Power Lunch - S&P 500 rises as investors claw back losses; Dow drops 300 points on UnitedHealth plunge 04/17/25

Episode Date: April 17, 2025

The S&P 500 is higher amid a choppy trading day, the last trading day of the week, as Wall Street looks to mitigate recent market declines. We’ll tell you all you need to know ahead of the holiday weekend. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

We are two hours away from the end of a short and trading week on Wall Street moments ago. You heard the president reiterating his complaints about Fed Chair Jerome Powell saying he is wrong, saying he is slow, saying he is not happy with him at all. And the president did say that Powell will leave if he asks him to. But in the past, Powell has insisted he will not resign. By the way, welcome to Power Lunch, everybody. I am Brian Sullivan. Kelly is back on Monday. and the markets are closed tomorrow for the Good Friday holiday. So happy sort of Friday.

Stocks, they are mostly higher today. United Health is so bad, it's actually dragging the entire Dow down. So the Dow is down, but most Dow stocks are actually higher. Nasdaq's up one quarter of one percent. Not a big move, but we're in the green. This move follows yesterday's shalacking, where the NASDAQ fell just over 3%. Now, if we do stretch it out a few days for the week, all three major averages are indeed down. But if you pull out even a little bit longer term, the S&P 500 is still up about 6% in a year. Kind of hard to believe down this year, but over 12 months, it is higher. Well, as we just highlighted, United Health, pretty much by itself, is dragging the Dow down. United Health cutting earnings guidance due to problems in its Medicare business.

That stock down 23 percent, and that point drop enough to crush the entire Dow Industrial average. Yesterday's big stock story stock move, of course, was Nvidia, and Nvidia is down again right now, off nearly 3 percent. And a big headline happening today is that Nvidia CEO Jensen Wong is actually in Beijing, China. All this is Nvidia falls 24 percent so far this year. All right, we're going to get to more on those stories throughout the hour and day here

on C&BC, but one big headline for you and your money right now is President Trump once again going after the Fed chair, Jerome Powell. Trump writing today calling the Fed chair, quote, too late and wrong, and that Powell's termination cannot come fast enough. Now, the president, of course, has made no secret. He wants lower interest rates, and he is frustrated that the European Central Bank is cutting rates, but our Federal Reserve is not, at least not since last fall when the Fed surprised many with a big half point interest rate cut. So why am I holding this? Because we're going to take a closer look at that cut and some other Fed moves over the last couple of years. Now, the Federal Reserve, of course, cut rates when the pandemic first hit,

wanting to mitigate any economic crash. We understand that. But then some might suggest the Federal Reserve made a policy mistake in keeping interest rates too low for two long, which would be this period here, even as many parts of the American economy took off. Then, of course, the Fed had to aggressively raise interest rates to try to slow down the raging inflation in part caused by those too low interest rates. And then, even as President Biden talked up how strong the American economy was last year, the Fed cut borrowing cost right here in the fall. one of those cuts was a half a percent, surprising a lot of people.

And now the Federal Reserve is just kind of sitting tight because there are concerns that tariffs may spike inflation and the Federal Reserve wants to be able to react if and when it does. Now, we know this. You may not care at all about the growing spat between these two guys, Trump and Powell, but it does matter to your money. So let's talk about it. Ed Yardini is the president of Yardini,

research and Matt Orton is chief market strategist at Raymond James Investment, Ed. Sort of political and ego battle aside. This does, I think, seem to matter for the markets and our viewers and listeners' money. Does it not? Because maybe Powell, while saying he's apolitical, how do you avoid, I mean, I don't know how as a human being you avoid this kind of presidential pressure? Well, look, we've seen this movie before. It happened during Trump 1.0 that the president came after the Fed chair and the Fed

chair stuck to his guns, didn't resign, and remained with us through today. And I think if Trump continues to ask him to resign, he's not going to accept. He's a big believer in the independence of the Fed. I think most economists agree that the Fed should be independent, should be not beswayed by political pressures. I don't think he knows. Ed, I think you nailed it. I'll go back to you really quickly because listen to talk as just human beings here.

If Trump says, oh, if I ask him to resign, he will. I don't think he would. I think you're exactly right. And in part, maybe the way to – because if you ask somebody to resign, they're going to say no because they don't want to see. like they're bowing to your pressure. Maybe the way to get Powell to quit would be to nominate him for another term because Powell is going to become a very, very rich person once he leaves office.

