Power Lunch - Tariff Threats & Your Money 02/10/25

Episode Date: February 10, 2025

CNBC’s Tyler Mathisen and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. ���Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch. Fly, markets fly. It's my best Philly impression. Your money is on the rise again. Stocks are higher. It's a good sign because Mondays have been a little bit manic so far this year. Plus, why one of the world's biggest energy companies now on the sights of a very aggressive hedge fund. And speaking of energy, Europe's woes getting even worse. Power prices popping. Kelly, you may not care, but we're going to tell you why what happens there matters here. And we have Lyft and Mobilize both rising today as they announced plans to team up with a Japanese company to bring Robo Taxis to Dallas as early as next year. And plans to sail thousands of vehicles to additional cities mobilized up almost 15%. MeMania too. Keep an eye here, folks. GameStop and MicroStra, I'm sorry, strategy are both hired today. GameStop CEO Ryan Cohen posting a picture of himself with Michael Saylor. That's it. That's enough to get GME up 8%, but it's still only a $26. Oh, and Micro Strategy did announce that plan to drop Micro from its name and become Brian Just Strategy. Speaking of strategy, let's hear from the president shortly who will impose 25% tariffs on all steel and aluminum imports, including those coming from Canada and Mexico.

The new tariffs would be on top of existing metals duties and shares of U.S. aluminum and steelmakers are surging today. Cleveland Cliffs is up 18%. Other names like New Corps, Alcoa, and U.S. steel, all posting solid gains as well. Canada, big supplier of aluminum, more than 80% of it into the U.S. market. Joining us now to discuss what impact these tariffs might have on his province and country. Is the Premier of Ontario, Doug Ford. Premier Ford, it's good to see you again. Welcome. Well, it's great to be on again, Kelly.

I appreciate you and Brian having me on today. And it's been on again, off again for tariffs, but it sounds like now steel tariffs aluminum definitely moving forward. Aluminum looks like it could have an especially large impact. It really could on both. This is totally unnecessary, attacking your closest friends and, you know, treasured allies that we've stood shoulder to shoulder. And we're just stronger together.

Kelly Evans saying, let's create an Amcan fortress because it's going to benefit both countries, Americans and Canadians. These tariffs are going to hurt both countries. Mark my words. And unfortunately, the president's gone down this avenue, which is no reason to. We can have too strong, wealthy, safe countries if we stick together. Right, but let's talk, if we can, about exactly what the Canada aluminum sector looks. I mean, first of all, you and others have been pretty vocal in trying to come up with retaliatory tariffs.

I remember going back to whether it was going to be 100% tariffs on Teslas, if that first round of blanket tariffs went through. Is anything like that being discussed now if it's steel and aluminum? Well, that's the last thing we want to do, but we will. retaliate. And, you know, Canada will feel the pain. There's no doubt. But I can assure you, when we retaliate, the Americans will feel the pain. And for what reason? There is no reason. You know, our trade with Ontario is split equally down the middle. We do approximately 500 billion Canadian going both ways. And if you take energy out of the sector of trade federally, then all of a

And now, you have a $45 billion surplus on Canada. And we're the number one customer to 17 states, number two to 11 others. Canada, I'm sorry, Ontario alone. Canada, we're the number one customer to 28 states. Why would you go up and attack your number one customer is beyond me? But there will be retaliation. Well, with the Premier Ford, it's Brian Sullivan. Thanks for joining us.

Got a lot of friends up there in Guelph, by the way. You know, here's, don't get a speeding ticket there, I learned that the hard way. Here's the reality, though, is that when you impose tariffs to push back on us, the people suffer. I understand why you want to punch back. I totally get it. You're going to do it to us. We're going to do it to you. But at what level of tariffs is it just kind of mutually assured destruction where we're each punching each other and nobody's really winning?

Everybody's only losing. 100%, Brian, you're bang on. Do you know who wins? America loses, Canada loses. I'll tell you who wins is China. China's sitting back laughing and the whole world's laughing watching two of the closest allies in the world,

you know, go at each other. It just doesn't make sense. I know that America needs our critical minerals because China's cut them off. Who has the critical minerals? Ontario and across the country. They need our energy, our oil. They need our electricity.

