Power Lunch - S&P 500 shaking off jitters ahead of tariff rollout 3/31/25

Episode Date: March 31, 2025

The S&P 500  clawed back earlier losses to trade slightly higher, as Wall Street nervously looks ahead to President Trump’s forthcoming trade tariffs. 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.

And welcome to Power Lunch alongside Kelly. I am Brian. We have got a lot on your Monday docket today. And your focus really is on tech versus tariffs. The president's tariff deadline approaching. The Dow, though, shrugging it off. Tech's troubles, though, continuing which one is the bigger deal for your money. Speaking of which, let's get a check on these markets with the Dow and the green after a rough start pre-market. It looked like it was going to be ugly last night. The S&P is still down half a percent. The NASDAQ, it's down 1.3 percent. And the NASDAQ 100s you can see there. Either way, you slice it, the big tech stocks are lagging. Chip stocks, they're getting dragged lower by a headline in the information that AI spending is on the decline.

We've seen this concern permeating the space for, I don't know, you could say weeks, months now. Invidia's down another 3 and a half percent. It's back to around 105. a share. And AI and cloud firm Corweave is down again after its week public debut. Corweave shares down almost 10% now to about 36. On the flip side, Newsmax. That's all you need is a TV channel to have a hot IPO today. That's dominating. It hit as high as I think we said $76 a share. It's below 60 right now, but it priced at 10 and opened at 14. Check out the airlines with United on track for its worst month. No joke since March of 2020. This month for United is as bad as the month that the

pandemic broke out five years ago, believe it or not. Delta and American on pace for their worst months in about three years and moves in the auto space around tariffs. Ford and GM turning slightly positive while Stalantis is still down nearly 2%. Who to thunk it? That chip stocks are down and old media is up. Is popping. Welcome to almost April. All right, let's begin. Well, I guess we'll begin with those tariffs, right? How seriously are investors taking this deadline? Is tech more important than the uncertainty that looms. Joining us now is Banerian Capital Management CEO, Sheena Sissell, and GMO co-head of asset allocation, Ben Inker.

Ben, I'll just ask you, why do you think the markets are shrugging off Liberation Day? You know, I think it's too soon to say they are truly shrugging it off. Obviously, the U.S. markets have really underperformed the rest of the world so far in Q1, and a lot of that is over the uncertainty around tariffs. and broader U.S. industrial policy. I think there is still so much uncertainty. Investors don't know quite what to do and what will happen. But it's very clear investors are worried,

and we're seeing that play out in both the market and what CEOs are saying when they're making their earnings announcements. You know, to Ben's point, we've already had a down, we were down 11% in the first quarter for the NASDAQ. So it's priced in. It's also going to be interesting to see what happens tomorrow because a lot of times on the eve of these big announcements, we start to get this real volatility around whether they will or will not happen and what the White House does or doesn't say about it. So I don't know if we're waiting for more clarity even tomorrow on what we could hear. Yeah, the markets want clarity.

They like to have a complete transparency. And when there's uncertainty, it's really hard to think long term and create long term policy. It's why consumer confidence has been soft. It's why CEO confidence has been soft. It's really hard to project and predict what you're going to look like a year from now if you don't even know what the total industrial policy decisions are going to be here in the U.S., how business policy taxes, all of those things are up in the air, so it's really hard to plan. So until we have more certainty and more transparency, the markets are going to be volatile.

And tomorrow could be a good sign, but something tells me it's not going to be as much information as we want. just if you think about how this administration communicates, it's a little all over the place. They say one thing and then the next day. They're like, no, that's not what I meant. So I think for a while we're going to have this kind of uncertainty. But long term, if you look at where stocks are today and longer term trends, if you look beyond just the short term uncertainty, there are attractive buying opportunities that are happening right now in a lot of really attractive spaces.

Yeah, and I think you like Nvidia, Lidos, AutoZone, Nike, I mean, these are all very, very different companies. Yeah, so I don't have AutoZone. I have Astrozenica. Astrozenica, there we go, AZN, AZO is AutoZone. I retire immediately. Yes, so you look at Nvidia, that's a stop that long term, the trends are very favorable. You know, whether short-term companies aren't putting CapEx into AI, spending is going down long term, the fact is that what NVIDIA produces is required for a trend that is not going away, which is AI. Now, how much spending happens in the short term is to be determined, but longer term, the fact of the matter is it's needed. If you look at Lidos, a lot of

uncertainty about defense spending, how Doge is going to affect government contracts, things of that nature. But Lytos is the leading provider of security, cybersecurity and security like at the airport. That is not going away. TSA is not going away. Doge is not going to affect that. It's not going to affect those contracts. So again, short-term uncertainty, giving us a good buying opportunity.

