Power Lunch - S&P 500 rises, led by Nvidia and chip stocks 6/3/25

Episode Date: June 3, 2025

The S&P 500 ticked higher Tuesday, fueled by strong gains in AI leader Nvidia, as investors anticipated details on potential U.S. trade deals. We’ll tell you all you need to know. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunch on this Tuesday afternoon alongside Kelly Evans. I'm Dominic Chu in for Brian Sullivan today. Coming up on the show, playing the waiting game. As the OECD cuts both U.S. and global growth forecast amid the tariff turmoil, our bond strategist and our stock picker making the case for caution in these markets, we're going to tell you how to position right now. And speaking of tariffs, Shark Ninja shifting its supply chain away from China, shares are up. of 42% since Trump paused his so-called reciprocal tariffs. We're going to talk to the CEO coming up. Very exciting. Plus, meta-goast nuclear, signing a deal with Constellation Energy that's got the uranium stocks on the move.

We'll dig into what it means for both sectors. But first, a quick check on the broad markets. With stocks still towards the session highs of the day, the Dow was in the red to start things off, but we're now on pace for a fourth straight day of gains, and it's up 211. The S&P and NASDAQ trying for their third positive day at four, as you heard Don mentioned earlier,

NASX up 1% and Vinias of 3% and got back the market cap crown. 10-year yield touch higher earlier. Now it's at 446, so just kind of bopping around. All of this trade uncertainty is where we start today with the White House saying the president will double those steel and aluminum tariffs. That was just moments ago,

plus some major drama with former, what do we call him now, former advisor, Doge in chief, Elon Musk. Yes. Amen, over to you for all the latest. Yeah, well, a couple of things. things to bring us up to speed on. First of all, the White House here now confirming this report that we got yesterday that U.S. Trade Representative's Office has sent countries around the world a letter asking for their best and final offer on trade by Wednesday of this week. The idea here

is that the administration wants to fast-track some of these negotiations, maybe some frustration behind the scenes that negotiations aren't moving along quickly enough with some of these countries. White House Press Secretary Caroline Levitt briefing reporters just a short time ago said, that they had sent the letter and explain why. Ambassador Greer, Secretary Besson, Secretary Lutnik, are in talks with many of our key trading partners around the globe, as you know. Brian, I know the Wall Street Journal has covered this quite heavily, and they continue to be engaged in those discussions,

and this letter was simply to remind these countries that the deadline is approaching, and the president expects good deals, and we are on track for that. So we're on track for that, the White House says. Meanwhile, no details from the White House on timing or a date. for the Xi Jinping Donald Trump phone call, which the White House has said is likely to happen this week. No official confirmation of any scheduling for that. So a lot of folks here at the White House is very much interested in when that will happen. The White House pinning a lot of hope on that call that the two men can work something out directly.

And the question is, really, is that going to be the case? Or because of Xi Jinping and his very scripted and disciplined nature, would any deal have to be really ironed out in advance of any kind of? a scripted leader-to-leater type conversation. Caroline Levin is saying in the briefing a short time ago that there will be a leader-to-leader conversation, quote, very soon, Kelly. Right. So then let's get to the breaking news of the past half hour or so, Amon, which is Elon Musk,

full on going after the big, beautiful bill that's being worked on in the Senate this week. Already we were seeing a few senators, Rand Paul, Ron Johnson, a signal they wouldn't support it potentially over its size and cost. and now Musk seemed to be throwing his weight behind them. Yeah, this is a problem for the Trump administration. Elon Musk has huge political weight. He's got a sort of political lifespan that extends beyond Donald Trump's, right? President Trump is going to be out of office, presumably, at the end of this term.

Elon Musk won't be. He'll be in a decision to be kingmaker in the Republican Party for maybe another generation, depending on how interested he is in doing that, and the vast amount of money that he has to deploy into politics. He said, he told our own David Faber, you know, he's kind of backing away from politics. Now that could change. So all of that will be in the mind of the senators who are looking at his message on social media just a short time ago. Here's what he said, if you look at the tweets, very specifically blasting this bill,

which is a prize possession of the Trump White House. He says, I'm sorry, but I just can't stand it anymore. This massive, outrageous pork-filled congressional spending bill is a disgusting abomination. shame on those who voted for it. You know you did wrong. You know it. He goes on to say it will massively increase the already gigantic budget deficit to $2.5 trillion and burdened American citizens with crushingly unsustainable debt. So Elon Musk, just off of his Doge effort where he really ran up against the Washington establishment and realized just how difficult it is to cut the federal budget here in Washington, D.C., given that every dollar that's spent has a constituency out

there that values that dollar and has a political ability to keep it coming. Elon Musk now saying he doesn't like this bill. He wants that legislation derailed. And we'll see where that goes, Kelly. This is a fascinating moment. The Trump administration now has to overcome both some reluctance among senators and also now the richest man in the world who until last week was attached at the hip as a political ally of this administration.

