Power Lunch - Stocks turn higher after Trump-Zelenskyy Oval Office spat 2/28/25

Episode Date: February 28, 2025

Markets are ticking higher this afternoon, after a brief pullback following a clash between President Trump and Ukraine President Volodymyr Zelenskyy in the Oval Office, which stoked concerns about rising geopolitical risks. We’ll bring you the latest details, including how this impacts markets and your money. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunch alongside Kelly Evans. I'm Dominic Chu. It's been an eventful afternoon, to say the very least. It's a historic day. A televised argument, an argument between two world leaders from inside the Oval Office. We were supposed to see a joint press conference between those leaders. But President Vladimir Zelensky of Ukraine has left the White House in just the last 15 minutes or so. Checking the market reaction. Stocks turned lower on the news and then briefly went positive again. but are now fractionally in the red now. So it's been a volatile session, although not by major amounts. It's still typical of what we've seen with developments out of the Trump administration on anything from tariffs to geopolitics. We're also coming against a tough market stretch. We're down on the week. The NASDAQ's down 5% on the week.

That's a big number. Haven't seen that in a couple of years. Now the NASDAQ and the S&P are negative on the year as well. So the sentiment coming in had already, you could argue, Don Price, and a lot of concerns about these issues. And again, now trying to figure out the significance of what we've just seen. I mean, this, in addition to Nvidia and all of the tech weakness that we've seen, it's, I wouldn't call it the perfect storm.

It's not to be melodramatic. But you get the idea there are a lot of headwinds for the market right now. Well, let's get right out to the White House for the latest on what we just alluded to. Amon Javr's is joining us with the latest on the update between the meeting between President Trump and President Zelensky. Contentious is probably a mild way to put it. Yeah, unprecedented scenes in the Oval Office, Dom, as we saw a shouting match erupt, heated emotions, real intensity between President Trump, President Zelensky, and also J.D. Vance, the U.S. Vice President, participating in this exchange, something that we just have never seen before as Americans in the Oval Office. All of that leading to a contentious breakup of the plans for the afternoon. The news conference, as you suggested, that's off. Zelensky has left the building. His motorcade exited just a few months. moments ago. I can tell you, Dom, I'm just texting now with some officials in the West Wing to get a little bit of the behind the scenes of what happened. I'm told by a White House official here just in the

past couple seconds that the President of the United States kicked Vladimir Zelensky out of the White House today. That is the description that we're being given of what happened after the part that we saw on camera. The president kicked him out is the text from a White House official. So dramatic stuff there. You saw that at the departure, President Trump clearly did not come to say goodbye or have a handshake at the end. There was a woman in a blue dress who shook Zelensky's hand. I'm told that is the protocol officer, new protocol officer of the White House who did that duty. Zelensky moving very quickly into the vehicle there, as you can see. Let's replay a bit of the contentious. Contentious doesn't even do it. Just the heated exchange between

the two men here in the Oval Office just a short time ago. Take a listen. You're either going to make a deal or we're out. And if we're out, you'll fight it out. I don't think it's going to be pretty, but you'll fight it out. But you don't have the cards. But once we sign that deal, you're in a much better position. But you're not acting at all thankful. And that's not a nice thing. I'll be honest, that's not a nice thing. So the president there upset, what he saw as Zelensky being disrespectful, to the United States, to him personally, to the American taxpayer who've provided hundreds of billions of dollars in military aid to Ukraine over the years. J.D. Vance, the vice president, suggesting to Zelensky that he hadn't even said thank you once during the course of that meeting. Zolinski then turning it about onto J.D. Vance and saying, well, you've never been to Ukraine, you should come and see it. Vance saying those are just propaganda trips, you know, the whole thing spiraled out of control in a relatively short period of time. And you wonder now, Kelly and Dom, whether or not this relationship can be put back together into anything of the sort that the Ukrainians needed to be in order to get some kind of result out of this war that allows Ukraine to continue to be an independent country.

Amen, we learned during the first Trump administration and in just the first month plus so of the second Trump administration, that negotiation is part and parcel to what the ethos of this particular president, this administration is. And this is all speculation at this point. Nobody really knows except the president in his closest days what the timeline will be. But what exactly then can we expect to see that would indicate either progress or the opposite with regard to America's relationship with Ukraine? What kind of timeline are we talking about? Is it days? Is it weeks? What does it look like? Yeah, I mean, I think it's going to take a couple of hours just for everybody's temperatures to simmer down here. And then you'll begin the planning of what comes next, Dom. Typically in diplomacy, what you look for is when is the next meeting scheduled? And that gives you a

sense of, you know, where things are. Behind the scenes, I think it's going to take some time here before we can get any meeting scheduled, certainly between Trump and Zelensky, let alone between the delegations between the two people. You know, we just saw the protocol officer there giving a quick handshake to Zelensky on the way out the door. That's, you know, very disrespectful, right, and intentional by the White House to show their displeasure with the way they see how Zelensky behaved in the Oval Office today. And like I say, I am told by a White House official, and I'm just literally texting now while we're talking, Dom, I am told by a White House official that the president kicked Zelensky out of the White House after that on-camera piece in the