And we have been complaining for the longest time for some of these tech stocks that they were too overvalued, too much of a premium, they're way ahead of their skis. And now we're complaining that they're cheaper. And I think that we need to make a decision if you like the longer-term friends,

which I do, buying opportunities and valuations like we see today is favorable if you're a long-term investor. Let's, Ben, let's wrap it with this, because I know tariffs are getting all the headlines, as they probably should, they affect the broader swath of the population. You came on shows such as this one at the end of January, and you talked about how tech valuations were, you know, not in every case, but certainly near the peaks. With all due respect to the information, they do great work.

We talked about this last week. TD Cowen talked about it last week, that spending maybe take. are coming down a little bit. Is that the main reason that markets are down? Or is it really the tariffs? Because the stocks that are selling off don't seem to have any relationship to tariffs whatsoever.

Well, I wouldn't say it's quite that simple. You know, if you look at an Nvidia, if there's tariffs on semiconductors, that hits them. And if you think about the really nice situation of being an Nvidia or an Apple or somebody who has really wonderful profit margins, The problem is tariffs increase costs, and if you've got really fat profit margins, they're going to hit them. The companies will still be fine.

I'm not worried about Apple. I'm not worried about Nvidia. But yeah, tariffs hit all sorts of companies. But the other thing that, you know, that you've been saying, and we think is really important here, is not just the tariffs, but the uncertainty. And I don't think the uncertainty goes away anytime soon. It's harder to manage a business under uncertainty. it's harder to make investment decisions. We're going to see less investment in the U.S.

because of the ongoing uncertainty. That's not great for companies that are driven by investment demand. All right. Appreciate it, guys. Thank you so much for joining us today. Ben Inker with GMO and Shana Sissell of Baner. All right. Also topping your tape on this Monday,

President Trump threatening Russia with new tariffs, new sanctions, or both. He told NBC News, New. news Kristen Welker this weekend that he was, quote, pissed off. That's his term, not ours, at Vladimir Putin, after Putin criticized the credibility of Ukrainian president Volodymyr Zelensky. And then Trump added that if Putin refuses to make a peace deal, he will hit Russia and any country buying Russian oil with a new 25% tariff. Now, that is a critical point, because Russia sells millions of barrels of oil per day around the world. Most of that goes to countries like China or India, and a lot, though, going to other countries as well, including into parts of Europe.

And if you add in oil products, Turkey is also a major buyer and trader of Russian oil. Now, the price of oil, not moving right now, even though this came out and OPEC tomorrow, is going to start putting 140,000 more barrels of oil on the market, and it could certainly add more in coming months. Let's talk about all of this with Bob McNally. He is president and CEO of Rapid A& Energy. And I know oil's not moving, Bob, but I want to get you on because this interview with Kristen and NBC really caught my ear. Sort of this, you know, in Trump's way, this sort of haphazard threat against Russia.

Is it a 25% tariff on any country that buys Russian oil, which is pretty much every country but us and Canada. Is that realistic? Hey, Brian, I don't think we're going to see that fully employed. But the president is multitasking at high speed. and he wants to bring Russia and Iran to a head. And when a president wants to do that, he's got two tools in the toolbox, a flamethrower, the Defense Department, and a hammer terrorist. And President Trump invented this secondary tariff idea last week, and he slapped it on Venezuela.

It's going to go into effect on Venezuela, but that's only 700,000 barrels a day. He also threatened it with Iran. That's a million and a half barrels a day. But Russia is the big one. As you mentioned, 4.3 million barrels a day of, crude exports, 2.3 million barrels a day of fine product exports, and 8% of the world's LNG. And so I think that's too big, really, to really impose a sanction on. So I think he'll probably be flexible with how he implements that if he does. There already are sanctions on Russian oil.

That was supposed to be the idea. As you put this price cap in, we know we didn't, the previous administration, and I know this, as I'm sure you do, living in D.C., Bob, they did not want to cut off Russian oil. They didn't $150 oil and $7 a gallon gasoline. So they allowed Russian oil to be sold around the world with this price cap, but Russia got around it by buying up all these old supertankers.