Fascinating moment. I do think now there's going to be a lot of scrutiny on the bigger rupture that may be taking place here between the two of them and what it means. Amen, appreciate it. Amen, Javvers. You back. All right, well, the ongoing trade and policy uncertainty has both of our next guest playing a bit of defense. So let's bring in Charles Schwab chief fixed income strategist, Kathy Jones. Also, Bryant Van Cronkite, senior equity portfolio manager over at Allspring Global Investments.

Thank you both for being here. Kathy, we're going to start with you. I mean, the budget deficit was something that Amon just mentioned. because Elon Musk mentioned it in a very high-profile way with regard to what our current fiscal state is. Do you think it's going to bother the bond markets over the medium to longer term? The short-term noise aside, are deficits an issue for this country? You know, historically, they haven't been. You know, we're the wealthiest country in the world.

We certainly have the capability of servicing our debt. But I do think what the market's telling you now with long rates moving up in concert with, those elsewhere, or Japan, et cetera, is that the market's getting more sensitive to rising debt and deficits and demanding more risk premium as they see no change in that trajectory. So it isn't so much that there's a risk of default. It's more that, you know, pay me more to compensate me for the risk that you're going to keep spending money rather frivolously. Now, is the inflation story, Kathy, still an issue? We know that it's something the Fed is watching closely, we know that there are probably those folks within the governing body that believe

that inflation may still be a problem. Is it something that we have to worry about as much as the deficits issue, or are those two kind of like a two-pronged negative attack on that bond market overall? I guess it's the two-prong negative attack. The problem with inflation right now is the current readings have been improved, but we know there's a bump in prices coming from the tariffs. When and if we get the tariffs, we don't even know what magnitude those will be or the timing, but we know the tariffs raise prices. And we've seen some preemptive price increases to get ahead of those. So we know that's coming.

Does it turn into a sustainable trend in inflation? I think that's the big question that the Fed is struggling with. On the flip side, tariffs do slow growth. And so they have to decide what's the bigger risk right now? Is it the inflation risk or the slowing growth right now? Growth looks okay. Unemployment rate is still pretty low. So they're going to focus on getting that inflation rate back

and not doing anything until they know how much the tariffs are going to cost in terms of inflation. Bryant, with that macro backdrop that Kathy has just laid out, it's kind of maybe amazing to some folks out there that we're at an S&P 500 level that's just a stones throw away from record highs yet again. Is this a market that you think is justified in terms of value? for the current stock market. Yeah, the market's been really resilient through all the uncertainty and all the noise, but for good reason, actually.

The soft data that was a very weak coming into the year has actually inflected positive, and the hard data we all fear that would roll over hasn't rolled over. And so the growth expectations are low but reasonable, and as you mentioned, inflation data is coming the right direction, which is giving the Fed and the market

may be a chance to act more positively or more aggressively, more offensively, in the near future. So I think the market's grabbing onto the data right now, recognizing the risk around the one big, beautiful bill, not getting done, and recognizing the best and final offers on tariffs might not be what we want them to be. That's still out there. But today, things look okay, and I think the market's grabbing onto that for the time being. You've got some different kind of options, like a choose-your-own-adventure. Brian, you've got, if you want to play offense, D.R. Horton, if you want to lean into risk in this environment,

I guess. Defense for offense, you can explain what that means is Charles River Lab, And then pure defense, what is ticker PRMB? Yeah, so what we're looking at right now is a situation where you have this wide expectation of potential results. And so you have to build a balanced portfolio. You want to have some offense in your portfolio. And so from an offensive standpoint, look at the home builders like DR Horton. They really struggle because starts have been weak, turnover has been weak, and those valuations reflect a very weak environment.