Ontario keeps 1.5 million lights on in New York and in Michigan and in Minnesota. And the list goes on and on and on. And we need each other and we're stronger together. We didn't start this fight, Brian and Kelly. I love the U.S. I spent 20 years of my life there in Chicago and New Jersey. Canadians love Americans, and I know Americans love Canadians. I talk to so many people, elected officials and business people,

no one's pointing north to the border and say Canada is the problem. They're pointing to China and saying China's the problem, which I agree. Yeah, 4.4 million barrels of oil a day imported a lot of it, obviously, a very special type of oil. Some of it's going literally directly via pipeline to U.S. refineries. They can't use any other oil. They're landlocked. They can't get the oil from anywhere else except for maybe like a barge or something like that, which could be environmentally dangerous, Premier Ford.

So what do you think is the ultimate goal? I'm sure you're dialed in talking to Trudeau and others. What is the ultimate goal do you believe of the White House and the Trump administration? What do we want from you? Well, that's what everyone's trying to figure out if, you know, if President Trump could set a bar and say this is what we want. But one day he's saying we have 30 days. The next day or the next couple days, he's saying they're going to put tariffs on.

So let's sit down and have a discussion and find out exactly. what the president wants. We're more than willing to sit down and negotiate a fair deal for both sides of the border that are going to benefit everyone. And, you know, Brian, you nailed it. That it's going to hurt both economies. The market's going to drop. As sure as I'm talking to you, as soon as those breaks open, it's not going to be good.

It's basically a tax on the people, attacks on Americans, a tax on Canadians. And I don't believe in tax. I've never raised the tax on my whole career. as the Premier, and I never will. I believe in putting money back into people's pockets, and I know President Trump does, too. So let's make it the two prosperous countries in the world. Uranium, for example.

You need uranium. Well, the largest uranium mine comes out of Saskatchewan, comes over to Ontario, and then gets enriched down in the U.S. Your farmers need products, potash, to keep their farming going. We want to ship more electricity, more oil, more uranium, more nickel, more critical metals.

That's what we want to do. Is the flip side of that what retaliation might look like? I mean, what can you tell us about the steps Canada might take in response? Well, we're going to discuss this right after we get a full look at the tariffs that President Trump wants to go on. I saw Cleveland Cliffs on your screen. I just got off of the CEO. So, big companies like DeFasco that have plants in Alabama, this is not good. I'm telling you, it's not good.

And hopefully we'll be able to sit down and continue building a strong relationship. It's not going to be good for either side. You can't turn off the auto sector that's been around since 1960. And, you know, just pull a switch and say, okay, cars are now being manufactured, which, by the way, we buy as many cars. as we sell down there. Yeah. Did you call him or did he call you, CEO of Cleveland Cliffs?

Well, I've known him. I've had him in my office when they bought Stelko up here. I've talked to him. I've talked to other CEOs. And I'll tell you, I haven't found a CEO that's all in favor of tariffs. We're so intertwined. Or, you know, no matter if it's the Procter & Gambles or Unilevers or any of the large Fortune 500 companies, the Walmart's the Costco.

Costco's. We're so integrated and we support each other. And we just don't attack your closest allies. It's, you know, some Canadians are, if I can put it this way, people are hurt. They're dismayed. They can't believe this is happening. And, you know, we're going to work through this and everyone's going to benefit hopefully at the end of the day. But this is the shocker, to be honest with you. Premier Ford, thanks for joining us to react. We appreciate it today. I love America. Of Ontario, Canada. I'm talking about Lorenzo Guncovis.

CEO of CLF, Cleveland Cliffs. Yes. He once called me a fill-in on a earnings conference call. I'm surprised that that's... I called him. He called me. We had a nice conversation. Lorenzo, you're welcome any time on this program. Indeed. I was just going to say, it seems like it would have so much meme stock potential.

He is so... I mean, you've heard comments from him over the years. He never mince his words, and it's often a big mover on these big geopolitical... We should take power lunch on the road. to Guelph. Guelph. Or Sarnia. Sounds good.

On the metal front as well, we have gold rising to another all-time high today. In fact, it's getting very close to $3,000 an ounce, which is leading to some chatter from the government as they're looking for ways to kind of capitalize on this and maybe, you know, fix our debt crisis. In fact, Jillian Tet writing in the Financial Times over the weekend that if the U.S. did revalue its gold holdings, it would inject $800 billion into the Treasury. So this idea is making its way to her and others. Currently, the gold is only valued at $42 in national accounts. And Brian, this gets mentioned in surface, you know, time and again, whether they do or don't do, it doesn't solve anything fundamental.

But central bank purchases of gold are a major trend and one that has continuing to drive this bull market. So can you help me understand? Because I actually, we do a morning call every day, and I don't fully understand this story. You do? I'm not sure that I would understand the account. counting of it, but I can understand conceptually, if for whatever reason, we're holding it on the books at $42 and it's worth what it's worth, and they revalue that, then while, now how does that actually flow through? I couldn't tell you that.

