd, April 3rd gap. There's still an issue there. Then there's the election gap. So there's a lot of overhead reasons. declining 50-day moving average. And, you know, we're playing a little defense. We went back into the Q's and the IWMs, the NASDAQ,

about a week and a half ago. So we're up on that. And small caps. You mentioned that. The Russell 2000, they were really washed out. We got stopped out of those and we're back in. We're also playing a little defense against the dollar weakness with some of the current's ETFs, the Swiss franc, the euro, and the yen,

as well as the DBA agricultural. And, you know, we're six months. We go into bonds. I like the real short term. SGOV and SHV are the ones. What did you say? Thrust but verify? Thrust but verify. Explain that for saying that what's the thrust? Well, the old thing is trust and verify. Right, right. But we have this breath thrust that has this perfect record. I knew Marty Zweig back in the days. It was a real doll, and a brilliant analyst. So we've seen this flip from very few advancing shares to a lot of advancing shares in a short period of time. And, you know, we've got that thrust.

It's got a perfect record. These kind of perfect records, to me, are just bound to be broken or primed to be broken. So we want to verify that with some other technicals. Thrust but verify. Keith, before we go, first of all, you fixed your shot, and it looks great. It looks better than ever. But second of all, I noticed Palantir, one of the stocks in the green this month. Are you still a fan of that one in Vivida?

What are some of your other go-go darlings? Oh, my goodness. I haven't let go of a single one of those shares. And as a matter of fact, I hope I'm smart enough to buy a, lot more. That's where the world is going to the discussion Dom and I were just having. You've got to lean in at moments like the president when everybody thinks that's not even remotely possible is where the biggest, best and most consistent profitable. So Nvidia is still on the list. Poundtier's still on the list. Tesla is still on the list. Costco is still on the list. Hmm. All right. Speaking of

high valuation companies, no. And real quickly, Jeff, before we go, what is significant? What are you watching today to see if we close in the green? How close are we? I mean, I just saw the DA flip green. over there, you know, a moment ago. I'm not sure if it's back and forth there. We need a little bit more for April to be positive and a little bit more for the best six months. So it's going to have to be a big rally at the end of the day for me to get really, you know, more bullish than I am right now.

All right. Appreciate it very much. Thank you all. Really glad you were here. Jeff Hirsch of Hirsch Holdings, Keith Fitzgerald of the Fitzgerald of the Fitzgera Group, Victoria Queen of G-squared Private Wealth. Squeeze in a quick break here.

Afterwards, it hasn't been a smooth ride for tech stocks during the first hundred days. Many expected Trump to bring growth and less regulation, but so far they've faced the opposite. So where does tech stand with Trump? We'll discuss next. Welcome back on Capitol Hill today. Lawmakers are meeting with some of the biggest names in tech, including NVIDIA's Jensen Wong, who spoke earlier with our own Emily Wilkins. Emily joins us now with some of those highlights and headlines. Hi, Emily. Hey, Kelly. Well, yeah, big day here on Capitol Hill for tech and lawmakers to come together, talk about things like AI, national security, and competitiveness.

And yes, spoke with the videos, Jensen Wong, a little bit earlier today. And he said that his message to lawmakers and then, of course, he's going to the White House leader, is really that you have to take a holistic approach when it comes to making sure that the U.S. is competitive on AI. Listen to what he told me. America would like to lead this industry. And so the policymakers should create policies that support and help accelerate the development of this industry. And it includes everything from manufacturing, unshoring manufacturing, to having available energy so that it could support this industry,

to re-skilling and bringing new skills into our country so that we could support this new industry. I also spoke with one of those lawmakers, Senator Todd Young. He was also here today, and he really re-ended to me a lot of what you heard from Navidia's CEO. there. That what lawmakers' role is going to be is make sure that there is enough energy on the grid for AI, that the skills are there, and that the entree manufacturing is there to make sure that the U.S. does remain competitive. One thing you're not hearing a lot about, though, is regulations on AI itself. At this point, we heard a lot more about that in the last administration. The Trump administration has been taking different tact, but doesn't really seem like anyone

in this room is too concerned about it. At this point, they see the lack of regulation as what is needed, for the industry to be able to go as quickly as they can, remain competitive, and certainly remain ahead of China. Kelly? All right, Emily, thanks. Emily Wilkins. We appreciate it. All right, well, Big Tech worked very hard to get close to President Trump, but that relationship does not seem to be paying off, at least for them so far this year.

