Power Lunch - Stocks claw back earlier losses, Nvidia leads Nasdaq into positive territory 2/4/25

Episode Date: March 4, 2025

Stocks recovered a chunk of their earlier losses, as Wall Street tries to shake off the latest escalation in global trade tensions. 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.

All right, stocks and your money. They are down again today, mostly, but they're also well off their lows. The NASDAQ briefly did turn higher the drop that we had and have on concerns about tariffs, profits, and you, the American consumer. Hi, everybody, and welcome to Power Lunch. Stocks down overall. But as we said, well off their lows of the session, companies that rely entirely on the American economy. Kelly, mostly the small caps being hit the hardest. And lookie there. The NASDAQ is. actually now higher. Yeah, and the small caps, the worst performer really since the election, too, which is interesting. Zooming out even further, that post-election rally has been pretty much completely wiped out. The Dow up a percent, the S&P half a percent, the NASDAQ still lower, and some big moves and bond yields we're tracking here as well. The 10-year, around 4.2 today, but this drop from 485 just a month or so ago has really been sharp and pronounced. And that's where we're going to watch, again, maybe for a Fed response, we're already seeing a better impact on mortgage rates as a result. So this is an important level. Maybe it's all being done on

purpose. Just something we can talk about in the show. All right. These tariffs, though, they lead to headlines. They're adding to preexisting fears about consumer and the consumer discretionary stocks. In fact, the discretionaries, things you don't have to buy. They're falling to the lowest level since, well, December. So a couple of months. But you got Best Buy, you've got Target, you got Tesla and the S&B consumer ETF. They are all lower. A lot of concerns. here. We'll dig into all of them, but right now, let's talk about it with our big guess. There's a lot going on, and we've got you covered, markets, money, and all. But let's kick things off on the show with Virginia Governor Glenn Yunkin, because no state may be hit harder by federal

government job cuts than Virginia. You've also got tariff concerns, of course, and concerns about military spending around Ukraine. A lot of these big ships, they're made in Norfolk and Newport News. There is a lot going on. Joining us now is the governor of Kelly and I's home state. That is Glenn Yonkin, the Old Dominion. Governor Yonkin, thank you so much for joining us here on Power Lunch. You got a couple of Virginians sitting with you. But let's talk about, first off, tariffs and the job cuts. The job cuts are separate. What is your overall macro concern about the Virginia economy and about this website you guys are launching to try to help people find new jobs?

Well, first of all, thank you for having me, Brian and Kelly. And thank you for trust us in Virginia. And also, I would just add to your description of Virginia, according to CNBC, the top state in America for business is Virginia as well. I've heard of that, Governor. I just point that out. And that is part of, that's part of the reality of the opportunity in the Commonwealth of Virginia today. And let me just start with tariffs. If anybody is surprised that President Trump has placed tariffs on countries like Mexico and Canada and China, And by the way, the reciprocal tariffs that he is already pre-announced that will be imposed in April, then they didn't listen to him during the campaign.

And he has told everybody that he is going to go to work and he is going to reestablish fair trade. And to date, so many countries around the world have been really taken advantage of the American market where they can send goods into the United States. but we can't send goods into their countries. And he's just taking that on straight up in a very, very direct and powerful way. But again, I will just reiterate, anyone who missed that this was coming

wasn't paying any attention during the run-up to November the 5th. You are a governor now, but you are a financier. I mean, that's how you made your fortune and your career prior to entering the governor's mansion in Richmond. So Kelly and I kind of alluded to it at the top of the show, Governor, Is there a part of you at all that would think?

Because say what you want about President Trump. I don't want to get into a political back and forth, but I know that the majority of his cabinet, these are not dumb people. Is there a part of you that believes that part of this is being done intentionally to maybe slow the economy, force the Fed's hand, and bring down interest rates? Well, the short answer is this is being done to rebalance unfair trade practices with countries around the world. And that has been his primary objective, but also to force many companies who otherwise might not invest in the United States to invest in the United States. And we're

already seeing the benefit of that, notwithstanding the fact that there's been over a trillion dollars of announcements of companies investing in America. We in Virginia have substantially benefited from that. I mean, we've had $100 billion of investments announced over the last few years. But just last week, we had three announcements of companies that are expanding in Virginia and 500 more jobs announced last week. So part of what is going to happen by reestablishing fair trade and reciprocal trading practices is companies are going to come to America and invest in the United States. And I would reiterate that Virginia is the top state in America for business. They should come here. And those are the jobs that have enabled us to,

to have a growing, growing job base opportunity that has surpassed any job growth record in the history of the Commonwealth, but also as we see, of course, the efficiency efforts out of the federal government that are expected, yes, to result in job losses for some federal workers. We have a lot of them in Virginia.