Well, he was a very rich person when he came into office. Richer. He'd be richer. But look, I think he's a dedicated public servant for the United States. He's done a, I think on balance, he's done a very good job. He's shown flexibility. Look, if he was replaced today, there's still 18 other people on the Federal Open Market Committee. So, you know, I mean, if Trump got exactly who he wants, he could also get 18 dissenters,

which would make it impossible for the new Fed chair to get anything done and certainly wouldn't bow down to President Trump. So his problem isn't really Powell. It's the independence of the Fed. Yeah, you know, Matt and Ed, your job and sort of our job in a way is to look forward, not backward. And Jay Powell has one year left in his term, nine meetings. There will be a new Fed chair come next May, and my sources will say that the search has already begun or beginning right now. Donald Trump is going to get the Fed chair that he wants at some. He's going to get somebody that wants lower rates likely next year.

So is Matt, as a strategist, how do you, this spat aside, 12 months from now. things could look very different. How do you plan for then? What type of recommendations do you make to your clients? Yeah, you know, Brian, that's a great question. And that's what we try and get a lot of our clients to focus on right now is that it's easy to get caught up in the chaos that you see in the market right now. But when you look forward for 12 months, the big question is really how are tariffs going to impact earnings? How are interest rates potentially going to impact earnings going forward? And there's a lot of parts of this market that clients can lean into, such as financials. So even looking at gold as a diversifier for portfolios, there's areas of technology that are not really

circulated around what's happening between Trump and Jay Powell. It's looking at long-term secular growth trends, and it's picking your spots. How do you want to tactically lean into what you think's going to work, where you think there's an acceleration and earnings growth going forward? And so when I look at the market right now, it's picking up some of the pieces that were thrown at with the bathwater, like cybersecurity within the technology space, looking at some of the big banks that have reported pretty good earnings on balance, and where a lot of those M&A pipelines that we were expecting to come through, they're delayed, not derailed. So there's still an opportunity

for earnings acceleration going forward in the back part of this year, and you've got a lot of much more attractive valuations right now than you had three weeks ago. Well, should, Matt, should the Federal Reserve be cutting interest rates right now? I don't think so. I mean, you look at the inflation data and really what's most important to me is the disanchoring of longer-term inflation expectations. That's a problem for the Fed. So the last job I would want in the world right now is to be Jay Powell because he has to thread the needle between what is a slowing economy. I don't think recession, that is not my base case, but the economy is slowing down. And you do have inflationary pressures that likely are going to be more short-term in nature or one-term hit,

but you still have to deal with that here and now. And so I don't think that we're going to see more than one or two rate cuts heading into the end of this year just because the Fed is stuck in a very difficult situation. Yeah, Ed, you know, I tweeted out yesterday that the Federal Reserve, respectfully, is taking orders, not making orders, meaning the bond market is in charge. The bond market is kind of flexing and showing, you know, like I'm doing like the flexing thing. And it's saying, we're the ones in charge. We're going to determine the direction of borrowing costs and thus maybe the equity market. Is that correct? Could the Fed reflex and force the bond and stock markets to change course?

Yeah, and I think the stock and bond markets are very powerful. They can certainly get everybody's attention when they behave badly and the stocks, prices go down. That certainly hurts a lot of people. And when interest rates go up in the long end of the market in the bond market, that hurts people. So politicians respond to our pain, and the reality is, I think both the stock and bond markets are saying that this approach to national security, this approach towards trade is, it's too much turmoil, and it's creating too much uncertainty and volatility for companies. And I think, you know, it was only a few weeks ago that Treasury Secretary Besson said that he and the president really were focusing on the 10-year bond yield. And I was thinking to myself, that's great, let them focus on the 10-year bond leave, leave the Fed alone.