But if we are in Goldilocks or if the Fed's able to behave off. Offensively, bad news could be good news, and rates coming lower will be very good for D.R. Horton and the builders and the building product stocks. I like that for offense. Now, offense for defense for offense, in the health care space. Healthcare is defensive. Healthcare is defensive, but they've been struggling behind a lot of the regulatory uncertainty, the most ever nation pricing, and the biotech especially has been challenged. which Charles River Labs is the picks and shovels to biotech, and we're starting to see some life being pushed into those stocks right now. And I think Charles River Labs is one of the best vertically integrated self-help businesses out there with an activist in place now as well. Could be a great place to have a little defense from health care, but while getting some offense on the other side of it.

And PRMB, just to circle back, is Primo brands, and they own Poland Spring. And Saratoga water. And, I mean, this is a $12 billion market cap. And the first time it's certainly across my radar. Yeah, it's a beverage company focusing on water, which is very on trend for the health conscious consumer that we're now hopefully coming into in the U.S. here. But importantly, what they've done is they brought two massive assets together,

which we think will generate tremendous synergies. And so when it comes to defense, I do worry that higher rates is what could cause the market to fall. And traditional defense of utilities and REITs might not be that accommodating to us, when rates are rising. So in Staples, I like to look for beverages as a very defensive place to put capital right now. All right, Kathy, last word to you here. He picked the stocks. You picked the bonds. Where do we go? Is it treasuries? Is it corporate investment grade, high yield, floating rate? Where do you go? Mortgage backed.

Yeah, we're up in credit quality. So we're kind of staying with treasuries. We like MDS, investment-grade corporates, and investment-grade munis. If you're in a high-tax bracket in a high-tax state, there have been some terrific opportunities in the municipal bond market for higher-income folks. So I think there's opportunities out there. You just kind of have to be nimble because they show up and then they disappear really quickly.

But we're, you know, intermediate term duration. We're not going long duration, but we're staying up in credit quality. All right. Kathy, thanks very much. Bryant, we appreciate it. Kathy Jones of Charles Schwab, Bryant Van Crockhite with Allspring. Coming up, we'll dig into power demand as meta locks in a 20-year agreement with Constellation Energy. Just the latest tech giant turned to nuclear to meet the growing power needs of AI. It's got the uranium complex on the move, as you can see there.

And here's Constellation Energy CEO in a power lunch exclusive on this topic just last week. For a significant period of time, there was a big cross-section of the American politic that didn't like nuclear. Environmental organizations cut their teeth on fighting nuclear. And then we we had to deal with climate. And all of a sudden we said, oh my goodness, this is the biggest source of reliable clean energy will ever have. And that started pulling people back. Welcome back. Meta is the latest big tech company turning to nuclear to power its AI ambitions as it's entered a 20-year agreement now with Constellation Energy. Alphabet, Amazon, they've also announced investments in small modular reactors that have lower costs and faster deployment times.

Microsoft, of course, has its own 20-year deal with Constellation to buy power from the Three Mile Island plant that had been shut down due to low demand. All of it comes on the heels of Trump's executive order aimed at boosting nuclear power. We signed that last month. Our next guest says all of these developments are leading up to a defining moment for the industry. Amir Adnan, is CEO of Uranium Energy Corp, the largest uranium producer in the U.S. Amir, it's good to see you again. So where do we go from here?

I mean, Kelly, this is just incredible. It's really transformational. We're finally seeing an alignment of market forces, big tech really voting with this wallet, as evidence with the latest deal announced today with Meta and Constellation. But then seeing Washington really invoke national security to rebuild the uranium supply chain

that we need domestically to really bring together the energy that's needed for AI ambitions that big tech has. So this is, I hate to use kind of an overuse term maybe, but this is the most perfect alignments of stars you could ask for for nuclear energy. Nuclear energy is back in a big way. Right. Although, you know, again, we talk a lot about how, you know, the big traditional reactors, these were huge projects, bringing new ones online takes a very, very long time. So maybe small modular. Those start to come online. That changes the narrative a little bit. But to what extent?

