Power Lunch - Stocks seesaw as tariff volatility eases 04/15/25

Episode Date: April 15, 2025

U.S. stocks are mostly unchanged, as investors analyze the latest batch of first-quarter earnings reports and also enjoy a decline in market turmoil. 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.

The White House trying to tamp down some of the tariff turmoil, but investors are not buying it, at least. Not right now. Welcome to Power Lunch, everybody. I am Brian Sullivan Kelly. Check her out on Squawk Fox all weeks long. Markets, they were higher until about 30, 45 minutes ago. All this is China hits back against one of America's most important companies. Another sign, the market is just about as negative as it can get. Plus, inflation and tariffs be darned, you're going to meet the guy. who's working to keep your cost down no matter what. We got all that ahead. But before that, it's going to look at your money. It's kind of a mixed bag today.

We are lower barely right now. We were higher earlier today. Now, that initial pop, likely on some comments for the Treasury Department, as one of the administration's top officials, says he expects tariff negotiations to work out. While some of that optimism has come out of the stock market, down industrials, down a whopping 49. Maybe this is actually a good sign.

We'll talk about that in just a moment. Let's hit a couple of individual names. If you own Netflix, you could chill. The company popping right now is it lays out plans to try to double revenue in just five years. Netflix's up 5% and wholly bounce back. Apple stock also. It was higher earlier, turning lower now, but it is still up 17% in a week. It is looking to move some big suppliers back to the United States.

what you just saw with Wolford Frost and Steve about sort of airlifting phones, Apple down right now, but after a massive pop, after a massive drop. So let us go back there and start with your money. Bank of America's latest mutual fund survey shows that mutual fund managers have not been this bearish in 30 years. That's right. Investors are the most negative they have been since 1995. 82% of those polled expect the global economy to weaken and a record number plan to cut exposure to U.S. stocks in part due to high uncertainty surrounding American trade policies. But one does wonder, could that actually be good news for the markets or does it really signal kind of a gloom and doom to come? Jeff Kilberg is founder and CEO of K-KM Financial. He is on set and Jason Ware is CIO of Albion Financial.

Jeff also a CNBC contributor. Jeff, good to see you on set, man. I will start with you. This mutual fund survey, right? Like the Fear and Greed Index, super negative. Mutual fund survey, worst than 30 years. Call me skeptical, but that's kind of when I get interested. It's like an alarm. You're supposed to buy when everybody else is selling. That's what I'm told.

I don't think it's equal to the VIX being over 60 being the signal to buy solely, but I think it's fascinating to see that just two months ago in February, we saw a data survey of the most bullish. So when you see sentiment swing with the velocity it has, yes, it's hard to capture that emotion. but I think investors right here right now have to continue to think through because remember, Sully, we're about 12 and a half, 13 percent higher off that recent low at 4800 and the S&P 500. And every day we have a higher high and people are continuing to be pessimistic.

Well, they are, Jason, I think because, and who can blame them, every sort of muttering or uttering about a tariff, the market can turn. I mean, one wrong word or run wrong statement or one right word or right statement and markets go up or down 5%. That's right, Brian. And I think that's exactly why we're seeing the survey data that we're seeing. Look, everyone is bearish on the macro right now, and understandably so. With these tariffs come great uncertainty, and that great uncertainty is causing strategists

and investors and analysts to mark down their estimates of growth. While at the same time, the positioning is a little bit less bearish. Why? Well, the answer is last Wednesday. We saw what happens when the one person that controls the outcome here tweet something that is bullish. And nobody wants to be on the wrong side of a massive move in the market. Will this be a V-shaped recovery when that recovery comes? Maybe we're already in it. I don't know. I'm not smart enough to be able to call short-term moves. But being off sides, either short or sitting in cash,

when that tweet comes and when these tariffs are resolved, investors aren't willing to position that way. So, Jason, let's go back to that point. Okay. I want to stick with you because I think I heard Scott Wopper and his team say kind of the same thing, which is that the risk is to the upside. What I mean by that, it's not a personal opinion. To your point, it's that if the president or Bessent or somebody else came out and said, we're going to kill the tariffs or ratchet them back or delay them again, whatever it is, stocks are going to rocket higher. And to your point, nobody wants to be in that position where they miss that move. Yeah, and I think that's expressed in how quickly the bear market was. And make no mistake,

this has been a flash bare market. We saw the S&P 21% peak. to trough, small caps down 30, the NASDAQ down 27, momentum down 25, midcaps down 26, the MAG 7 down 34. So this has been a bare market and it happened very quickly, not unlike COVID. And so I think the recovery can happen quickly if we get that tweet or even just incremental improvement. Markets care more about, less about the absolutes of good and bad and more about whether things are getting better or worse.