If the president does what he says he's going to do, let's say he does, you don't think it's going to happen, but let's say it does happen. What happens to the price of oil? Well, the price of oil will skyrocket if we really remove the million barrels

a day of exports from Russia. Spare capacity, as you know, Saudi Arabia, UAE, they've got some in the tank, but it's more on the order of four and a half, five million barrels today, generously six, but it's probably around four and a half. If we zero all that out, even if they offset, the market will see spare go to zero, and we still have Iran looming over the horizon. So it's very bullish. You know, pity the Indians if this happens, Brian, right? Because as you said, the Biden administration went to India and said, we know you don't take any Russian oil in 2022. Now take it all for us so that we can still have the oil keep gasoline prices low. What President Trump is saying now,

no, no, no, anyone who takes Russian oil, we're going to zap you with an incremental 25% tariff. So the price of oil is going up in India, unfortunately, is just in a world of hurt. That's interesting. And I remember well that period of time, Bob, when we were all super concerned about what could bring prices down. He sort of thought, well, you look the other way, you make sure those barrels get into the global market. It's kind of a win for the U.S. consumer. People in the energy space, I don't have to tell you, have been really bearish about what's going to happen with the oil. Do you really think this changes things?

You know, I think it does. It's not just Russia, which again, the president wants to bring it to a head. He's, I don't want to say in a hurry, but he's moving briskly, and he's using the biggest tools, the most powerful tools he has. Iran is another one right over the horizon. Pretty soon we will have three carrier-strike groups. We're staging B-2s and B-52s over there. We may well have a deal, but also the president is determined to solve his problem one way or the other.

I think, this is a similar story, Kelly, you've heard from me before. I think the market has been a little complacent about geopolitical risks. And that's been short. But I think in the next few weeks, we're going to see cause for more of that risk premium to come back in the market. Is the market able to be complacent, meaning price to stay around 70 bucks a barrel? Because there's this OPEC put. OPEC tomorrow is scheduled to start putting, I think it's 140,000 more barrels of oil

a day, back on the market, this two and a half year cut. is going to start slowly to roll off tomorrow. They have a meeting coming up on Saturday of this weekend. Is the market complacent because they know that OPEC, in particular the Saudis, stand ready and able to add more barrels to the market if they want? I think that's part of it. Now, the returning volumes are pretty low, about 140,000 barrels a day a month. And OPEC Plus has said, we can stop this, we can reverse it.

So far since it started, crude has risen. Not just on geopolitics. Inventories are pretty low. Demand's not that bad. Curves are getting more backward-dated. So, you know, OPEC Plus is doing well with this argument that, look, we can afford to bring this oil back. But that spare capacity, you mentioned, Brian, is very important. That four and a half, five million barrels a day keeps the market thinking we can weather a disruption, except Russia. Russia's too big, and Iran is too big if it gets to Hormuz and so forth. So I would put Russia and Iran in categories where if we really start to price that in,

it will pull upward pressure on prices. It'll force those shorts to cover, and it'll dispel some of that complacency. Yeah, I mean, and we'll let you go, Bob, but I think that, you know, comparing Venezuela, which is, to your point, 700,000 barrels a day, which is effectively one small to medium-sized ship or half of a big ship a day to Russia, totally different things. Tomorrow's kind of OPEC day as well. We appreciate you coming on, Bob McNaugnalli, Rapid Energy, Bob. Thank you very much. I want to give you a quick check on these markets, folks. I know a lot of it is why you're tuning in.

We're seeing a really interesting divergence play out. All the markets open lower, Kelly. The Dow is now on its highs of this session, up 7 tenths of 1%. Big Tech is still down. Yeah, I mean, 271 points all of the sudden, the only substantial headlines we've had in the past hour or so from the White House saying the tariffs will be country by country on Wednesday, not sectoral per se. This would be a delayed reaction to that, but it's not unheard of as everyone tries to figure out,

you know, what to react to. The NASDAQ, to your point, is still lower. The S&P has now also turned positive. So big change, huge change from the tone that we first saw in Mark. And one does wonder, and this is the big if, folks, and the president made some nice comments about Canadian Prime Minister Mark Carney. Remember, they have an election. Canada has an election on April 28th. So Mark Carney is only the prime minister until then. He could go on, but they have an election. What if there's no tariffs?

What if the president says? You know what? I got what I wanted. They're going to put 500 extra troops to the border. tariffs are off. There was also some fentanyl news as well. Banks and people and how the money, fentanyl money was being routed through Canada. So to Megan's point, if this is setting us up for, hey, we're getting stuff done, and we don't need that more blunt tool, you can imagine people would be thrilled at that outcome. But there's a lot of hypothesizing.

