Power Lunch - Tackling Financial Literacy & Tariff Impact on Consumers 4/25/25

Episode Date: April 25, 2025

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Markets and your money looking to end a big week with more big gains. This even with a he said, she said. That's good. You like that? On tariff negotiations between the U.S. and China, welcome to power lunch. Happy Friday, everybody alongside Kelly. Hi, I am Brian. And right now, stocks will be for a brief moment.

We're higher after what Brian just referenced, the president making some more comments on Air Force One, saying he expects tariffs to be reasonable. Those gains were short-lived, though, for the Dow I'm talking about as the barometer. Because why not? It's down 179 points now. though, are about a quarter, half a percent. The S&P is still up a quarter percent, and the NASDAQ is up two-thirds of one percent, and six percent for the week, nearly. So take a look at these stats, S&P up four percent since Monday, Dow up two. That said, they're all down

for the month of April, with only three trading days left. And Tesla is helping to boost the NASDAQ. Those shares are up 9 percent today and nearly 30 percent this week. Federal government could be clearing the way for driverless cars. We were just talking about that. Alphabet also up about 1%, 1.5% after earnings. Off the highs, search was stronger than feared, despite AI competition. And Apple is fractionally lower on news. It's reportedly going to make most of its US iPhones in India now instead of China. Oh, and by the way, thank you to Gina and Chris Hayes and our entire data team, because they just ping me. This is the second best week of the year. Best week was the week of April 11th. The NASDAQ up 7.3%.

Not the best day today, but overall, second best week of the year. Tells you what a bad year it's been. Well, that's true. But we'll take it. And we'll take it. And by the way, we'll take them making us look smarter. So thank you. And Kelly, check out this.

The unusual Wales subversive democratic trading ETF. It's a thing. The ticker is N-A-NC, Nance. Its mission is to buy what Democratic members of Congress are buying based on their disclosures. Now, why are we showing you this? because President Trump this week said he would sign a bill to ban stock trading by Congress, both parties, it doesn't matter, if such a bill made it to his desk. In other words, could you follow what the Pelosi's, the Gothheimers, the Tubervilles, the whatever of Congress are doing?

One of the few arguments you could make for even having that be the status quo is so that you can have the transparency here of what their holdings are. But I think by and large the public has moved against that. want to see something happen. Is that unusual whales like the social media account? I believe so. All right. Good to know. By the way, I've never seen a whale that's usual. I mean, if I see a whale, it's, that's very unusual. Well, I was just going to say also that ETF is up less than 10% over the past 52 weeks. So I don't even know if that's outperformance, but nevertheless. Mildly outperformance, but like by 2% on the S&P 500.

Well, there you go. All right, folks, let's kind of broaden out and start with a big question for you and really the entire American economy. Are you, all of you out there, putting off a major purchase because of the tariffs? There is some indication. At least some of you may be doing that. New data from the University of Michigan shows that overall consumer sentiment is going down.

It's not good. But it's also not quite that simple about the economy. Another report, this one on durable goods, indicates that many people may be pulling forward some big ticket buys because they're nervous about where prices may go in the weeks and the months ahead. And while nobody out there has a magic eight ball

to see exactly where everything is going, banks have a pretty good early read on where things may be headed. And let's speak with a big one now. Joining us, Valley National Bank Chairman and CEO Ira Robbins, they trade under the ticker VLY, 62 billion in assets, thousands of teammates,

200 branches across the country and offices. So Ira, welcome. Thanks. Great to be here. You have a great read, particularly, on the mid-Atlantic, but a lot of GDP has produced in this region, by the way. Are your clients and your customers not borrowing money because they're afraid? So they're borrowing. Maybe just let me give us some backdrop to the type of clients we have,

and that's a little bit different than I think than what you're maybe hearing from some of the other individuals that have been talking on TV recently. We hear about large corporations that are publicly traded, right? Their time horizons as to how their CEOs think about their businesses are six to 18 months. The clients I talk to are largely generational families, small, mid-sized entrepreneurs. Their time horizon is much longer. If you ask me, are they buying? The answer is yes.

Is there chaos in the industry as to their concern without question? But they are still moving forward on a lot of their purchases, and there is a little bit of noise without question, but the economy in their mind is still strong. What's so contrarian about that is that we're told, if this is how big business is doing, imagine how much worse it must be for small business. doesn't have the resources that they do and they're facing all this uncertainty. But you're telling us, and again, maybe it's the kind of customers you interface with, but you're telling us almost the opposite.

I would say maybe there's an Ontario motive. I was in Alabama last week, which we have a very large client base there, logistic companies, trailer companies, 80% of the table of dinner I sat with, positive about what was going to happen. A little bit negative on the short-term instances, but from a long-term perspective, very, very positive about where they- That's funny because I actually talked to a guy yesterday who works for a New Jersey company, that's building a giant warehouse in Alabama.