And any deals that come in the weeks ahead will be progression toward. Jason, I think you bring up a great point. And what's interesting is that we saw that. That de-leveraging. That de-leveraged that happened. If you remember, Sully, just a week ago, Friday, we saw the most put options ever bought in the marketplace. What happened?

The following, the subsequent week, we had the best market we've had in quite so many years. How? How can we have both things be true? Because of the velocity of this acute move. We talked about this flash correction, this flash kind of crash, which allowed people to really hedge, but it was hedging too late. And we've talked a lot here on Power Lunge, Sully. The time to hedge is when the VIX is under 15,

not when it's above 60. So I think. So to your point, way too. expensive. So this moment right here, right now, the risk is to the upside because people are either sitting in cash or they're so hedge. They're going to have to cover those hedges. They want all that insurance that they bought, go to zero. And you're seeing the 10-year note soothe some of the nerves today. So every day we're inching up a little bit higher, close to that 20-8 moving average in the S&P 500.

Take it's inside the markets. I know you worked, you know, you traded S&P futures and you're in the pit Chicago guy originally. You ever see Bill and Ted's Excellent Adventure? Yes, of course. Jason, I know, you ever see that movie? There's a scene in that movie. And Bear with me, people have said, Sullivan's finally lost it. There's seen that movie where one of the jocks is on stage and he's trying to explain stuff. And he goes, it's bigger and yet smaller. It's computers. And then he rants about the football team. It's like jumbo shrimp. And I bring this up because that was 40 or whatever years ago, but I feel like the computers have not fully taken over, but they're close. And I bring it up because I think

that's the reason stocks can fall 15% in a matter of days and then rally 10% in a matter of days, and literally mom and pop are on vacation somewhere, and they wake up and there's a 30% round trip in the equity market. Next snapping. Next napping moves, but that velocity you talk about is due to the fact that the electronics

trade and the algorithms really exaggerate these moves. And I know Jason talks about, but what we saw was the bullishness. Remember Meadow was up 20 days in a row, and no one could really explain it back in February? That was the euphoria to the bullish case. Now of a sudden... Meadow went up 500% in like a year and a half.

Correct. But that euphoria led by the MAG7, we saw that devalue. All of a sudden, terrorists came out of nowhere. No one expected that. And now we're trying to really calm nerves. Yes, there's still anxiety on any of the service of what potentially Trump may say. But I think people on the right, people on the left are both confused. And I think the market could grind higher inside of this ambiguity. Jason, what do you see happening? Yeah, I mean, I think that's generally the way we see it as well. I mean, the volatility is going to state for, you know, the foreseeable future. We know volatility.

clusters, the best days hover around the worst days. And I think you can expect that as we work through the next 30, 60, 90 days and see what Scott Besan is able to deliver. We expect deals to come in either in one-off fashion or in clusters. And I think those days we're going to see relief rallies. And then I think on the days where maybe we have an air pocket of news or we have Trump that puts out a truth social post or something that's net net. We'll see the stock market fall. So it's going to be volatile. But we think the direction of the economy is one that's slower, or not recession. Earnings are likely to come through with growth,

and therefore we think things can hire. Guys, sit tight. I'm not going to wrap you, and I'm not going to wrap you because we just talked about headlines from D.C. Well, we have some. Megan Kassella, the press conference at the White House just wrapped up.

Megan Kisela joining us down. Who knows what market-moving information may be in this? You never know what's going to come, Brian, but we just had the chance to hear from White House Press Secretary Caroline Levitt, holding her regular press briefing. A few headlines here to bring you. First on trade, she spoke about the ongoing trade negotiations. She said more than 15 deals. She called these actual pieces of paper have been put forward by more than 15 countries. They're on the table and under negotiation. She says

more than 75 countries have reached out. The president wants to personally sign off on each one of these. And she says the administration believes they will be able to announce some deals, quote, very soon. So we'll have to see what those look like. But forward progress there. amidst this 90-day pause on China specifically. She was also asked about this. She said the president had just given her a statement. She's quoting the president directly here saying that the ball is in China's court.