Oval Office today. All right, so behind the scenes, it's pretty much what it looked like to us behind in front of the curtain as well. All right. Or maybe worse. Thank you very much for that. We'll see you later on for more and what's going on at the White House. Let's get some more reaction now to President Trump's contentious meeting with Ukrainian President Vladimir Zelensky. Edward Fishman is the senior fellow at the Atlantic Council and a former State Department official. He is also author of choke points, American power in the age of economic warfare, which is just out this week. And maybe no better time for this kind of a book. And to talk with you, Edward, about this. Maybe bring us up to speed on just what kind of image this particular

president and administration want to portray to the rest of the world. It is very much front and center about Ukraine, but this is also a signal to our allies and enemies about how America is going to conduct its policy in the coming months. I think that's exactly right. Look, Volodymyr Zelensky came to the White House today, hoping that he could persuade Trump that it was not only in America national security interests to support Ukraine, but also in its economic interest. That's why he came with this critical minerals deal to sign. The fact that this ended so badly with Trump saying that he had kicked Zelensky out of the White House, I'll say, I've been involved in U.S. foreign policy for almost two decades.

I have never seen anything like that. And so what it suggests to me, Dom, is whether this is all sort of part of a political theater, right? Whether this is, in fact, kind of a setup. Perhaps Trump and J.D. Vance knew that they were going to treat Zelensky in this way. Maybe this is their way of trying to pressure Zelensky. But if you're, from the perspective of the rest of the world, the Europeans, they cannot trust that the United States is going to stand by Ukraine for one day longer. And so I think the Europeans' feet really is to the fire right now to either put up or shut up

when it comes to backing Ukraine both economically and militarily. Is there a, I mean, these are all theories and maybe speculation again at this point, because we don't know exactly what the president is thinking. But how much of that theater that you alluded to is going to be meant to lay the groundwork for just how he will treat pretty much every, what seems to be, no more multilateral deals, but bilateral deals on individual bases with individual parties. And they're going to use this as a precedent center for how negotiations will proceed, economically or otherwise, militarily, anything like that. Is that a fair assessment in your mind? I do think so. And I think one thing that's important, though, to pull out here, Dom, though, is we have seen Trump so far in his month back in the White House be very aggressive in terms of bullying countries when they're not doing what he wants. Let's look, though, at who the targets have been. It's been Ukraine, which is a country that's been under, you know, being invaded for the last three years. It's been Colombia. It's been Canada. It's been Mexico. The countries you haven't seen kind of get this treatment by Trump are. Russia or China. It's other sort of big powers, you know, countries that you traditionally

view as America's adversaries. And so I do think we have to start asking ourselves, is Trump really trying to do a fundamental realignment in U.S. foreign policy in which he's trying to get the U.S. on the side of the Chinas and Russia's in the world in opposition to the Ukraines, the Europeans, the Europe's, and even the Canada's and Mexico's. So, Edward, you know, you watch this play out now, and the market's trying to think through sort of the real politic of What is the real policy? What are the takeaways into the weekend from this? And again, I don't even mean, you know, how Europe thinks about, you know, it's a lot. I mean like very pragmatically speaking. Yeah. Look, I think that there's a real significant chance that Trump will go for what Putin has been

trying to do. So Putin's strategy for the last several weeks has been to persuade Trump that the U.S. and Russia should cut a bilateral deal that basically sidelines the Ukraine issue, normalizes U.S.-Russian relations and potentially lifts American sanctions on Russia without even taking into account the war in Ukraine. After today's meeting, I think the odds of that have gone up. So what does that mean for the markets? It means that crude oil could potentially start coming onto the market from Russia. It means that you could see more exports of liquefied natural gas from Russia. That will have a bearish perspective on prices. I think that, in a kind of an ironic way will hurt Trump's goal, his stated goal of American energy dominance, which is

to have American shale producers really be the dominant players in the world. I think if you're seeing the markets being flooded with Russian oil and natural gas, in some ways that could actually undercut Trump's American energy dominance goal. But, okay, Edward, just to kind of put one point on that, yes, it may work against that particular aspect of the administration's perceived policies. At the same time, it does lower the price of commodities oil specifically. It helps bring down inflation. That could be something as well. And the other thing, too, that we're not noticing right now is, I mean, we are seeing dollar strength on this. I mean, there's maybe a flight to safety aspect of this. We're also saying,

by the way, U.S. government bond prices on the rise, which means the 10-year no yield is now below four and a quarter percent at this point. So yields are going lower. So how does that reconcile it, you can't reconcile it because there are so many opposing forces, right, and interests, even from within this administration about what they want. I agree. Look, I think one of the more interesting findings I had when I was writing my book, choke points, is, you know, back in 2022, when the U.S. imposed sanctions on the central bank of Russia, there was predictions at the time that this was going to kill the dollar. Basically, it was the end of the dollar's role as the world's reserve currency.