And now because they're realizing that the bond market has its own strengths and determination of where things should go, the bond yield has gone up. It hasn't come down as they were expecting. So naturally, the president is beating up on the Fed. Ed, quickly, do you think the stock market will continue to kind of lake down slowly until this terrified is solved? Look, I think after what happened on April 8th and 9th, it's hard to short this stock market, and it's hard to really contemplate being out of it because it could really rip to the upside here if a lot of these deals do get resolved. And over the next 90 days, we may very well see 90 countries.

coming up with some sort of agreements. It could be a one piece of, you know, one sheet, piece of paper that says, you know, we're not going to do these things that hurt you and sign it and the president will declare victory. And then we can move on to extending the tax cuts. Yeah, we're going to leave you. I think you're exactly right, Ed,

and a lot of what you and Matt and others, other smart people have said is, you know, the risk may be the upside. If we get one tweet that the president and Xi Jinping are going to meet in Honolulu or something, Yeah. I think the market rips a thousand points higher. Ed and Matt, appreciate both of you. Have a good long weekend. Appreciate it. Thank you very much. You too. You're very welcome. All right. Up next year on Power Lunch, why nobody, not even you,

is off the hook from the terror turmoil, at least. Not yet. All right, welcome back. You've probably picked up on everybody now seems to finally want to be talking about something that we've been talking about in this show for months, and that is the growing spat and the growing rift between President Trump and Fed Chair J. Powell. Trump clearly doesn't like Powell. And I can tell you that my sources have also told me that Powell cannot stand Trump either. But while those guys fight it out in the media about tariffs and inflation, you care about where tariffs, inflation, and the economy actually end up. And maybe, well, this could also end up in the courts. So it's kind of talk about it all. Wrap it together with a bow with our friend Libby Cantrill. She's head of public

policy at PIMCO. I know, Libby, listen, as you just heard, we're kind of sitting back and watching this growing rift. Your job at PIMCO is to try to help navigate your clients through it. How do you see this ultimately playing out? And why does it matter for the markets? Yeah, well, Brian, nice to be with you. Well, I mean, you just touched on a lot. I mean, obviously, this is, I think, pretty emblematic of what is, you know, kind of on the, on the sort of front of mind for our clients as well. There is a lot going on. There are a lot of cross currents. Many of our clients are focused exactly what you just said on the independence of the Fed and concerns there. But most of them are really

focused on what's next for tariff policy. I think what our view is is that if nothing else rolls on right now, the existing tariff level is very high. It's obviously much higher than we had under Trump 1.0 or under Biden. And that has implications for growth and for inflation. And then, you know, to the earlier point, to also in terms of Fed policy. So this clearly impacts the stock market, the bond market, but also it impacts the real economy, both in terms of prices and then also in terms of growth. We are not one of those that are necessarily making some bold call about recession, but certainly recession risks have increased relatively significantly. We do see a pretty significant headwind to growth. We were already penciling in some headwind

to growth just because of some immigration policies that were actually pursued under President Biden that we thought we're going to catch up to growth in 2025. So again, kind of wrapping all of this together, it is a very uncertain market. Now, one thing we have been advising our clients is that they've gotten a lot of vegetables, so to speak. They will get some dessert. We will see some tax cuts. We're expecting not only an extension of the Trump tax cuts, but also some additional tax cuts. It feels. We've had the bad news first. Well, and I think it's hard to focus on. I get it, because it's like a fire hose of information. But often when a new CEO takes over, or maybe like a new governor or mayor of a place, whatever it may be, he or she will often do a dump of

bad news at the front end, get all the crap out, and then at the tail end, when people forget about all the bad stuff, they can ride this sort of wave of good feelings. Is there any part of you, Libby, that feels that President Trump and his team, which I presume are not dumb people, that they know this, and they're just trying to get this to your point, get the dessert later, and get all the bad stuff out, if that's the case, and that means investors may see a light at the end of the proverbial tunnel. Well, look, I mean, I think you're absolutely right. I mean, these are smart people in Washington, for one.

But two, I think really importantly, Brian, this is something that caught the market off guard is just the depth and sort of longstanding nature of this view by the president around trade policy. I think a lot of folks just underestimated the sort of the passion in which he really does believe that the good, trade deficit is something that needs to be corrected. He really believes that tariffs are the solution.

He doesn't necessarily think that they're a problem. But I think he's very committed to rebalancing the economy. Now, some people may agree with that. Some people may disagree with that. But I do think that to your point, there is a sense of urgency around this administration, having felt like there was some unfinished business from Trump 1.0. Of course, the pandemic got in the way of a lot of, I think, there are policy objectives. And so I don't think he wants to risk that. So, is it? Is there some eye to sequencing of policies, maybe? But again, I think something that we have been reinforcing to our clients time and time again is that the president believes in this.