China needs to make a deal with us. We don't have to make a deal with them. She also says the president said to her that China wants what we have, which is the American consumer. In other words, they need our money. So again, playing hardball there a little bit with Beijing saying that the president is open to a deal with China,

but that China needs to want to make a deal with the U.S. As far as we know, Brian, those two leaders, President she and President Trump have not yet spoken amidst this tariff war. And then finally, just on the corporate tax rate, Caroline Levitt was asked whether the president would support raising the corporate tax rate in order to pay for other tax cuts. She was noncommittal here, but she said she'd seen the proposal. She doesn't believe that the president has yet made a determination on whether he would support that or not. So not closing the door entirely, leaving some room there to potentially seeing the corporate tax rate go a little bit higher as we see these tax negotiations continue.

All right. Megan Gisela, thank you. Jason, where I'm going to say goodbye to you now. I appreciate that. One quick comment, Jeff, because you're here and we'll see you later on in the show before we get to Rick Santelli. When or if Trump says I'm going to meet with President Xi or President Xi announces some kind of a meeting. Is that a market moving? That's a ripper, is it's tangible and it's a ripper. That is a tangible ripper. Right now we continue getting news out and the S&P futures really did nothing. So we want something that. that's tangible, sink our teeth into, and I think you do see that rip 5% higher. Yeah.

If, if, and if, we don't know. It could be a, I don't know if it's a win. It's definitely an if. We'll see, can't spell tariff without if. Jeff Kilberg, we'll see it a few minutes. Thank you. All right, so many will argue that the bond market is actually driving the stock market right now, which is important because the 30-year U.S. government bond continues to see its prices

move down and its yields move up, closing it on maybe hitting 5% Again, Rick Santelli joining us now from Chicago, and I think these bond auctions, Rick, have been as important as I can ever remember. Yes, and, you know, it's very difficult to use the auctions as a long-term indicator because, well, we basically have a significant trio of auctions every other week or so, and the volatility in the marketplace due to headlines, well, it's very similar at the auctions. We've had some very strong auctions of late and make. Maybe that's because the market volatility is causing many to get brave.

Now, you just brought up a very important point. On Friday, we were getting close to seeing levels near 5% in a 30-year bond, but things have changed since Friday. Look at 10s and the S&P together on this chart from Friday. Remember, Friday's close for 10-year yields was close to a two-month high-year close. For 30s, it was a three-month high-year close. But it's morphine. Right now, lower-year yields.

yields before we had some of this red show up later in the session in equities, lower yields was fueling more upside or holding the upside. It wasn't a flight to safety trade. It was lower yields where, well, they were well liked by investors trading the equities. Now, something very important happened yesterday in the dollar index. It had its first close under that big psychological point of 100 since July of 23. Let's call it 21 months. But as you go to a two-day chart. You can see it's reversed a bit. You want to pay close attention here. We've had a lot of bouts

with 100 as of late and most of the time it seems to hold. Should we get below this level? It would be very significant even though historically the amount of time spent above 100 from 03 to COVID was actually very short.

Sully, back to you. Fascinating and informative as always, Rick Santelli, thank you very much. All right, folks, we are just getting started and on deck is the reign of King Dollar over. All right, welcome back and let's talk about money because the U.S. Dollar Index hitting a new 52-week low today and is now back to where it was exactly five years ago. And many argue that you got to watch the dollar right now to know where stocks, bonds, and maybe the entire economy could be headed. Mark Chandler writes about this as well as

anybody out there. He is chief market strategist to Bannockburn Capital Marks. And he joins us now, Mark, I am not a currency expert by any means. I leave that smart people like you. I have learned a lot from your notes recently. And this move, though, and the dollar has been pretty dramatic. What does it tell you and put it in some kind of historical context for the non-currency experts out there? Sure, yeah, thanks. So the dollar has really been rallying more or less since the end of the great financial crisis in 0809.

and the dollar index that Rick had shown earlier peak in 2022. But we've been going broadly sideways. And I think that what's happened is the dollar is breaking down. It's not just because of the tariffs, though that's capturing our imaginations. But there's been a real reversal of U.S. positions on many different foreign economic policies lately. I think about the WTO, U.S. is going to be paying the dues. I'm worried about next week at the IMF World Bank meetings,

the U.S. may very well announce cuts in some funding of different programs. And so I think that the dollars decline long overdue. And the way we think about it being overdue is that the dollar is very expensive on a purchasing power parity terms. It's like watching two fighters. And they say the smaller fighter is stronger than the larger fighter, pound for pound. That's a similar measure we use in the foreign exchange market. It's kind of pounds for pound purchasing power parity. And by that measure, the euro and the yen are still almost 50% undervalued. So I think what's happening now sparked by the change in administration is that rubber band is snapping back. That would seem to play a role in what companies actually pay vis-a-vis tariffs also, would it not?