But now, if you fast forward three years, the dollar looks stronger than ever. And in fact, the dollar's usage as an international payments currency has shot up since 2022. I think the reason for that, Dom, is because the Biden administration back then worked in concert with the issuers of the other reserve currencies, you know, the euro, the pound, and the end. There was a coalition of the G7 that went ahead with this action. I think what Trump is doing in terms of just unilaterally using his sort of cudgel, whether it be the dollar or the U.S. consumer market through tariffs, I think what you could

see maybe in the short term, I agree, maybe some dollar. dollar strength, flight to safety. But in the long term, what that does is it injects this geopolitical risk into the dollar that I think potentially could wind up leading to the dollar being undermined in the long run. All right. That's a lot to unpack for sure. Edward Fishman, senior fellow at the Atlantic Council. Thank you very much. I'm sure we'll be seeing you again soon. Yeah, great to be here. Thank you. The U.S. and Ukraine, we're supposed to sign a deal on critical minerals today. Ukraine, we're told, holds deposits of 22 out of 34 minerals that are classified as critical. But many of them are in areas currently controlled by Russia.

Many of these minds have never been built. Many of these investigations haven't been updated in a while. Let's bring in our own Brian Sullivan for some fact and fiction on this, Brian. And to react to everything that's just taken place, it's good to see you. Yeah, it's supposed to be off today, but a little too much going on to be off. And to be perfectly blunt, a lot of miss and disinformation going out there in the media that needs to be maybe corrected or at least cleared up. Okay, so I'm just going to go and you guys can interrupt me and we'll talk more about this.

Number one, you hear a lot about this term rare earth minerals, rare earth. Ukraine has rare earth and people say they don't have rare earths. They're both correct. But the reality is if you're factoring in what they technically call a rare earth mineral, that's only 17 different chemical elements that you remember maybe from high school chemistry class. Ukraine does not have a lot of the technical rare earth. those 17 specific praesiodymium, neodymium, et cetera, minerals. There is not a lot of that, not a lot of dollar value,

and to be perfectly blunt, a lot of the media, and even maybe the White House, is using that term incorrectly. What Ukraine does have, guys, a lot of, are other minerals that are critical. They're not, quote, rare earths, but they're critical for things that we need for the future. Ukraine, very heavy with about 500,000 metric tons of estimated reserves of lithium, of titanium, of graphite, of cobalt. All of those things, guys, go into batteries, into magnets, into defense

characteristics, and I would say the total value of all of those minerals, even iron ore and coal, those are hardly rare earth, guys, the value of those has been estimated at 14, to $26 trillion with a T. So the rare earth part, there's not a lot there. But the White House and other parts of the media have used that incorrectly. But in terms of just raw mineral wealth, and I think Trump used the term raw minerals today,

if my ears did not see me, there is a lot there. And that's what the deal was supposed to be about a lot. And by the way, I want to say something to Ed Fish, but I don't know if he's still there. Russia had record LNG exports last year of 33.6 million tons. That's a record. Russia is already selling a ton of LNG around the world and a lot of oil on this ghost fleet, which we talked about two years ago.

What do you make, Brian, of the sell-off, the mild sell-off in WTI? It's not like we're down 5%, you know, LNG. Again, mild declines across the energy complex. There is absolutely no indication that the sanctions on Russia's, are reducing Russia's ability to sell oil around the world. Because as we reported two years ago, we even gave you the names of the ships, Russia bought a bunch of old super tankers that they're able to get around the sanctions on insurance on and thus transport oil from Vladivostok or wherever to India, China, and Malaysia, some

of the other big buyers of Russian oil. I could even argue that might be keeping the price of oil lower because they're selling just as much oil as they were before guys, but they have to do it cheaper because they basically got it's illegal oil in some weird way, not everywhere, but to us it is. And so if you're going to sell something like that, you might actually have to offer it at a little bit of a discount. Anyway, a lot of mis and disinformation that's been out there, not so much on CNBC, thankfully, but I just wanted to jump on to try to. to correct some of that information. Ukraine is very, very mineral rich. The problem is it's in a lot of areas that are either controlled by Russia, are in Russia fighting areas, or are just expensive to get out. The U.S., by the way, has plenty of lithium. We used to be the biggest lithium producer in the world until it had no value. Now with batteries, it has value again. Yeah. Bray, you look great. You look

like you've been on vacation. I wish. And my thanks to the doctors at Mountie, Sionai for patching me up so quickly. Indeed. And thank you for joining us so quickly as well. Brian Sullivan. Amon Jabbers is down at the White House with more on this breaking story for us. Amen? Kelly, that's right. I can tell you, I just talked to the White House official behind the scenes here and got a little bit of the detail of what happened after that on-camera piece that we saw in the Oval Office where the situation blew up between the President of the United States and the President of Ukraine.