Whether it's the tariffs hitting their businesses or an aggressive DOJ, putting them under the microscope for anything merger-related, where does tech stand with the Trump administration? Let's bring in Adam Kovacovic, the CEO of the Chamber of Progress, which is a tech industry group. And he was, by the way, formerly the head of Google's U.S. policy strategy, somebody who interacted a lot with the Washington, D.C. circuit. Adam, it's great to have you here to shed some expertise on what's going on right now. What exactly do you read for what we've seen for these tech CEOs visiting the White House and what it means for the future of their policies and their businesses, given the Trump. administration? Sure. Well, I think one of the things that tech CEOs learned from Trump's first term

is that it was better to approach Trump with honey rather than vinegar, right? That it was better to have a direct relationship with the president and, you know, be able to talk with him directly. And I think we've seen several CEOs do that. The flip side of that is that we've companies have seen that Trump can be punitive, can be retaliatory. And there is a little bit of anxiety and fear, frankly, about being too candid. And I think one of the things you see, for example, is while there's a lot of excitement about things like the deregulatory steps that Trump has taken around, things like the SEC lawsuits against the crypto industry, and telling Europe to kind of knock off some of its protectionist regulation of U.S. tech companies, frankly, I think companies are unwilling to really

voice the anxiety that they have about the tariffs and the downstream impact that's having on their investment plans, hiring plans, M&A activities. And I think that's a lot. because any individual company fears speaking up about that. Is there, I mean, any presidency, any president of the United States has to have at least a good working relationship with the business leaders of this country. There's no doubt about that. But these particular CEOs in this time for us seem to all either have the president on speed dial or the president has them on speed dial.

There's a lot of speed dialing. We just saw Jeff Bezos and President Trump apparently have a conversation face to, not face to face, but over the phone with regard to some of the reporting that was done about Amazon and possible tariff pricing. What exactly is that dynamic like when you navigate or have to advise people about how to approach a relationship with the president? Absolutely. Well, so I think it's very important to say that one of the things I heard a lot from companies during the Biden years was that they didn't really have a lot of direct access to. the president. There were people in the Biden administration, particularly at the SEC and the FTC, who kind of took the view that meeting with companies was sort of inherently problematic, right? Because it would cause them to somehow be co-opted by those companies. And so I wouldn't underestimate, like, just how appreciative companies are of having an open channel. At the same time,

I think there is a concern that companies can't necessarily be completely honest in those conversations about how they feel about things like tariffs or regulations because of a fear of kind of getting crosswise with Trump. So I do think, like, yes, they have an open channel, but they're not necessarily having a communication of 100% candor. Your group, Adam, is about four years old now, the Chamber of Progress. Why did you start it? What is it? What are your goals? Well, I've started this because I am a pro-tech Democrat, and I was getting concerned with kind of the direction that Democrats were taking on technology policy issues, right? Where I sort of grew up in the party of Obama, really, kind of associate himself with Silicon Valley. And I think most,

even Democratic voters, are generally pro-technology. But frankly, I think, you know, I was pretty dismayed by the direction that the Biden administration took against tech. I think they assumed there was more support for kind of taking a hostile posture against tech. But you got to remember, like, these are services that, like, Americans love, like Amazon, Google, Apple, these are, like, some of the most popular companies in the country. And yet there was an element of the Biden administration that kind of felt that there was some benefit to targeting those companies. They launched all these antitrust lawsuits. They now have antitrust lawsuits against, you know, all four or five of the big tech companies. Some of those cases are going on right now. What's ironic about that, Adam,

is now you get the Republican administration, which is carrying on the work. Yeah, that's right. That's completely right. And I look, I think because so many people in Silicon Valley were so frustrated with Biden's hostility. At the beginning of Trump's term, there had been kind of us a hope, right, that this would be better. And again, to give credit where it's due, the positive, the regulatory things he's done

on the SEC, around Europe, AI, like, that's been welcome. But at the same time, all the antitrust cases have continued, right? These are, you got trials going on this week against both meta and Google. And the tariffs are just causing, you know, massive uncertainty for companies.