And that's why I did launch our big effort last week to first help those displaced workers know that there's a pathway to a great job here in Virginia. Our website, Virginia has jobs.com, lists 250,000 job opportunities, but also resources for those displaced workers who want to seek retraining, who need to file for unemployment, who might need to make sure that their insurance isn't interrupted. But most importantly, to get on a path to a great future in this next chapter in the Commonwealth of Virginia where we have tons of jobs, tons of investment, and tons of opportunity. Although in governor, it's Kelly, and I appreciate again you joining us. Just one more follow-up on this.

Look, you know, I know tons of people who work for the defense companies in Northern Virginia. I mean, and by the way, obviously, you have all the data centers, but those are not huge engines of employment per se. So we've seen some of the mid-Atlantic governors and senators and different officials kind of leading the charge here, not fighting against Doge, but really kind of trying to protect who they view as their constituents that will be negatively affected by these cuts. So how do you balance the negative fallout for your region, which has benefited so much from all of this D.C. growth in the last couple decades against your personal view that, you know, this is something that will be beneficial in the long run?

Well, let's just begin with the reality that the federal government has $37 trillion of debt. And when President Trump came in was running a $2 trillion a year annual deficit adding to that debt. And therefore, the necessity to find efficiencies is critical in order for America. With that said, we recognize that this will, unfortunately, cause some job losses for Virginians. And listen, I have a huge empathy for this. My dad lost his twice when I was growing up. And I understand what it means when families are incredibly displaced by this. We had to move and all kinds of things. But at the end of the day, there are tremendous opportunities here in the Commonwealth of Virginia. And those opportunities are with great jobs

that provide a great future. I do believe that the defense industry is going to continue to be a very strong industry for Virginia. It's going to continue to be one of the places where there's job opportunities. And Brian, you mentioned at the onset of shipbuilding. And there is a backlog of shipbuilding that lasts Newport News shipyard for longer, longer than I will be in the employment world. And I think my children and my grandchildren will be able to see those ships being built. Absolutely. So this dynamic moment that is going to, yes, result in, there's some job losses at the federal government, and I reiterate, I have huge empathy for what families are going through the anxiety that they are feeling. But that is why the opportunity

is to move into the private sector, to take advantage of, as I said, 250,000 jobs in Virginia, where we are now announcing literally hundreds a week of new opportunities for folks. The $100 billion of commitments that have come to Virginia from companies that are expanding here, moving here, building here, also bring another 65,000 jobs with them. And these are great jobs with great opportunity all over the state in all kinds of areas. Let me ask you on kind of a related note. What was going through your mind on Friday? I don't know at what point you saw what was happening at the Oval Office between the president and the vice president and President Zelensky. What was your reaction to the way that that meeting happened, to the fallout

since, to the U.S. halting military aid to Ukraine? Republican senators, many of them senior senators still support Ukraine and say, you know, Russia invaded them and we need to come to their support and defense. The president obviously seems to feel very differently. Again, the president campaigned very clearly telling everyone that he was going to bring the war in Ukraine to an end. And I believe that's exactly what he aims to do. And he reiterated it again yesterday that the killing has to end. And I think that there will be an end to the war in Ukraine. And that's exactly what President Trump promised he would do.

Listen, he promised that he would secure the border. And now we have seen a drop of 93% of illegal crossings at the border. He told everybody he was going to use tariffs in order to rebalance the imbalance trade around the world with our trading partners. That's exactly what he's doing. He told everyone that he would get the hostages out of Israel and bring an end to that conflict. and I think as long as as as long as Hamas actually complies with what they promised that will happen. If they don't, then it won't.

And he also promised that he would go to work to bring an end to the war in Ukraine. And I think that's exactly what he's trying to do. You referenced that Virginia was number one in the CNBC top states for business. As we said, we've heard about that. Governor, do you worry, though, that with these tariffs and with those that, you know, you could see, you know, contracts to companies like Booz Allen Hamilton, which have, huge numbers of employees in Falls Church and Fairfax and Lake Prattuck and wherever it might be, do you worry that Virginia won't be able to maintain its leading economic status,

given all of these headwinds that it may now face? I think Virginia will continue to be incredibly strong. We have invested a substantial amount in infrastructure, which is the top criteria. Our educational system continues to be incredibly strong. We have a fantastic workforce with some of the most educated people in the country. We are incredibly business friendly and we continue to reduce tax burdens on people and streamline regulations. And therefore, Virginia will continue to be a top state, if not the top state in America

for business. I do believe, again, that one of the great opportunities for growing companies is to tap into the broad workforce across the Commonwealth. And therefore, if there is dislocation with some of the federal workers in Virginia, they have great opportunities. I also have spoken to the senior leadership of many, many, many of some of the federal contractors. And there is a real sense of long-term optimism among them. If the federal government is going to really be efficient and effective, then a company

that delivers efficient and effective outcomes will thrive. And of course, those companies that don't are the ones that should be worried. And that's why I'm so proud of the industrial base and business base that we have in Virginia because I think that's exactly what they have to offer to a federal government going forward as effective and efficient outcomes that deliver results for an administration that is demanding results like no administration has in recent memory. Governor, before we let you go and appreciate all the time you've given us today, I just want to circle back for one second.