What I'm told by this White House official is that President Zelensky left the Oval Office immediately after that blowup that we just saw on tape, went into a holding room in the West Wing. That's the typical protocol for how these things are done. It's called a reset after they do that and then before the scheduled news conference. While Zelensky was in that holding room during the normal process, the world saw that post on truth social from President Trump saying that Zelensky is invited back if he's ready for peace. After that, that's what I'm told that Michael Walsh, the National Security Advisor and Secretary of State Marco Rubio, went into the hold room with Zelensky to tell him that the afternoon was now over and that he needed to leave the White House. That was the end of the day as far as the White House was concerned. We don't know exactly what was said or how that was conveyed, but we know that it was the National Security Advisor Walson, the Secretary of State Rubio,

who spoke directly to Zelensky in that hold room, and then we saw Zelensky leaving the White House in that very rushed exit that we saw play out on live television. I can also tell you that the White House official was asked by reporters whether or not this was a setup today, whether or not the president and the vice president went into this determined to provoke Zelensky to provoke an incident in order to break up this relationship. White House official said that's absolutely not the case. And in fact, that President Trump went into today determined to come out

with a peace deal. Now we don't have a peace deal. We don't have a minerals deal. We don't have much of a relationship between the United States and Ukraine. But that's a little bit of the color behind the scenes of how things unfolded after that live television peace, Kelly. Amen, for those who saw the clip, so Secretary of State Rubio was sitting to Vance's left during this entire exchange, never said a word of, did not say anything. So what did he then say and do afterwards? Well, what we're told is that after the press was let out, the way these things work in the Oval Office is the president speaks until the president is done speaking, however long he wants to do that, and then says, thank you. And that's when you generally hear the White House press aid saying, thank you, press, thank you, press, and pushing everybody out the door. The press goes out to the colonnade, which is just outside the Oval Office, facing the Rose Garden. And then those people who are left in the room, generally the protocol is that the foreign head of state will be brought to a holding room inside the West Wing. That's what happened here after that.

We don't know what was said in the Oval Office after the press left, but Zillinsky went to that holding room to do what they call a reset, which is just the standard way these things are done. It was during the time that Zolinski was in that hold room that the president posted. excuse me, his message on truth social, and that's when Waltz and Rubio went into the hold room to tell Zelensky that his visit to the White House was now over. The White House aides are describing this as the president having kicked Zelensky out. I'm not getting any indication, excuse me, I'm not getting any indication that President Trump and President Zelensky spoke or that President Trump specifically eyeball-to-eyeball kicked Zelensky out. It's more of the case that he issued this statement and then his aides went to tell Zelensky what was going to happen for the rest of the day.

All right, Amon Jabbers. We're going to let you take a break, catch your breath, get a cup of coffee, clear that throat, and then we'll see you in a few minutes here. All right. Thanks very much, Amen, for that. Now, let's turn to how markets are reacting to the White House fireworks. And for that, we bring in Bob Pisani, who's got the details, the tail of the tape. I mean, if you just put up the intradate chart of the S&P, the Dow, the NASDAQ, it doesn't

matter, you kind of get an idea for what happened. But to me, Bob, and I'd be curious to get your thoughts here. To me, the interesting part about this is just how tempered the reaction has been so far. Well, there has been a lot of issues with the market. And what we have now today is a new one, which you might call international headline risk on top of Washington policy risk in general. So you're looking at the S&P. And Dom's right, we dropped about 40 points. and then largely recovered much of it immediately after.

It was sort of like the market was, thank goodness, this is over, and it started rising again. And as you can see, it's been sideways to slightly down since recovering a little bit. Let me show you some of the industries here. And Dom is right. It's not a dramatic reaction, but some of the big global industrials generally were weaker on this and haven't really recovered much. I'm talking about deer-eaten, Illinois Toolworks, for example. example. Several sectors dropped and then started recovering very, very quickly. So the banks, JP Morgan put up JP Morgan, dropped about $2. And then you see recovered here fairly quickly,

but still down on the day. Most tech was like that. Very short, sharp drops and recovered. There's a little bit. There's Nvidia, which recovered a bit and then sort of moving down a little bit here. Stuff that hold up pretty well and didn't really move much were defensive stocks, consumer staples, for example, Walmart, Costco, Kroger generally held up pretty well. I wouldn't expect a lot of movement there on an international headline risk. One sector that held up very well were energy stocks. So, you know, your Conoco, your slumbergets, all held up very well. Oil was all over the place. It dropped, then it rallied, and it dropped again. It was around $70 throughout the and you heard Brian discoursing on what's going on with the oil issues. So if you look at the market

