Power Lunch - S&P 500 rises, but heads for worst week since September 03/07/25

Episode Date: March 7, 2025

The S&P 500 has regained some steam, but is still heading for its worst week in months as tariff fears unnerve investors. 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.

All right, welcome to Power Lunch, everybody. Morgan Brennan joining us on what was another downday for your money. Now it's an update for your money. Stocks have turned around. But overall, we're still seeing our worst selling in months. You got tariff confusion. You got concerns about the job market and the president and the Fed chair, both talking about it today. We're going to find out if what we've seen is normal or maybe even healthy Morgan or the start of something worse. Plus, we're going to, I love this. We are going to focus on the high. consumer, legendary restaurateur, and now lifestyle guru Mario Carbone is in the house. He will join us live on set. Talk about a power lunch, Brian. Well, let's start with the markets because we have seen a big intraday turnaround. As Brian just mentioned, Fed Chair Powell. Speaking this afternoon, came across slightly doveish here, saying the economy is at a good place. And therefore, the Fed doesn't need to be in a hurry. But that brought stocks off the lows of the day, now into positive territory, but that's still not nearly enough to race the weekly losses that we've seen for the NASDAQ down for the third straight week. This is the worst week since December. It's down

6% for the year, but as I mentioned, we are fractionally higher for all the major averages right now. So perhaps at least some green on the screen to end the week. We're also watching shares of Nvidia. Those are flat today, but down roughly a trillion bucks in market cap since hitting a record high in early January. You can see up a little less than 1%. But let's dig deeper into what's really driving this wild action today. At one point, the SEP was down over 1% with cyclical sectors like consumer discretionary and financials leading the losses.

Again, that's following the weaker than expected February jobs report, uncertainty about tariffs, also adding to the negative tone. And then Fed Chair Powell reassured investors about the economy. Joining us on how to navigate all of this volatility is Ben Snyder. He's senior equity strategist at Goldman Sachs.

Ben, it's great to speak with you today. I mean, we've had four and a half days since this latest tranche of tariffs were implemented. It almost feels like four years. And headlines moving in every direction. Developments coming every which way, depending on which White House official or cabinet official is speaking, including the president himself just earlier today. How do you navigate this as an investor, especially given the fact that we went into this administration just 47 days ago with stocks overvalued? I think you're exactly right.

the key issue so far this year has been the market struggle to assess the forward trajectory of the economy. And as you noted, we entered this year with investors very optimistic about what that growth path would look like. And over the last few weeks, we've seen a very sharp downgrade. Now, the good news is, if we look at where things are priced today, they look much more reasonable in our view. And so our base case here is still, the economy is in good shape, it's growing. We saw a confirmation of that this morning. Earnings are still growing. And that means the equity market should be moving higher as well. All right.

So in light of that, then, where do you put your money to work right now? Especially as we've seen yields come off pretty dramatically. We've seen this rotation out of things like more economically sensitive parts of the market, like cyclical sectors. What do you like? I think you're exactly right. There's been so much volatility on the cyclical side that rather than take a strong view today going all in on cyclicals or all in on defensives, we're trying to find a balanced.

And that means some sectors on the cyclical side and some on the defensive side. On the defensive side, we've been recommending health care, and that's done very well this year, one of the best sectors in the market so far. And despite that outperformance, it's still trading at nearly the lowest valuations in history. So that's very attractive to us. And on the cyclical side, material stocks look very attractive. They've dramatically underperformed the commodities to which they're usually linked. And when you look at the recent headlines of potential fiscal expansion,

of Europe and maybe some focus on domestic reinvestment here in the U.S. Those policies should benefit the sector as well. Is there a way, Ben, to know how much of this is headline-driven? I know the headlines. We don't listen. To be fair to the media, we always need a reason for something. Stocks sell because of blank. Insert reason here.

I've been doing this almost 30 years, so I've seen a lot of reasons why stocks go down. How much of this is tariffs and uncertainty versus simply algos, algorithms, changes in buyer or seller habits, and just like the other 28, 5% declines we've had in the last 15 years. I think you're getting into key point here. So before we even think about what's going on and what will happen next, we should just look at that typical experience when the market draws down. So if you don't know what's coming out of Washington, D.C. or the economic data, but you do know that the S&P 500 has just declined, history tells you that's usually a good buying opportunity. In fact, over history, an investor who buys the S&P 500 down 5%, generates a positive return over the next six months, 85% of the time.