Yeah, but do we get that face ripper rally that Tom Lee and others have talked about if we don't get the tariffs? Oh, sure, but that's a big if. Absolutely, would we get it? Yes. Who said it? You can't spell tariff. Without if? Without if. That's clever. I didn't come up with it. Up next, has Google lost the verb? Alphabet stock is struggling along with the rest of big tech this year. But our guest is asking whether Google is still the king of search. We'll have more on that next. All right, welcome back. Let's stay on the topic of big tech versus big tariffs because both are issues topping your tape today. But the drop off the top in tech cannot be ignored. And a lot of the losses have to be. with fears of spending cuts in artificial intelligence. Christina Ports and Eve, breaking down the performance of what I guess

we're supposed to now call the lag. It was the MAG 7. Now it's the lag 7. There must be something in between. Yeah, I stole that from Bank of America. They called it the Lagnificent 7, and it's been down that group 12 of the past 13 weeks, dragging down the NASDAQ 100, down about 9%,

or yeah, a little bit less than 9% quarter to date. Big picture, though. The NASDAQ composite has really wiped out a little more than half of last year's gains this quarter versus the S&P 500, losing less than a third of last year's gains this quarter. So you can see the difference there when it comes to encompassing tech more so on the NASDAQ. InVIDIA alphabet down, what, over 18 percent. Microsoft for the quarter headed for its fourth negative month in a row, something we haven't seen since 2009. And there are three major key factors driving this downward 10, particularly for tech, not including tariffs. First, the generative AI narrative that you talked about, Brian, has lost momentum since DeepSeek entered the mark. And investors are realizing AI can be built more cheaply.

Second, confidence in tech earnings is deteriorating, especially when you see headlines constantly like yesterday's with the information saying some large cloud customers slow AI spending. And then lastly, these tech giants really lost their defensive market positioning, according to Bank of America. And that's why hedge funds, according to Golden Sachs, are selling more than buying tech, according to just as, of last week. They sold about 75% of that basket was selling in the U.S. versus non-U.S. tech firms. But there's a twist amid that tech wreckage. China internet stocks have been doing quite well. Baidu, Alibaba, Tencent, Xiaomi. You can see a sea of green double digits with Baidu up 9% in the quarter. And then traditional telecom names like AT&T up 25%. Actually, all of these names outperforming the market. So today we mark the end of Q1 or as Oppenheimer put it in a note this

morning, to say March ending will be a welcome site is an understatement. Guys? Indeed. Christina, thanks. Let's stick with tech dig into alphabet specifically. It's down 26% from the year highs, down 20% this year. Our next guest says the biggest issue with the stock is the verbiage. If Google is losing its role is the verb to indicate online searching.

Ben writes as head of technology research at Melias. And Ben, it's almost like we're not even talking about search anymore, right? We're talking about, like, getting stuff done and getting answers. And I say, I use chat GPT now as a verb all the time. We use grok, too, but a lot of people don't know what I'm talking about. I agree with you. I agree with you. If you have children that do homework, not saying my kids use it for homework,

but I've heard that children say I chat GPTed my paper and things like that. So I really do feel like the younger users are gravitating towards new things. And just like we were 20, 25 years ago, we became really good experts at. Google. And we have data in our report today that talks about almost half of the users for chat GPT are under 24. And you know how valuable that is for advertisers. So at some point, that's an issue. In the irony is, and I don't mean to jump too far ahead here, but, you know, Google's heyday was probably in 2005 or whatever year it was when it didn't have any ads. And it was really wonderful to use. And it's become unusable in recent years. You have to scroll

through 10 sponsored ads. Just make sure you're getting to the actual thing that you search for. So I feel like they brought this upon themselves in a way, but it means at some point, and you and I both know the day will come when chat, GPT, maybe GROC 2, will be as cluttered and unusable. So how long a window do I have here to use it effectively? I think what they'll do is they will learn, and obviously privacy, notwithstanding, they will learn how to give you the right answers that are more pointed. I think this view that people want to go on the web and search for an answer, so they'll be. They don't waste their time. That's going nowhere. That is only going to accelerate.

And Google's current version of search that's proliferating is this AI summaries. That's a tweener. That is not satisfying the answer people. And it's not satisfying the advertisers. So at some point, Open AI, GROC will say, this is how we're going to do ads and provide you more answer-based, solution-based type of assistant work. But Google also has its own AI. So then where does Gemini fall into the sphere of, you know,

anthropic and perplexity and chat GPT? Where is Google's product in all this? With all due respect, it doesn't matter. Really? First of all, no, it doesn't matter. Are you Gemini and stuff? I'm not offended by that. You don't have to say with all due respect to me.

I mean, I mean, it's confusing. It's very cluttered. Make a bet. I don't know one, other than analysts and investors, who can name every model and every product that Google's experimenting with. What has happened time and again in this market is there's disruptors who make a bet. This is the way things are going to go and they move faster. It's actually not always the best product. It's not always the best model.