Randomly. They're not stopping. No. They're still building the warehouse, which means you're still going to hire people to work in the warehouse. You know, there's this old Yiddish saying, right? We make plans and God laughs.

Right. And I think large corporations don't adjust to that too well. Smaller corporations, entrepreneurs, they adjust to that. They're more resilient, I think, as how they think about their individual businesses. I was talking to some real estate developers last week, commentary surrounding,

are we looking at doing something? now or are we slowing back? They sat there and said, we went through COVID, slowed down. Went through rise in interest rates, slow down. We're not slowing down now. Steal some of the other attributes, maybe 5% of the overall cost. The larger cost are interest rates, larger costs are employees. Those are more level and more common in their mind. So they're moving forward. And when they come to you, it sounds like you're not being conservative either, because they could easily come and say, we want to see through this and you could say, well, we don't. But it sounds like you're still willing to extend that capital? I think we are banks in general. You look at the

commercial real estate as, which has been under fire for the last 18 months. I mean, there's been a laser being focused right on it. Credit spreads have come down 70, 80 basis points from where they were a year ago. There is a lot of liquidity coming back to the market and supporting capital investment today. What does that mean in sort of, for the non-bond investor commercial real estate expert out there, where you just said that we saw the spreads widen or narrow. What does that mean in plain English? I think it means from a liquidity perspective, do developers, do people thinking about refinancing the business, are there places for them to be today to refinance? The answer is without question, yes. 18 months ago, you had to rethink where I was going to get

capital from for a new product. So that's critical. So we've talked a lot about this and sort of waiting for the commercial real estate doom that's never come. Right. Okay. So let's say you got a, you got a three-story pretty big office building in Morristown, New Jersey, kind of near where you are, just randomly throwing that up there. $100 million building, whatever it is, coming up for refinancing. The owner of that building, you're saying right now could get refinanced. They could stay. Without question.

And a year and a half ago, he or she would have had to contemplating putting capital in, right, if they were looking at refinancing to a lower rate or whatever to make the economics work. Today, they don't have to worry about putting capital in. They can get the economics work out of it. And then they can go ahead and look at what they're doing with their next project. It is a very different dynamic today than what it was 18 months ago. And how is that possible, right? So do you feel competitive pressure from private credit that like if you don't do these projects or extend that capital, that they'll step up and do the same thing?

Because you'd think just obviously speaking, risk assets are down, like you said, spreads are wider. The economy, the outlook is uncertain. So aren't banks supposed to kind of like pull back and just kind of be on the sidelines, wait and see? Or maybe you've never felt that pressure? No, I think we definitely felt that pressure, right? And I think we have the most unbelievable economy in the United States because we have so many different. diverse contributors of where capital comes from, whether it's banks, whether it's private credit, there's a multitude of different places.

18 months ago, private credit absolutely stepped in where there was a bank void. That said today, banks are able to be back in the marketplace. There's less regulatory scrutiny associated with what's happening in the commercial real estate. As you alluded to, those losses largely never materialized. I've been CEO for seven years. The cumulative losses at our bank over a seven-year period are 89 basis points. Wow. Over seven years.

Cumulative. Yeah. Yet we have a riskier asset class. People were modeling 8 to 9 basis points for commercial real estate just for one year. We're talking seven years. Those losses haven't materialized and there's capital that's now available to borrowers today. I don't know what we do with IRA here because with all due respect to anybody else. When I read the paper or watch or listen to other things, all I hear is we're doomed.

Well, and by the way, the beige book from the Federal Reserve, reserve itself was not all that upbeat this week either. So we have all of this. It was, what do we call it, a darker shade of page? You know, so we have all these conflicting data points where we say, I don't know, maybe Ira's just good at what he does. I don't know. Like, what exactly is that.

You understand what we're getting at here, right? I can flip through the channels and I'm not knocking any of my colleagues or competitors or friends or whatever, and it's doom, doom, doom, doom, doom, we're doomed, we're doomed, why we're doomed. Every story is why we're more doomed than the last story. And I'm just trying, and we're talking to you, you're on the front line of this stuff, And at least right now, and maybe this changes, Ira, you're saying, I think what I'm hearing is we're not doomed. Are there conversations?

Absolutely. Is there a perception concern? Absolutely. Do I see behavior changing? Not that dramatically to this point. Now, that does not mean three months from now, four months from now, something's going to change and behavior does change. But right now, absolutely a lot of noise, a lot of rhetoric. I have not seen the behavior change to this point in the clients that I've spoken to.