Does this go to that story that Trump was sort of claiming that they found irregularities? That's what people are wondering. In the treasuries. Yes. So the comments he made on the plane on the way to the Super Bowl interview to the press corps suggested that the president said we've sort of found some ways of save, or something. By the way, on the 11 o'clock show today, Money Movers, there was an interview the CEO Easterly Corporation. They build and lease to the government. And he was saying that it was three X the money

for the government to build the same building than him. So I retweeted that. I basically quoted that and tweeted out. Mr. Elon Musk has now just retweeted me. So if I'm not here after the break, you'll know. Wow, because you're going to have to deal with about two million comments on your phone. By the way, of course, Elon Musk, welcome on this program. Is that fair to say?

Yes, anytime. Anytime. All right, on deck. flag alert on not one, not two, but three stocks you may own the legend. Herb Greenberg, joining us next. All right, there are very few people who dig into companies like your next guest. You don't want to be on his radar. And there are some companies that are catching his eye right now, including a little company called Apple. You may use one of their phones. Let's talk about it. Bring in the man, the myth, and the legend joining us now. Don't cross, look at he crossed his arms.

He's like all ready to fight. Herb Greenberg, editor of Herb Greenberg on the street, I'm having flashbacks, although that may just be the mushrooms. Who knows Herb? Let's start with Apple. Why is Apple on your radar? Well, if you look at Apple and you see what's going on with Apple in China, you could argue, as I have, that maybe Apple is a pawn in a big game of chess being played between the United States and China. And I say that because shortly after the tariffs were slapped on the last time around a week or two ago, The China, there were stories starting to rumble through. I knew Bloomberg got a story about China saying it had some, you know,

was going to start probing the app store issues dealing with Apple. That app store issue is an app, an app store tax, as people call it, which effectively is the 30% Apple charges, publishers, developers, and others to have their apps on Apple. So the real question you get to here is this. as this thing moves forward, and as you see China become less and less part of Apple's business, does China try to freeze Apple out of China? It's just something I think you have to watch. And, you know, and if you do look at that or if you do see that Apple tax retrenching, that app is actually, you know, a decent amount of revenue for Apple, but it's even more profit.

So it starts to have even more impact at a company where people have wondered. And look, I use Apple products. I love Apple products. Has it lost its mojo. No, and I'll say this is somebody who's been to China a couple of times. When the Chinese government effectively dictates something, I'm not dictating you use a Huawei or whatever phone, but when they sort of semi-dictate it, there's a lot of public pressure. We don't face that here in the States, but there's a lot of top-down pressure to maybe not be seen with specific stuff. All right. Speaking of phones, us pivot to shoes, how'd you like that transition? Herb Greenberg. Decker's, they make Ugs, they make Hoka, which makes everybody three inches taller. What's your beef with Decker's? It's not a beef. Remember, these are risks you want to pay attention to you. That's what I like to do is point out the risks. You could start seeing, if you look at the stock, Deckers has been a fantastic investment for many people. Hoka's a great product. Ugs, great product. Done phenomenally well in the marketplace. But you can start seeing

changes in the filings and the disclosures the company has been putting in its filings. I called out one in June, where the company basically used to say it would report its pairs, the volume of pairs sold, it changed the word pairs to the volume of units sold, which reflects the fact that they're moving more away from shoes. As I start talking to folks, even before this last quarter, which was not a dismal quarter, the guidance was terrible. You could see where there were starting to be some accounting issues that were starting to concern some of the people I talked to. And then, after this most recent quarter, if you look in the 10-Q, interestingly enough, as refers to its international business, it talks about it adds the word outsized. That's very important,

outsized, to what it's talking about Hoka's wholesale sales internationally. The importance of that is wholesale is sell in, not sell through. Hoka's a really hot product. Does that suggest they're stuffing the channel internationally with Hocas? I'm not saying they are, But that word outsized is new. It's worth paying attention to. And I think therein lies a risk going forward with Decker. Herbie, let's posit that Hoka's growth is slowing because it simply just became so popular and saturated and what have you. Then the company should be doing what?