Yes, I mean, of course, you know, the thing is that a lot of the things that U.S. imports are already denominated in U.S. dollars. Same thing with much of what we export. So the dollar's impact on that might be relatively modest. I think that when we're in the middle of earnings season, and many companies will attribute some of the weaknesses to the strength of the dollar. So the weaker dollar will help U.S. exporters and help U.S. multinationals earnings. But we're not going to really see that yet in the data. We probably have to wait another quarter or two.

Are you watching the dollar index, Mark, or are you watching the dollar versus the euro? the dollar versus the Chinese Yuan or D all the above, I guess. Yeah, I think that, you know, it matters where you are, where you sit. For many of our clients at Bannock, they're corporations, and they don't have dollar index exposure. They have euro exposure or Mexican peso exposure. But I think for many of your viewers, just to get a quick handle on what the dollar is doing, the dollar index is useful. And because it's an index, it tends to trend better, which means that some of the tools that the people,

People use in the market, like moving averages, tend to work a little bit better with the dollar index and it does with individual currencies. It's interesting. I don't watch a lot of currencies, but I know the moves have been like everything else. They've been pretty outsized lately. So Mark Chandler, we're glad you're there to help us make sense of it all. Mark Chandler, Vanekburn, thank you. Thank you. All right. All right. Coming up, we just talked about the dollar. What about earnings? What do they tell us about companies see the economy ahead? By the way, as my good friend here, Dom Chu, just noted as he walked up onto this platform, we are at session lows. Not down a lot, Dom.

No. Down 130 points, but we are off three-tenths. And if you're just joining us waking up in, I don't know, Kona, the Big Island. I like that. Or drive a Kona. Waya Kolo. I like that far. Yes.

Fantastic. Or the Hilo or the Hilo side of the island. Suisan fish market in Hilo, which is the best fish I've ever had. I don't know. But I've seen better markets. Mama's Fish House and Maui is still my favorite. Anyway, so let's talk a little bit about the navigation side of things right now because we are seen a little bit of that momentum losing out.

Most of the banks are in the green today, with one exception, and it's J.P. Morgan Chase, but it's just slightly lower. So could J.P. Morgan Chase, which is a bellwether of the global banking business, be able to continue or slide a little bit more and how much of the worst is actually behind us? Joining us now is Tony Zang, the chief strategist, over at Options Play. he sees more downside for J.P. Morgan Chase and is here to tell us why and then how to play it. So why the more, I guess maybe Barish is the strong way to put it, but why are you a little bit more negative on J.P. Morgan than other parts of the market?

Yeah. I mean, really, if you look at the charts here, I think the charts speak a lot in terms of we did have earnings coming out last week, which were more positive than analysts were expecting. But despite that, we failed to get back above prior highs. continue to have a series of lower lows and lower highs that speaks to the fact that despite the strong earnings, it wasn't enough to reverse the overall trend that we've seen here in this particular stock. And if you just zoom out a little bit more, you know, you really have what looks like a bit of a head and shoulders top that's starting to form here for J.P. Morgan.

Not to mention just the valuations on J.P. Morgan is certainly on the higher end for the banking industry right now. And given the outlook that they've kind of, Jamie Diamond has provided here for, and for 2025, it certainly strikes a much more cautious tone here for the economic conditions ahead. You know, Q4 earnings, they were much more upbeat, much more positive in terms of expectations for the economy and just the strength of the bank. And you note that this particular earnings cycle, they really spoke about a much more cautious economic condition usually due to tariffs, trade wars, you know, higher inflation.

that they announced all of these things within their more cautious tone for 2025, it was balanced out by some positive with potential positives with tax reform and deregulation, but largely there was a much more cautious tone that they had for the earnings, for the outlook that they provided for this particular year. So, you know, when you look at the charts, you look at the outlook they provided, which usually sets the tone for earnings season. And we also had Delta report earlier this year that really set a much more cautious view for consumer spending for this year. I think when you look at everything in combination with each other, there's a much more concern about the economic conditions ahead.