Well, I'm glad you were here today to enlighten us. That's interesting. It is very interesting, yeah. Because my wife and I were undergoing a major project. Now I'm blessed to be in a position where I can do it. Okay, I totally accept and respect that. But we're not stopping this home project because I'm annoyed. I'm going to buy stuff in advance.

Right. Stored in my garage. But at the same time, because I'm worried it might go up in price, but I'm not stopping. So you're not seeing, I want to be clear. You're not seeing right now. And this could change tomorrow. major projects stop. We have a 2,000 auto dealers across the country that we deal with.

I was in the phone with a few of them earlier. You're talking between 10 to 20% increases in March activity because people were concerned about it. So you've seen pre-purchases. Now over a period of time, when you look at GDP and what that does, it's gonna level off, right? Until there's significant changes four or five months from now. But right now, no one's concerned.

Or to your point, it's even helped some activities. It's accelerated and moved to the future. things forward. We're not going to get GDP numbers or any kind of economics that show what really happened until third quarter. If that's the case, there's going to be another conversation we're talking about with the administration. Yeah. Interesting. And kind of a nice, optimistic way to end the week. We don't know what tomorrow's going to bring, but right now, the sun's out, been a good week for the market. And this guy's celebrating. Kelly's smiling. You're smiling. This is a smile for me. It looks it. Ira, thank you. Thank you.

Always good to see you. Ira Robbins, Valley Bank. Let's turn to the bond market now where the 10-year yield feels better, too. Rick Santelli is joining us from Chicago. Rick? Yes, not only the 10-year, but two-year. The whole curve, let's look at yields, shall we? If you look at a two-day chart of twos and tens, put them on the same chart. You can see we're below yesterday's low yields.

If you look at the week in twos and tens, we're basically down about the exact same amount on the day as on the week, because prices last Thursday, yields last Thursday. We're about where they are yesterday on the close. We're down a handful of basis points in each. Certainly doesn't sound too aggressive, and especially when you look at some of the ranges we've had the last several plus weeks. And that dollar index, it is hanging on by a thread right now

for its first weekly gain in five weeks. The last guest was a bit optimistic. I don't know. You know the guests that I look at to see if there's optimism or pessimism? It's called the markets, whether it's the Dow, the NASDAQ, treasuries, and to see yields cross-fertilizing some green equities, makes me a bit positive. In terms of the data, take University of Michigan today. It wasn't terrific, a slight improvement on the confidence.

The inflation numbers were still very high. The market looked right past it. That should tell us something. Kelly, back to you and have a good weekend. You too, Rick. Thanks so much, Rick Santelli. After the break, what do markets want? Are investors just waiting to sell or desperate for any chance to jump in on the rally?

We'll discuss what they're waiting for next. Welcome back. Stocks are putting together a rally they're trying to into the weekend. But this morning, Wells Fargo's Chris Harvey warns the market still has a Trump collar around it as stocks hang on every utterance out of the White House. Joining us now to discuss his thoughts is George Cipollone. He's a portfolio manager at Penn Mutual Asset Management. George, it's good to see you. And we were just talking last hour, Steve Saznik,

and he's not convinced yet that these pullbacks are buying opportunities, actually, versus maybe selling moments to get out of the market. So how are you thinking about things? Well, first of all, great to be with you. And, yeah, I think this market is showing lots of divergences now. And I think typically when you go into earnings season, usually you have companies that do well, companies that do poorly. But now we have a third bucket.

And it's companies that can even give guidance or not give guidance. And so we saw Skechers today and we saw Carter's today with really bad guidance around tariffs and not being able to give it. And we saw that earlier this week with American Airlines, for example, and United Air giving dual guidance, which is really new for us today, right? So yeah, I think, so for us, we love volatility. We love to take a chance. And, you know, from an opportunistic standpoint, there will be winners and there will be losers through this period. It's not all a net negative unless, unless, of course, things go poorly with the whole tariff negotiations. So you love it because presumably you've got a list of companies where you're seeing the valuation,

kind of almost putting blinders on about the economic environment. Can you tell us what some of those names might be that you'd be picking up here or that you are? Sure. I wish we could. We don't give specific names, but I will say the word, you know, again, if you look at the company commentary and if you look at certain companies, as they reported, you know, some companies, well, one that we don't own, for example, Hasbro on the stock side, their margins actually expanded in a period where everybody thought toy makers were going to get smashed, right, because of tariffs. And so again, if you understand a company's strategy and if you can see and identify those margin opportunities, those margin expansion

opportunities, you can still find some ways to win. Again, that's what we're looking for from a bottom-up basis. We have great leadership at Penn Mutual Asset Management, and they're constantly encouraging us not to hide in the recession fears, but to actually go out and be opportunistic, which I think is the right thing to do. Did you hear our previous conversation? George, it's okay if you didn't. I'm just curious. I don't want to repeat it. Absolutely, Brian. Yeah, yeah, it was excellent. Well, I don't know, but Ira was a little more optimistic, right? And I know that's a lot of people are struggling. Jobs are hard to come by. By the way, costs have been up for years. Let's just be very, the burger that was 13 is now 18 and it might be going to 20. I don't know.