We're going to hear this joint session to Congress tonight from the president. I imagine he's going to go back and, like he said, say, I'm keeping the campaign promises I told you, including I'm going to end the war in Ukraine. But how do you end it in a way that doesn't appease Russia, that doesn't make, give them designs on Europe, or maybe you'd argue that's not our problem, that doesn't put them in a position of strength or reward those who have been, you know, combative towards other countries and basically say, you know, with China and Taiwan, well, China, if you want Taiwan and we've did a couple of people. you know, maybe we wash our hands. Like, that's what I can't figure out is an American. Well, I think the first step here is to recognize that we need to bring an end to this war. Second of all, that the minerals deal that was on the table was a good deal for Ukraine, and it was a good deal for the United States.

And incentivized the United States to stay economically involved in Ukraine, and therefore to stay involved in Ukraine. Also, you've seen Europe really step up here like they should, like they should. And therefore, I do believe that there is a pathway, and the president is a master at this, at reaching the deal. And we must bring an end to the war in Ukraine. I do believe also that a strong America and a strong president will once again recognize that China is not just a competitor. They're an adversary. And we have to be strong with China. And I think that's why the economic statement that the president has made, which is we're not going to let you take advantage of us anymore, is so important.

And that's why I think tonight he will cover the last five weeks of his administration, which have been at a pace that no one has ever seen in administration before. And the successes of securing the border and delivering on promises made and getting the hostages out of Israel, working to bring peace to Ukraine. And I think this is exactly what you'll hear from him tonight, but also a vision that, listen, the best days are ahead. And we're going to have a strong economy, vibrant America, and it's going to unleash unbridled opportunity. We're going to have to whack everything else in the show because we've gone so long. But I can't let you go without asking you this. And I might be breaking some news to you, Governor, or maybe not. Reuters is now reporting that that Ukraine mineral deal actually is back on because the president apparently wants to announce it tonight.

the deal that was supposed to be announced the White House on Friday. Then, of course, we had the dressing down of Vladimir Zelensky, and it turned into they, I think they call that some kind of show. And you know where I'm going with that. Governor Yon, do you believe the mineral deal is back on? Do you have any knowledge of whether it's back on? I don't have any knowledge specifically, but I do know that it's a good deal for America, and it's a good deal for Ukraine.

Otherwise, the president wouldn't do it. But on top of that, it does give America an economic interest in Ukraine's future. And that's a really good thing for them. But it also allows us to recoup the billions and billions and billions that have been invested in Ukraine. And I think that's a good deal for both sides. Virginia Governor Glenn Yonkin, wide-ranging interview, Governor, we do appreciate you joining us on Power Lunch. Thank you very much. And thank you for the shout-out on the Top State for Business.

Great. Thank you. Thank you. All right. And let's check back on the markets as they digest those headlines that Brian just mentioned. Could the Ukraine Mineral deal be back on representing the U.S. coming back in to try to come to some kind of solution there? The Dow is way off the lows on that, only down three, only down about 300 points. We were down nearly 800 earlier on.

As we head to break, let's check out some of the names that hit new lows, which have also made a comeback. You can see three of them are now green, N-phase Dow Inc. and Mosaic. A line is still down 2%. We'll be right back. Shares of NVIDIA, they are higher right now following an 8% drop yesterday. NVIDIA is not only massively important to the market because it's, you know, NVIDIA, but it's in more than 500 major market ETFs, and it makes up a big portion of some very widely held funds.

Bottom line, NVIDIA is really important to the market. And Christina Ports in Avelas is really important to us, And so we welcome her in now. I hope my microphone was muted. Our audience is really important to me, which is why I'm actually going to start with Super Micro. Something different for a change. Well, it was a boy. Worstock in the S&P 500.

You're taking it right from, yes. Sorry. I don't know. Because volatility is the name of the game, especially within chips and hardware. Super Micro. To your point, swung from the S&P 500's worst performer to its top performer overnight, pushing ahead with a new Silicon Valley facility. So they mentioned this a few days ago, and they're going to be building, despite tariff challenges, lawsuit, DOJ, SEC, probes, a lot of volatility in that name.