And for those reasons, I think it makes sense to take a much more neutral to potentially bearish view here for a major bank like J.C. So what's the trade? After all of that, what exactly is the trade for J.P. Morgan? Yeah, so what's really interesting with the market dynamics right now is that if you go out to that March, May 30th expiration, which is a weekly expiration, if you sold the 235-250 call spread, normally by selling a 45-day out-of-the-money call spread like this, you can collect about one-third of the width. So on a $15-wide credit spread, you can collect about $5 in income. But right now, you can actually collect over $7 in income. So I think there's an interesting ability to take advantage of the elevated and implied volatility and collect some extra premium here to take that neutral to bearish view here for J.P. Morgan. It's a very unusual market, but you can have a near one-to-one risk-reward ratio right now. All right. Tony Zhang with the trade on J.P. Morgan Chase, not outright bearish, but certainly not bullish on it. Thank you very much. We'll see you later on. Neutral to bearers. Okay, so here's the thing. If you're selling away a call

or a call spread. You are basically saying, I don't think it's going to go higher. That's kind of your more bearish or more neutral view. If you're collecting premium, like Tony says, seven bucks or thereabouts, what you want is for the stock to not go higher and just go lower. And then that way, the insurance money that you collected never gets called upon, never gets used. So that's the maximum benefit you get is the $7 you take in. And then your cap at your losses because you've bought another call on the upside to kind get away some of that risk. That's the reason why he's doing it. And that's one to grow on. One to grow on. Comjunction junction junction. What is? I know what your function. I know exactly what his function is to explain stuff to me so I can pretend I understand it. Up next, how one man is

fighting to keep costs down one T at a time. Welcome back to Power Lunch. I'm Kate Rooney with your CNBC news update. Roughly 22,000 IRS employees have now reportedly signed up for the Trump administration's latest deferred resignation offer. According to the New York Times, the employees would be put on leave, paid leave until September and then officially leave their jobs. The tax agency had about 100,000 employees before President Trump took office. The CDC, meanwhile, reported a rise in autism rates today, saying one in 31 children in the U.S.

are diagnosed by their eighth birthday. The finding is based on an analysis of medical records from 2022. It does show a dramatic rise from 2016 when the CDC reported one in 54 eight-year-olds had been diagnosed. And finally, you can add new uniform standards to all the changes happening at Starbucks, starting on May 12th employees will be required to wear a black shirt and khaki, black, or blue bottoms under their signature green aprons. Starbucks does say will increase familiar.

for customers. The coffee chain has made a host of other recent changes, including a simplified menu and reintroduction of condiment bars as it tries to revamp its image and sluggish sales, Brian. Back over to you. So they can do khaki pants, black or blue? Black or blue. That's those are good options. That seems to simplify life, you know, if you could just wear the same thing every day. Not sure the, like you guys. Not sure the Starbucks team members will feel the exact same way, but we shall... We'll see. It's like us. We get told what to wear. Kay Rooney, thank you very much.

All right. Thanks, Sally. Well, your next guest made his fortune one can of iced tea at a time, and he did it by keeping costs as low as he can. Well, with new tariffs sitting on aluminum, how are CEOs and founders dealing with some of the new numbers? Let's continue our growing series on speaking to real businesses. People that actually run companies to help you navigate through everything that is going on with us now Arizona beverage company founder and chair, Don Voltajio, and it says right there

in the can, the 99 cents, Don, you started your career in the worst neighborhood of Brooklyn, selling stuff out of a truck. I don't think anything scares you, but you do have to deal with tariffs. How do you do it? Well, we try to do it the same way we're doing all these years. Deal with the things we can deal with and the stuff they're on by control you live with. Yeah, but you've got a tougher job because your suppliers and the people who make your cans, they come to you and they say, Don, I love you. But I got to charge you X plus whatever it is. What's your answer to them?

What's your discussion with customers? Well, you know, aluminum is recalibrated every month based on LME and Midwest premium. So we've been dealing with that forever. But, you know, the aluminum portion of can making is out of the amount. their control and I have my control because it's a material that goes into making cans, obviously, but it's something that fluctuates and now with the tariff and some of the things that have happened with Midwest Premium is really where the spur in my boot is because I think it's a manipulated index that causes the cans and the cost of the loan to go up and it's not really tied to the base

a moment. But again, that's out of my control as well. Yeah, and you're not just driving. And you're not just You're known for drinks, obviously, for iced tea. You're in all kinds of beverages. You also do snacks. You're a billionaire, okay? You're one of the richest guys in America. You've made it. You're still plugging away every single day.