You don't have to be as bullish or whatever as Ira may have been, but are you seeing right now, George, a major change in your business? There's an old saying that we used to say with, you know, my old partners, and we used to say, it's not necessarily that you have to be bullish or bearish, but you have to be absolutely realistic, no matter what the period is. And I think we're trying to today. And I think one of the things that we're looking at, Brian, so we're down a path here that has some potential troubles associated with it.

I mean, if you listen to an economist like Thomas Al, for example, he said everything can go fine as long as there are known rules for these tariffs, which we don't have right now. So I think as we get the negotiations going, as we get some wins going, I think that's the most optimistic and positive path. The negative path is if we don't get those knowns and we don't get those rules for the economy, then money starts to freeze. And you mentioned about, you know, your house, for example, how you're buying early, companies are doing that today. And we're going to see a pretty big surge and maybe some inventory levels that have increased to prepare for this. Well, the last phase of this, and again, I don't think we need to guess the exact outcome. I think we need to be aware of all the possible outcomes. One possible outcome is money freezing.

And so we see that in the markets, right? We see that when the VIX spikes. We see that when the long end of the treasury curve goes up. And we see that when credit spreads go higher. So those are our indications from a market level what to watch out for underlying all of this. again, we're going to try to pick good companies that can withstand this period. Yeah, well, our guests are in a pretty good move this afternoon at least. George, appreciate you joining us and kind of giving a hint of what you guys are up to.

We appreciate it. Here, thank you. George Cipollone. All right, so exactly how do we know that tariffs have become kind of already rooted in the economy? Well, they made it to the ad waves. We'll explain coming up. All right, welcome back to Power Lunch Markets. but heading for our second best week of the year.

Well, as we just talked about it, it's not clear yet exactly what may happen, but certainly fears about the potential economic impact of tariffs are rippling through the economy. Tariffs on cars won't just hurt Ford and GM, but also maybe the advertising market, because, as we know, the car companies are big spenders on ads. Julia Borsden is looking at that side of the tariff story

and joins us now, Julia. you. Hey, Brian, that's right. It amid so much uncertainty, companies and sectors ranging from travel and beauty to mattresses to autos are all marketing to consumers to buy now before prices may increase. Now, automakers' new messaging is particularly visible if you've been watching TV because they're spending accounts for 7.6% of all U.S. ad dollars in its nearly 15% of all digital ad growth. Automakers are tweaking their strategy. and Hyundai are promoting that they've temporarily locked in prices, looking to reassure consumers. And Nissan is promoting short-term discounted prices while Ford and Stalantis ads are touting

their American heritage. Global Automotive Lead at Agency MRM, Michael Jopst tells us, quote, in the short term, they're using tariffs as a buy-now messaging opportunity to drive sales by heightening urgency. The goal is to pull forward as many sales as possible and sell through the existing inventory. What that means is that some ad spending slated for the second half of the year could get pulled into this quarter. And with the network's upfront ad sales presentations coming up in just a few weeks, we can expect negotiations over upfront commitments to likely drag on for longer than usual as brands wait for some clarity. We could also see potentially fewer ad dollars be committed in this upfront ad sales period. And with an increasing premium on

flexibility. There's some talk about how this uncertainty could further accelerate the shift into streaming digital platforms like Hulu and Peacock. Kelly? I wouldn't be surprised about any of that, Julie. I also noticed that Hyundai and some others are advertising that they're going to keep prices flat. You know, we're putting the customer first. And that was not messaging we heard during COVID when they were definitely raising prices. Yeah, the question here is, you know, with these huge, big ticket items. And I would say even a pricey investment in a mattress is something that people don't make all the time with cars. If someone's going to buy a car this year, can the automakers convince them to buy the car in the next month or so before the

tariffs kick in? Even if it's not clear exactly how the tariffs are going to play out, is there something about the certainty of buying now that's going to lower in more customers? There's been a lot of speculation that overall ad spending for the year will decline. But what I'm hearing from advertisers is that there's so much uncertainty about the end of the year that we don't know what's going to happen in Q3 and Q4, but for Q2, spending has not gone down for many categories, and in some cases has actually gone up as they try to get rid of their inventory. Exactly. Julia, for now, thanks. We'll see what happens, Julia Borsden. And tariffs are also front and center for price conscious consumers trying to figure out how to time their purchases.