And he is going to be committed. Obviously, there's some of this is a negotiating tactic, a means to an end. But some of this is an end to itself. And I think that is what we are focused on from a growth perspective. Trump's been talking about tariffs since the 80s. Literally there's clips of him on like entertainment tonight, whatever, talking about Terry King. Larry King live.

Yes. Yeah, exactly. One of those two things. Libby Cantrell of Pimco helping us make sense of what is certainly a chaotic and busy time. All right. Thank you. Libby. President Trump, wrapping up his comments at the White House, even had more to say about Fed Chair J. Powell.

Let's go back to Megan Gisela at the White House. Brian, that's right. Fed Chair J. Powell definitely being the largest topic of conversation in that pool spray we just saw in the Oval Office. President Trump's talk asked several times about Chair Powell saying that if he, wants Powell out, quote, he will be out of there real fast, believe me. But he was walking a very fine line here, Brian, not going so far as to saying that he wanted to actually officially fire the Fed chairman. He said he praised the European Central Bank for cutting their rates today, but said that, quote, our guy wants to play cute. He accused Powell of playing politics with

interest rates. He said that the Fed owes it to the American people to get interest rates down. And he said he thinks that at some point the Fed will get there. He says that, he says that that he believes the Fed will have a lot of political pressure. He accused the Fed of being political as well and said, quote, I think there's a lot of political pressure for Powell to lower interest rates. But again, did not answer a question specifically as to whether he would be looking to remove Powell. Also did not answer a question directly about whether he regrets nominating Powell initially back in his first term. And again, this also comes after Brian, a White House official earlier today,

told me not to interpret that true social post as a threat to officially fire him. So they're really wanting to make their discomfort or their discontent known with the Federal Reserve Chairman making that very clear today, but not going so far as to actually push for his removal at this point. Also a lot of talk about trade and tariffs and trade negotiations. The president saying that they have a lot of countries that want to make a deal even more than Trump himself wants to make the deal. The Treasury Secretary Scott Bessent was in the room.

He listed Japan, the European Union, South Korea and India as nations that had either been here for negotiations or were in. in the midst of negotiation saying that all four of those were moving very quickly. So potential movement there towards a deal. And then the Italian Prime Minister Maloney said they had spoken about trade during this meeting saying that Italy would have to increase its LNG imports, potentially buy more nuclear as well. Shows you a little bit about the nature of these talks and how countries are looking for ways

to reduce their trade deficits and buy more from the U.S. in order to satisfy the White House. One final topic, Brian, the Minerals deal with Ukraine also came up. the president was asked about the Ukrainian president, Vladimir Zelensky, saying that there would be a minerals deal signed potentially this week. The president says that next Thursday, a deal is set to be signed. And he said, I assume that the Ukrainians will live up to the deal. So more questions than answers there about what exactly is in that deal, but saying that there will be something signed at some point late next week. Brian? Okay.

Obviously, a lot going on. Megan Kassela. Thank you very much. All right. Coming up, folks, it is opportunity Thursday here on power launch and on deck. we're going to find some opportunity for you. All right. The markets are a little bit misleading, Dom Chu.

The Dow shows it's down 610s and 1% because it is, but because it's a price weighted index and United Health is down 23%. The Dow would be up but for one stock. So a little bit of a weird thing. Not even up. Up like 700 points if it wasn't for United Health. Really? Yes.

But let's bring that in discussion. I know. It's RBI. I'm sure. Look at this. I know. Here, give me some of that. Anyway, so much with the volatility here, right?

There are so many things that investors are shifting gears towards moving to, from growth, everything else to value. Our next guest says that many of his clients are not yet panicked about the Wild Springs on Wall Street because they have all gone back to the basics. And we're talking about dividend investing specifically when it comes to value. Joining us now is Matt Powers, managing partner at Powers Advisory Group. And Matt, this is a tale that a lot of folks like to hear, this getting paid to wait, getting some capital appreciation along the way. but even dividend stocks have been sold off in this recent melee. So why do investors turn back towards dividend paying equities? Yeah, thanks for having me, guys.