So one option here. We're going to call this Optimism Friday. I just made that up. Can you repeat that stat because it sounded kind of good? It's incredibly good, right? The idea is, if you don't know anything about the outlook, all you know is the S&P 500 just declined, and you're a buyer, history tells you over the following six months, you will, generate a positive return 85% of the time, an average return of 8%. So that should be you a signal that if you don't have a strong view on the economy and you don't have a strong

view on policy and all you're doing is looking at the market, you should start rather than panicking thinking about where I want to be buying. There's a lot of talk about the growth scare that has been playing out in the market here, but there's a difference between a growth scare that results in recession and a gross career that simply results in a slowing down of economic growth. And a key piece of all of this has been the fact that fiscal stimulus is starting to exit the equation here as you do see things like Doge cuts and other, you know, spending, possible spending cuts starting to move to the forefront. How much is the liquidity piece of this affecting the gyrations we're seeing in the market?

Yeah, so to be fair, we have reduced slightly our expectations for U.S. growth. We have reduced slightly our expectations for earnings growth. We came into the year expecting S&P 500 earnings to grow by 11%. Now we're expecting 9%. So there has been a very modest deterioration in the outlook. But mostly it's been a function of volatility and positioning. So we have a tracker that we use for positioning that combines hedge funds, mutual funds, retail investors, nine different statistically significant measures of positioning. At the start of this year, That was almost three standard deviations above average. It was the highest reading in the history of that indicator.

Today, it's just slightly below neutral. So it's very clear, based on those data, that a big part of what's happened is just a move from very, very elevated length to something more normal. So we went from nine standard deviations off to three standard deviations off. So what does that mean, Ben? Like, what do we just see happen? I think you're describing the movie. Tell us after the movie what the movie was about.

Well, the movie was about very elevated expectations, very strong returns, not just last year, but over the last two years, with the S&P returning more than 20% in each year. And then the combination of those elevated expectations and the elevated uncertainty we were discussing a little bit earlier. So that's required a recalibration. It's been a painful and violent recalibations. calibration, but the bottom line here is you're starting today from a much more balanced position. All right, Ben Snyder of Goldman Sachs. Thank you. Sounds like you kind of just said, we got a little dumb, and now we've just reverted to the median or the mean. Yeah, this has been a reset. And I have to say, it's been a very swift reset.

It's been, what, less than two weeks, and this week in particular was, you know, felt very dramatic and tumultuous. But again, to go back to my point, These tariffs just got implemented at midnight on Tuesday, and we've already seen every which way the swinging of the seesaw as that policy gets shook out. We're in the process. We're not at the end. So everybody's talking about uncertainty, and I get that,

but we're four and a half days into a process. A negotiating process. Now I'm fired up. Let's bring in Rick Santelli, who's always fired up. He's in the bond market. Rick, I'm not going to steal your thunder, talk about whatever you want, but maybe kind of go to Morgan and I's point that because of computers and algorithms and whatever,

Everything does move a lot quicker now than it used to. And by used to, I mean, like, five years ago, just things move faster. I agree. And that's why I think today could be a bottom. I think that's how fast we move. I like going on record. I think we're going to see a whole lot more green in stocks. And, to be fair, you too sound like a couple of Debbie Downers today.

Because in my estimation, no matter what, I'm hearing or reading, I was looking at the report. I brought out the report. And I didn't see any big surprises. It isn't whether it was a little weak or not. It was about big surprises. This definitely fits in the jar of we can do it. It's okay. There isn't a bottom falling out of the labor market.

And if you look at twos and tens on one chart, it really does say quite a bit. Two years lagged because of the fear the Fed's going to have to come and bail out a weak economy. But 10 years, whether it's paying attention to the ultimate notion that we might have a hiccup in growth, but we might not have a bucket of hiccups and growth, and, of course, a bit of movement on the next chart affected our yields. The 10-year boon this week, one week to date, was up 45 basis points. That is just unfathomable to me.

We went from a 240 last Friday's close to 285 today. Historic move. And why is it so important? Because all of that stimulus is going to have to have a lot of issues. and there's going to be competition for all of the investor demand. And finally, this is a week today to the dollar index. I think it's down close to what? Neighborhood of 3% in one week, and it's on pace to close at a four-month low.