Actually, the best model belongs to Google. It's called Gemini 2.5 Pro. It is the best. We set it in our note. You know, Kodak had the best digital cameras, too. Every six months, they'd come out with one that topped canon. It didn't matter. It's, it's, you got to make a bet and disrupt yourself.

And it's tough. I will say, though, Ben, using chat GPT lately, and I don't know. So I'm probably going to overshare. You know, Netflix passenger, my husband and I share an account, right? We pay $20 a month because who wants to pay for two $20 month accounts. Anyway, it's become practically unusable. I don't know if it's us. I don't know if it's the Ghibli animations or what's happening.

But, like, it's so slow. It gets confused. It takes forever. So there's an opportunity here still for a Gemini product or something to come in and be like even better. You know what I mean? Yeah, there sure is. I just hope you figure out how to use it and can get all the names of all the products down, which is deep research, which is not deep research, which is Gemini. And, you know, good luck.

But I think that Chat, GPT and GROC can just go in and maneuver quicker. and this landscape can change quite a bit. They haven't even put out ad platforms yet. So we'll see what happens over the course of time. But this has happened time and again. Stock in November of 2021, so three, not quite three and a half years ago, but now far off was $150 stock. It's 154 now.

I get it's been down, it's been up. If you traded it, you've probably made some money. But owning it, you really haven't been. Is it time to sell the stock? Look, I mean, we don't want to overdo it. So on the positive side, they've a great cloud business run by Thomas Currian. who's a really can-do executive, who's done some good things. I thought the acquisition of whiz, maybe they overpaid a little, who knows, but it was

pretty good one. And I think that YouTube is great. So I think there's a lot of great things at the company, but we just wanted to kind of highlight to people that multiples can contract as, you know, you look over the rainbow and you don't see how they monetize this as well as the incumbents that don't get anchored in this innovator's dilemma. But I think the stock is pretty cheap, and it's cheap for a reason. and most people are recommending it on the sell side.

And we sort of stand out with this kind of view that, hey, at an 18 multiple, I've seen stocks go to a lower multiple. And it's tough to just say it's cheap, though, if this is ahead of them. Times are a change in. Ben, thanks very much. Appreciate you joining us today. Thank you very much. I appreciate it. Ben writes this with Melius.

All right, on deck. IPO's and wowes. Two very different market reactions for two very different companies. We'll tell you about them both. Next. Welcome back to Power Lunch. I'm Kate Rooney with your CNBC News Update. The death toll in last week's massive earthquake in Myanmar has now passed 2000.

That's according to local media. The 7.7 magnitude quake hit the country on Friday near Mandalay, which is Myanmar's second largest city. Meanwhile, a new Mexico judge is weighing this afternoon whether to block the release of investigation records into the deaths of actor Gene Hackman and his wife Betsy Arakawa. Their partially mummified remains were found in their Santa Fe home last month. Their state's representative is asking the judge to seal photos, videos, and documents to protect the family's constitutional right to privacy. And United Airlines said today the FAA approved its first Starlink equipped aircraft.

The high-speed Wi-Fi is set to be tested on a commercial flight in May. United says access to Starlink, which is the satellite service owned by Elon Musk's SpaceX, is expected to come to 40 regional jets by the end of this year and to all of its flights over the next several years. Brian, back over to you. I'd get working intranet in the skies or we're better working internet in the skies. Kate Rooney, thank you very much. All right, folks, I don't need to tell you. Tomorrow is the first day of April, which means that not only is March over, but so is the first quarter of the year, which means it's a good time for us to see which city in America has done the best in the stock market so far this year. We do that by looking at our exclusive power

city indexes. Those are 38 exclusive city and metro area stock indexes that we built with the 11 or 12 biggest market cap companies in all cities around America. And your first quarter stock market winner pending, I guess, some massive change in the next two hours is Denver. The Denver Boulder Power City Index has an average gain of 8% this year in a down market. You've had big gains in Anglo Gold, Ashanti, Newmont Mining, and even Turkey Maker, I'm joking, Pilgrim's Pride. Only three companies in the Denver Power City Index are down this year. So a big congratulations to the Denver area for winning the first quarter in the stock market.

Kelly, you'll find this interesting. On the flip side, the biggest drop so far this year? The once hot Austin, Texas, 10 of its 12 companies are down this year with, look at that, huge losses in Tesla, Dell, and Q2 Holdings. The Austin Power City Index, ugh, not powerful at all, down 14 and a half percent this year. But you go, Denver. The housing market in Austin, not as hot as it used to be either. Now we know why, Brian, thanks. Up next, Tesla's troubles continue.