What about the wealthier ones? We'll have details on that next. Welcome back to Power Lunch. I'm Kate Rooney with your CNBC News Update. The Vatican announced today more than 250,000 people have filed through St. Peter's Basilica at the Vatican in the last three days to pay their respects to Pope Francis. The Vatican says more than 160 delegations from around the world are confirmed to attend his funeral tomorrow. President Trump and the First Lady are traveling to Rome today. Meanwhile, the jury in Karen Reid's second murder trial today visited the site of Boston police officer John O'Keeffe's death. Reid is accused of killing her boyfriend by backing into him with her SUV and then leaving the scene at a house in Canton, Massachusetts.

Reed's first trial ended in a mistrial after the jury said it couldn't reach a unanimous verdict on all counts. And as commercial airlines see a slip in demand for air travel recently, private jet passengers are also feeling the economic pinch. That's according to Barclay's latest survey of business jet dealers and financiers, customer interests, they say, in flying private has fallen by. 49% since March. That is the biggest percentage drop reported by Barclays since the pandemic, guys.

Back over to you. Say it ain't so, Kate Rooney. Now it's hitting the private jet air travel. How will they feed their families? Keeping the PJs in the garage. And we showed a prop plane, by the way, Pilatus. Great plane. Fastest single prop plane in the world.

That's the one you have, Brian, right? Oh, well, I have two. I have a backup, Pilatus, Palatis. It's a Swiss-made aircraft. But it's a type of private jet? No, it's not a jet. It's a prop plane. It's got propeller. Okay, anyway, if you're on the radio, you're like, he's finally lost. Yeah.

Let's stay on our big tariff and economic focus today because we've been very clear on. The exact impact of the tariff turmoil is unclear. No one actually knows what's going to happen. Higher income families, higher costs could certainly get hurt. Lower income families, by the way, are most at risk of higher costs, right? Things go up in price. They don't have the income. It hurts. but as Sharon Epperson is here to report, even higher income families, and we're not just talking about like the super rich on their private jets, okay?

I was being tongue-in-cheek. These are families that are the working wealthy. Exactly, the working wealthy. You know, an important gauge of consumer sentiment was released earlier today, and it shows a decline across age, education, and income. The University of Michigan's Consumer Sentiment Index for April fell for the fourth straight month, plunging 8% from March. Sentiment has now lost more than 32% since January.

Now, among higher-income consumers who are more invested in the stock market, the outlook is particularly negative. Bain & Company reports the consumer outlook among upper-income Americans earning $100,000 a year or more, had its sharpest drop in April and is near its lowest level in seven years. And a CNBC survey monkey poll finds the vast majority of Americans are stressed out about their finances, including high earners. More than 1,700 U.S. adults with six-figure incomes were surveyed the first week of April. 69% say tariffs are causing them financial stress. And as a result of tariff news, one-third say they've delayed or avoided purchases. 14% say they've stocked up, and about half say they've made no changes.

However, there is often a disconnect between what consumers say and what they do, and that can make it difficult to predict how much of an impact of decline in consumer sentiment will actually have on. future spending. To help improve your spending and investing outlook, subscribe to my free Money 101 newsletter series. You can scan the QR code right there or go to cnbc.com slash money 101 to sign up. It's also available in Spanish. And I thought it was interesting sharing to keep in mind as we think through, okay, some level why does this matter that this is where so much of the spending in the economy comes from. So you kind of, you know, as much as you say, well, you know, these aren't the people who might be showing up at the food bank. These are the people who, if they

stop spending, that's going to ripple through in a pretty impactful way. They have a disproportionate share of overall spending, and they also have more than 50 percent of discretionary spending. So as they may be buying some big ticket items right now, kind of front-loading that to make sure that they do it before prices go up, they're not going to be able to continue to spend or may not choose to continue to spend. And then in terms of their future outlook, more people are saying now, I'm going to delay retirement. I may not be able to retire because of tariffs, because of the economic uncertainty. And we're talking about more than a third of Americans, according to a new survey that just came out from Voyage.

Was that the same one that showed there's an increase in hardship withdrawals too and all of that? They are looking at the hardship withdraws as well. Wow. But that's respectfully, it's odd that people say I'm on delay retirement. The S&D 500 is still up 7% over the last year. But I think people just get very concerned about how much more terminal there can be and how much they can be assured that they will have whatever amount of nest egg that they've accumulated will be there for them when they're ready for time.

Well, it's not survey monkey, but we did our own survey, and we asked, you know, on the Twitter thing. So take it for what it's worth. But I said, are you going to delay purchases? We didn't survey by income level. And 55% of people said no, but that means sharing 45% of the people. And again, these are just people that responded to me. 45% of people said, yes, they're going to delay. That's a lot.