And so I, yes, I mean, those things are definitely negative. Does that surprise? Do you think the tech world is taken aback by this after having kind of just, I don't want to say come out, but come out to support Trump in many ways, that they're surprised that it seems like this is still a very populous presidency? Well, I wouldn't overstate it. The reality is that most big companies didn't endorse a candidate and kind of understood that they'd have to work with whoever want. Obviously, they were high profile Trump supporters in tech. There were also high-profile Harris supporters in tech. But when you look at most of the, kind of the big company CEOs, most of them stayed pretty quiet during the election.

And so I think they've gotten to the point where they kind of know, look, we're going to have to work with whoever is in charge that's going to ping pong back and forth based on kind of, you know, the close margin in American politics. And so let's kind of just let's establish principles that we can kind of live with no matter who is in the White House. Yeah. And then there's the whole campaign against Harvard. And I only bring it up because I read here that your first advocacy campaign came as

an undergraduate at Harvard, where you led a successful campaign to bring grapes back to Harvard's dining halls. How quaint that must now seem against the challenges that college campuses are facing. What do you make of the way Harvard is fighting back? Do you support what they're doing? Well, I do. I do, because I do think, you know, academic independence in being able to operate your institution in a way that makes sense is really kind of, you know, preempt, you know, It's really, it's such an important value for universities to defend. That's not to say that universities don't need reform. They do need reform.

I hope universities take step to reform themselves and make themselves, you know, better, more inclusive places, things like that. But, you know, I think protecting their own independence is really a clear, clear line they have to defend. What exactly, Adam, before we let you go, what exactly is going to make you more constructive about the future for Silicon Valley vis-a-vis this Trump administration and this White House? Well, look, here's the thing. They've said a lot of great things, but then they've done other things to undermine the things they've said, right? They say we've got to go beat China, and then Trump's decided not to enforce the law that, you know, requires divestiture TikTok, right?

They said that we've got to win, that we want to win the global tech race, but then they have all these antitrust suits against our companies who are going to be the ones to win those race. They said we want to reduce dependence on foreign semiconductor manufacturing, but then he said he wants to strike. scrap the chips program, right? They say they want to build more nuclear, you know, and then they scrap, those scraps the office that's going to build that, right? So I want their action to match their rhetoric. And I think if that happens, and I think there'd be, you know, kind of rising support for what Trump's doing within the Valley.

All right. Adam Kovacovic of the Chamber of Progress, a group that lobbies around Washington, D.C. for the tech business. Thank you very much. We'll see you soon. Please keep us updated. Thank you. That was fascinating.

Interesting guy. After the break, the U.S. economy shrinking. We'll hit the CBO trading floor for the bond market reaction to all of this data. Stay with us. All right. Stocks are lower right now after this morning's economic data showed that the U.S. economy contracted in the first quarter, but we're well off the worst levels of the session. The Dow was down around 800 points at its lows of the day, and it's now down 114. You can kind of see the movement more steadily to the upside throughout the course of the afternoon. And by the way, the yield on the 10-year Treasury note is still slightly lower on the day so far. So if you take a look at all of that in context, 4.183, we're still below 4.2. With that, we're going to get out to Rick Santelli in Chicago for more on today's big economic data. I'll send things down to you, Rick. Well, thank you, Dom.

You know, what a wild day in terms of data, though. We get hot GDP price action, even though the growth aspect was negative. We get cooler PCE outside of the revisions, which Jerome was talking about or still hot in the rearview mirror, and yields are well off their high yields. What did you think of today's day to Jerome? Ultimately, I most importantly pay attention to the revisions on the inflation side. And that still pertains an environment where inflation is still moving upward. About 3.5% core PCE is something that we really need to be paying attention to,

and there's potential for it to move higher in the longer term. So that's really going to be a focal point for the Federal Reserve, at least in the near term, and perhaps create tension at odds with jobs outlooks and things like that. Obviously, the ADP was somewhat disappointing today, but let's focus on the facts. At least in the near term, job growth is remaining relatively resilient. That creates attention for the Federal Reserve and probably leans itself into perhaps focusing on the inflation fight, at least for the near term until later this year when things might turn. You know, they had that old soda commercial, tastes great, less filling.