are these new power sources that big tech is tapping versus existing ones that they're trying to siphon off? I think it's a blend of both, and you touch on an excellent point. Look at today's announcement with Meta and Constellation. Not only will they look to extend the life of the Clinton reactor by 20 years, but they're talking about now using that site to deploy advanced and small reactors on that site which could really benefit from accelerated permitting. But look at the executive orders that President Trump,

signed over a week ago, quadrupling a nuclear power by 2050, having five gigawatts of uprate by 2030, and having 10 gigawatts, that's 10 new reactors, large ones, under construction by 2030, that's around the corner. And so this is incredibly positive because, and I think it was positive about today's announcement is since we had the executive orders signed by President Trump, a lot of market participants were saying, well, are these executive orders backed by market reality? And to see that 24-7 base load power is so essential to big techs energy needs, evidenced by today's deal, and that renewables are not going to be able to satisfy this incredible thirst for energy that's out

there, this combination of, again, government policy with the real market demand that makes nuclear investable. And I think making nuclear investable is really the key thing, that this is not a sector that's looking for subsidies. This is a sector that's investable. Again, big tech has that demand. We're seeing it. Don't forget about Microsoft's Constellation deal from last September either. And now I think the big question is, can we get the uranium supplies up and running? Can we power these nuclear reactors? And even if we get five big builds by 2030, forget 10, that's an incredible amount of growth. There didn't used to be this kind of growth, Kelly, before

in the U.S. nuclear was not growing in the U.S. It was growing and still is growing in China and India. And it's exciting to see nuclear energy growth come back to this country. Hey, Amir, it's Dom. I want to just get your take on this. Do you feel as though the collective consciousness of us

as Americans is now open to the idea that we have a basically insatiable thirst for power when it comes to this kind of energy and is it enough to make sure that nuclear has a very clear and predictable glide path into the future? It used to be not in my backyard. Do you think that's still the case or not?

It's unbelievable to watch college football games and to see students in the background holding up nuclear energy signs. Nuclear has become cool. And I think small modular reactors backed by people like Sam Altman, Elon Musk, Bill Gates, are really bringing a new level of energy and entrepreneurship and innovation to nuclear. And look, at the end of the day, AI can't run on hope and sunshine. It needs base load power, around the clock power. And this is the final, I think, conclusion, Dom, that we're coming to is that no more messing around. We need around the clock energy.

Nuclear is the only solution that does that in an emission-free basis. So now you've got, again, I think, the coming together of these incredible forces, the best of what the country has to offer. The big power of innovation and the financial muscle of big tech, combined with the right policy, combined with the existing fleet, over 90 reactors that are operating already powering one in every five home in America. We just got to now address the fuel side of it because effectively we're importing 100% of the uranium requirements for all this positive development that we're talking about. So I agree with you, though. The mood has changed. The attitude has changed. And even the environmental community has come to realize that without nuclear, we're not going to meet the climate targets.

All right. Amir Adnani, Uranium Corp, CEO. Thank you so much. We'll see you again soon, sir. Thank you, Don. Thank you, Kelly. All right, well, still ahead on the show, the investor fear factor. Is this market a buying opportunity you should be scared to miss out on or a mess of uncertainty you should run away?

way from. Your next guest says there's nothing to fear but fear itself, at least when it comes to buying stocks. Stay tuned. Welcome back. We always talk about FOMO in the markets, fear of missing out. But what about FOGI, FOGI, the fear of getting in when it comes to stocks. We broached that subject yesterday. That Jason's wide piece in the journal over the weekend. Our next guest says, historically speaking, having FOMO. It's a better way to play this market. Joining us now is Jeff Kilberg, founder of KKM Financial and to see NBC contributor. So don't be afraid, Jeff. Just jump into the market, never worry about it.

Don't look back. Well, not necessarily, Kelly. If you remember during the depths of the decline in April, I was out here talking about buying with both fists, when a lot of people were on here repricing their S&P 500 targets. And you also saw a lot of folks talking about recession. But I think there's a way to thread the needle. For all the FOMO folks out there and the Foggies,

that's a new one, Kelly. I like that. But there's a way to thread the needle. And I think that's using options, defining your risk, because I do believe with the way the MAG-7 has recovered here. Think about the MAG-7. What we saw in the month of May, they were up 13.4%. That was more than double what the S&P 500 was up in the month of May.

And to quote my buddy Ryan Dietrich real quickly, when we see a month of May above 5% in gains, that one year later, on average, we see the market up 20%. And never have we seen a year of 220% decline. So all the people look out there for that retest of 40%. of 4,800 and the S&P 500, it's never happened before, and I don't think it's happening. Well, that, I mean, so that's the conundrum is you go, okay, well,

I guess April was an entry point for a couple of days, and now I get in and we're basically, you know, back up at the highs, and do I just kind of trust it for the, you know, those of the long enough time horizon don't have to worry too much about it. I guess it would be those if they thought, okay, I'm approaching retirement, or this is for a 529 account, or, you know, do I need something in here so that if there's a wobbly patch in the next 12, 24 months, it doesn't screw up my plans.