Just kind of walking this back a little bit. You know, we've been discussing this for some time now on the network, the shift from growth of value, which feeds directly into dividend equities. And our conversation with clients, they really aren't panicked or anxious necessarily about the volatility. They're just looking to put sideline cash to work in this environment. But the challenge we all have is just uncertainties at a premium. I mean, things are changing by the hour.

it's creating this untradable short-term environment, but it does create some opportunity, and it's really based around the unpredictable tariffs. I mean, dividend strategies, they're back on the radar really for two key reasons. So it's cash flow, like you said, while you wait out choppy markets, and defensive positioning without giving up potential appreciation. So looking at it, how do you place funds? And that's the conversation we're having, is it ETFs, broad-based ETFs, or individual stocks? You know, with ETFs, you're getting, you know, they're easy, diversified, cost-effective,

but they come with one major drawback. You're generally getting the whole sector, the good, the bad, the tariff exposed. And, you know, we believe it's a stock pickers market, so you can clearly be more selective with individual names within there. All right, Matt, so let's talk about which names you are picking then because you are a stock picker. So which ones are attractive? What parts of the market do you think are the better relative dividend payers, even if you're not the biggest dividend payers? Yeah, you know, even though it's one of the more dividend-rich defensive sectors, you know, we like health care. But broad exposure to health care is no longer, really no longer makes sense as a shield against volatility.

You know, the recent pharma tariffs announced by Trump caught everybody off guard within the sector. So health care is exposed. But, I mean, this one's timely and polarizing today, but United Healthcare, right? It's the top headline, no doubt, clearly a surprise, unexpected, pretty heavy earnings missed and reduced guidance. You know, in this aftermath, though, some positives and opportunities that we look for here, They're a dividend grower and they have no tariff, pharma tariff exposure. And they do have some tailwinds, actually, from a policy and higher reimbursement payments for Medicare, which is almost doubling where they were. And a lot of the risk in UNH has been taken out today, and they have challenges that appear to be manageable.

But we're not traders, we're investors. We're buying stocks to own, not to sell. So we're always looking at an entry point. We like it more today than we did yesterday with the pullback of shares off. I think they're off over 20 percent today. But to my point, UNH is the second largest waiting in the Dow. And most healthcare ETFs, it's the largest weighting. So if you're buying the ETF, you've got to pullback because of one company,

along with the collateral damage of that managed care subsector. And lastly, Elevantzell, Blue Cross, Blue Shield. They actually pre-released details of its first quarter earnings ahead of schedule next week. I think it's April 22nd as earnings. And that they said it should come in above analysts' expectations and they're reaffirming their financial guidance for the year. All right, there it is. Matt Powers buying the dip in both Elevents and United Health down 23%. We appreciate the time. Have a nice weekend. Matt, we'll see you soon.

Have a great Easter. Thank you. All right. Brian. Oh, say down 23% is a pretty big dip. That's a big dip. You wonder if they can keep the dividend. If they can, that's a big buying. Yeah, and also, I mean, it's a more serious topic, but the head of their Medicare business was murdered on a street in Manhattan a couple months ago as well. So you got, there's a lot of stuff going around. Sure. UNH. All right. We're going to move on past that.

still ahead. We're going to look at the legal side of three Trump priorities. Can he really impose tariffs without Congress? Huh. We're talking about just that and more coming up. Welcome back to Power Lunch. I'm Pippa Stevens with your CNBC News update. Tallahassee police tell NBC news that they have one person in custody after an active shooter situation on the campus of Florida State University. And a senior law enforcement official tells NBC there's at least one fatality. Tallahassee Memorial Health tells NBC news that the hospital has received six patients with one in critical condition and the others listed in serious condition.

Ukrainian President Vlomir Zelenskyy said today that while Russia has cut the number of strikes on energy infrastructure, it is attacking civilian infrastructure instead. Russia and Ukraine both agreed to a U.S. broker 30-day pause on military strikes against energy targets, but it frequently accused each other of violating it. And New Jersey's Attorney General today sued the social gaming platform discord for allegedly failing to adequately protect underage users from predators. Discord bans anyone under the age of 13 and says it has a zero tolerance policy toward people who exploit minors. Brian, back to you.

All right, Pippa Stevens. Pippa, thanks very much. Very quickly, folks. Yesterday was the 18th anniversary of the Virginia Tech shooting. I'm a Virginia Tech Hockey. Many of you know that. So it hits home and our thoughts definitely to the entire Florida state family today. All right. Let's get now to a power rundown.

We have NBC News legal analyst Danny Savalos with us. They had a couple of big headlines out of D.C. Danny, really appreciate your time. I know you're busy. Let's start with one potential roadblock. It's a big one. Okay, there are five small businesses suing to block the tariffs, saying that this is not Trump's job.