And guess what? What's 58% of the dollar indexed the euro currency? Yes, which means it's on pace for a four-month high close, and that makes sense considering the interest rate environment. But no matter how fast market moves, ultimately, what you want to watch today and all three major stock indices is the fact that we made new lows over yesterday and we're attempting to overtake the highs.

If we can overtake the highs of yesterday and turn it into an outside day, there's going to be a lot more company in my bucket thinking we may have to switch to a more greener future in the equity indices. Brian, back to you. I don't think we're Debbie Downers. I think we're sure on board with you.

We're very upbeat about this, and I love hearing you say that, Rick Santelli, and I think it's a key point. Well, you didn't say in negative jobs report. I heard it. I don't think we did. I think our guests might have. But, um...

Well, I'm glad. I'm glad. I'm glad. Because you know what? To me, a negative job had been down 50,000. Came in pretty much in line and was better than January. So how about that? Call me...

I like it. Okay. We're the three musketeers. Here we are. Ulysses upper. I'm trying to think of a U-name because I can't think of anything. It starts with you. Just don't say green shoots.

Please do not. I would... The credit crisis ruined that expression for me forever. Forever. And you live in the farmland. Like I would never say green shoots. Rick Sinteli, thank you very much. All right, coming up after the break,

is it going to be green shoots or game over? Stats on why the next few days may be critical to where this market could go from here. All right, welcome back to Power Lunch. Your Friday got a little bit better about an hour ago because the major averages, as you can see, or you will hear me say on the air, they are now higher on the day.

You had Trump making comments, Jay Powell made some comments. Maybe it's just more buyers and sellers. Who knows? Markets right now, and there's still an hour and 45 left to go, right now markets are up. Overall, but a pretty bad week for most investors, especially in a lot of this high valuation tech, the NASDAQ triple Q ETF down more than 3% this week. But here's where we're not Debbie Downers.

We're going to remind you of something very important. Are you listening? Everybody listening? market declines are not only common, they are necessary, and they can be healthy. Per the aforementioned Charlie Bellello of Creative Planning, this is currently Morgan, just the 17th worst decline in 15 years. In other words, I'm not a math major, but that means there are 16 periods in the last few years where stocks have fallen more than this.

I think the question, maybe the only question that matters is, are we near the bottom, as Rick just said, or can it get much worse from here? Because things have to start somewhere. Let's talk about it with clockwise capital partner, James Chalkmock, and more insights and strategy CEO Patrick Moorhead. Patrick, start with you. All 20% declines, start with a 5% decline. If you know what I mean, what do you think this is?

Listen, I think the upswing we're seeing today is just a smokescreen. I think that the voluble. In the volatility in market, whether you're looking at consumer confidence, whether you're looking at, I'll call it, tariff ping pong, is going to keep pushing uncertainty. Imagine if you are the CEO or CFO of a tech company. What do you forecast? Right? A lot of those forecasts have to do with the entire ecosystem of goods crossing lines between Mexico, U.S. and China. Where do you even decide to build your goods?

James, what do you think about this market decline? Yeah, I mean, I think we're at a period of peak uncertainty right now. I mean, you have to question the technology cycle. What is the sustainable growth rate of these companies, particularly in semiconductor industry? You know, there's a short term with tariffs and interest rates. What's going to happen there? Question marks, you know, oscillating between two or three rate cuts this year. And then the long term, you know, you have the geopolitical as well.

So I think it's a 50-50 market at this point. and you've got to play it as such. So Patrick Moorhead, broadcom earnings, better than expected, strong results really across the board. AI in particular, accelerating in terms of growth here. Is the AI trade still alive and well? Or is it a situation where, instead of it being so broad-based, you need to start looking for winners and losers specifically, and if so, what are they? Yeah, I really think it's the latter.