So inflationary pressures or less growth. And this is going to be a debate going back and forth. I happen to agree with you, but it certainly seems, though, since this administration's been in power, the Fed's paying a whole lot more attention to inflation. I guess the uncertainty does fuel that line of thinking. Well, it's also at the consumer level. On one hand, you see the consumers acting very robustly in terms of bringing home all the goods before the terrorists. And that still remains intact.

It's probably supporting growth, at least here in the near term. Well, that's the big reason that GDP today, even down three-tenths, Maybe the U-turn and yields was because 4.8% of that was related to imports. Absolutely. That's part of it. But the other part of the equation is purchasing power. And consumers are really focusing on the purchasing power element of what the power of the dollar is going to be, not just today, but in the future. The important thing for investors and the markets to pay attention to is what are those inflationary expectations longer term? And more importantly, how do markets and how do investors adapt to that?

And that's simply one of the reasons that you look at the environment today. you see the yield curve, you see it steepening, and there's a variety of opportunities in those yields and that income. You know, normally I love yield curve steepening. It's a good thing. But I like bear steepening. I like when yields are going up in the curve steepening. What we've seen lately is most likely induced by this fantasy about four eases by the Fed. Without a doubt, we've seen a bull steepening in this regard, meaning the Federal Reserve is expected by the markets to continue to cut rates. At Pemco, we think that's going to be a little bit more elongated, pushing it to later this year, maybe even more aggressively in terms of, But the key here is that let's not bet on the meeting to meeting of the Fed. We need to really focus on where does the opportunity here.

The opportunity here is focus on the opportunity for higher yields at the front end. Capital preservation. Capital preservation and finding ways to produce income across all varieties of fixed income without the uncertainty. It's income in credit markets are your choice. Unfortunately with the certainty right now. We're thinking it's PIMCO. That makes perfect sense. Jerome Snyder, thank you for joining me on the CBO.

Dom Chu. Back to you. All right. Have an offline conversation with Jerome, by the way, about use car. That was what we talked about the last time. Anyway, thank you guys very much for that for the bond report. All this economic uncertainty is hitting housing as well. Mortgage demand is dropping.

Ryan Serhan joins us now to discuss the state of the real estate market. Power Lunch is back in two. Welcome back to Power Lunch. I'm Leslie Picker with your CNBC News Update. A U.S. District Judge directed the Trump administration today to once again provide information on its efforts to comply with her order to return a mistakenly deported Maryland man from an El Salvador prison. It comes after she ruled earlier this month. The government must facilitate his return.

President Trump said this afternoon he hasn't spoken to El Salvador's leader. The Supreme Court appeared receptive today to allowing Oklahoma to approve the nation's first ever religious public charter school. The case could weaken the separation between church and state. Several conservative judges expressed support for the school's arguments, but the court won't issue a decision until late June or early July. And Vietnam is celebrating 50 years since the end of its war with the United States. In 1975, communist forces seized Saigon, the capital of U.S. backed south, about two years after Washington withdrew its last combat troops. Celebrations today included a parade with thousands of marching troops and an air show in Ho Chiman City.

Kelly, I'll send it back to you. All right, Leslie, Leslie Picker. Let's talk housing now as the spring's selling season is well underway. data today showing a mixed picture. Pending home sales actually surged by the most in a year, but mortgage applications continue to slip. Let's get some insight on the market now from a top real estate broker. Ryan Sourhand is founder and CEO of Sourhand, a real estate brokerage with more than a thousand agents across nine states now, which is crazy, Ryan. Well, you guys, you should go public. Compass did. It's too, to think I want that kind of pressure.