I mean, trying to look for other brands that they can, they paid, it was like a couple hundred million dollars, maybe less for Hoka and turned it into this incredibly valuable franchise. Are they going to have to find a way to do that again? Well, you know, you grow through acquisition only takes you so far. It's really, in their case, just how far can that one brand go? Or, you know, remember, Ugs is doing very well, too. Ugs is their other big shoe brand. But in terms of Hoka, what you start looking at is the competition Hoka is brought upon itself, because Hoka's done so well, if you start looking at running shoes or walking shoes or whatever shoes you have, everyone out there has a Hoka product that they're emulating. And that, to me, is a very important part of it. again, they're victims of their, they're potentially victims of their own success. Yeah. Well, let's move along and talk a little bit of Super Bowl, by which is only to say, and Brian, maybe you can tell us, this Hymns ad. Did you actually see it, the Hymns ad? Yeah, I did. And they're poking herb kind of at the big pharma companies and kind of saying, you know, you're the problem and we're the solution here, but do you think there's more to the story?

I think there's a tremendous amount to the story. Look, I've read flagged this company when the stock was half where it is today. So don't I look like the chunk? But if you look at the stock right now, this stock is up not because of fundamentals. It's up because of a short squeeze. The mother of all short squeezes, as they like to say. And that's fine as long as the fundamentals followed out. And the company's going to report earnings pretty soon. They're going to report fantastic numbers because everyone looks at the credit card data.

And it shows it's going to be fantastic because of the GLP1 drugs. But there's a battle going on under the surfaces between the FDA and the company and the pharma, the drug companies and the company over their ability to sell compounded versions of these GLP-1s. And by the way, Herb, I'm going to jump in because last year we interviewed the CEO of Lilly at their headquarters in Indianapolis, David Ricks, and this compounded word, and I'm not saying it's good or bad. I want to be very clear. I'm not supporting any side. But compounded just means it could be done differently, correct? And that's, I think, the key word is that it's sort of a custom mix. And when you see the word compounded, I think, as it's a...

a consumer of any drug. Again, not saying good, bad, or otherwise, but when you see that word, compounded, just make sure you know what exactly you're getting, correct? I mean, that's kind of the thing. And in this case, you're compounding something that you're only allowed to compound. Remember, these are patented drugs. You're only allowed to compound it because of a shortage or a perceived shortage or increasingly what appears to be no shortage of these GLP1 drugs. And what I will say, especially if you look at that ad, what you really have to say is this. If the new administration, under the new administration, they're going to gut the FDA. There's going to be no more FDA.

In fact, patents, as they relate to drugs, no longer valid. Rule of law, no longer valid. Then, you know what? Maybe Hibn's has a leg to stand on, but there's something else here. Even beyond these GLP ones where there's tons of competition and they're the only public company that is, you know, playing off this as a mail-order pharmacy type situation, you also have to look at the fact that their underlying business, erectile dysfunction drugs, baldness drugs. That business is going like this. That business is not going like this the way it used to. So if the GLP-1s start to lose steam or somehow

they can't sell these drugs, which is what the FDA is sort of wrestling with them. Therein you have a problem. Therein lies the risk. Got it. Got it. The key lesson here is watch to make sure that Directile dysfunction drug market doesn't start sagging. We got it. Loud and clear, Herb Greenberg. Thank you. Always a pleasure, Brian. You're welcome.

Up next, we're taking a lunch break and chatting two interesting stock stories. We're back right after this. Don't go anywhere. All right, welcome back. And so we're in these chairs, which means it's time to give you what we'll call maybe a power lunchable. I don't, until we get sued, we'll say that. Some quick hits on big stories that you need to know about. First up is BP.

The big hedge fund, Elliott Management, reportedly, taking a stake in BP, the British Oil and Energy Company, that has gotten BP a little bit higher today, eight bucks. But even with today's move, that stock has been well underperforming its competitors. Its market cap is now only about half of, say, shells. And RBC says that Elliott Management could be trying to break up BP. Thus the trend lately between GE Honeywell and the others. A lot of people have been kind of raising this point about its underperformance and say,

kind of asking what it should do. Should it be a takeover target? Should it try to be acquisitive? Can you kind of put this in the broader context? Like, we, a lot of us here as we think, well, I remember when they went to Beyond Petroleum, then they kind of backpedaled from that. And what happened that they have remained in such an uncompetitive position

relative to competitor? Okay, first thing, BP, by the way, I reached out. They have reached back out to me. Reach out to me. Let's get Murray, Auschw, who's the CEO on. Their former CEO, Bernard Looney, got whacked. He got let go.