And let's talk about Broadcom, right? What Brokom did that Invidia and AMD didn't do is they gave a very rosy forecast that was beyond what anybody else would think. CEO Hock Tan talked about two new incremental hyperscaler winds that weren't based in their forecast. And on the contrary, we didn't see that from AMD and we didn't see that from Nvidia. So unless you're knocking the skin off the ball, I think. a beat is a meat and a meat is a miss in this type of environment. Macro long term, we do need to look downstream to the AI trade, the enterprise SaaS companies. Are they crushing it? Well, if we looked at Salesforce, what they did in the last quarter, we're looking at single digit, I believe,

9% growth, and that is not crushing it downstream. We have to look to the service now as the SAPs for that long-term view. But I think it's situational at this point, just not a dive in and hit, hit every ticker that's related to the AI trade. James, I want to go back to something that Rick Santelli touched on. And that's the fact that you've seen German bund yields moving higher dramatically this week. We've seen stocks another part of the world rallying and rallying strongly since the start of the year. And that amid the backdrop of this idea of U.S. exceptionalism. We talked. about rotations within the S&P 500, but is the rotation here more global, especially as you do

start to see spending pickup in some of these other parts of the world right now because of defense and other things? Yeah, I do think you need some international exposure within the portfolio. From our standpoint, the bigger rotations that need to happen are though our sector-specific domestically. You know, I think you've got to move up balance sheet to higher quality tech. Actually, Apple is the only company that we've actually. increased our position size in. We've been cutting the other ones on the way down.

Utilities, commodities. And I think crypto. Crypto, I think, is going to be the big standout within technology. And I think that will continue to. There's a lot of headlines out there about the executive order for the Bitcoin Reserve not being what people expected. But I think if you read through it carefully, it's much better than expected. So we think that that could be an outperformer as we look into 2025 and we navigate this validality short term with broader tech with the NASDAQ. Yeah, and certainly I think, you know, you have this crypto summit that's going on too and expectations that maybe we're going to get some comments, more comments about this from President Trump as the afternoon unfolds. But James, I am curious, just on the last point you

made, why is Bitcoin down so much despite the fact that everybody has been, you know, in that industry, and that asset class has been pushing for this for so long? Yeah, there's a lot of new money that came into it over the last couple of months. If you looked at the sellers, the net sellers over the last month where it came back to below 80, over 50% of those were buyers that had bought within the last month. So the base who believes in Bitcoin continues to be very sticky. What's coming out of the White House continues to be very impressive as it relates to the crypto policy. And I think we have support in Congress to get something going,

this year. So I think the sky is very high for Bitcoin. So we continue to be strong there. But when we think about our portfolio, I do think you have to operate as 50-50. You've got to keep the hedges on because right now is what you're seeing in the market could very well be a head fake. The S&P earnings are still estimated to climb 15% this year. That number could come down. So the valuation may not be as cheap as it appears after this pullback. So a lot of land. mine's everywhere. So just we need more information to be able to make a directional call. All right. James and Patrick, thank you both for joining us. Thanks. Thank you. Well, Rollcoaster Day for Bitcoin, we just touched on it as President Trump hosts the Crypto Summit

at the White House. We're going to dive into that even more, but this is the first ever U.S. Strategic Bitcoin Reserve. There are a lot of geopolitical implications and perhaps implications to other asset classes as well. We're going to dig into all of that. next. Welcome back to Power Lunch. Bitcoin at about $88,000 right now. That's well off its post-election highs in hopes of the Trump administration would support cryptocurrencies. It's off the lows of earlier this week, too, though. A crypto summit is taking place at the White House this afternoon, and the president expected to speak later. But there is some disappointment that what might actually happen is short of what the crypto community was hoping for. Mackenzie Segalos is here

with us on set. She joins us now with more. Mackenzie. Hey Morgan. So investors were not impressed with the President's Bitcoin Reserve Order, despite it being a big win for the industry. Markets sold off on the news with alt coins like Ether, Solana, and XRP leading losses overnight. Now, those tokens were recently promoted by Trump on Truth Social, but none are mentioned in the EO. Instead, it seems they're getting shuffled into a separate stockpile for orderly management. But the main concern here is that the order stops short of any immediate government Bitcoin

buying strategy. Instead, the U.S. will only hold onto seized tokens, meaning that no taxpayer dollars are going toward new purchases. That is a letdown for investors who were hoping for real federal demand. Now, that said, we just heard from White House AI and Cryptozar David Sacks, who hinted at a possible Bitcoin buying plan only under budget neutral conditions. Take a listen. If the Secretary of the Treasury or the Secretary of Commerce can come up with a budget

neutral way to acquire more, then they are authorized. They don't have to, but they're authorized to develop those strategies. Now, all eyes are on the first ever White House crypto summit, where Trump is set to speak shortly to a room filled with industry heavyweights, including Brian Armstrong, Vlad Tenive, and Michael Saylor. Some are pushing for stable coin policy, while others see crypto's future in tokenizing private markets and putting trillions in equity on chain.