I do. I think you would flourish. You would absolutely shine. Okay, so I remember the last time you were on about a year ago, and we were talking about high rates. You said you were advising a lot of people to date the rate and marry the house. I'm just curious for an update now on our prices coming down. Are rates still high in a problem? What are the buying and selling conversations you're generally having? Just what's the market like? Absolutely. Well, March was great. I think the March numbers just came up. Everything was up. Sales were up 6.1% month over month. Some of that is standard springtime home buying. Some of that is because there was a dip in rates. There was a strong sense of consumer confidence. And then everything changed in April. 36% of all available homes

in April across the United States had a price drop. So you have prices starting to come down. April saw more price reductions on homes nationally than any April in the past 12 years. So the tariff scare came through and then rates spiked. So yes, we have people who bought homes over the past 12 months who've had pockets of moments to do rate reductions and to refinance their loans. But for the most part, we're seeing pricing start to come down. Inventory is starting to creep up. I think in the past 30 days, 14% of all pending home purchases were actually canceled, which is the highest level we've seen since the beginning of COVID, which provides great opportunity for buyers to get back out into the market right now. Yeah. I mean, it doesn't feel good for a lot of owners who have

fought so hard to get into their homes. They're like, come on, I don't want prices to come down. It sounds like that would bring some rationality into the market. Yeah, I remember this is all near-term thinking. Home prices have actually increased nationally by over 50% in just the last four and a half years. So even if we give back 20 to 25%, it'll be a big terrible media headline, but we are still up net effective, positive. I think the Fed, though, is trying not to lower rates, right? They've been pretty clear about that. Jobs are good, right?

Employment strong. inflation is still there, sticky. So we'll see where we go with rates. The housing market is determined by only three things, right? It's supply, its demand, and its rates. So we need something to give. And right now, right now it's supply in some key markets as a lot of these purchasers who bought during COVID are coming back to market as their lives change, which is all pretty natural. Ryan, it's Tom. One of the things that kind of drives all of that conversation and kind of weaves its way through those three things you just talked about is people's perception of what their financial future will look like. And we learned from the Mortgage Bankers Association. We saw

mortgage applications for purchase and refinance fall 4% over the past week. A lot of that was due to maybe people's, I guess, caution about where things could look or what things could look like in six months. Are you seeing that kind of at least change in sentiment? And if not, do you think it would change the housing dynamic? Oh, absolutely. I think people buying homes up to a million and people buying homes, over $10 million, are not really affected by what's happening in the market day to day, right? There's low inventory, luxury purchasers, and first-time home buyers need to make moves. They need to live somewhere.

If you're looking for a home or looking to sell a home between $1 and $10 million at a national level, there is some pause. People are taking a step back. They were saving, right, in the equities markets. They were saving that down payment trying to put down at least 30 percent, you know, if they couldn't put down any more than that. And so they're feeling a little bit nervous. But at the same time, we all want lower prices, right?

We want lower prices. We want lower rates. And you can't get the good, which would be lower prices and lower rates, without some of the bad, which is a reduction in equities market. So you kind of have to look at every crisis as an opportunity. And so that's what we're advising buyers to do. Don't wait until the sun comes out to go and buy your convertible. You'll pay more money.

Wait until it rains. You're going to feel nervous because you're not going to drive it that day, but you're going to get the best price. And so the buyers that are making moves now, just like the people that bought in the real estate market in March and April of 2020 are the ones who have forward thinking and they're predicting their own future. Their own future looks pretty bright when they're buying against the grain. No, it's good that at least, you know, there's some stability and certainty out there at a time like this. You guys have wrapped on owning Manhattan season two. Is that right? Netflix show, isn't it? Yes. Yes, the greatest real estate TV show in

the history of the world. So you could also refer to it that way. We just wrapped. It'll come out the summer. I actually lost my voice doing it yesterday, so I don't normally sound this debonair. Well, I wasn't sure if it was just a little bit of, you know, caution about the economy or the housing market or something. It's all the yelling. It's all the yelling. Don't look at the markets. Yeah, but I sell. I'm curious, Ryan, I mean, Netflix is just such a juggernaut. And what can you tell us about the reach that you've found, you know, from being on that platform versus your cable days? Oh my goodness. I mean, it changed my life. It changed our firm's lives. When that show came out last June, I mean, it put our brand and our company in front of over 200 million people. That's not something we could ever even afford through advertising. Now Netflix has over 300 million subscribers. When season two drops sometime in the summer, I don't know when exactly it's going to be just yet. I mean, it breaks our systems. You know, our agents have grown on the backs of our content. to commerce philosophy.