issues right now, this is a really complicated stew of issues. So let's just call this broadly Washington headline risk. And remember, we had other kinds of Washington headline risk. We had Doge. We had budget issues. And now we have a new Washington headline risk. We sort of have international headline risk. So those are like separate issues there. We also, of course, have the old one tariff risk. Canada, Mexico. tax go tariffs in a few days, new China tariffs. We have inflation fed rate cuts. We heard today, PCE was roughly in line, probably one to two rate cuts. That's a little bit of a relief. So that's fading a little bit as an issue. Broader issues, the growth slowdowns that

we're talking about today. And we've had a few weak economic numbers today, spending today. Numbers were on the weak side. Finally, we have these high valuation. So the question is, what can push the market up? Right now, it's tough. all of this complicated stew of issues that are dealing with. So Domney Kelly, what I see here is looking at volumes. And I would say the volumes are slightly elevated, but not dramatically so. So what happens here is you get kind of policy fatigue

where investors can't figure out exactly what's going on. They're not going to sell dramatically, but they're just going to move to the sidelines. And that's, we used to call this buyer strike, where you're simply not getting a lot of people interested in buying into the market, but you're also not getting really, really heavy selling, like really notable selling. And the market just kind of droops there because there's not

enough sellers, excuse me, not enough buyers expressing interest in buying into this. So it's the complicated stew of issues that make it very, very difficult for people to figure out what the short-term direction of the market's going to be. And that's why you see people sort of move aside of it. Guys? All right, Bob, thanks. Bob Bassani, look at that 10-year. 422. That's how bonds are responding. But that was even before this afternoon's event. In fact, yields have fallen dramatically, get you details after this quick break. Welcome back. Bog yields are a major story today, and I don't think we can blame what happened in the Oval

Office for this one that might have contributed on the margin. Rick Santelli is out in Chicago with more for us. Rick, let's hear it. Yeah, you know, I don't know that I could pick out, and I want viewers to pay close attention to the charts. We're going to look at an intraday of a short maturity, then open it up to the week. Then we'll do it for a 10-year, open it up for the week. And I see patterns here that.

I can't pick out some of the wild activity that we saw coming out from the White House today. Now, that doesn't dismiss the notion that the real catalyst, in my opinion, of everything we're seeing, and by the way, remember, we settled at 420 in a two year last week. We're at 399. We're down 21 basis points. We settled at 443 in a 10 year, and we're basically at 423. We're down 20 basis points in a 10 year. The driving force has been the volatility.

the anxiety, trying to figure out the uncertainty in the equity markets. And, you know, we live in a time where I think some investors and some economists and analysts think, you know, that we need to remove uncertainty that, you know, trading in the market should be just something where you put your money in, you get 15 percent, and you shouldn't have any aggravation at all. That's not really the world of equities. And when I see interest rates do this at a day where the big story is inflation, it was as expected. Certainly, it was. was and as expected is nowhere near the zip code of 2% of the Fed's inflation target. Now maybe one metric got a little closer but another metric got a little farther away. And when I looked

at inventories today, it was so peculiar. Retail inventories down to 10th, wholesale inventories flying shows that stockpiling may be going on. There's a lot of moving parts here. But ultimately whether what's going on in the White House or how the markets are reacting, it really brings this whole question of, you know, the world of the 1940s and when the UN was formed and all the issues that be brought out about conventional wisdom of relationships and countries, nothing's the same as the 1940s. Things change. This whole administration is disruption and change. And yes, it's very painful if you want to be led by the nose by the central bank and tell where everything's going to go and invest and expect double-digit returns every year.

That's not the way the financial world works. And I think some of the comments out of the Federal Reserve the last three or four weeks, they're worried about the unknown in the past. They were not very predictable and accurate in the unknown in the rearview mirror. So to me, nothing has really changed. The story continues to be. Is the economy slowing enough? Are the nervous tensions in the equity is going to last a long time?

And I think the answer to many of these questions is we're going to find out, Wednesday and next Friday that the labor market might not be at its peak, but it certainly doesn't feel like it's falling apart. The economy certainly doesn't feel like it's falling apart. And when incomes up nine-tenths and spending's down two-tenths and the savings rate goes up, that's just bullets for the next war of retail and wholesale activity by the consumer. Dom, back to you. All right. Rick Santelli, you know, it's always psychological to see a two-year note yield below 4% right now on a three-handle. Anyway, thank you very much, Rick, for that. After the break, Ukrainian President Vladimir Zelenskyy finally speaking out.

We've got the details coming up next. All right, welcome back to Power Lunch. Following that heated exchange in the White House earlier this afternoon, President Vladimir Zelensky is posting now on X, quote, thank you America, thank you for your support, thank you for this visit, thank you at POTUS, Congress, and the American people. Ukraine needs just and lasting peace, and we are working exactly for that, end quote. Joining us now for more on this is Victoria Coates, the vice president of national security and foreign policy at the Heritage Foundation and a former national security advisor to President Trump. This will be great, Victoria, to get your thoughts on this, because we all want to kind of know the thinking behind this.