What is your, do you have like a motivational speech for a lot of people watching this segment or CNBC right now that are you 40 years ago that are kind of just getting started? I tell people, know your business and keep learning because everyday things change. I've been in business for over 50 years. And I have thousands of people who work for me. And those people are my friends. I treat them like family. And when tough times come around, we kind of support each other. You know, during COVID, we had the similar situation where it was real tough times.

But the good news is we're a company that sells drinks. We're not selling exotic items that people might back off on. You have to stay lubricated and hydrated. So, you know, we're in a pretty good industry. plus the fact that I've got to know it pretty well, and I'm pretty good at it. Worth a couple billion. I think you're probably pretty good at that,

and a few other things, Don. I'm a great truck driver as well. So I know how to drive a truck and a forklift and do all those kind of things. I still do them, and I enjoy it. But it is a tough margin. A lot of competition. I go to, you know, Wawa or Sheets or 7-Eleven or whatever it might be.

There's a lot of drinks. There's a lot of drinks there. I got a lot of choices. Price matters. Margin matters to you and your investors. Price matters to your customers. What's the proper balance? Well, I don't have any investors.

You know, we're solely owned and family owned. I don't have any debt. I own everything. I pay four things when I need them. So I don't have the stresses that a lot of companies have. And we ride the tide. Good news now. some loyal declines so some of our transportation is down.

We built a new factory in the heat in New Jersey, which has got rail sightings and close to the port. So we put some of our cost of moving product around. And internationally, we make the product locally because you don't want to ship water around. So we're pretty more positioned around the globe. Locally, you know, the competition is done. But what they don't have is a bit.

to make decisions quickly. That's what I have. I can, you know, see a market trend and go with it. I can do it in months where it takes some people years or more. So the nimble fact of our business and our scale, you know, we're not the biggest, but we're not the smallest of us. So what we have is the ability to compete with the big guys and do things a lot quicker than they can do. You know, it's an excellent point.

And a friend of mine who is well known to this audience, someone for Tita, obviously, he runs, he's got a private company. family owned, it's his business. And so you call him up, he'll make the decision. Do you think it's just that much harder to be a public company CEO right now? I mean, we're CNBC. We talk about stocks all the time. But I just wonder if it's just getting even more difficult to be a publicly traded CEO.

I mean, would you ever go public? No. I've heard too many horror stories from people who have done it. And I think, you know, some people go public for the wrong reason. We've funded our business. I tell people when I needed banks, they didn't want to loan money to me. Now they want a loan money to me when I don't need them. So, you know, it's kind of the evolution of business.

But, you know, the environment is tough because I think there's a lot of people who are running some of these companies who are not that good at it. Not that I'm so special, but I came up to the ranks. You know, I drove the truck. I unloaded trailers. I wrote invoices. I did all that stuff. I have a very good sense of what you need to do when things get tough. I've had a lot of CEOs of companies who,

candidly, I wouldn't have by my business because of their lack of knowledge. You've got to get a little deep with the knowledge. You can't be just superficial. You can't just be watching the stock trade and not knowing what goes on in your factories or warehouses or your salespeople or wherever. So I don't know. I'm fortunate that I have the ability to do what I do and can do it in a world where it's very difficult to do what we do

because there's not a lot of family-owned businesses any longer in America, especially in big categories. Yeah, but you have done it and you've done it very well. I'm one of the richest men in the United States. I know you don't do a lot of TV, and we appreciate you coming on. Power Lunch, Don Vultagio, Arizona beverage company, Don, really appreciate it and best to you in your team. Thank you. Thank you. Thank you for your time as well.

All right. Absolutely our pleasure. This is it. Folks. Got to talk to people that are actually running companies. What are they doing and how are they doing it? And Don and his team, one of the best in the business. Coming up, China's stark mandate for U.S. Airlines.

All right, welcome back. Time now for a power rundown, a trio of transportation topics to tackle with our Phil LeBow. Phil, welcome. Let's start with China's latest salvo in the trade. We're reportedly ordering its airlines to halt delivery of Boeing jets. I don't know how that's possible because they don't make enough jets to, do they? Does Boeing make enough jets? No, does China make enough jets the source of its domestic jet industry on its own?

No, no. And it doesn't mean they're going to stop flying Boeing aircraft. But if this report is true, and by the way, we've had no confirmation from the state government in China. Boeing is saying no comment at this time. And that's the reason why the shares, while they were down much more this morning, they've come back a little bit. They're still negative for the day. Make no mistake because of the implications of the China market. but it's not as great as many people originally thought it would be, let's say five years ago, when China was a big part of Boeing's order book.