This is Congress's job because the tariff acts effectively as a tax. It's not getting as much attention, I think, as it deserves. And some would argue it's definitely not a national. emergency, what's your take? Yeah. The International Economic Emergency Powers Act gives the President a lot of power to get involved and issue economic sanctions internationally, but he needs to be able to declare a national emergency.

And that may be one sticking point, which is, has he properly declared a national emergency? And does the same law even really allow him to impose tariffs? That, at least according to the Constitution, appears to be the power of Congress. to regulate international commerce. So if you're betting when this goes up through the courts at the final stop, more likely the tariffs could get struck down, but they could survive too. It's a relatively unanswered question in the law.

Yeah, I guess what we are gonna get an answer to. The next up is Trump versus everybody at this point, I guess, Trump versus Harvard. The president freezing more than $2 billion in grants to Harvard. He is threatening to pull its tax-exempt status after the university said it would not not agree to a series of demands for the Trump administration. Danny, whose side is the law on potentially in this dispute? Again, if you're betting, I'd probably go with Harvard and here's why.

The IRS can revoke a university's tax-exempt status, and in fact, it did it with Bob Jones University many years ago. So this is something that can be done. But here's the thing. 501c3 organizations cannot engage in political advocacy, but they can take viewpoints. The IRS regulations allow for that. You can be a university and take a particular viewpoint as long as you present both sides and you give a full discussion of the issue. And, you know, there may be some argument that Harvard's not doing that. But as long as they're following IRS regulations, the mere fact that they even do take a viewpoint.

And I'm not saying that they do. but if they did, that alone might not be enough to destroy their 501 C3 tax-exempt status. It's another one of these big fights. I feel like there's going to be a lot of answered legal questions, Danny, over the next couple of months and quarters. Danny Savalos, NBC News Legal Analyst joining us a power lunch, Danny. Thank you. All right, on deck.

What you need to know about Netflix tonight. All right, welcome back. The big numbers that are out tonight is going to be Netflix. Netflix, by the way, outperforming most of the day. Most of the markets this year, a rare bright spot, up about 10% and up about 5% since what some people, I guess, the president calls Liberation Day regarding tariffs. But your next guest says it's really because Netflix is one of the least tariff-exposed names in the world. And he sees an upside of more than 50, 5% from here joining us now as Barton Crockett, senior internet media analyst Rosenblatt Securities. I guess the basic thesis, Barton, and there's a lot to it.

But the idea is that, hey, no matter what happens with the economy, people aren't going to cancel their Netflix. Correct. You know, if you're worried about the macro, these type of cheap, subscription, diversions, these are the things that people hang on to when times are tough. So it's protected from that. They don't sell goods that are tariff. They sell services, which right now we're not being tariff. Well, you know, could fall into that if the EU comes back. But Netflix has pricing. leverage. So even if there is a tariff, they'd have better than kind of average ability to pass that on. So in many ways, these guys are really well positioned for this environment. Yeah. I mean, do people cancel their Netflix if they don't have a hit show? All right, squid games over. Let's cancel. Let's wait for the next thing. Or they just leave it on,

let the subscription go every month. It's called churn, I guess, technically. Yeah, I mean, their churn is kind of low for the sector. And that's because they have hit show after hit show that keeps people engaged. And, you know, this past quarter, the first quarter was an example of that, right? The adolescents really came on strong, you know, vaulted to number 16 on Netflix's all-time list. You know, they started off the quarter with a lead in from Squid Game Season 2, which is up there. So they've kind of bookended what they've been doing for a long time, which is exceptional success, putting content out that keeps subscribers subscribing. What's the risk to Netflix?

You know, the risk is that there is some type of, they lose their ability to create hit shows. They keep people signing up. You know, in the past other entertainment companies, they have cycles, right? They hit for a while and then they miss. Netflix seems to have so much going on, such a vast expanse of spend, plus some talented executives, that they haven't hit that dry spell that others. have in the entertainment industry. And that may be because they're a different business.