Big number. 45% is a big number. Yeah. That's a little scary. It is scary. And people are saying that they're going to, you know, avoid making purchases. The other thing that's become really popular and has continued to gain steam

is this no-by-2020-five. People already started the year saying, I'm going to be a lot more frugal. Now they're just like, I'm definitely not spending because I'm not going to have it. Was that a political movement as it began? It was no-by- 2025? It was more like a trend on TikTok.

It was. Yeah, with just people talking on social media about what they would do. Now it's becoming more of a necessity, particularly as people are worried about being laid off or have been laid off. So interesting. No buy 2025.

You've heard about this? No. I just heard about it just now. I'm starting to see it. Once we hear about it, it's going to be. We're the last. Sharon Epperson, breaking news right now on the breaking news desk of power lunch. Sharon, thank you.

And sticking with the consumer, we got that bad data this morning. It was the final sentiment reading from the University of Michigan, which was a little bit better than the preliminary, but still the lowest since July of 2022. And the fourth straight down month, inflation expectations came in at six and a half percent. near their highest level in more than 40 years. Joining us now is the University of Michigan's Joanne Shue. She is director of the surveys of consumers, and they have been really bad, Joanne,

there's no other way to put it. Any glimmers of hope here? Consumers telling us that they're warning signs in the economy on multiple dimensions. Consumers are worried about business conditions. They're worried about their personal finances, unemployment, inflation, basically all of the above. And most concerningly, consumers are worried

that their own incomes are not going to grow that fast over the next year. And that could be one reason why they're not going to be able to sustain the high levels of spending that we saw after the pandemic. The only kind of positive spend I can give to this is one I heard from market participants, because obviously I've written a lot up this data with a lot of interest. But they would say, look, these surveys are so bad. I mean, we were talking about basically the lowest readings ever recorded since this began

in, I think, the 1970s. They're so bad they can't get any worse. Do you think there's some truth to that? that the shock is now fully manifested and maybe in the months to come as the market settle down, the rhetoric settles down that we start to turn a corner? Consumers are very much telling us that they're really worried about tariffs and really worried about the uncertainty and volatility around tariffs. So if tariffs resolve in the upcoming weeks, that could very well stem the bleeding in terms

of consumer sentiment. But right now, consumers just perceive so much uncertainty. They are fully aware that businesses are having a lot of trouble planning and they're having a lot of trouble planning in themselves as well. And given that consumer spending is two-thirds of GDP, if consumers are unwilling to spend, that does not bode well for the aggregate economy. But I want to be clear, though, you know, there were already tariffs on. I know it's easy to forget. These are new tariffs. Some of them are very severe, 145% on China. There were tariffs that were put on in 2018 by the previous Trump administration that were left on Joe Biden.

Joe Biden slapped new tariffs 100% on electric cars made in China. You're in Michigan, so the car business is kind of a big deal. So really this. this would be the third round and much biggest, bigger, or the biggest round yet, right, Joanne? And so you just wonder, is this sort of the inflation straw that may break the consumer back? I don't know. The tariff hikes that we're seeing this round are historically large on many, many different dimensions and are really not comparable to any of the tariffs that we saw in the previous two administrations, including the 2018 hikes.

One key thing is that the 2018 tax tariff hikes were amid a backdrop of very low inflation. And now we've had consumers telling us how frustrated they are by high prices and the persistence of inflation since the pandemic. So it's a completely different situation now. And for the last several years, high prices have been top of mind for consumers and they're just not seeing any relief ahead. All right. Joanne, we appreciate you joining us. We'll check back in soon. Joanne Shue with the University of Michigan. All right, so yesterday, some celebrities battling it out fisticuffs on our stock draft building dream portfolios like pro teams.

When it comes to pro athletes, actual finances, who calls the shots? Well, you're going to hear from someone who does exactly that and get his recommendations. Next. Welcome back. The NFL kicking off its annual draft last night, Green Bay, go Packers. Just as we held our celebrity stock draft here, 50s. featuring a pair of former star athletes, Carly Lloyd and Andre Iguidala. Carly and Andre had long careers in their respect of sports, soccer and basketball,

but that won't be the case for all the college players turning pro. In fact, the average NFL career is only three and a half years, just slightly longer than TV news anchors. So learning what to do and what not to do with your newfound riches, when you get all that money, what do you do with it? Well, your next guest, financial planner and advisor for athletes, celebrities, and more. one of his clients just got drafted in the first round last night. Mark Doman is a managing director of creative planning.

Mark, welcome. Can we ask who it was? Yeah, are you able to say? Yes, it's Mike Hell Williams. He played Georgia. And I was actually with him last night in Atlanta with his family. Well, congrats to him and his family. And listen, here's the reality. And this is interesting, though, because I've been, you know, I went to a big state school, Virginia Tech. Right. And so NIL money issue is a big deal.