And he was pivoting to more. of a, the European energy majors are under a pressure that we can't understand. We talk about climate, they live it, and they were pivoting more to wind and things like that, which are great on paper, but they're not bringing in the kinds of returns. Yet,

they may, we don't know, but not bringing into the kind of returns that our companies are. So you look at like a shell, which said, you know what, we're going to go this way. BP went that way. BP's now trying to go back the other way, but the market may be saying... Did the shell literally change its domicile to try to not... They move from, they were

dual headquarter, dual listed like Doug Ford mentioned Unilever, which is right next to us here. Co-listed. Shell was co-listed in the Netherlands and in the UK. Now they're just primarily the UK. Because the European courts are putting a lot of pressure on them to count their entire supply chain for fossil fuel ejection, all these things. So now that I wonder, so does that remain kind of a competitive challenge for them? Or do they relax the rules, like to your point about European power prices? I'll make you a bet.

Let's hear it. Okay. I'll bet you $5. that in five years, Shell is headquartered in the United States. Really? I don't want to take that bet because I want that to happen. We're on the record. What do they call it a timestamp? That's interesting, though. Another story we're watching is that Starlink is looking to disrupt the whole cellular industry.

T-Mobile is now launching its satellite to sell service in July for $15 a month. This was an ad last night, if I'm not mistaken. It will be powered by SpaceX's Starlink and aims to eliminate dead zones, extend coverage to remote areas. T-Mobile shares. are up to date, up 3% to a new all-time high. They're up 15% this year. The stock has been a great performer. Listen, I think, I don't know if this is what they, I was watching. The ad was brilliant last night, whatever you think of T-Mobile. And I like, remember the movie, it's a true story about the guy that got stuck in the rock and he had to cut his own arm off with like a rusty

I mean, the movie, you know, anyway, the story is unreal. And I hate to say, this is probably not what they were thinking, but all I was thinking about was that guy last night, because the ad was people like in a desert where you would normally not have coverage on your cell phone. There's a point to this. I'm not just, you know, and I think it was smart. Starlink for 15 bucks a month, not supporting T-Mobile or not, but I thought the ad is very well done. The idea is that you're never out of reach. Yes. And I think even where you may be. Well, but there's also, I think, a point here that puts that industry and to some extent the cable industry on notice, which is to say, we've seen Starlink become more widely available to use on airplanes. You've seen it

become more common. See, look. There it is. In the scary desert where you might have to well, the guy even looks like Aaron Ralston in the movie, which was James Franco. But if this is a way of saying to people, hey, Starlink is arriving, then that gives people a whole other option for when they're looking for internet someday or cell phone service right now. That is going to be a real competitor. And there's entire industries, cellular and cable, that are on notice because of it. And we're a stock market channel, sort of. Look at, look at T-My TMUS, T-Mobile stock. I don't know if we showed it already.

I was looking at the thing. Last time I looked at it, there we go. All-time high. It's up three bucks, all-time highs. It's doing well. Starlink is even hanging over. So you talk about Comcast, whether it ties up with charter, some of these issues, by 2030, Starlink is going to be part of that conversation as well.

Some more must-see TV after the break. Our next guest sees a potential. Five to 10 percent pullback for markets. We'll see. We'll talk about why and what you should do about it when we come right back. Stay with us. Welcome back to Power Lunch. I'm Bertha Coombs with your CNBC News update. Federal judge said today there is evidence that the Trump administration did not fully follow his order to unfreeze federal spending and it must release the funds. The White House ordered that initial freeze last month so that it could review spending in its words to ensure it aligns with the president's agenda. The judge temporarily paused that plan and said today some grants and loans still are not. going out to recipients as required. Meanwhile, 22 state attorneys general have sued the Trump

administration today over cuts to medical and public health research funds. The National Institutes of Health announced the cuts on Friday, saying it would save the government more than $4 billion a year. And Philadelphia police say Super Bowl victory celebrations in the city last night led to dozens of arrests, 29 citations, and at least eight instances of vandalism. Authorities say fans shot off fireworks, climbed dump trucks, and pulled down traffic posts. This is when they won. I guess, I guess, I guess that's the light version. Bertha, we all have friends from Philly that live in Philly. We love Philly. We're glad they won. One of my friends' kids was in Philly last night, and I said,

if they lose, they're going to set things on fire. If they win, they're going to set things on fire. Just be careful. That's it. It's different. It's Philly. Then that's your team, right? Didn't you want the Eagles to win?