You know, Sir Hant is a media company that sells real estate, and that's how you have to think moving forward. And we use AI, and we have great technology to give our agents and our customers the tools they need to be successful. But the Netflix machine

is the largest global distribution network there's ever been. I mean, there's literally nothing else like it. And we can put our properties and more eyeballs than anybody else because of it. So, you know, it's a win-win for our clients. And it helps explain how you can now have a thousand agents across nine states.

And I'm wondering if you would almost kind of say a lot of companies should be thinking that way. You know, we're a media company that sells realists or that sells toys or what have you. I think a lot of companies do think that way. I think they don't know how to get out of their own way, right? So we keep our blinders on and we are super customer focused, right? We lead with purpose. We match the right people with the right product.

We don't think any other way and it's proved to be a very, very great strategy for us. And then we do that across social. You know, we have 10 million followers and subscribers that with the click of a button, I can put a house in the Hamptons or a house in the Benetian Islands or Miami or we just opened in Arizona and Scottsdale in front of just under 10 million people. And it's not who do they, they know. It's who did they, they know, who's the cousin know, who's the daughter know. And we are able to sell our homes for more money and faster than our competition by far. Super interesting. It sounds like an IPO road show, Ryan. I'm just saying. This was a- You're both getting this conversation with me going public and then I'll talk. totally lose my voice.

Well, thanks for making the time to join us as amid this super busy time. Really appreciate it. Of course. Ryan, Sourhant, founder and CEO of Sourhand. All right, still ahead on this show. As all companies try to incorporate AI into their business models, we'll hear what Visa is doing. And as we head out to break, check out what's happening with oil futures

closing at their lowest levels since March of 2021. U.S. benchmark crew prices $58.20. cents right now down three and a half percent we'll be back after this welcome back visa's another company in the earnings parade this week the payments giant is reporting mixed results and then this morning rolling out some new technology products kate runy spoke with the CEO of visa and joins us now with the breakdown kate what exactly is visa doing so dom visa is announcing a new a i shopping tool at this product event they're hosting today here in san francisco it's going to let AI agents, basically access your credit card information securely and then let them go ahead

and shop and buy things on your behalf. You can think of agents, as I just mentioned, like AI assistance in a way. Visa is not going to be building its own agent. It's all happening on the back end. CEO Ryan McEnnerney told me avoiding fraud was one of the key reasons companies like OpenAI, philanthropic, perplexity are now partnering with Visa. MasterCard and PayPal also rolled out something similar this week. Here's what McInerney told me about this.

boom we're seeing in AI shopping. It's going to be a lot like self-driving cars. I think we're going to have the ability to be able to just, you know, say, whether it's groceries or a specific gift that I'm trying to buy, it's going to take for those people that want to take kind of the top of the shopping funnel out of their daily lives, it's just going to make it a lot easier. And, you know, in general, kind of more efficient, more effective outcomes win in the world. And I think consumers will vote with their feet and they'll want their agents to go do a

significant portion of their shopping with better outcomes. Visa also announcing a way to make it easier to pay with cryptocurrency. And the CEO sounded bullish on the consumer after what was a mixed report for Visa yesterday. McEnnerney telling me, consumer is, quote, resilient. He said they are not seeing any sort of slowdown in the spending data, even through April, despite some of the consumer sentiment numbers we've seen, but they are trying to game out different scenarios for what all the tariff uncertainty is going to mean for Visa's business. He said it is certainly uncertain.

And I thought was the line of the day, which a lot of companies can relate to guys. All right. Visa with Agentic AI. Thank you very much, Kate, for that. We'll see you later on. Surprising. Still to come, wire trader says you should scoop up shares of this mystery stock bucking today's market downtrend. Details after this.