So these kids used to get, have no money and then become very wealthy quickly. Now some of them actually have money in college, but get richer outside of college. And they have their financial advisor there. You're there or they call you. What's your first piece of advice? The first thing I tell them is that the average NFL career is about three and a half years. But the best part is that they preserve their capital. Their investment horizon is decades longer than your traditional high net worth individual.

So the goal is to stack that cash. And truth be told in this market where it's so bumpy, They have really a once-in-a-decade opportunity to buy when the market's down. I love the way you just put that, which is, and I know it's hard to preserve some of that capital in those years. You want to be high-sped. I understand that. But that their horizon is so much low. A lot of people don't make this kind of money until they're 50, 55 years old.

I mean, they could get it all at once right up front. That's exactly right. And I tell them, if they just get the ordinary rate of return of the S&P, the Rule 72 says that the market doubles approximately every nine years. So what I like to tell them is if they're going to look at a quarter million-dollar car, They could choose that vehicle or in 15 or 16 years, they could have a million dollars. It gives you the perspective you need. Could we just talk about people retiring at, you know, maybe 67? Some of these people, and I'm using air quotes, effectively, we retire at 27.

Yeah. Right. I mean, they'll go on to have other businesses or jobs or revenue opportunities, but not like this. No, there's no way they can have that earning power right out of professional sports. You know, we actually ask that all of our athlete clients come to New York City every off season to intern in our office, to study their money. and, you know, it's an odd question to ask someone who just got drafted into the NFL about what they're going to do when their career is over. But that's something we really focus on in our practice at creative plan.

And by and let's not forget also, okay? These are, these, I don't want to say kids. They're kids. They're 21, 22 years old, okay? 23. I was a ding-dong at that age. Same here. Okay?

You know, 12 CDs for a penny seemed like a good deal until you got the shipping bill. There were just things you don't know, not because you're an athlete or not because you're young, right? These are young people that also just found some of them a boatload of money. It's the biggest mistake they can make. I mean, there's several. I mean, the first thing is really the luxury goods and items that these young people want to get. There's what I would describe as predatory jewelers that come out of the woodwork, offering them all sorts of fancy stuff to wear on draft night,

but they're expecting that money to get paid back when they get their signing bonus. Oh, are they? One particular example, they will tell a young man go and buy a very expensive Rolex and then put diamonds all over it. which, you know, I like to say you don't paint over a Picasso, right? And so we really try to get these guys to understand that we care way more about future NFL player when they're retired as opposed to today when they're only 21, 22 years old. If you're living better than a college kid, you're already winning.

Do you ever get pushback from parents or from their friends around them saying don't pay these guys, right? Like, don't listen, don't take these guys, don't listen? Or do you think people have actually gotten much more savvy about this and realize, like, I better have someone who themselves is financially savvy with me? Well, the players have gotten much more. savvy during my 20 years of doing this. But, you know, there's a saying, it's really hard to say no to your friends and family if they need help. But, you know, I like to tell them they're not my friends and they're not my family and I'm happy to say no for you. You'd be the bad guy. Yeah.

Yeah, that's very clever. Because that is part of the problem, too, is that people come out of the woodwork and they want everybody to invest and, you know, people you've never heard, second cousin you've never heard of, now something wants to open, whatever it might be. I would imagine that saying know is maybe the most powerful word there is. And hard. And it's hard. And it's hard. And you know, I like to share with these guys.

I mean, nowadays with TikTok and Instagram, there's a lot of investment advice out there, right? No buy 25, apparently. Who know? Yeah. I mean, starting a vending machine empire is like a big thing right now online. Really? Yeah. Oh, absolutely.

And so they'll want to come to you with these ideas. Yeah. They say I want to have passive income. And I share that I'm probably not doing my job well enough because their stocks are paying dividends. Their bonds are giving them yield. They already have passive income that I would say is a lot less risky. So, filling up a vending machine with chips or gummy bears is not, there's nothing passive about that. That's exactly right.

Collecting quarters? Giving them perspective on who is better at making money. You and your pals who are just starting a business or the CEO of Microsoft, the CEO of Amazon or Walmart. These are people that are running companies that are worth hundreds of billions, if not trillions of dollars. So I would rather put my dollars with those folks as opposed to a startup. It's well said, and listen, congrats. And some of these paychecks are, they're taxed. I mean, they're heavily taxed, right?

Like, these guys get a $10 million check and they see like four. And like all these different states. Not that they're suffering, but you get my point, 50% tax rate all in, depending on what state they're in, plus your fee and other, their agents fee. The money can go quick, I think. Absolutely. Uncle Sam's going to take half. No, that's exactly right. Are they shocked by the tax bill?