Well, it's not going to be a straight path. To your point, we're still figuring out about what the budget, the spending bill is. We just saw that come out from Elon Musk. And we're also still trying to land some trade tariff deal. So I agree with you. Volatility will stay elevated, but I think if you utilize options, and remember, Spy, SPY, that's the ETF that we like to utilize for the S&P 500. Just back in early April, it was trading 481.

Right now, it's above $5.95. So that is next snapping V-shaped recovery. But I think I want to use an old strategy called a risk reversal, Kelly. That's going to have me selling a put. So I want to sell July 18th expiration. I want to sell that 580 put. It's going to allow me to collect and I did this trade this morning. So I own it.

I got to get in the game. I sold that $8.65. I used most of that premium, all that premium, to buy the $5.95 call. It's the exact same expiration. It cost me $12.60. So it was about $395. I had to lay out per one lot spread for this. risk reversal, but you see my break evens at $5.99. And if we go back up to that all-time high,

which is about $6150 in the S&P 500 or $613 on the SPY, I have unlimited upside to this because my break-even is $599. So all the FOMO folks and all the Fogie folks, I'm using options to define my risk and better understand where I want to potentially come in. Listen, some of us old fogies just want to just buy it, the stocks and just hope they go up in I just want to mention we're 3% away from the all-time highs, Jeff. And according to Dietrich, when the S&P gains more than 5% in May, the next 12 months have never been lower and have gained nearly 20% on average. So time to leverage up.

Well, I don't know about that. I don't know about leveraging. I think it's time to continue the momentum because what do we see in all this momentum? And I was very skeptical, Kelly, of the MAG 7, if you go back to Q1 this year, of being over-constrained. So I think at the end of the day, momentum moves markets too far. But the S&P 500, it's not overbought on a relative strength index yet. So I think you have more room to run.

Jeff Kilberg. Thank you, sir, as always. See you, I appreciate it. See you later. By the way, I see what you did there. Old Fogie, right? Coming up on the show, we're going to hear from a company

at the intersection of consumer goods and the cutting edge of technology and who plans to launch at least 25 new products every year, according to recent guidance. The CEO of Shark Ninja joins us coming up next in a Power Lunch exclusive. Welcome back as Markets, move to fresh session highs, not derailed by Musk's criticism of Trump's one big, beautiful

bill in the past hour. The NASDAQ leading the way, actually a little bit off its session highs, but the Dow is up 246 points right now. Shares of Dollar General are also surging and potentially having their best day in three years. Up about 15 percent, they raised earnings and sales guidance. Management says they've got plans in place to navigate tariff uncertainty, including any possibility of China tariffs ratcheting back up. While those are temporarily lower, tariffs are higher across the board now. So what does it all mean for how much the consumer is actually paying? Courtney Reagan joins us now with a luck court. So Kelly, the true cost of tariffs, it's almost impossible to quantify. But if a retailer didn't or couldn't absorb the cost, mitigate it,

and had to pass it all on to the consumer, how much would prices increase? Well, we asked, Alex Partners, and they built these example models exclusively for CNBC to illustrate it. So let's walk you through. Before the April 2nd tariff, a cotton min sweater made in China, cost about $6.80 to make. At a 41.5% total tariff was already in place for that sweater, shipped to the U.S. before April 2nd, and that equal to total cost of about $2.82. Now, the cost of logistics and sourcing, that's going to add another 95 cents to that sweater. Put it together, the total cost of making that sweater is $10.57. Now, a typical initial retail markup to get to a 65% target gross margin rate,

the retail price of that sweater would be about $30. Again, this is before April 2nd. Now, let's look at the same sweater at today's tariff rate. So the China manufacturing costs that stays the same at 680. Logistics and sourcing costs, those stay the same at 95 cents. But that 41.5% existing tariff for the sweater before April 2nd now has a 10% universal tariff, a 20% percent fentanyl tariff, making the current tariff rate 71.5% of the manufacturing costs. or $4.86, making the new cost to make the sweater that the retailer pays $12.61.