And of course, we heard very, very pronounced comments from Vice President J.D. Vance about not hearing a thank you from Zelensky at all during that meeting. This seems like a direct and somewhat proportional response to that particular question from Vance. Well, it does. And good to be with you both. I think that what you saw it of both President Trump and the vice president this afternoon was a pretty natural response to, what seemed like a pretty ungrateful president of Ukraine arriving to continue negotiations on something they thought was wrapped up, the mineral rights deal, that was supposed to be finalized last night. So I think, you know, they responded, you know, to what was kind of a misread of the room by President Zelensky with, you know, with a pretty tough love. And, you know, it's very different than what President Zelensky has received from Washington over the course of the three years of the war. so he can be forgiven for perhaps being a little bit surprised.

But this is what President Trump campaigned on. So I think, you know, this is, you know, an unfortunate diplomatic incident, but very much in character with what President Trump has been saying on Ukraine. Victoria, just tell us what you think the next steps are. You know, we've spoken a lot with Amin Javers, with Edward Fishman, about just where we think the timeline is or what it looks like for us to determine. whether there's progress being made or a lack thereof. What exactly do you think is going to be that next step for the administration and or President Zelensky and his team about getting back to the negotiating table? Well, President Trump opened the door to that an hour so ago when he put his truth social post up,

saying that, you know, President Zelensky was welcome back when he's ready to talk. But as I said, I mean, this was really a central piece of President Trump's campaign, that he was going to end the war, end the killing, get to a deal. He has communicated that clearly to President Zelensky in their previous engagements. And I think that's what the American people elected him to do. Nobody who gave him the mandate voted for an extension or an expansion of the Ukraine war. So, you know, that is where we have to get. And hopefully, at least the end of President Zelensky's ex post indicates that he's going to work toward that.

I'd get back to that mineral rights deal. That was a good deal for both the United States and Ukraine. It would have increased mutual prosperity and increased Ukrainian security by getting American interests on the ground in the country. So I would go back to that as a point of mutual agreement, see if we can get a deal there and then build it out. Victoria, a good negotiation, they always say, ends with both sides or multiple sides, not being entirely happy with the outcome. in your mind, from a foreign policy perspective, what exactly does a good deal, so to speak, or a victory look like for Vladimir Zelensky, for Vladimir Putin, and for President Trump? What kind of a deal does get everybody to say, okay, you know what, I can live with it?

It's the principle of having everyone be equally unhappy, Dom. And so I think in this case, you know, the maximalist rhetoric, of the last three years, you know, that Ukraine was going to be restored to its 1992 borders and Putin would be decisively defeated probably hasn't been helpful. And the cutting off of any kind of discussions with Russia is also unhelpful. I mean, President Reagan didn't do that during the Cold War. And we certainly didn't do it during the first Trump term when we met regularly with Russian counterparts to have, you know, open lines of communication.

And we didn't have an invasion of Ukraine. So I do think, you know, what the key national security interests of the United States is is not having Putin do this again. It's expensive and disruptive and it gets way too close to NATO for our comfort levels. So deterring Putin has to be one thing and getting to a face-saving solution for him so that he is willing to accept whatever this deal is. And then maintaining Ukrainian sovereignty, I think from Zelensky's perspective. would be his top priorities. So hopefully we can within those parameters get to something acceptable, as President Trump has said, repeatedly end the killing. There have been hundreds of thousands of casualties here. It's been going on for three years. And I think most of the world

would very much like to see their BP's. That said, Victoria, just, you know, tell us how that happens without this being appeasement, essentially. Well, that's the thing. And that's why, Kelly, I said, you know, I really do like this mineral right still because it's something that would physically deter Putin. You know, attacking Ukraine is one thing. Attacking U.S. interests specifically is another. That is a potential massive escalation that he would have to deal with. And so these kinds of engagements are the sorts of things that could provide a material deterrent to additional aggression out of Putin. In addition, we could have much stronger actions out of our Europe. allies. I don't think it's enough for Prime Minister Starrmer to announce with great fanfare. He was going to

drag the United Kingdom to 2.5% of GDP on defense by 2027. That's not a deterrent to Putin. What he needs to see is a robust European investment in defenses. He should have seen it three years ago when they should have started this process instead of waiting to see if President Trump was going to be elected and they were going to have to do their homework. So I think that is the sort of thing that would bolster Ukrainian security deter Putin and take some burdens off the United States for European security, since we also have to look at the Middle East and Asia. All right. The next steps will be key here. Victoria Coates from Heritage. Thank you very much. Have a nice weekend. All right. We're going to dig a little deeper into the market view on all of this and more coming up after the break. Keep it right here. Welcome back to Power Lunch. I'm Sima Modi with your CNBC News.