No, no. Yes, I wanted Eagles to win because I don't like the Kansas City State Farms. That's right. It was the Jake issue. I'm also Chargers fan, so I naturally can't like the Chiefs. So I was rooting against the Chiefs. Well, I like saying. I was actually rooting for the Eagles and the Chiefs.

under 48 and a half. That did not happen. We're getting the over kind of on we're getting the green. How about that? The Dow's up about a third of a percent. The NASDAQ is up a healthy 1% today and the S&P just a little bit behind that. All of that said, our next guest wouldn't be surprised

to see a 5 to 10% pullback in part because of the trade war and sticky inflation problems. But he's going to buy if that happens. Bob Dahl is CEO and CIO of cross-market global investments. Bob, it's great to see you again. Same, Kelly. So bring us up to speed on your thinking here.

It sounds like you're sort of bullish and bearish. Yeah, that's the message. I think it's going to be a lot of cross currents. Today is a good day. It's green. Well, I guess that's because the Eagles. But you get the update and the drift toward tech. Tomorrow could be just the opposite.

The value stocks run and tech pulls back. Look back since the first year. We've had a lot of that oscillation. There are more uncertainties than usual, Kelly. And I think that's what's going to make. make it very difficult to have strategy and stick with it during the course of the year. Look, 5% pullbacks happen on average three times a year, 10% corrections about every 14 months. So to say a 5% to 10% corrections, really not saying much.

Do you have a tariff playbook? Do you ignore them? Well, thank you. I think it's really difficult. I think you are more reactionary than programmatic in an advanced sense, because we don't know what the tariffs are going to look like. Is it a bargaining tariff? Is it an economic tariff? Is it a political tariff? And it's going to just bounce around. And look, the Trump administration's throwing lots of things against the wall. More than anybody thought they would probably. Some will stick and some won't. We don't know what's going to stick and whatnot. Yeah. I guess so you wouldn't be buying here at all time. How do you feel the biggest argument

that I hear is about whether the S&P itself is riskier, and say, going into small caps or going into international or, you know, tilting towards value and all of which feels risky based on the last 15 years? I don't disagree. Look, I would lean toward value overgrowth. I think you have to own some of the mega-cap stocks, the Mag 7, but I think you should own less today than you owned a year ago and do some bargain hunting in areas that have lag.

Look how well health care is done. We'll get a run at some point in time. The energy stocks have done well year to date. So it's not the same game as it was last year or the year before. All right. If we get that poll back, we'll get you back on. Bob, thanks so much. Appreciate it. Bob Dahl of Crossmark Global Investments. All right. Meantime, this is going to kick off a very busy week for economic news. You got Jay Powell testifying before Congress tomorrow and Wednesday. You got some inflation data on Wednesday and Thursday. It all could move the bond market, which could move the stock market. why am I still talking? Let's go to Chicago. Rick Zendtellie's forgotten more about this than I will ever know. You know, Brian, it's not only everything you mentioned, but it's even more important, especially Wednesday. When you intersect Powell, the House Financial Services Committee and CPI, remember, CPI will come out before he goes and testifies in front of the House.

And that's going to be key. And it's not only the important data points. And by the way, you know what's important with these data points, that whether you look at year-over-year-of-year CPI or PPI, in the former, you're basically right at and right below the 3% area. And PPI, all the year-over-year metrics are well above 3%. Targets 2%. And we have the 3-year-58 billion on Tuesday, Brian.

We have $42,010 years on Wednesday, and $25 billion, 30 years on Thursday. Wednesday's a key day. Look at a year to date of two year, and I really want to draw your attention. We're starting to really be in a tight range. You can really see it if you open the chart up a bit. We're going sideways. Now that chart starts on 50 basis point September 1718 rate cut, but you can see how we've gone sideways. Now contrast that with the 10 year. Now there's a 10 year to date. Unlike the two year going sideways, this guy's aiming down. And we all know that. The curve, The curve went from over 40 basis points of steepening to about 20.

And that's an important point to stay on top of. You see that red line on that 9-17 start to 2-10 spread? That's at 20. I call that a transversal line. It nicely symmetry on above and below that 20 basis points. Look at that as support. And after all the things we talked about this week, when the closing dust settles, which side of 20 will be a good clue?

Above 20, I think a better economy, below 20, not as good as an economy. Can it be more simple than that? Back to you. I will be rooting for more than 20 on the 2s 10 spread. Rick, thanks. Rick Santelli. This fast food chain just had its worst sales drop since the pandemic, the reveal in three-stock lunch, and the stock is up. All right, time now for three-stock lunch where we hit three different stock stories, then try to give you the trade to go with it. And your trader today is James Demert. He is the chief investment officer at Main Street. Research James, good to see again. Let's go. First up is McDonald's. Kind of a weird day. McDonald's stock is up big. It's up 5% even though sales fell last quarter. I guess bad, just not bad enough. James, you got a trade and a take on the golden

arches. We do, Brian. Good to see you. And yeah, those golden arches look good on the market today. But boy, the report was awful. I mean, they missed what was already. low bar. I mean, 4% earnings decline. At Main Street, we're looking for companies that can increase earnings significantly and are trading at a reasonable price. This is a company that basically is reporting earnings at a loss, revenue, less than expected. Management just gave that perfect comment that I think gave people optimism. The stock is up, and we would suggest take that strength, use it as a selling. There's many more modern brands in fast or faster food, such as Kava is a really good example.