Speaking of Austin or Texas at least, the stock is down again. And today, we'll dig into the latest on the Elon Musk files next. All right, well, we just talked about how Tesla is hurting the Austin, Texas Power City Index. Well, Tesla stocked down again today. Research firm Stiefel Nicholas cutting its Tesla price target, not by a lot, but it was still cut. Musk, of course, remains at the center of pop culture and also controversy. Meantime, there's a big deal in the mortgage market. Rocket.

Kelly, do you know who Mr. Cooper Group is? I know all about Mr. Cooper Group. Who are they? We have had that CEO on a couple of times, and now they're up 15% being acquired by Rocket, all in the mortgage servicing space. And as we hear, even though mortgage activity has been de minimis, servicing can still be a decent business, but no surprise they're probably looking for skill right now. There you go.

So Rocket is buying Mr. Cooper, and that stock up 15%. And the tail of two very different IPOs. You've got CoreWeave. Remember them? They went public Friday? Well, they're down 7% right now below the IPO price. But look at Newsmax. Newsmax, which has a TV news channel, is up 511% off its IPO today.

Crazy. Wow. Joining us now to talk about these topics and more is Dan Premak. He is business editor at Axios. Dan, I want to get into Tesla and Musk and all that stuff. But you follow IPOs for a living. What do you make of this Newsmax news? I make that, you know, we always talk Trump trades in terms of companies that are, you know,

in industries that might benefit or not. This is the most kind of pure Trump trade, right? This is like Trump media or Rumble to a certain extent. When these right-wing are kind of conservative-focused media properties go public or are public, there's just a ton of buying activity into this. Remember, this is not a terribly strong company, right? It's losing money. It only has about $80 million in revenue.

The multiples are nothing like. like what any other media company, whether they be television or digital have, but people love buying into these. What is interesting right now, though, it's now valued higher than Trump media was. Well, they do 80 million in revenue and it's a $5 billion market cap now? Yeah, basically, yes. All right. Well, that brings. The law. The loss, yeah. The lab brings us to the other kind of, let's go back to Friday night. If this had happened during the week, Dan, there would have been wall-to-wall coverage. XAI bought X. And just

all the X is in know. make my head spin. But what do you think about the valuation? What do you think about the move? And look, you have to hand it to Elon Musk. He creates XAI out of thin air, basically. I just talk about how much we use GROC all the time. It's a genius use case for Twitter, which I'll continue to use that name. Unpack the deal for us. Sure. For starters, on the valuation side, yes, it's a good valuation. On the other hand, Elon's the one who's determining these valuations, right? He's the control shareholder of both companies, I don't believe that X Holdings, which is Twitter, even has a board of directors.

So he's the one who's approving this. So, you know, valuation a little bit with a grain of salt, remember most of the big institutional investors that hold Twitter slash X had valued it much, much lower, had significantly cut it. But yeah, look, we at Axios, we kind of previewed this a year and a half ago. The kind of the pivot for X or Twitter was going to be merging it with XAI, because that's kind of where the growth was. And you could see where Elon was putting a lot of his attention. And there's been huge interactions between the two companies and not just in terms of employees, but in terms of money flows, right? XAI has been paying X for its data. So it absolutely makes sense. Combine them. And the shareholder basis of both companies,

they're not identical, but there's a lot of very similar large players, Sequoia Capital, fidelity, et cetera. We're already invested in both. Right. Do you, do you, I mean, is there anything more to say about it beyond the fact that he controls them both? He can set the price. He can do what he wants and so forth. I mean, if you just look at XAI, then, I mean, do you think they're going to ultimately take that public or no? I mean, maybe someday. I mean, it's, it is unclear kind of where the revenue is outside of, you know, outside of the Twitter relationship. They might, I mean, if I'm Elon, he's never really been a fan of having public companies, right? SpaceX is private forever and is probably maybe the strongest fundamental business he has.

He tried taking Tesla private. He obviously took Twitter as a public company. and brought it private. I mean, maybe, but there's no particular reason to think he's going to. Yeah, it's also the biggest deal of the year. Again, maybe with an asterisk. There was a small deal. We mentioned Mr. Cooper. There was, I think, another small financial deal. Does any of this have broader significance to you? Not yet. I mean, the M&A numbers were fairly meager in the first quarter. I mean, I think the Mr. Cooper won. That, that, you know, you or Brian was talking about how there have been relatively few mortgages because obviously the home buying markets dried up. This is a question of scale, right? Control is much of the business.

become a one-stop shop, and then when volume goes down, it's obviously not good for Rocket. It's not good for Mr. Cooper. But that eases it a little bit if you've got all pieces of the business except just one part. You have a take, go back to Musk. People are defacing Tesla. You've seen that. I don't want to go into all that nonsense. There was a movement this weekend where they were supposed to protest.