Welcome back. It's time for now three stock lunch. Today we're looking at some of the names on the move after reporting quarterly results and giving you the trades to go along with them. Joining us yet again is Victoria Green, G-squared, private. wealth, CIO, also as CNBC contributor. The first stock is Starbucks. Those shares are dropping over 6% after the company missed earnings and revenue estimates for their second quarter. Victoria, are you buying this dip? I am. It's a long-term buy. I'm not saying the bottom's completely in. We may have to go down on that 72, 73 level, but I love what Brian Nichols is doing.

They are turning the ship around. It's a little bit slow in the U.S., surprisingly strong in China for them. When they are implementing on his vision, we're getting the many, slim down. The one thing they really got to do is continue to figure out a way to keep coffee prices in check. They manage to not raise prices, but if the coffee continues to rise and not hedge correctly, that could be an issue for them on margins. For me, I love Brian's vision for this company. It's a buy for me for a long-term hold, not saying it's going to pop tomorrow, but I really like this stock teacher. All right. Let's move along then and talk some super micro. The stock plummeting after they issued preliminary results well below expectations. It's down 14%.

and the shares are down 60% over the past year. Is there a buying opportunity? Not for me. This is casting a falling knife. I'm not touching the stock. I think you could go back down to 18 very, very easily. Nobody's buying the hopper chips. Everybody's waiting for Blackwell.

They said, oh, well, people are delaying their purchases. Well, they may not actually then do those purchases next quarter. And so I'm very concerned on this isn't the bottom necessarily for them, as well as if we have chip restrictions. If we see a little bit less explosive cap-back spending, you know, we'll hear from meta after hours. Are they really spending $60, $65 billion on AI data centers? So we had all of this flurry on data centers,

and we need all these servers, and then we had the deep seek moment. And I really just don't see SIPro Micro as well positioned, especially if Navidia kind of breaks up with them, which there was a little bit of a rumor that, hey, maybe they weren't as happy being so closely tied with Sipromicro. I'm just not sure the stock is worth a risk here. And for me, even though you're down, what, 14% today? I'd still get out because even though you're down,

doesn't mean you can't go down further. All right. And finally, we've got Mondalise, our mystery chart, by the way, from earlier on, the lone bright spot today as shares are moving higher after the company beat first quarter profit estimates following several rounds of price increases. So are you buying into this rally for Mondalise today? I am. I think it's finally going to break out. It's been going sideways for about three months here. I love the legs behind the stock. They've done so well with Cocoa prices, even though that's moved from like 2000 to almost 10,000 an ounce. They've done great jobs pricing. And it's an international stock. It only gets about a third of its revenues from the U.S. And they also say, hey, are U.S.

revenues? They're very insulated from terrorists. They're either U.S. MCA, sorry, UMESCA exempt, or they're made in the manufacturing United States. So I think you're going to see a little bit of downsizing, unfortunately. My beloved Belveda bars, they may go from four bars to three bars in a pack because they talked about $4 is the snacking price point for U.S. and they have to stay under that. My kids like those chocolate bell vistas as well. All right. The blueberry one.

I like those ones too. All right, Victoria Green, G-squared private wealth, CIO and CNBC contributor. Thank you very much for helping us to bookend the show today. And remember, you can recap every three-stock lunch. Anytime you want, just scan that QR code on your screen or head to CNBC.com for more. We'll be right back.

Dow tried briefly to turn positive today, but we're down another 240 points at this hour. So that leaves us looking at the month-to-date, which given, Tom, didn't we have a day that the NASDAQ was down 12%? Yeah, it was kind of crazy to think in context about just how far we've come from April 2nd to the week and a half that followed that and then to where we are right now. On balance, all of it, as Kelly points out, the Dow is down 4% for the month. The S&P's down one in three quarters in the NASDAQ is almost positive. So that's way better than what we were three weeks ago.

We're down 12% on a day and now we're almost positive for the month. So the crazy part about that also, second. sector-wise, consumer staples, maybe not surprise, the best performing, one of the best performing. Technology, though, also up there. Meanwhile, energy with oil prices, no surprise. Down 14%. There you go. I mean, that's a whopping hit. Good for consumers. All right. So we are going to close out this month. Thanks for watching Power Lunch here. Tom, thanks for being. Yeah, it's going to be fun. I appreciate it. Closing bell starts now.