My only question about tokenizing private markets is what is tokenizing private markets? What does that mean? Well, this is actually something that Vlad Tenive has been pushing. for quite a while now because there is an appetite with Robin Hood's customers, which essentially is everyday customers because of SEC rules limiting private markets to accredited investors, they can't get exposure to a SpaceX or to a stripe, for example. And so by putting that on chain, which would require some sort of congressional adjustment, something in a market infrastructure bill, they would finally be able to get that, you democratize the private markets.

Very quickly. Do we know how many seized tokens the U.S. has or has been seizing? It's funny that you asked that because David Sacks mentioned the fact that we need to do some due diligence, some accounting. And so the estimate is 200,000 tokens, which would put it at roughly $17 billion, but one of the top priorities of this working. You know Ross Albrecht was? No, I'm serious. Silk Road, he's in prison. He's being pardoned. Like, where's that money? Where's all? Ross Albrec would be like one of the, I mean, I'm not justifying what he did. Silk Road, selling drugs, guns, weapons. You could buy a bazooka. But that's like hundreds of billions of Bitcoin, I think, nowadays. And the U.S. government did seize a large stash of Bitcoin from Silk Road, which they have since liquidated. Okay.

And part of the argument of this administration is why didn't we hold on to it? Because it's appreciated in value we've lost billions of dollars because of premature sales. Yeah. And I will say this. Just another great decision by the brain trust in Washington. Yeah. Well, it seems to be. I said it. You can just nod. It's all fine. No, it's super fascinating.

McKenzie Sagalos. Thank you for joining us. We'll see you, I believe, on closing bill. overtime with the latest on all of this too. Yeah, see you see. All right, up next, we're going to take a look at some of the AI-related stocks that have fallen from grace and have a trader that says which ones may still be worth your hard-earned tokens. Welcome back to Power Lunch.

I'm Sima Modi with your CNBC News Update. President Trump says he sent a letter to Iran's Supreme Leader hoping to negotiate a nuclear deal. During his first term, he withdrew a previous agreement former President Obama struck with Tehran. The letter comes after the UN's nuclear watchdog warned of a dramatic acceleration in Iran's uranium enrichment. Meanwhile, the Pentagon officially reinstated the name of the nation's largest army installation to Fort Bragg today. The post was renamed Fort Liberty in 2023 to shed its ties from Braxton Bragg, a former Confederate general who owned slaves. The new designation is for Private Roland Bragg, who was a silver star and Purple Heart recipient during World War II.

And United Airlines announcing Starlink enabled Wi-Fi has officially been added to one of its aircraft. United says by the end of this year, it plans to equip its entire fleet with the satellite internet provider owned by Elon Musk's SpaceX. It will be free for loyalty reward members. Hawaiian, Air France, and Qatar have also announced partnerships with Starlink. Morgan, back to you. All right. Sima Modi, thank you. And certainly United has been working hard on that Starlink partnership for a number of months now.

It's time now for our three-stock lunch. Today, we're taking a look at some AI angels that have fallen from Grace and how to trade them right now. So here's our trader. It's Quint Tatro. He is founder and president, excuse me, of Jewell Financial. First up is Invidia. The once market darling is on pace for its third straight negative week. It's down about 16 percent so far this year. Quint, you say sell. Why? Well, let me preface, Morgan. First of all, thanks for having me. But we are so. significantly oversold. So I would expect that we see a pretty decent rally in all of these names that we're going to talk about today. So I don't necessarily think that today is a good idea to sell this name. But if you are caught in this name and you have watched it decline and you are hoping and praying for a relief rally, when it comes, I think you should consider lightening the position here. Ultimately, Invidia is a textbook place. on the early adoption and phase of AI, clearly selling chips, incredible fundamentals.