Oh, got it. I mean, literally, you're like, I just got $10 million. No, no, here's $4 million. Like, no, but I made $10. Yeah, no, but the government took half. As the messenger on taxes, I get shot constantly, right? Because when you see these guys and they see that big top line number and they realize approximately half is going to go to Uncle Sam, you know, that's a tough

conversation. But then we start teaching them the concepts of tax write-offs and understand the importance of, you know, categorizing expenses. It's really just a financial literacy exercise in the early days. And, you know, I'm proud to say that a lot of these guys have a lot of financial success after their careers because we're spending time educating them during their careers. Are you going anywhere tonight or in the next couple nights? Yeah, I'm actually going to be hitting the road again.

There's two more days of the NFL draft. You're going to Green Bay? Austin Straubble International Airport. You know, great casino across the street, by the way. I'm there all the time. You know, surprisingly, a lot of the players decided not to go celebrate the biggest day of their life in Green Bay, Wisconsin. They decided to spend time in their hometowns. They, you know, they rent a little conference room at a hotel and they can have all of their friends and family

from day one up into the draft. And that's what I was doing last night in Atlanta. Do you have Shadour Sanders by any chance? I don't. Throwing that out there. I just see what happens today. No, I, uh, but I'm hoping that, uh, you know, they call his name today. He's a really talented player, but we'll see, right?

I mean, that's why people tune in. You're not sure exactly where you're going to get picked. Celebrate it Rustica Pizzeria and Swamaco, which is just north of Green Bay. I'm getting all the great recommendations. Thank you. Brian Scott at all. I'm there all the time. Absolutely.

Well, listen, I, uh, it's really exciting to, be able to share the journey of these young athletes. And as I've shared with all of them again, the opportunity set when the market's as bumpy as it is now, if you're investing for your future, this is an amazing opportunity. I think it's cool that you bring them into the office, too, to get that exposure, see what it's like on the other side. It must be impactful. Well, you have in my office, you have interns from NYU and Columbia, and then there's a 330-pound detackle studying his equity portfolio. It's a fun place to work. Mark Doman, creative planning. Great stuff. Fun segment on a Friday, too. Thank you.

Thanks for coming, especially in such a busy time. Power Lunch will be right back. Welcome back. Let's close things out here with some three-stock lunch. Recapping our amazing stock draft from yesterday. Danielle She is going to bring us her thoughts and reaction. She's vice president of options at Simpler Trading. Danielle, it's great to see you. We asked you to choose the best pick from yesterday's draft from all the teams. And you picked Costco.

This is the second person recently to kind of confirm Austin Crawl's instinct. That was his first round pick. And Tim Seymour wasn't a huge fan of it. but why do you like it here? I love it here, Kelly. If you look at that weekly chart, you're going to see a gorgeous trend along with a cup and handle pattern

and a very clear target up at 1,200 a share. You have dividends, you have people trying to get deals right now, and it's always packed. Okay, so then Costco for you is the best pick of the whole draft. What is the worst one? Well, when you look at Nike, this stock has been in a downtrend since 2021. I know that people want to buy this stock

because it's so-called cheap at this moment, but you don't want to buy something that's been in a downtrend far before the market correction. This stock, to me, I would short it around $60, $75 a share down into 50 because I think the path of release resistance is lower. Wow, and we were liking that one yesterday. Okay, but I take your point about the downtrend. So what was the best name that was not picked?

I like Broadcom here, Kelly. This one doesn't get as much attention as InVidia, but it had the stock split last year. The options market has much better volume now. And when you look at it, it's pulled back very nicely, but it's still holding a weekly trend. I have a price target on it up into 250 and then up into 280. And this is one that I'm regularly adding to my portfolio.

One that's been hard hit. A favorite of Stephanie Lynx for years as well. Danielle, you joined the team. It's good to see you. Thanks so much. We appreciate it today. Danielle Shea. Thank you.

All right. So let's just take the last 45 seconds. Let's show the markets and how we're doing because, yeah, we're not a huge win today for the Dow. the NASDAQ's up more than 1%. But get off the Dow, show the NASDAQ because we're up 6.6% for the week. Second best week of the year. Still down in the year, Kelly.

Still down for the month. But not a bad way to end a decent week. A lot of the riskier parts of the market have been outperforming. Like Peter Navarro. Oh, sorry, what? Bank Arc K, which is when we don't talk about it. Look at Tesla up 10% today and now up about 30% just this week. So the buzz around it is growing with full self-driving, but also, you know, sentiment had.

and the shorts had made so much money on this one. And California kind of throwing a gift of potential self-driving cars like Tesla. How about that Gavin Newsom and Musk? People are going to talk. New alliances, perhaps. Thanks for watching Power Lunch, everybody. Have a great weekend on your prop plane.