Year today, Boeing has delivered 18 aircraft to China. That's about 14% of their deliveries for the year. The remainder of the year, they're expected to deliver 29. That would be 6% of their expected deliveries in 2025. Bottom line, you should take a look at shares of Boeing over the next three months. And by the way, or last three months, by the way, we get the Q1 results. next week and we'll have better clarity in terms of what they're looking at in terms of their order book. The bottom line is this, Brian, losing China, even for a couple of years. Let's

let's just throw that out there as a possibility. It would not be good, but it's not a death blow to Boeing. It certainly is something that they would like to avoid. They'd love to increase deliveries to China. But if China says, you know what, you're in the penalty box for a couple of years, I think the analyst notes today make it pretty clear, Boeing's going to be able to weather that They would rather have it, given the situation they're in, but they'll be able to weather it. All right, topic two, United Airlines, they got their results coming up after the bell. And we saw with Delta last week in your excellent interview. You know, this is a weird time for airlines.

I mean, they boom forever. And now there's all these signs about what may or may not happen going forward. What do we think? It's all about the outlook and how much clarity we get from United in terms of what the company is seeing right now and what it thinks it will see, not only in the second quarter, but for the remainder of this year. So the numbers when they come out, look, most of the first quarter was relatively strong for the airlines. It really was the last month to seven, or to six weeks where you saw slow down there. EPS estimate is 76 cents a share. How much is demand slowing? And what's the

global outlook? You know, the global network for United is immensely important. They have expanded transatlantic, trans-Pacific. Are the trade wars impacting travel? Do you see fewer Americans who want to go over to Europe or go to Asia? And vice versa. Are there fewer people from Europe who are willing to come over here to the United States? And what's happening with corporate travel? So that's really the focus of the UAL earnings this afternoon. And then the interview with Scott Kirby tomorrow morning on Squawk Box. Yeah, certainly with Scott tomorrow mornings. I'm so curious. Like you, Phil, you know, you and I are both United Airlines guys. You're out of O'Hare. I'm out of Newark. And it's going to be fascinating to see what he says because, you know, we eyeball the airplane.

Every time we get on, we're like, okay, this plane's full, this one's not. All right, last topic. Everyone's kind of trying to figure out how tariffs are going to impact the consumer like you. I talked to dealers. Got a lot of friends that are car dealers. Some of them don't know, Phil, what their cars may cost them if they're a foreign-owned company. It's crazy in the auto business right now. Right.

And we probably won't know at least until mid-May what the true impact is in terms of pricing. But JD Power, which tracks pricing every single day. And we check in with them, and they haven't noticed a deterioration in terms of the inventory that is out there, or in terms of the pricing that the dealers are passing along. In other words, an increase. But they do believe that when you look into the rest of this year, and they're out with a new report today, we should see gradually slower U.S. sales. Not a surprise there. I think all the automakers are bringing in less, especially from foreign manufacturing sites. But new model prices.

Look at this, Brian. they think they're likely to go up only $2,300 on average, and the decline will be about 1.1 million vehicles. Why is this important? For a long time, Brian, when we were expecting the tariffs to kick in, everyone said, here you go. Everything's going to go up, $6,000, $7,000. What J.D. Power is saying is, look, there will be increased costs for the automakers, and they will eat some of it, and they'll pass some along to the consumer.

But they're not going to pass all of it along, because if you're, like, in the small crossover utility vehicle, Very popular. Are you going to raise your prices $3,000 when your competitor may say, okay, we'll only go up $500. That's going to keep some pressure on the prices from rising too much. And the automakers will eat it. We'll definitely notice it in terms of their margin. And I'm going to offend a lot of people right now, okay? And I get it, the tariffs matter. They're going to matter. But it's not like prices for cars haven't gone up the last few years, Phil. I know you and I have talked about this extensively. There are average, very spectacularly average SUVs right now that are $120,000.

I don't know who's buying them. It blows my mind. And I just wonder, to your point, like, is another three or four grand grand going to matter when people are paying $100,000 for a Jeep grand wagoner? And I own two Jeep, so I don't want Jeep coming out. The answer is not on the high end. It will matter on the lower end in the midsection. And bottom line is we will likely see transaction prices cross over 50,000 on average.

Yeah, maybe just stretch that loan out to 10 years from nine or whatever it may be. It's a crazy town in car talk. But that's why we love having you on, Phil. I can do a whole hour just ranting about car prices, but I won't because we'd have no viewers left. Phila Bo, thank you very much. All right, still ahead. Three key stocks you need to know making headlines today. Jeff Kilberg is back with the names and how to trade them.