Taiwan Semi planning a massive $100 billion investment, but also could face even higher operating costs. They complain about this in the past, so that could squeeze margins, yet shares are up about 5% right now. InVIDIA, to your point, its stock is on a wild ride, trading at a market multiple that almost matches the S&P 500, so when normally it should be trading at a premium, because it's a growth company still.

And that raises the question, is Nvidia undervalued? Some are saying yes, or is the market headed for a fall, you know, for that market multiple to be lower. There's still a lot of regulatory risk for Nvidia AI diffusion rules, restricting chip exports to certain countries that would come into play this May. The possibility of further China ban, specifically the H20s. We talked about that yesterday, but just it is a big portion of their business to China. And then switching to Intel, you can see shares, one of the few chip names down almost 5%, 5.5% after recent chip testing buzz with Opie, Ohio plant delays suggesting potential demand issues. So there was a note yesterday than NVIDIA and Broadcom

we're testing Intel's advanced processes, and now you're seeing that sell up. But the most interesting trend on with that is investors are shifting, really. We're seeing this AI shift, which we see across the market, but traditional analog names, like Texas Instrument, analog devices, those are holding steady if you're looking on a year-to-day basis, which is interesting for the chips. Okay. What do you want to go to?

Okay. I want to use your big, knowledge brain about stock, because you're also at the NASDAQ all the time. Correct. Right? So you know the stock market and you know Invidian, see how nice I am? So nice. So nice. Let's praise you.

And that's a song, Fat Boy Slim, right? Praise you like us. I didn't ask for you to sing. I just want to mention the song. How important is Invidia to the market? We said 546, I think it was the actual number, ETFs. Invidia, in some ways, like almost is the stock market? Well, because it's a, if it's weighted, right? So I think as of last year,

the S&P 500, it was over 5%. Or it accounted for 5.5% of S&P 500 returns. So to your point, it is a big portion of the market. So when it does well, it goes with it. The AI trades also move in almost tandem with NVIDIA as of late. So yes, it has an outsized weight on the markets. Well, that's it. I thought you were going to grill me with some more. Nope, nope. Nope. We'll leave the Canada stuff for another time. Oh, okay, good, because he always brings that up. Yeah, Christina. Brings up what?

Nothing. You're not from Canada. Praise you like a rift. The rift. You're from Quebec. Less of the rift in the market this afternoon. Dow was down nearly 800, more than 800 points, I should say, at the lows. But the NASDAQ is now positive.

For more on the impact of tariffs and potentially this Ukraine Minerals deal, let's bring in Mike Bailey, Director of Research at FBB Capital Partners. And CBC contributor to Mike Afar, who is president and CEO Far Miller and Washington and chief of market strategist at Hightower. Gentlemen, welcome to you both. Mike Bailey, first to you on the first to you on the president. this crazy market day. What can you tell us? Yeah, it's a pretty wild ride here. I think especially between the big move lower we saw yesterday this morning, opening was pretty terrible. I do think

investors are starting to take a deep breath and say, okay, wait a minute. Have we gone a little bit too far? Is there something else that could happen? Could Trump realize, hey, wait a minute, maybe we've pushed things a little bit too much, come back and find a way of softening the blow of it. So I do think investors are putting those pieces together, coming back, starting to buy a little bit. Your last segment touched on in Vindia, sort of that's a big driver of markets. We've seen a nice reversal. And I think you mentioned that the multiple on VINVIDIA is crossing where the broader market is. In some ways, you know, I think that does suggest some values. I think investors are starting to think through that, pick up the pieces, some of these things that have blown up with

tariffs and start to get involved. And we're seeing that as a nice recovery here today. Michael, Far, you think the same. So I think a lot of people, and I can ask this now, literally people are texting me and saying, what's going on with the market? Should I give them Mike Bay. Look, I'm not going to give anyone any advice. I'll just ask you guys. But there's the Mike Bailey response, which is maybe it's time to look at this as an opportunity. There's the response, though, that you hear from some of the others, including some heavy hitters in the market, who say, this is not the time. The economy's slowing.

There's going to be a lot more bumps in the road to come this year. You know, maybe buy bonds. I think you always have to look. So let's do both. Let's listen to Mike Bailey and say, yes, there are always opportunities out there. And maybe, as in your last segment, we should look at the other 493 stocks and maybe not the magnificent seven. But Wall Street's been doing a pretty good job, Kelly,

of discerning the difference between the president's sort of bombastic approach to different topics that have indeed been effective and brought certain folks to the table, to the negotiating table, successfully. Whether it's your style or not, it has worked some. But when that sort of bombast, and in this case, tariffs, actually becomes policy, Wall Street has to recalculate. They have to step back and say, minute. This might be a little bit too much risk. We've got a debt ceiling cap coming up in a