And now we're seeing a movement away from that. And ultimately, there's a lot of uncertainty. And what you're going to hear from a variety of people out there is now how inexpensive from a valuation standpoint the stock is. It was trading 35 times forward earnings near the peak. Now it's only trading at 20. The problem is those earnings are decelerating. It's still trading 21 times sales, and we just think there's too much uncertainty, and the technical

trade is broken. So a relief rally here, which I do believe possibly has started today, will allow you to lighten up and sell this into strength. Okay. So if we shift from picks and shovels of AI to application, let's talk about our next name. That's Snowflake. It's on pace for its worst week in a year. Third straight week in the red.

We should note, Quint, this is also down about 3% since you recommend. as a top pick for 2025 here on Power Lynch at the end of December, but you're still saying it's a buy. Why? Well, first of all, 3% thus far as a top pick in this environment for tech, I don't think is all that bad. So we'll see. I think we can continue to track this one all year and see how it plays out. But yeah, this is our theme. Our theme is that the next AI play is really in the software area. And Snowflake emboldens this. And we really believe this is a company despite the valuation. This is a little difficult because you're looking at a company as trading a hundred times forward earnings. Like, why would you ever touch that? But the earnings

are accelerating the beat top and bottom. Last quarter, they raised guidance. And then they've gotten caught in this significant pullback here in the general market. So they're about 12% off the recent highs. But it's only trading 14 times sales and in an environment that we think will continue to gather momentum. So unlike selling Nvidia into a pop, this is an environment where we are adding to our longer-term thesis and investment behind Snowflake. We think this pullback offers great opportunity and is still one of our top picks for 2025. Okay, finally, Palantir. It's in the news today. It delivered its first two AI-enabled Titan trucks to the U.S. Army on time, on budget, just a year after being named the prime contractor, which was an unprecedented move by the military

to do that with a software company. It's down this week. We should note the stock is up 11% this year still, but Quint, you say this is still just a hold. Yeah, thanks for giving me the hold and not the, not the sell. I've been a believer of Carp and crew for a long time. I've been a shareholder there and still am a shareholder there from much lower from here. But the stock has just unfortunately gotten well ahead of itself. And a lot of people think, you know, on this initial pullback here that we've seen. Oh, what a great opportunity to jump in. I think you have to be very careful. If the momentum has come out of this name for the time being, we could see a lot lower prices in this name. It's trading 68 times sales, 120 plus times forward earnings. Stellar balance sheet

and $4 billion on the balance sheet in cash, but we feel like it's just gotten ahead of itself. And you've got to let it digest this unbelievable move that it's seen over the last couple of years. So for us, it's a hold. I'd be hard pressed to sell after this decline, but I'm certainly not buying here. There will be a better opportunity, and Palantir is best-to-breed going forward. It's going to be a standout stock for a long time, but a very tough buy at this level. Okay. Quint Tatro, thank you. Appreciate it. And remember, you can recap every three-stock lunch anytime you want. Visit cnbc.com or scan the QR code on your screen right now. All right, on deck, the great Mario Carbone is going to join us live on.

set, talk about his growing food and lifestyle empire in the Carbone Beach that's coming up. Plus, right at Morgan's Alley, intuitive machines moon landing. It went sideways. We're back right after this. Welcome back. A big week for space-related news, particularly over the last call it 30 hours. Now, starting with SpaceX, Elon Musk's company conducting its eighth test flight of the monster Starship rocket system. This is a flight that lifted off from South Texas with plans to test deployment of payloads. Starship made it about nine minutes into the flight before. engine issues and ultimately detonation with falling debris spotted in parts of the Caribbean and temporary ground stops triggered at some Florida airports. Now this was the second time in a row

that Starship was lost, but also the second time in a row, take a look at your screen, that the super heavy booster returned to the launch pad for a successful catch by Starbase's chopstick arms. Now remember, Starship has been built to be, to become the holy grail in spaceflight, full reusability, which completely changes the economics of space travel. Meantime, shares of intuitive machines. Those are tumbling again today. The company announcing its mission, it was contracted with NASA, is officially over after its privately owned robotic lander named Athena landed sideways in a crater near the moon's

South Pole yesterday afternoon. Now, just moments ago, getting news that it ran out of power. It is officially, for lack of a better word, dead. But Athena was intuitive machines' second lander to touch down on the moon in 13 months. The first softly landed last year. It carried out parts of its mission. and it was heralded as a success, but that, too, had also fallen on its side.