update. Accused Mexican cartel leader Rafael Caro Cantaro pleading not guilty this afternoon in a New York federal court just hours after he was extradited to the U.S. He is facing trafficking charges that could trigger a death sentence. He is one of 29 cartel members Mexico sent to the U.S. as Mexico seeks to head off Trump administration tariffs over the flow of fentanyl into the U.S. The Vatican said this afternoon the Pope had an isolated breathing crisis in the hospital where he has spent the last two weeks receiving treatment for double pneumonia. According to the statement, he received a non-invasive mechanical ventilation to help him breathe. And the next off-season version of HBO's Hard Knocks will reportedly feature Bill Belichick's

North Carolina program. According to a report from front office sports, no NFL teams agreed to sign on to the show. Belichick signed a five-year contract in December to coach Satar Heels. It will be his first appearance on Hard Knocks despite his acclaimed NFL coaching. career. Kelly, send it back to you. You know, there's one answer to who should be on hard knocks, and that's probably the one. They do a great job booking that. Seema, thanks. Let's check in on the reaction from markets this afternoon to the extraordinary events of the White House between Trump and Zelensky.

Let's bring in Chris Grosanti. He's the chief equity strategist at MIA capital management. Not to make you a geopolitical analyst, Chris, but obviously the market's got to think through what all this means now, as the Ukrainian president has left with no deal and Trump's told him to come back when he's ready to make to to to do peace yeah yeah yeah i think we're all geopolitical analysts at this point um and the other funny thing is is that usually i i like to say hey i've been around a long time i you know my experience in the 90s or even earlier than that tells me what to do here we've got no playbook we've never seen anything like this before we're hearing reporters have been covering the white house or 40 years saying they've never heard a conversation like that

between two world leaders in the white house before so the problem so the problem The problem when we get to the markets is that we have this uncertainty. And obviously, this is with Ukraine today, but it was with tariffs yesterday and it will certainly be with tariffs next week. And so uncertainty is bad for market multiples. And so I think you're seeing some of that. The MAG 7 now since mid-July of last year is now about flat. And you're seeing things start to struggle to make their way forward, even though the economy

remains pretty solid. So I think a lot of that is coming from the turmoil and volatility caused by the current administration. Yeah. So what do you do? You know, you always look for these kind of dislocations, areas of opportunity, Chris, places that people might be overly focused on, things they're overlooking. I mean, does this create anything like that for you? Or how do you just invest for the next couple of months knowing we're not going to know how this plays out? Sure. Sure. Well, we've been getting kind of more cautious really over the last six months. As you know, Kelly, we've talked about this. One of the things I like is that the volatility and especially the negativism in the health care sector has really hit those stocks hard. An election year usually does it, and this one was much worse. So we find a lot of value there because folks just don't want to go there. They want to go to technology. So that's one way to take care of what's happening in the administration, causing market dislocation.

And in this case, we think that that's overdone. That would be an example. So I would, exactly what you're saying, I would emphasize there are opportunities with capital moving around so quickly to find dislocations. So those dislocations, Chris, what's interesting is we've been showing our viewers and, you know, listeners out there. We've been showing these U.S. dollar strength charts, you know, for the better part of the last couple of hours or so. You know, in the past, dollar strength to the degree that we're seeing has always been that quote unquote headwind for large multinational companies. I wonder in the coming quarters, do you feel as though those large-cap multinationals face market headwinds because of the rising U.S. dollar, because of the geopolitical state of play? Or do you think that this is something that we can shake off and move around because the capital is flowing so freely around the globe right now?

Dom, it's good to see again, though. What I would say about this is I think when everybody agrees that the dollars headed higher, the dollar's about peaked. And I do think in a contrarian way, we're starting to see emerging markets improve versus the United States. We're starting to see Europe improve versus the United States. I'm just talking about stock markets now. And what I also think will shift to a tailwind for these multinationals is a kind of peaking dollar. I don't think the dollar will meet the expectations that most investors have written. So what I, okay, we always like Chris to check it on your most contrarian ideas.

Are there any others that come to mind right now? Well, if you want to talk specific stocks, Kell, I really like the United Healthcare set up. There are so many negatives. Talk about headwinds, Dom. I mean, I can count about five of them. We don't really have the time. But I think they have all pushed United Health Group to a decade low valuation versus the market. And it's the most exciting kind of contrarian pick I've had in quite a while, Kelly, probably since Verizon of a couple of years ago. Well, that said, we've heard a surprising, all right, two or three. other people come out and say it's their favorite pick right now, too. In fact, health care, as you know, is hardly contrarian. It's really become the play this year, right? Health care, the defensive

areas. Energy. Energy. Energy, right. And value as a whole. People say, oh, are we really turning towards value now? And I would point out since July, you know, for the last seven months, it's been a value market. The value index has beaten the S&P by double since the middle of July. So, and the good news for value investors is this doesn't usually last for a quarter or two. Usually last two to three years. And we've taken it on the chin for the last couple of years, and I'm waiting to enjoy the show coming up. So that would be good. All right. Chris, thank you.