couple of weeks here in Washington. Washington has gotten quieter, but still doesn't appear functional completely. So maybe take a little off the table, maybe take some profits. And I would also agree with Mike that maybe we overreacted this morning, maybe not. But Wall Street's trying to adjust to tariffs and perhaps a new source of inflation. Mike Bailey, how significant would it be if the president does announce a Ukraine minerals deal tonight. Certainly. And anything that can help resolve some of the serious adjada out there, you know, among investors, that's a good thing. So again, there are a lot of plenty of conflicts out there, geopolitical, also just regular economic stresses out there. You start to take away

some of those risk factors one by one. I do think that cools people's down, et cetera. We're seeing the VIX creeping up. That's an indicator of fear. We're kind of flashing yellow right now. We're not hitting red. I'd call it VIX above 30 red. So anything along those lines, whether it's policy, if it's Ukraine, et cetera. I do think that's going to help out reduce some of that. We get back to thinking about regular economic trends, earnings growth, et cetera, probably a good thing, especially in the short term. Farr, we've talked to Mike some of his shopping list names.

Mike Bailey's would be Amazon, UNH. That's one that's been coming up a lot lately. McDonald's. What's on your list? I came up with two for today. Medtronic, I think, are more stable names, Medtronic and Pepsi Cola. 16 and a half times earnings for Medtronic, about 18 and a half times for Pepsi Cola. Medtronic has a 2.9% dividend, the medical device maker.

PepsiCola, 3.4% dividend, 7% earnings growth. You know, if I got a 3% dividend and 7% earnings growth and a 10% return out of these kind of stalwart companies, I'd be okay. I'd be cautious in here still because the market's adjusting to a new president who's thrown a whole lot at us, The Fed's got to figure out what to do. Ukraine's got to figure out what to do. So remember, Warren Buffett's looking for a buying opportunity. He's sure not going to panic, and neither should you. All right, gentlemen, thanks.

The mics. Mike Bailey, FBB, Michael Farr, Far Miller, and Washington. Appreciate it. All right, on deck. Call it shields from the sell-off. Some defensive ways to play this market meltdown. That's next. All right, welcome back to Power Lunch.

Stocks. They are off their worst levels of the session. In fact, the NASDAQ is now. higher. The NASDAQ composite is up 90 points. That's about a half a percent. The S&P and the Dow are down. But Dom Chu, I know we've got market navigator. You're a money guy. Nasdaq turning around. S&P, it is not impossible. The S&P ends today higher. No, it's not because if it stays right where it is, it would have bounced right off. It went below its 200-day moving average. It's longer-term trend line. And then the dip buyers just came in in force, by the way. So it's been a rocky

couple of days for sure, Brian. Our next guest says that there are ways to actually play the market a little bit more defensively, rally aside here, to tell us how to shield your investments when the markets do sell off the way they did earlier and may still in the coming hour and a half. Joining us now is Tony Zhang, the chief strategist over at Options Play. Tony, I maybe just let's get your thoughts first of all. The Q's, the NASDAQQQQQEF went down to like $488 and even less by a few pennies. and has rallied all the way back up to 500 bucks.

It looked ominous at one point. It doesn't look so now. What does this tell you about the market? Well, I still think that the fact that we rallied back up to that $500 level is still concerning because what effectively we've done is we've broken below a major support level, that $500 support level. We trade it all the way down to, as you say, to $4.88. Right now we're just back up to that resistance level.

If we can't get back above $500, that is still concerned. from me going forward. And that's why I do think it makes sense for investors, especially if you want to remain fully invested in your portfolio for dividend reasons or for tax reasons to potentially take a look at buying some protection plays at this moment. Protection is a little bit more expensive than it was a couple of weeks ago, but I think that right now you can still structure it using options to buy yourself some protection in a cost-effective manner to protect yourself at least for the next roughly 10% downside on the queues. So Tony, then let's talk about the structure of that insurance. How exactly do you do it? Do you just buy the put protection outright?

Or can you cheapen it up a little bit with some maybe costs associated with that? Yeah, that's exactly what I want to do, because if you outright just go out and buy the puts, and I was going out to looking out to the May expiration, which gives you a little over two months of time. If you look at buying the May 490 puts, these are puts that are just slightly out of the money from where we are right now. that's going to cost you a little over 15 bucks right now. That's more than 3% of the ETF's value. In my opinion, that's a lot to give up in terms of upside to buy that 10% downside protection over the next three months or so. So I think the best way to play this is to look at kind of where the next level of support looks like on the cues. And for me, that looks like around 450 or so. So what I'm going to do is I'm going to sell the 450 puts against that in May as well.