You can see shares of LUNR, lunar. They've shed more than 40% in two days. They're down right now about 23%. That said, there was also some good news this week. Intuitive Machines was not the only NASA contracted company landing on the moon. Startup Firefly Aerospace did it successfully early on Sunday morning. And without complications, they're also contracted with NASA. Firefly's CEO, Jason Kim, telling me so far,

everything's going according to plan with Blue Ghost's 14-day mission. But Brian, here's the big takeaway for all of this, for investors, for the American public. Even when not successful because space is hard and many times it's not successful, these companies are attempting feats that are at fractions of the price, traditionally, that it would cost the government and thus taxpayers to do something similar. That in turn is spurring more innovation. It's unlocking this long dreamed of space economy, Just to give you an example, Firefly was like a $61, $62 million mission.

Normally would have costed billions of dollars in the past. I have not been to the moon. Not yet. Not yet. There's no carbon or zizi's on the moon. What exactly do we want to do on the moon? I'm told there's nothing there. That's not true at all.

What's there then? Rare earths? We have water. We have rare earths. We have other types of minerals and materials that because of the, because of the gravity. dynamics that are so different than Earth could be easier to extract. And that's going to be another piece of the equation is how you bring some of this stuff home. But also, don't forget, we're getting ready to put American astronauts on the moon here in the coming years through the Artemis program.

And we're not the only country doing it. We've locked this out in treaties with allies. But China, too, is also racing to get to the moon and build a permanent outpost. So there are geopolitical implications to this as well. That's right. Get there before they do. it. Not an accidental reference, though, about Carbon or Zizi's, by the way, because coming up after the break, Mario Carbone will be on set with us. It's Friday. The markets are up, and we're

going to talk about Carbone Beach F1 fans. You know what I'm talking about. That's next. Well, welcome back. Stocks are higher today, but recently, tariff fears have hit the market. A big concern is whether consumers can hold up should prices increase, even if temporarily. So let's check on a couple of consumer companies, starting with Costco. The stock's down 6% following earnings, which were after the bell last night. $62 billion of revenue in three months. Not enough for analysts. The company has said it's ready to adapt if tariffs are imposed.

They had a miss on the bottom line. On the other hand, we have Gap. Now, its earnings were much better than expected, so was it margins, beating slightly on revenue, saying every brand gained market share. As far as potential tariffs, Gap says it will have a small impact on margin. Less than 10% of its products come from China, less than 1% from Canada and Mexico. combined. You can see those shares are spiking 16% right now. This has been a turnaround story for a little while now. Everyone loves Richard Dixon, the relatively new CEO of the Gap. He turned around

Barbie. He turned around Barbie. You know what? Let's talk about the consumer and stay on that story, particularly the higher-end consumer. Maybe many of you watching or listening right now, because from May 2nd to May 4th, Carbone Beach is happening in Miami around the F1 race. Hedge fund billionaire Ken Griffin, aspiring newspaper mogul Jeff Bezos. Just some of the bold-faced business names who have hit the event. Let's talk about that, the consumer, and building a luxury lifestyle brand in chaotic stock markets, one of the team behind it. Guy named Mario Carbone, we forced him to wear a tie. He's in the house now. Mario, it's great to have you on set in New Jersey. Thank you for joining us. I love wearing ties.

Do you really? Yeah, I do. As a Queens guy? I'm an old soul. Old soul. I love that. And by the way, be careful for Morgan. She comes from a long line in the restaurant industry. Oh, here we go. Her dad, my parents were a fast food franchisee. Her parents are a own burger cake. I know gourmet. So be careful. You know hard work. That's what you know.

That's it. Hard work and labor. Let's talk about your, a lot of our viewers and listeners right now are or would like to be major food group customers. How do you see the higher end consumer right now? We know they always spend. Yep. But the stock market's also been volatile.

Do you hear your customers talking about it? Listen, I mean, if you take New York, for instance, our numbers are booming, right? They're above pre-COVID numbers. So New York is telling us everything's good. You know, there's no fears right now with our dining, certainly in the luxury sector. Stats are up. If you go out, if you're out and about, we were talking about restaurants earlier. Energy's through the roof.

Places are packed. You know. Any sign of that slowing at all? Anything. As of right now, I would say no. I don't feel it. I don't feel it. I look every morning.