We appreciate it today. Chris Christi. Have a great weekend with MAI Capital Management. That collapse in discussions at the White House has some big ramifications for the energy space, potentially. We'll dive into it next. Welcome back to Power Lunch Markets are continuing. to digest that extraordinary meeting at the White House today between Trump and Zelensky. Stocks have now turned higher solidly after the initial shock. Oil, though, is still lower down

right around 1% or so. John Kilduff is here, the founder of Again Capital. He's also a C. and BC contributor to help us break down that oil trade. You know, we heard earlier from Brian Sullivan and maybe this notion that oil could come back online if a deal were hypothetically struck, what exactly is the ramification of this meeting on energy markets? I think the ramification for this meeting on energy markets, Tom, is that clearly that President Trump is favoring Russia over Ukraine. That signals to the oil market that, in fact, Russian crude oil and, and more importantly, Russian refined products, and potentially for Europe, Russian natural gas gets back to the world markets, and that's been pressing prices lower.

Russia very much wants to be back in. They've been among the OPEC Raqalcitrants who routinely pushed for higher production levels from the group, wanting to compete on market share. So, you know, all of this Ukraine's strife in the energy market translates into a sort of a pro-Russia position, which then the follow-on is that there's more supply to the global energy markets. John, I'm a consumer. I still have an internal combustion engine car. This is good for me if oil falls and gasoline prices go lower. It helps the general inflation narrative. But it also dents the idea that the U.S. can kind of progress even higher with world hydrocarbon energy dominance. So how do we kind of reconcile those two points together? You really can't. They are at odds. The mass of Russian production has a lower. cost basis, break-even basis than are much of our U.S. shale producers, which are the crux of our energy dominance and our energy exports. Also, too, if the Russian supplies to Europe were to come

back online via the Nord Stream pipeline and other distribution networks, that would hurt, that would push down the price in Europe and would make LNG exports and LNG destinations deliveries there, unaffordable or uncompetitive, I guess, is the better word. I'm sorry. So all of this really does undercut this U.S. position if Russia is brought back into the fold, which from what we're hearing seems to be the game plan here. So those two contentions are, in fact, at odds. A huge part of this. Just story for the markets and energy has. has been this idea that there's going to be more investment in U.S. energy infrastructure, not just for the exploration and production of those fossil fuels, but also for the exporting of it,

whether it be crude or refined product or liquefied natural gas. What exactly then does that setup look like for, say, U.S. companies who are looking to spend capital-wise on building out infrastructure and capacity to export energy, is it still going to be worth it? And if not, how exactly do investors handicap what kinds of energy companies stand to relatively benefit? Well, in terms of investing in them, if the commodity price goes down, I don't care how well run the company is, be it Exxon Mobil, Chevron, the ones we like the best, they're going to get hurt. The stock price is going to get hurt because their returns are going to get hurt. In terms of this volatility, in terms of the potential for an overhang of supply from, say,

Russia to come back to the market in a fairly rapid fashion, it undermines, confidence in these companies' abilities to forecast and in fact bring these projects to market. I can tell you, this break of WTI below 70 is causing some nervousness already in the patch as to where the next stop lower is and where we're going from here, which looks to be lower. So this will chill potentially further investments in infrastructure and exports because what are you exporting into? And I'll also warn as well, I've seen this. before. The LNG story is one that's gotten currency in every single natural gas producing country

out there. Qatar, Australia, other places that want a piece of the pie. And they're coming for it. And usually that translates into a bust period in terms of prices, at least for a time, Dom. So that's the other concern in this market. The volatility, the uncertainty, and what's real is potential of overhang of supply that's out there hitting this market. John, I sort of watch this and go, okay, you know, on a potential deal between Russia and Ukraine, things move lower. Maybe that's now it's moving lower anyway, but then tariffs seem to push oil higher. Can you just elaborate on that quickly?

Yeah, I kind of joke lately. The inputs into the oil price these days are coming at us like haymakers. These are big punches that this market has to absorb. Just like you said, the tariffs do. chill the demand outlook. But when you have the president then clamping down on Chevron's ability to deal with Venezuela, as he just did, that bumps prices higher. To the extent it's drill, baby drill, prices lower. To the extensive sanctions, baby sanctions, prices higher. We recently clamped down further and they want a zero Adirans exports, for example. That is an underpin to the price

in the market. So these are huge inputs to the price almost on a daily, if not hourly basis anymore. Thanks. Thanks for joining us today. We appreciate it. John killed up with again capital. So again, we're seeing below $70 for U.S. Benchfark crude prices for the sixth straight week. We're down. Longest weekly losing streak in more than a year. So keep it out on that. That is to head towards the closing bell. Don, thanks for joining us today. And we'll do Rare Disease Day on another day. Closing bell starts right now.