I think there's 277 Tesla dealerships and service centers. It's supposed to be a combined protest at all of them this weekend. I don't know what exactly. Dan, but do you have a take on where this goes? You know, if people are afraid to drive Teslas, either they don't like Musk or they just don't want to be, they don't want to be bothered in a grocery store parking lot, whatever the case is. Does this have an end date? I don't know if it has an end date so long as Elon is very actively out there, you know, with Doge and kind of not just supportive of the Trump administration, but an active member of

it, given that about, you know, we're really a 50-50 country, which means 50% of the country doesn't like what Trump is doing. And Tesla's historically have been purchased more, driven more in coastal cities, blue cities. So I think that 50-50 is probably skewed anti-Trump, anti-Musk, where Tesla's are most. But isn't that the weirdest thing, right? Like my town, very heavily Tesla.

There's Tesla's everywhere. And in New Jersey, probably where you are in Massachusetts as well. Kelly, you probably see him as well. And I know a lot of Tesla owners, and they tend to lean center left. And so now they're getting yelled at in the grocery store parking lot, and they're confused because they're like, this is my car, and I actually am not a Trump supporter.

In fact, maybe the opposite. I was behind one the other day's traffic that had a bumper sticker that was Elon with a line through it, a red Tesla. Or I bought this Tesla before Musk went crazy. And I don't want to get into the political actions of it. I do wonder, though, Dan, this was supposed to be the company that the left loved years ago because they were saving the planet. There was no emissions, all built in the United States. And now it's widely hated.

It's a very bizarre story. Got a downgrade today for that reason. It's absolutely bizarre. And by the way, Brian, that bumper sticker you saw, I've seen a bunch of those around here on Tesla's. Of course, it's a bizarre story. And so is Elon's kind of political transformation when you consider he got a ton of government subsidies from California and from federal government, or at least buyers got them from the federal government, you know, in order to help grow Tesla. So he's flipped and then kind of the owners or at least the perception, you know, He flipped against the left and then the perception of the left flipped against him in reaction. It's not surprising.

It's strange, but it's not surprising. The other thing is, unlike, say, five years ago, if you are someone who wants to buy an electric vehicle, you have a lot more options than just Tesla now, whereas five years ago it was kind of Tesla robust. Not in that price range, though, Dan. That's the problem is that the Tesla 40 grand, were you going to buy a Rivian at 100? Yeah, I mean, maybe you are. So I'll say that somebody's got a 4DV. I mean, there are some that are cheaper. You don't have to go all the way up to a Rivian.

Well, your car was made in Mexico, Dan. Enjoy it. Driven in Massachusetts, Brian. That's it. Listen, it's a weird story, and we'll see where it ends because I don't know where this goes, but it's an important conversation. Dan Primmack, thank you very much. Thank you.

All right. And the Dow firmly in the green at session highs. In fact, it's up 345 points. Even the S&P has turned positive. Nessex, still down by a third Treasury yields. right just about unge, as you can see on your screen there, 425, as Wall Street braces for the president's tariffs will break down the bond market with Rick Santelli right after this. Welcome back. As mentioned, the S&P has now turned positive. The Dow hanging onto a decent gain this afternoon. The NASDAQ is still lagging somewhat. Let's get the view from the bond side with Rick Santelli tracking the action. It's the 10 years kind of caught in the middle of this slowdown, but inflation and tariffs tug of war, Rick.

Yeah, yeah. Matter of fact, even the short maturities, which I've been concentrating on more, goes a long way. You know, the press in general is making tariffs out to be the worst thing since the machine broke the sliced bread. In my opinion, a lot of this is temporary. Look what we have very quickly. You look at two-year in the U.S., hovering at the lowest yields since October when it was under 388. It's moved a little bit higher, you see on the chart. Look at Europe, the boon. Same scenario, lowest yields of the year. You look towards Canada and Mexico, they're at four-year Leo lows. So let's talk to Mike here. Mike, here's what I see. Equity markets are skittish. What happens? Interest rates go down. But part of that's because of the flight to safety to avoid