I get all the reports from all the restaurants. I'm not really seeing it in spend. I'm not seeing it. in sort of the trends there. So as of right now, I'm going to say no. Jared Isaacman, who at least until recently, was the CEO of Shift 4, so payments processing, works with a lot of different restaurants across a lot of different markets, would talk about the steak effect, especially in the wake of inflation and things like higher beef prices in recent years. Have you seen any signs of that or any restoking of that,

especially as we are talking about the possibility of food prices increasing again here? I mean, listen, inflation certainly hits us just like everybody else, right? I think we have a responsibility of the customer. You know, certainly we occupy the luxury sector there, and I think that there is a promise being made to our customers that on any given night, we're going to bring in the finest ingredients in the world no matter what. That's what we represent as a company. So we have no choice but to pass that along to the customer

because we're going to continue to buy everything that we would normally have bought. The last thing our customer wants to hear is we're making concessions, and buying ingredients that are lesser grade than we would normally have done. Food has changed so much the last few years, Mario, talk to us about this. And I'm not going to knock anybody anywhere that wants their food.

Don't do it. No, but I'm going to do it, actually. You know what? Let's do it. It's Power Lunch. Well, it is, the show's called Power Lunch. The food got weird for a while, and still knock, but it's like,

I'm going to make nitrous oxide and sea foam and we all watch the Bears and what Karmie is doing in Chicago. What you and your team, I think, have done better than anybody or as good as anybody and very successfully is you made food approachable again. Like, no offense, I don't want sea foam that tastes like licorice, but give me a big piece of chicken parm, a good glass of wine in a great vibe with good company. How has dining? And I think my friend Tillman Fertitas realized this, buying Keynes and others. How has dining changed? Tillman's certainly at the forefront of it, obviously. How has dining changed? I'm not sure it has.

I think we are always going to have these sort of outliers. I think they're important. Some of them are geniuses. You take, you know, for Anadria, you take... El Bully. I'm going to be able to. They're amazing. They are geniuses.

Noma. It's important that they're out there pushing the boundaries, right? But by and large, what we do at our company, what I challenge my chefs is, and I believe it's just as difficult, is make the best version of something that people have had hundreds, if not thousands of times before. Give them the best meatball they've ever had, the best bowl of pasta. If you can do that, you have a customer for life, right? Even at the very best of that other style of meal, which, again, important that they exist in the world for the art, even at the very best of it, you're going to have it maybe once in your whole life. I have customers three or four

times a week. I much rather be in that business. Are there markets that you're not in now or that you are in, but you're looking to grow or expand or invest further? Definitely. Okay. You know, we're growing in Las Vegas. I love, I love Las Vegas. I think it's the food and beverage capital of the country. Why aren't you in Chicago?

I'm going to be in Chicago in a week. My wife's from Chicago. I'd love to be in Chicago. Please. Chicago, Atlanta, Phoenix, Gatsdale. Those are areas that we are not in right now. Phoenix a little bit, but I'd like to be in wholeheartedly. Boston, we're in a little bit.

I'd like to be in further. You know, those are the cities, and then certainly continue to double and triple down New York, double, triple down Miami, as we just talk about the states, and then we're looking certainly abroad. Do you feel like there is any relationship at all between, you know, Carbone Beach, it's an amazing event, I'm told I've never been. It's not cheap. Partner with American Express.

We've got to get you there. Well, you know, it's the tickets sell out, by the way. At $3,000 they sell out. They do sell out? Do you watch the stock market? I mean, do you feel like your business is tied at all? to how the markets do? I watch it.

I mean, I'm curious about it. I, you know, I wake up in the morning. I sort of see what's going on. I think it's important for me to know. You know, certainly as it pertains to areas that we're looking to grow into, new markets, you know, I like consuming the information. But what's most important to me is the numbers that my team delivers to me every day. What happened last night? I don't want to be in the game of making knee-jerk reactions on topics that I'm not an expert.

I'm an expert in restaurants and I want to know what the numbers say last night. What did we spend on wine last night? And how does that, what's that number year over year? That's what really concerns me. I want to hear more about this. We don't have time. We're going to wrap it up at the steak effect that you brought. I don't know what that is, but I like it.

And now I'm intrigued. Maro Carbone, chef, co-founder of major food group with Rich and Jeff Zelaznick. Thank you for coming in. Thank you for having me. Slepping out to New Jersey. We appreciate it. Appreciate you. All right.

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