Time now for three stock lunch, $2.50 in the East Coast, so it's late lunch. We're looking at some of the biggest names making headlines this afternoon. Welcome back in our friend, Jeff Kilberg, with our trades. Don't worry, Jeff, I'm not going to rant about car prices to you. But I will rant about Netflix in a good way because Netflix reportedly saying they want to double revenue in five years. And the stocks, stocks up. And the stock's shown it. It's a big pop today.

And it's been on a monstrous run, Sully. But we look at a 4P of 39 forward P.E ratio. it's not the most expensive it's been. So yes, it's been on a monstrous run. So I want to be a hold of this name, but I want to trim. If you've owned this stock, you've seen a 16% annualized return. This has just been a machine, a workhorse. I think you have to consider taking some profits here as we see this as the tariff-proof type of stock.

But at the end of the day, this has been on a monstrous run. Yeah, it has been, and it's up 5% today. All right, New Jersey guy, Jersey company, Johnson and Johnson. Okay, this is a homegrown New Jersey company. They can't get out of their own way. I know, but Sully, I want to be a buyer here. Actually, own this in the Essential 40. I own this in the Central 40.

I own this in the Central 40, ETSF, and I'm actually going down to Short Hills, New Jersey, to see my friends at SkyPath, private wealth to talk about Johnson & Johnson. Today, after the show, after the bell. A mall there. A little investment. It's very nice. And they're very nice. How current I said high.

I will. But Johnson and Johnson is interesting. 10% off its all-time high. It's been sideways for the last three years. But this is an essential name. Yes, there's concerns. The CEO talked about the concerns today of the concerns today of the materials, the ingredients, the inputs, they're going to come into the materials.

Will it be terrified higher? But I think they've really learned a lot post-COVID about that complex supply chain. I think they've diversified. So I want to be a buyer here. I didn't appreciate your eyebrow being raised because Johnson Johnson is going to move back. No, I want them to do well. It's not a raised eyebrow. I want J&J to do well.

I like Band-Aids. Hopefully you don't need any Band-Aids. It's been a coiled chart for last three years. Okay. I live near some J&J people. I mean, they want the stock to get. going again. I'm just telling you. All right. Speaking of going again, Under Armour.

Who? Yeah. What was that a raised-dive? You made a groaning sound. They're expanding their board of directors. Oh, and by the way, I know your son's a quarterback. They're signing Cam Ward. Yes. Do an endorsement deal? Yeah, and my son who's going to Colgate is an Under Armour school. I appreciate that.

Amon Jabbers is Colgate alum, I believe. Look, I'm a fan of Under Armour. I know it is 88% off its all-time high. I'm a fan of Kevin Plank. The brand has lost its luster. No doubt about that. trying to be revived. It was up over $5.50.10s come off a little bit, but I think you buy it here, Sully. This is a trade.

There's an opportunity to hold it longer term because what they just do with the NFL, they just signed a new contract. So all the shoes in the NFL, they were kind of gone from 20 to 25. I know, selling. It stinks. But it's going to come up. It's coming off the mat. Watch it go up.

Get some in your 401K. This is the name that's going to be revived. This is a great American brand, Sully. Baltimore, again, we want them to win. We do. We want underarm. Baltimore's had enough problems. I'm not touching that.

We need Charm City to succeed. Under Armour is the way. Under Armour is the way. Johnson, between Maryland and New Jersey, you're just throwing out the love. Hey, essential. And much love to your son. Congratulations, by the way, on that.

Jeff Kilbert, KKM Financial and CNBC, contributor. And remember, you can recap every three-stock lunch, every time you want, scan the QR code on your screen. I mean, right now, jump up, run to the TV, and do that. We'll head over to cbc.com for more. We will be right back. We started today.

The markets were up. Half an hour later, the markets were down across the board. Now we are exactly mixed. The S&P 500. I mean, that is as close to UNCH, unchanged. In fact, if I sit here long enough, it probably will be exactly. Look at that. The NASDAQ was just exactly unchanged.

I can't do any better than that. We'll see what happens, though. We got one hour left to trading. Closing bell is going to take you through it as well. with Scott Wapner. That's going to be a big one. Tune into our 6 a.m. Asia Time show called U.S. Markets Edition as well. I'll see tomorrow. Closing Bell now.