Again, let's hold that 65% markup to maintain this gross margin level of profitability, and the new price of consumer pays is $35.80. That's a price increase overall of more than 19%. That's what we're looking at today. But what happens if those full tariffs announced on April 2nd would be enforced for China. So at that 41 and a half percent pre-April 2nd existing tariff for the sweater, plus the additional 145 percent. The tariff rate is now 186 and a half percent for this sweater or total of $12 and $68, making the new cost to retailer pays for the sweater $20.43. Remember, it started at $10.57. Again, use that same markup rate to get to a target gross margin and the new price that the customer could pay $57.97. That's an increase of more than

93% almost double the original retail price. Now, of course, guys, a lot of nuances, right? This is no mitigation strategies that we're talking about. This is if a retailer passed along the entire cost in the form of prices. That's just crazy just to think about just the level that you have to kind of conceive. And by the way, maybe people will pay it. That's the other thing too. A $5 increase might not be the end of the world, but if we go back to those high levels, then it feels, and I wonder how many retailers are going to raise their price by a lot of that and just capture the margin if the tariffs don't happen. Right. And remember, a lot of these retailers have told us, like a Walmart, a Home Depot, a Lowe's, and Macy's, they use a portfolio approach to products. So they're going to look at the elasticity and demand of every single product. So if there's a T-shirt that always sells for $5, they may not want to charge, you know, $5.72.

They want to keep that at $5. They put that 72 cents on some other items. So it's also going to be really hard to say, oh, but this item is made in China and still $5. Well, that doesn't mean the retailer didn't pay more for that. No, it's a great point. All right, Courtney, thanks for breaking it all down for us there, the costs of everything. All right, so let's stick with tariffs in the retail landscape. Shark Ninja makes everything from vacuum cleaners to fans to food processors,

and it's shifting its supply chain because of the tariffs. On track to have approximately 90% of its U.S. volume sourced out. side of China by the end of the second quarter. So here for a power lunch exclusive is Mark Barokas, the CEO of Shark Ninja. He's joining us from the William Blair Growth Stock Conference out in Chicago. Mark, thank you very much for joining us here. I don't know if you heard any of what Courtney was just talking about with regard to the costs and the tariff kind of sensitivity or scenario analysis. Is this something that you guys do as an executive team at Shark Ninja to kind of figure out what those scenarios could look like and what demand elasticity could be?

Well, yeah, I mean, thanks for having me. And we obviously are looking at this every day right now since tariffs have escalated and gone into effect since February. We're looking at everything on the buy side, on the sell side, trying to do everything we can to try to minimize price increases to consumers. But as you said, you know, we've been working for the last four and a half years to diversify our global supply chain. And I think, that was the right decision that we made four and a half years ago. If that's the case and you are diversifying, how long do you think it will take you for you to kind of get your operations to a point where you feel insulated as best you can

from some of the China-U.S. trade war that's going on right now. Do you feel as though it's something that you can provide transparency or clarity on, not just from your own team, but for investors as well? Well, look, obviously, as you said in the beginning, I mean, 90% of our U.S. production will be able to be made outside of China by the end of Q2 and virtually 100% by the end of this year. So we have to play the deck of cards that are handed to us. And at this point right now, you know, we're diversified, you know, all through Southeast Asia, a number of different countries. And we feel that, you know, we've scaled up our manufacturing, our cost, our quality coming out of those factories is very good. We have a large team of Shark Ninja

associates that are on the ground in those factories, you know, working with our suppliers. And so we feel good at this point about what our global supply chain looks like. So we were just talking about our various appliances, Mark. I've got a cordless Dyson that it's good, but I actually wish it were strong. I've got a corded shark that's lasted forever. You know, we've got, we've, this stuff runs the gamut. How much should we expect prices to actually go up this year? Well, first of all, I mean, thanks for, you know, commenting on your shark vacuum that has lasted as long as it has. I mean, our business is built upon, you know, market leading innovation, great performance, great quality, and also at a great value.

And, you know, we sell in 37 different product categories. We sell in 26 different countries around the world. I mean, this year, nearly 40% of our business is going to be done outside of the U.S. So, you know, we're looking at kind of how do we manage pricing and mix and assortment, you know, not just in our U.S. business, but we're looking at it, you know, how do we manage it all across the globe? Right. And especially if you're moving from China to Vietnam, but then Vietnam gets hit or maybe it's not going to or I don't know if you move to India. So if you could just mention a few of those countries, is it Mexico? Where are you sourcing from?