I got two teenagers that can prove that. But yeah, I think this is a sell. We were just there yesterday. I take your point, James. Let's move on from the food world to financials where Charles Schwab is falling 2.5% today after TD announced plans to sell its 10% stake in the company. Any opinion on this one?

Yeah, you don't want to wake up as a public shareholder or company and find out that your largest stakeholder is selling shares. I mean, that's really some overhang on the stock. stock. Now, Schwab is going to buy back about $1.5 billion of what they want to sell, TD Bank, that is. But that's going to put some overhang on the stock. And one of my concerns, and as a team, again, looking for great companies with great growth rates. I like Schwab's growth rate, but at 19 times earnings, with this overhang of one of the largest shareholders selling, I think it's going to put some breaks on the stock's ability to go higher. I think this is a

stock that, yes, maybe buy it cheaper, but here we'd be a seller. All right. And then we ourselves. Yeah, we, okay, two for two. Jokers Wild, here we go. We asked you to pick a stock. We didn't, we didn't have a story. We said, pick a stock that you want to talk about for any reason. You pick German software company, SAP. How come? You know, we love the European market. The valuations are just way more compelling. Back to buy great companies, reasonable price. And SAP is sort of like, if you will, a larger than Oracle or maybe a sales force and has a platform similar to service now. So it's a second derivative AI company, really early investor in AI, and you're starting to see that come out in the earnings. I don't know if you saw a week or two ago they reported beat on the top of the bottom line, trading at 22 times earnings, growing at 36% a year.

I mean, what a great example of second derivative AI in this early part of the AI tech-led bowl. market. And Brian's been pounding the table on the German stock market, doing quite well lately. I've been... You were drawing attention to it. Drawing, yeah. I'm not pounding anything. Advocating. I wrote about it. One of my predictions a year and a half ago. Awful economy, but that's, I guess, the point. James Demert, thank you very much, Main Street Research. Pleasure. And stick around. Up next, we reveal the winner of the 2024 CNBC stock draft, and it was also a blowout. All right, welcome back. After a nine-month

competition. I mean, half the people aren't even live anymore. It's time to officially crown our 2024 Stocks draft champion and its mentalist. O's Perlman, O's Knows, the winner, finishing up, get this, 147 percent with two picks. Carvana, soaring up 240 percent since the April draft. And Bitcoin of 48 percent. O's, congratulations. Thank you so much. The name was the team. O's knows. I had a feeling. I told you at the start. But, oh, you can take this. And, like, I mean, to be this good at stock picking is, like, a multi-trillion dollar skill here. So that is not far from the truth.

And it's funny you mentioned that. First off, I have to give a shout out to my guys at BMO, who helped me with the Carvana pick deep analysis. We bounced that back and forth. I was very happy. So shout out to Bimo. But I'm going to be honest with you, which is real talk. Yes, picking stocks has a lot to do with luck, though. Luck of the draw.

You can't get this every time. But my phone's been ringing off the hook this year from your viewers, CEOs, business leaders, who have realized something else. You know what it is? What? It's the other skill I have, the tangible skill, which is I can read people

better than almost anyone in the world. I'm serious, though. Think about this. Forget about the entertainment. Forget about the entertainment task. What if you're doing a deal worth millions or billions? And I can look the person in the eye

who's sitting across the table and tell you whether they're telling you the truth or lying to you. Yeah. Right? What they're really thinking? What is the value to you for that? Let's give it a shot.

Talk is cheap. How about this? I'm going to ask you a question. And only you will know whether you're going to tell me the truth or lie. Right. Right. And here we go. Here we go.

I'm going to make it something that I don't want to go too crazy. But you tell me the answer and only you know whether you tell the truth or lie right now. Right on your honor. Hold on. Here we go. I'm going to throw it out there. What is your favorite number? And do you want to tell the truth or lie?

Okay. So you already made that decision. I don't want to know. Hold on, hold on. Oh, yes. It's like heads or tails. I don't want to know. That's your choice.