your markets. The other part is just a general slowing that tariffs may bring, especially the countries that are on the other side of our tariffs. I think that's the real thing here. We used to look at lowering rates as being positive for the market, right? The market looks like a better deal. That said, you know, we're not going into this dominant Fed-related rates, rates are market anymore. That was a huge influence over the last two, three, four years, especially as we talked about inflation constantly. The tariff situation is a catalyst here, right? We obviously have this big event on April 2nd coming up. That's going to create a whole new news cycle. We're going to pull off with, you know, carving out countries, carving out industries,

constant news in this front. So that's going to be a catalyst along with rates, and both those are going to move with each other. And there's going to create a lot of activity here in this market. So the skittish just will probably continue. Now, I'm going to take the other side of that to some extent. There's a lot of days where we're really deep shades of red early and we turn green late. The market seemed to be much more used to this uncertainty question. And another point is, all these countries, no matter who you're talking about in the G7, even the G20, they're laden with debt. When you're laden with debt, once this flight to safety ends, a lot of countries' interest rates are going to, what do you think, happen?

Perhaps bounce on that in that road down? So if you're out there thinking that this flight to safety is a great indoctrination to come in and buy corporate bonds or government bonds, be really careful because these yields going down, this may be a very temporary scenario. It's not only the equity markets that we're going to see being skittish in this environment. For the reasons you name there, there's a lot of reasons to think about why we've seen rates to do what they've done. I think it's important to remember that these overnight markets is where we're seeing we're down big. Like last night we were down maybe 65 points in the SB 500. We were down on the lows on Friday. We closed on the lows, so that kind of continued in today.

The balance is because we didn't keep selling off. People started to say, okay, this seems to be the end of it. We're down 200 points from Thursday's closed to Monday afternoon. So I think that was part of the reason we pulled back. And then there's something else that I think Merritt's talking to. If President Trump gets his way with tariffs, he wants to lower trade deficits. And I understand that. But at a time where we make...

need every single buyer for our debt, tariffs are going to take some of those trade deficits away. That really is kind of a pool of money that, in many ways, finds its way in the government bond market. Your last thought? It is a complex market. That is exactly correct. If you looked at just financial markets alone, you're not getting the whole story. You have international markets, and you also have the bond markets. All are very important. And the general state of the economies before the tariffs, even were talked about. That's right. Well, thank you very much for joining me today. Brian Sullivan, back to you. Rick Santelli, thank you very much. I'll take it. All right, folks. It's a mystery chart. It's a mystery stock. It is down 12% on the year. Is that stock

worth holding long term? Can you guess the name? We'll bring it to you next. Welcome back. We have two and a half minutes for three stock lunch. Let's see if Courtney Garcia can do it. She's senior wealth advisor at Payne Capital Management and a CNBC contributor. Courtney, welcome. Let's touch on Palantir, shall we? Because we haven't in a little while. It's down with some of the other AI names, but also off the lows doing a five-day losing streak on Pace to Break and nine-month win streak if it finishes March and the Red. What do you do with it? Yeah, and this is a company that really started off the Earth Strong. It was up 65% through February 18th, only to go on to lose about a third of its value over that time frame. And some of that is just with a broader sell-off

in tech. But a lot of this is also due to Palantir specifically. And really, when you look at its valuation, trades 147 times next year's earnings compared to only 20 times for the S&P 500. And it's also almost double its own five-year average. I think in this type of environment where you're seeing question on where IT spending is going to go going forward and people are moving more towards defensive and value, probably as a name that's not going to hold up well in that environment. So I'd actually stay clear here. All right, Courtney, next up is the mystery stock that we just teased.

And that is General Motors, GM. It's down about 4% in March, down 12% off. on the year. You got the auto tariffs potentially taking effect in a couple of days. They make most of their cars here, but a lot of the parts come from foreign locations. What's your take on GM? Definitely still some headwinds here. I mean, yes, they make a lot here in the U.S., but 31% of their sales are actually in China, for example. So they're going to be at risk of tariffs, retaliatory tariffs, and just general weakening of those two countries. But at this sort of valuation, it now only trades four times forward earnings. It's down 15% since the election. I think a lot of

that's probably price in. I would hold this here if you own it. I'm not jumping in based on some of the headwinds, but I don't think there's a time to get out either. All right, Coinbase, you buy, sell, or hold? Coinbase, I'd sell. This is very volatile with cryptocurrency trading, as we've seen. I think for that reason, that stay away from it. I'll be quick here because I know we're short in time. Courtney did it. Thank you so much. Courtney Garcia, you can recap every three stock lunch anytime with that nice QR code. That's not on your screen. What a pro. She nailed it. That's it. Stock markets up, S&P's up. Dows up. Everything's fine. There's no problems. We'll see what tomorrow brings.

Thanks for watching, Power Lunch. Closing bell starts right now.