And what happens with steel tariffs at this point? Yeah, well, look, I mean, there isn't a lot of steel in our products. I mean, there is some, and obviously, you know, those tariffs have impacted us. You know, we're in countries like Thailand, in Indonesia and Malaysia and Cambodia and Vietnam. And, you know, we're looking at production in the United States. I mean, we've been having, you know, significant ongoing discussions over the last couple of weeks as to which one of our products, you know, or which one of our categories would be applicable. to setting up manufacturing in the U.S. I mean, we've talked to, you know, a number of different people around that. So, you know, that is something that I think over the course of the next 90 days, you know, we'll make some decisions on and really assess are there some products that we can actually start moving back to the United States. And, Mark, before we let you go, I had mentioned in the intro to you that you guys are on,

are trying to be on pace for dozens of product releases and innovations in the coming years. what exactly else can you do? Well, what else can we do as it relates to the tariffs? I mean, we're innovating. You know, we're in 37 different product categories. I mean, our business is based on our ability to find the next consumer problem and solve that problem. And we do that and everything from robot vacuums to hair care, to skin care, to vacuum cleaners, to air friars, to outdoor cookers, to fans. You know, we're in so many different products around the home.

And, you know, I'll plug two of those just because we're coming into, you know, busy hot season right now. I mean, our shark turbo blade, you know, and our shark, you know, hydrogo are two great fan products that are doing excellent. And, you know, barbecue season is well in swing. And the ninja flex flame, you know, is a product that we're really seeing a lot of excitement on social media. I don't know. What is the ninja flex flame? I feel like this is turning into QVC or something. Well, I mean, it's a grill.

It's a smoker. It's a griddle. It's a pizza oven. It's a roaster all under one hood. I'm intrigued. I will check it out. I'm intrigued. Mark, really appreciate you joining us today. Thank you. Thank you. Mark Broke us with Shark Ninja. And Dom has a 27-year-old Vitamix. I do have a 27-year-old Vitamix, blunder, by the way. Over to Contessa Brewer now for the CNBC News update. Contessa. Yeah, well, I have my great-grandmother's kitchen-aid mixer, so I think I beat you both there.

To the news now, a federal judge reversed an executive order from President Trump today, affecting transgender people in the nation's prisons. The decision requires the Federal Bureau of Prisons to continue providing hormone therapy and social accommodations to roughly 600 trans inmates. The judge said in the ruling that gender dysphoria should not be treated differently than any other mental health intervention. City Group is dropping a gun sales policy it adopted in 2018 after the Parkland school shooting in Florida. that policy required businesses that worked with City to promote responsible sales practices, including only selling guns to people 21 and older, performing background checks, and not selling bump stocks or high-capacity magazines. The bank put the update on its website saying it will no longer have a specific gun policy.

And Peyton Manning is investing in women's sports. The Hall of Fame quarterback is now a part owner of Denver's National Women's Soccer League team. They begin play next year, and so far they don't have a name. Manning's brother Eli is a minority investor in Gotham FC, which is the women's team in the New York metro area. It's great to see women's sports getting so much attention, but the dollars as well, Kelly. Big land grab. Everyone's piling in. Contested, thanks. Appreciate it. As we had to break our Chinese businesses, suddenly losing their taste for American goods. We'll head to Beijing to find out next.

Crypto Watch is sponsored by Crypto.com. Welcome back to Power Lunch. The U.S. China Trade Wars hitting businesses in both countries. Our Eunice Yun has a look at how restaurants in Beijing are shifting their supply chains as well. And here's what she found. At his restaurant in Beijing, owner Gong Shao Yun used to offer a special dish. Salt baked chicken feet or Phoenix talons, as they're called here, imported from America. But after prices rose 30% from March due to tariffs, he's had to pull the Chinese delicacy from the menu.

American chicken feet are so beautiful, he says. Chinese feet just aren't as good. The tariffs and uncertainty they cause is why some American products have been vanishing from stores and restaurants. Beef supplier Liu Li says U.S. beef supply is unstable and now 50% more expensive. He's switched to Australian beef, which has zero duty. U.S. beef is fattier and tastier, he says. It's a shame we're in a trade war. The high price is just too much to bear.

I'm taking you to a restaurant in Beijing that is famous locally for its American-style barbecue. It's now to source all of its beef from the U.S. Until May. The menu has already been completely changed. The staff here tell us that all of the beef is Australian. Chinese customers are forced to adjust. I don't think there's much difference, he says. Not everyone is willing to compromise.