Don't tell me. Please don't tell me. I give you the answer that. That, that, okay. Yeah, yeah, but that was your choice. But don't tell me you're telling the truth or lying. Don't tell what you're lying or telling truth, but you know whether you're lying and telling the truth.

Do you understand? Yes. So you right now, go ahead. Let's start this over. What is your favorite number? Two. See, clear indicators. Four different indicators I could tell you that indicated to me 100% you told the truth,

didn't you? Clear cut. That's why I do. That's my race car number. Oh, no. Wait, time is money. Let's keep going. Ryan.

I'm giving you three questions. And again, the same thing. This is only you know whether you're going to lie, tell the truth, lie, lie, lie, or tell, like, there's all different permutations. Because I'm in TV news. I'm good at both. Both. Yes, sir, yes, sir. Here. First question, only you know if you're going to tell the truth or lie. Right, here we go. What's your favorite color? Blue. So notice the wave, the time, the indicators of deceit, the way he looked up, didn't access his memories, accessed what he was going to say, his creative centers. Left, right, you're lying. You lie. You're lying. You lie. I hate the color blue. Of course you lie. I don't like anybody like. And you're wearing all blue, so I knew it. Hold on. Next question. Next question.

Some people will think that since I surprised you, the processing time gave it away, right? You have to think of what the answer is going to be when you lie. So I'm asking the question first. Wait till I ask it a second time to answer. What is your favorite movie? Now wait, so you have time to process. So you don't think that people just say, I read you, right? Like a poker table. You get to decide when you make the bet. And this is our second question. Only you know if you're going to lie or tell the truth in this moment. go ahead what is your favorite movie

the right stuff so this time he tried to look away because he knew my advantage and he went against it it's reverse psychology I told you not the best in the business for no reason you told the truth the time didn't you right third try that's true I told the truth I know you did do the same crap

I know you did here's the hardest question of all do it with her no no are you are you're married I see the ring that's not a trick question don't you don't lie to that here's the question I want you to go back in time. Close your eyes for this. And I want you to recount the name of the first girl you ever had a big crush on.

Like, what age? I don't know how you roll. This could have been two weeks ago. No, I'm kidding. A long, long time ago. Yes, throwback. Okay. Something there's no way to-

Second grade. I'll go back all the way to second grade. Second grade. Okay. Heartbreaker. Okay. Open your eyes. Are we ready?

Took him some time. Okay. What is the name of, you know what, stop? I already know your mind. about to lie. Be honest, you're about to lie. Is that correct? Yes. I know you were. I saw you because there's three ways. One, the tension was because you didn't remember the name. Right? So he would have been saying, oh God, I was in second grade. Or he was about to tell the truth and didn't want to get in trouble at home being like, why did you remember her name so quickly? Who is she?

Second grade. Cover your eyes. Okay. Please put one hand on top on your eyes. Oh. And I'm going to show our viewer at home. Can you swear? Honestly, Brian. That there's no way that I could have found this out, ask somebody around. There's no big... There's nobody would know. I haven't told anybody. Nobody knows anything. Open your eyes.

Open your eyes. I sit on a different floor here. You sure do. Open your eyes. Haven't thought of us in second grade. What was the name of your first crush? Am I telling you the truth? I wrote it.

Yeah, tell us the truth. Leslie. Leslie. Can we find Leslie? And do you want to know the best part? Hold on. Hold on. Here is why the CEOs and business leaders of companies call me,

because it's not just 50-50, if you lie. I know how you lie. I know how you lie. lie. That's what's worth a lot. Look at me. The name that popped in your head when you're about to lie? Linda. I'm still impressed with the stock picks. I was going to lie

and say Linda. I said at the same time you did. I knew you about say Linda. We didn't have no. I'm out. There's more power lunch next. All right. I'm still, my mind is blown. Stocks are higher across the board, which is surprising because it's Monday, but all stocks have been down on

Mondays this year. But also, the Eagles victory may be a bad omen, not a knocking Philly. Love it. Ryan Dietrich-Karsen group, our friend, points out that whenever a Philly team, Kelly wins a title.

Eagles in 2018, Phillies in 2008, and the Eagles in 1980, the market or the economy tends to go down. We hope that does not happen this year. No, I hope not. We don't want to double-dip recession

or anything like that. Can I mention meta real quickly if we put in the stock chart? It is trying for its 16th gain. We've never even had a METC-7 hit 15 before. It's up by 0.1.1. two. All right, people, I want the street. Keep it alive. I knew you were going

to say that. Thanks for watching Power Lunch. Closing bell starts right now.