And you're going to collect a little over $6 on that. And that brings your total cost of that put vertical spread to just a little over $9 per share or $900 per contract. So now you're reducing the overall cost of buying this protection from a little over 3% now to below 2% of the ETS value. And I think that's a much more cost efficient way, a much more capital efficient way to buy yourself downside protection over the next few months. Because I don't think that if we do get a sell off here, we're going to be meaning. below 450 or so. And that's why I think this is the right trade structure for right now, even though it is a little bit more expensive to buy protection than it was a few weeks ago. But I think now is the right time because now is the time where you feel you really need potential

protection. But before, when it hadn't broke below 500, I didn't think the need for buying protection was as necessary. All right. So last thought here. Does the price action today make you think a little bit differently about the potential for upside in the coming weeks, not just the downside protection that you're guarding against right now? Absolutely, especially since both SPYQQQQ are holding some major support levels at this moment, but especially even in video, holding 115, I think, is incredibly important. And I think from my perspective, looking at sector rotation, I think that the chances of a meaningful decline here is less,

as of after today. All right. Tony Zang, options plate. Thank you very much. We'll see you again soon, sir. Thank you so much. If we get the U.S. Ukraine deal, like Reuters is reporting, if it's done deal, it shows that a lot of this is performance art

and that stuff is happening. And I would buy a call option on Tony Zang's hair. Well, now you've got to think about whether or not that translates into what's happening with tariff policy. Not just the hair, tariff policy. Well, we'll see what happens. But you got it, Tony, I mean, you got it. The guy's got some hair.

It's unbelievable. Exactly. Kelly. I liked it. Gentlemen, thanks. Oil prices are making a comeback well off the lows today. It's still fractionally lower and caught in a tough spot between OPEG, tariffs, and more. We'll discuss after the break. Welcome back to Power Lunch. I'm Pippa Stevens with your CNBC news update. At an Arab summit in Cairo today, leaders adopted an Egyptian-led plan for reconstruction in Gaza that they say would cost an estimated $53 billion and avoid resettling Palestinians. That's in start costing. contrast to President Trump's plan to take control of the enclave and remove Palestinians. But it's unclear if Israel or the U.S. would accept the Egyptian plan. Congressional Republicans are again being told to avoid in-person town halls after several such meetings went viral after attendees berated lawmakers overcuts to the federal government. House Speaker Mike Johnson claiming today, without evidence, the paid protesters are to blame for the disruptions.

He's encouraging members to hold telephone town halls. and small group gatherings. And the company famous for ketchup and mac and cheese is getting into the booze business. Craft Hines just unveiled its first ever alcoholic drink, Crystal Light Vodka Seltzers. The move into alcohol comes as Craft Hines is struggling with some of its core products

reporting declining sales for the last five consecutive quarters. Brian, only a matter of time before ketchup-flavored vodka. Okay, Pippa. Okay, Crystal Light flavored vodka. All of us made an adoring face when you said that. What's your hot take on crystal light flavored vodka? Yes or no? Don't knock it until you try it.

That's it. Okay, fair enough. Pink lemonade, whatever. Ketchup vodka, Pippa, thank you. All right. More good news. The price of gasoline may be coming down in your area soon. Tariffs aside.

Oil prices, they're falling. Most of young concerns about economic slowdowns and OPEC yesterday saying that it will go ahead with a slight production increase in April. OPEC and its allies known as OPEC Plus, saying it will increase production by about 140,000 barrels per day beginning April 1st. Not a lot of barrels, but it would add barrels onto a market where many say there is already enough oil.

But let's be clear, oil $68.30, really back to levels of just last fall. Let's talk about it all with Lema Croft. She was just at an OPEC meeting in Vienna, Austria last week, had time to talk to all the heavyators and energy and joins us now. Also, RBC, hosting a big conference in New Yorker Financial's conference. Thank you for making some time. Thank you for having me. But I wasn't at the OPEC meeting.

I know. This was like a communications thing. But a lot of the ministers were there. Were you surprised by the adding barrels thing yesterday? So certainly I thought there was a case for OPEC to wait to the second half of the year. Given the uncertainty over where we're going to land on tariffs, the impact on China, what could be coming in the form of sanctions release? for further sanctions, there was a case.

But that's sad. What I heard at OPEC was every time we delay, we still get punished by the market because people say the market fundamentals must be so bad that you're not putting barrels on the market. So basically we're punished if we put them on. We're punished if we take them off. Like maybe we should think about going ahead.

And I do think if you're Russia, you stand again by having this incremental increase go ahead because now you can make the case to the White House. you're being super helpful because basically you're on side with this incremental increase. And does it take the heat off of OPEC? Potentially, yes. Well, there's so much stuff going on. I mean, you almost need like CNBC 2 to cover all this stuff. On days like today, you do.