Gung keeps a small stash for himself, but hopes to serve his salt-baked American Phoenix talents once again. The price of American chicken feat will come back down, he says, as long as there are no big changes in the world's political situation. Quite a feat, with U.S.-China attention. so high. Gung could source chicken feet from Brazil or even Russia, but he said guys that they just don't stand up to the American ones.

I had no idea that those were American chicken feet. I thought the whole point of going to China and trying the chicken feet was that you were having a Chinese delicacy. It is a Chinese delicacy, but with American ingredients. I had no idea. Eunice, thank you. I appreciate that. I can't believe how much has already changed.

And again, that's where, you know, they always say, What do they say the way to get a man is through his stomach? Yes. Yes. The way to... Well, for me, it would be true. Yeah, I think for many. And it's interesting to see how even a small thing like that,

not having access to the beef or whatever on those menu items is a way that you might... What I would say is, I'd like to know what the demand elasticity is for that. American beef, would you pay more? Anyway. All right. Coming up, CrowdStrike reports after the bell. Microsoft conducting yet another round of layoffs. And Adam Jonas says this is the best name position for data,

robotics and AI. It's all coming up in three stock lunch. Welcome back and it's time for today's three stock lunch. We've got three names making headlines today. And our trader today is Eddie Gabor, managing partner at Key Advisors Wealth Management. Eddie, it's good to see you. Let's start with CrowdStrike up ahead of its earnings, which are on tap this afternoon. Cybersecurity space has been a hot one this year. What would you do here? Cybersecurity is going to be huge. And I think they're going to have a revenue beat. We own the name so we're not buying it ahead of earnings. don't own it, I would be comfortable putting a position on now and then the other half of that position post earnings in case of a big move. But cybersecurity demand over the next decade,

I can't think of another business that's going to have more natural demand than this because of the threat to companies. And their AI power security platform is going to continue to catch fire. So the outlook is really strong here for this name. We love it. By the way, I think it's a record high for crowds back today as well ahead of earnings. Next up you got Eddie Microsoft cutting hundreds of jobs just weeks after it's large. largest layoff in years. Shears are little changed today, but it's the best performer in the Mag 7 so far this year. What's the trade for Microsoft? So we own a 6% position in Microsoft right now in our tactical strategies. It was a contrarian play, because to your point, it was one of

the worst performers of the Mag 7 last year. We think it will be one of the best this year. And Azure, it really had a drag on this stock. And this past quarter, we saw some revenue growth there to exceeded expectations. So they're still continuing to invest in AI about $80 billion. So we really like Microsoft to be a big winner in 2025. All right. So bullish. Across the board, does it extend to Tesla? That's our last stock, our mystery chart as well. Shares are up more than 3 percent today. Adam Jonas calling it one of the best position companies in terms of artificial intelligence and robotics and manufacturing. You like this one too? I do. And I couldn't agree more with those comments. I think one of the best thing for a shareholder

that happened was Elon leaving Doge and focusing really back to his businesses. And I think they're being rewarded. And the other thing is, I think too many people are focused on car sales. This is not a car company. This is an AI play. So you have to look at it a little bit differently instead of focusing on that fundamental breakdown and look at the big picture. I think this name could hit new highs, December highs by the end of summer. All right. Next time, come with something you hate. Okay. You got a deal. Eddie, thanks very much, Eddie Gabor. All right. Well, remember, you can recap. every three-stock launch anytime you want. Just scan that QR code on your screen right now or head over to CNBC.com for more. We'll be right back after this. All right, less than a minute to go here

before we go. A final check on the markets right now. Look at that. Just about near session highs as we kind of move the screens around here. Right now the down dust rolls up about 230 points. The S&P up 37. The NASDAQ up 173. The Russell 2000, by the way, small caps up one and three quarters percent. Kelly and I were just talking during the commercial break about the kind of evolution from Fang to the Magnificent Seven. I wanted to just show you the board that we put up here because these names have all hit record intraday highs so far today. Netflix, the N in the old Fang is one of them. Are you putting booking and Darden and Allstate in there? I mean, no, I'm not putting it. Those are just the stocks that have hit record highs today.

Fair enough. Netflix, I thought was interesting was wonderful. They were going to kick it out a while. By the way, they kicked out Tom Dipido. Did you see? I saw that. Come on. He did great. All right. Anyway, thanks for watching Power Lenthal. Closing bell starts right now.