And that gives them an advantage that's hard for the rest of the entertainment industry to catch up to. Yeah, it really is. It kind of feels like Netflix World and we're showing the names, all the names up there. And by the way, our company, Peacock is in that list. We got Netflix, Prime Video, Disney, Max Paramount, Hulu Peacock and Apple TV Plus. Is that too many? Probably over time. I mean, certainly if there's a recession, some of the ancillary services are kind of

get cut, probably not Netflix. So, yeah, you could worry about the lower end of that list, but probably not Netflix. That's probably the one thing people hang on to. Yeah, do you see consolidation, Barton, asking for a friend? I do think that there's less kind of M&A-driven consolidation. Netflix doesn't really need to buy any other streaming services. But I think at the lower end of the tier, guys will get together. That's part of the thinking behind a lot of the restructuring of the media companies

is that there could be this great get-together at the low end, which probably needs to happen. Kind of feels a little bit like cable. A little bit, yeah. Right? I mean, let's all go one way and then we're all going to re-bundle and charge a big amount. We've got this huge seismic shift coming up in the fall with ESPN leaving the bundle going off on its own. We're all just kind of wondering in this business, Barton, what is that going to mean? What do you think?

Look, I think that the trend is clear, which is that generationally, technologically, people like streaming. They're trending towards that. That's not going to change. And the streamers are kind of on the world. You know, I think everything that we see on TV today is kind of be sliced up and diced up and repackaged in a streaming formulation. And you can't stop it at this point. it's too strong. They make too much money. There's too much generational kind of interest.

That's where it's kind of be. And so just prepare for that. I think we are. At least we are certainly all trying. Netflix numbers, they are out tonight. Fast money 5 p.m. We'll have them along with closing bell over time. Barton Crockett. Thank you very much. Great. Thank you. All right. Take care. Coming up, why your trader thinks it is now the time to buy one beaten down stock, you know. That's called a tease. All right, welcome back to Power Lunch. Dow Industrial, as you can see, down about three-tenths of one per three-quarters of

one percent. But again, as we have said over and over again, it's really one stock. United Health Group, most of the market is up, but United Health is down so much that it's dragging down the entire Dow, the S&P and NASDAQ, they're higher, not by a lot. It doesn't mitigate yesterday's shalacking, but we are up about three-quarters of one percent. All right, now it's at three-stock lunch. joining us, Courtney Garcia, Payne Capital Management, Senior Walth Advisor, and CNBC contributor. United Health is actually your first stock. I mean, the stock is down 20. It's losing almost

a fourth of its value today. Are you buying the dip, Courtney? You know, I'm not buying this dip, at least not yet. And the reason that you're seeing this down over 23% yet in one single day. I mean, talk about a drop there is clearly its investors dissatisfaction after you saw an earnings guidance cut. And this really had to do with their Medicare Advantage business, which you saw higher medical utilization costs, which is expected to probably continue in the near future. And that's going to weigh on their earnings. Now, this is also a company, which you're looking at as the Medicare budget is getting cut, the Medicaid budget is under question. This is likely going to continue to put pressure on them. And add on top

of that, they're still under investigation from the Department of Justice on their Medicare billing practices. So they just have a lot of different headwinds here, and I don't think those are necessarily going away in the near term. So at some point, this will be a buying opportunity. I don't think it's here yet. I would not be stepping in on this dev. Yeah, and there's just like we talked about earlier, the tragic murder of one of their division heads in New York City. So it's just a lot going on with this company. Yeah. Let's move on. Stock number two is Eli Lilly. That stock is actually jumping. They got some positive news around a drug trial on another one of these anti-obicity drugs. Yeah, and the reason this is important is this was a really watched

trial. They had a phase three trial with a pill version of the GLP1. So when you think about these, the GLP ones have had a huge addressable market that really they can't make these fast enough in order to get it to the amount of people who want these at this point in time. But if you can create a pill version that is successful, you don't have the issues of the cold storage, which they make this easier and cheaper to distribute, especially outside the United States. And after you saw a trial like this, which is actually showing even more success than was expected, this means they're probably going to remain the head of the GLP space, at least in the near term. So I think my biggest issue with Eli Lilly is the fact you are not getting the stock cheap. It trades over 30-6 times forward

earnings, which is like three times its peers. I do think where it stands in this market, I don't think that's a reason to get out of it. I would stay with the stock by all means, but that would be my one hesitation here. It's not cheap. Okay, running at the hat trick. And this was our mystery chart, by the way. It's also a pharmaceutical company. This one is Merck. Merck's higher right now, but it's down about 17% in a month, getting no respect at all. Are you giving Merck any respect, Courtney? In this one, I actually would be buying up as an opportunity. I think you get to a certain point in here where a lot of the negative news is going to get priced in. And there are headwinds that they are facing, largely the fact that they're key Trudeau drug, which is over 50% of their