No, because you've got, let's talk about Venezuela. 100%. Next week I'll be in Houston interviewing the CEO of Chevron. So today, the Trump administration basically said to Chevron, you got 30 days to cut off your oil in Venezuela. Venezuela is done. For now, we don't know what's going to happen. The sanctions on Iran may go back up, and we're talking tariffs on four and a half million barrels per day of Canadian oil. 60% of our imports, 10% tariff. So how do you manage all the math? Exactly. So this is what I think is so interesting when we do OPEC math. If you look at the

Chevron decision and you say, let's pull these export permits, that's potentially, potentially two to 300,000 barrels that could be dislocated from the market. At the same time, you have Secretary of State Rubio pressuring the Iraqi Prime Minister to reopen this northern pipeline route. So basically people are saying, are we going to get more out of Iraq? So everybody's trying to figure out then what do we think about in terms of Russia? Is it less Russian oil, more Russian oil? What's going to happen with Iran? So it's hard to make all the math add up right now because there's so much policy uncertainty. Our friend Dan Pickering, the other day was frustrated about the OPEC barrels that might be coming onto the market.

And he said something on X to the extent of, we can't absorb any more supply. And I was wondering, is sentiment in the oil space and with the energy coverage, is it really that bad at this point? Well, I think this is what is so interesting, is that you have, when you talk to U.S. shale producers, I think the companies that are most concerned about more barrels are American companies. Because let's say OPEC decided to give in fully to President Trump. When President Trump is like, I want more OPEC barrels, if OPEC just decided, yes, President Trump,

we're going to give you exactly what you want, then it will be shale companies that will have to deal with the damage of that. They would have to call President Trump and say, hey, could you help us out here? So I do think there's a lot of trepidation in U.S. companies about what is OPEC going to do. But again, OPEC had planned to increase. It's an incremental increase. No indications yet that the group is breaking up. They're kind of sticking to a plan they out. lined over the summer. Well, the other thing is, so President Trump has, you know, he campaigned

on lower prices, right, bringing down inflation. Energy is a huge part of that. It's not about gasoline. Oil goes into about half the thing. It's in her computer. It's in your phone case. It's in my, it's in my hair? I got oil everywhere, Halima. But on a serious note, so all this stuff is happening, but at the same time, the world, if you increase oil production to bring down prices, somebody's going to lose. Well, this is the question. And I think that's the math, the balance that President Trump has to figure out. Well, this is where I think President Trump has to figure out.

Do you want American energy dominance? Do you want the explosive growth of U.S. shale? Well, if you do, there's a price that's required for that. And so these companies are not going to drill themselves into unprofitability. So that is what he really, I think, has to balance. It's like, what is the price that works for the consumer? what's the price it works for the producer? That's why Sean Fieler, who he had on the show,

jokes, but was serious that the U.S. should join OPEC. And basically say if we want to... He said that? He said the U.S. should join OPEC, basically set the price, achieve our... Senator Grassley might have an issue with that. I know, as we're doing the OPEC bill, can you imagine? But because of what you just mentioned in terms of...

Well, I interviewed the Secretary of Energy, Chris Wright, a few weeks ago in Washington, D.C., and I kind of joked around them about this. I mean, I don't think it'd be the worst thing for the U.S. to at least engage Well, look what happened. We're not colluding, there's nobody making deals. I mean, certainly we saw in March of 2020, you did have an active dialogue because the shale

companies called President Trump and said, hey, Russia-Saudy price war, not awesome for us, and American energy dominance is not going to thrive in this price environment. So President Trump, remember, he became like the fact of President of OPEC. Like, he got the largest collective production cut done in April 2020. Yeah, volatility is the real. enemy of the producer because they can't plan their budgets. Halima Croft, RBC Capital Markets. Thank you for having me on.

You're very welcome. Have a great conference. We are right back. Welcome back to Power Lund. Rick Santella here live at CMEHQ. Look at two-year note yields today. Hovering near unchained. Look at where the high on the far right is compared to the left.

Now look at a 10-year. Ten-year yields are up almost six basis points. Completely different look to that chart. What's going on? You know, yesterday we had a really hot prices paid. The long end completely ignored it. Today, early in the morning, tariffs are the end of the world. The market paid attention.

The curve steepened, but yet equities have come back. Interest rates have remained steepened yield curve. The euro versus the dollar, which, by the way, is 57.6 of the dollar index, is at a three-month high. And I know they're both on the same chart and might seem a redundancy, but I think it's important to realize that 12-5 December 5th is exactly where the dollar index is comped to in terms of a low close. All of that, of course, is predicated on what may happen in the future

and the uncertainty involved, but the market's movement today should teach a lot of lessons about conventional wisdom. Power lunch to return after a short break. Welcome back as President Trump's new 25% tariffs on Canada and Mexico go into effect. Along with the 10% additional tariff on China, retail stocks are among the worst performers today, although the declines have moderated.

Target, for instance, was down 6% earlier, about two and a half percent today. Meanwhile, Dick's sporting goods, that's another stock on the move. Ralph Lauren, those are trading lower, but our next guest believes they could gain an advantage amid a higher tariff environment. Joining us now is Deborah Weinzwig, the CEO and founder of Korsight Research. Deborah, welcome. Let's just start right there. Why could these two firms benefit? I think that many of these companies in the, you know, with Dicks and Ralph Lauren, right, they have been for the last few years moving production. thinking about where their sales are and trying to match sales to product. And so they're

tending to have at this point more product and market. And they really also shorten their supply chains as well. So those are two great examples of retailers who've kind of gotten ahead of it and will fare better than others. What do you think about? I look, Target. That was down sharply today. They said they might have to raise the prices of bananas and avocados in the next couple of days. Best Buy got creamed this morning. I'm not sure if that's still down double digits. They said their supply chain, not direct supply, supply chain was primarily in China and Mexico. So what are investors supposed to do kind of navigating all this? It's a great question and incredibly timely. So we look at the off-price retailers, so the Burlington's, the TJs, et cetera, raw stores, who source

over 80 percent, most of them are like 95 percent domestically. And that, you know, so they haven't had to get ahead of it. They already were there. Secondly, a lot of the CPG, so Clorax and PNG, we spoke to, And they've both, you know, kind of not only are they ahead of it, but once again, most of their production is domestic. You think about, like, the weight of a lot of what Clorax sells. So that's a great example. And then the industry that is a bit of a concern is the toy industry, over 80% of that is sourced from China. And what, you know, some recent news is, right, Lego is building a new factory in Virginia. So they're trying to move more of that locally. So I would say there's not a retailer out there who's not rethinking their supply chain.

but, you know, having spent a lot of time in the supply chain industry, it's incredibly complex and difficult. And, you know, the good news is there's a lot of room for opportunity to cut costs and ultimately have, you know, more efficiencies and lower prices. Yeah, Claussen Quality Chocolate of Wisconsin. Actually, just bought land in Virginia. I only know that because it's near my parents. It's all about the Virginia show. So there is some growth here. Deborah, listen, I'm not saying the tariffs aren't big.

I have no idea what's going to happen. and I know everybody's already out of their minds paying enough for stuff. And that's my point. I know we're losing our collective minds about the tariffs, and they may crash the economy. I have no idea. But we've dealt with inflation for four years like we haven't seen in 30 years, and prices for so many things went up 20, 30, 40, whatever percent.

Why is this the camel or the tax that broke the consumers back? because how is this different than all the higher cost that consumers are already paying everywhere for everything? Brian, you're just too logical for me. Damn it, I'll stop. I'm sorry. But truly, I think the one thing that's gotten a lot of airtime is eggs, right? Eggflation or whatever we want to call it.

And it's wild. So we track weekly consumer sentiment across the U.S. and when kind of egg prices really kind of hit that high a few weeks ago, that's when we really started to see a significant decline in consumer confidence because I think all people heard was eggs, eggs, eggs, and consumers 2 to 3 percent of their food budget is eggs. So it's something that they see every week. It's like the price of gas.

And so I think that that has had a contributing factor. But honestly, nothing is that much different today than it was 6, 12, 18 weeks ago. Supply chains are difficult. they're tricky. There's a huge opportunity to simplify it. And I think that we've gotten that opportunity handed to us on a silver platter to do so. So I'm totally with you. Last word here, Deborah, as we go, what would you say kind of broadly about the space? You think it's going to remain in the crosshairs? Oh, I think it's going to be volatile. I also think there's a lot more, right? Target said today,

17% of their goods come out of China. I mean, there's a big focus on where goods are being sourced. And I think that what we're going to see is much more of an early deluxe. of holiday than we've seen in years past because I think there are a lot of concerns. So that will be a big change. So we'll have probably additional inventory. But since this is being so well televised, I think people are going to shop early and make sure that they get what they need because they just don't know if it's going to be there when they go back. Absolutely. Yeah, like will they front load? Will there be a pepah pig toy or not for my, I mean, these are will you pick a pack of paper towels at Costco early? Debrae, Debrae Wineswick, of course,

Thank you, Deborah. And we appreciate her joining us on a day like today. Huge negatives earlier on, still some mild negatives, but a little bit better tone this afternoon. The NASDAQ is now up three quarters of a percent. Look at that. The S&P 500 could end today. I bet it will. That's your coffee tomorrow.

That was Karen's call on halftime. So we'll see. Closing bell starts right now.