sales, that's facing patent expiration here in 2028. And the closer we get to that, investors are questioning what they're going to be doing to replace that. And you're, you're going to be doing to replace that. And you're also saying that they had to pause their Gardasil vaccine in China. So they really have a lot of things that are issues and is why their stock is down. But I think a lot of that has arguably been priced in. It's now down almost 20% since the year. And it trades only 8.8 times forward earnings pays over a 4% dividend. I would actually, a lot of that negativity has already been priced into the stock.

And they already have shown a lot of opportunities just even with they had a partnership with a Chinese company trying to get in the GLP1 space. I don't think that's going to change the world, but I do think you're starting to see they are going to be making some moves here for the future. So I would start to look at this as an opportunity. Starting to look at that, but also noting, you know, Lily before is expensive. Courtney Garcia, Payne Capital Management, Senior Wealth Advisor. Corny, thank you. Thanks for happening. A reminder, you're very welcome.

You can recap any three-stock luncheon time you want. You can scan your QR code on that screen right there. Head over to CNBC.com and you've got some time coming up. One area of the federal government getting hit from cost cutting that you will have rather, mixed feelings about. Robert Frank with that story. Another big twist to the big story. The Wall Street Journal out right now

with a story from Brian Schwartz and Nick Timmeros that Donald Trump has been thinking about firing Fed Chair Jay Powell for months and indeed even interviewed Kevin Warsh, formerly of the Fed, former bank executive at Maralago. But Kevin Warsh advised the president do not try to fire Jay Powell. He's only got a year left in his term.

Let him write out the term. But the journal out with the story that Trump not only is thinking about firing Jerome Powell, but even had a meeting with Kevin Warsh about possibly replacing Powell should he be fired. But as we talked about, it's not even clear if Trump has the power, the political or legal power or both to fire Jay Powell.

Just another twist in a very twisty story. Robert Frank's latest Inside Wealth newsletter is out, and in it he is highlighting how the IRS is ghosting rich taxpayers. And I guess, Robert Frank, in a way that would make those rich taxpayers happy. Good for the rich taxpayers. Not too good for revenue, Brian. IRS audits of the wealthy have virtually ground to a halt with all those agency job cuts. The IRS fired over 6,000 staffers in February. About 25,000 more have taken buyouts.

So that's more than a third of the IRS staff now gone and more layoffs to come. Now, most of the cuts are in compliance and enforcement, especially in the two units that target the wealthy and the large partnerships. Those are the ones that pay a lot of the taxes. Now, one former IRS agent told me he was working on audits totaling more than $150 million before he was fired. Those audits will now end, he said, for lack of staff. And the attorneys who defend the audits tell me the cases they had been working on for years have suddenly, closed or just gone silent after the agents have left. Now the tax gap, that's the amount that goes uncollected every year, now estimated over $600 billion. That's money we could use right now.

The audit rate for taxpayers who make more than a million a year has fallen over 90% since 2010. According to the Tax Foundation, the 1% still pay 40% of the taxes. That's the latest year available. Now, Brian, for the full story, as you mentioned, you can read them in my Inside Wealth newsletter out today. That's cnbc.com slash insideweller. wealth, Brian. And you know, I tease that. I love that newsletter. It's excellent, by the way. I'm not just saying that. So very quickly, I guess, I mean, if you're rich, this is good news. Yeah, it's not so much that people just aren't going to file their taxes, which is what you've seen. It's that these more complicated techniques. It's illegal to not file your taxes.

Absolutely. It's that these very complicated techniques that take them years to figure out are actually illegal that will be, I think, starting to develop more as there are less cops on the beat now. And I'm sure this story about how the rich may be getting off on taxes is going to have no political legs at all, Robert. No, not any. Right. You know what? It's too early for sarcasm. Robert Frank, check out his Inside Wealth newsletter. It's out every week. It is excellent. Go to that. Sign up today as well, folks. Hey, markets are closed tomorrow. Bond markets already closed. Got a long weekend as well. Happy Easter, everybody. I will see you back with Kelly on Monday. Closing bell and a wild market starts right now.