>> welcome to power lunch, everybody. alongside contessa brewer i'm tyler matheson. glad you could join us on a somewhat salty day here in new york. quick check on the markets right now. the industrials with modest gains of about five points at 44 742 point s&p about a half a point higher. did to the nasdaq. let's get to steve policeman now for the minutes from the latest federal reserve meeting. >> the minutes of the november meeting site that if the economy performs as expected, as in, inflation continues to come down, the labor market remains around full employment, it would be appropriate to gradually move the rates towards neutral. notice the word gradually appears a couple times in the minutes. all participants agreed at the meeting to lower the rate in november. almost all saw the risks on both sides of the mandates between full employment and stable prices to be pretty much

balanced. some saw less downside risk to the economy in the labor market. some suggested that the fed could pause if inflation remained elevated. some said easing could be accelerated if the economy and the labor market weekend more than anticipated. there was uncertainty over the neutral rate complicating the level, determining how restrictive the fed is, and underscoring the need for the fed to move gradually, because of that uncertainty over the level of restrictiveness and the neutral rate. the committee did see progress on inflation but noted it remained elevated. they expect housing inflation to come down in the coming months. a couple were concerned that inflation, however, could take longer to get to the 2% target. several factors we are seeing, putting downward pressure on inflation including declining pricing power in businesses, the still restrictive monetary policy of the federal reserve,

along with anchored inflation expectations. some did not see wages any longer as a potential source of inflation, especially due to productivity gains. the economy was seen extending at a solid pace and the financial system had risks, including unrealized losses on bank assets and commercial real estate. notice, guys, no talk of tariffs. the only mention of the word physical was in regard to china and there was no talk about the election except for one note from the staff about volatility in markets around the election. the fed, this may have been issues that were on the minds of fed officials, but it does not appear they have showed up in the meeting. tyler? >> steve, stick around as we discussed this a little bit more with steve and stanley, chief u.s. economist at santander capital markets. stephen, thank you. we'll make him stephen, we'll make him steve just for clarity's sake. did you hear anything in here that surprised you at all? >> not really. the fed is on a downward path and we are all guessing what the pace is going to be. >> you here in here, some say a

pause is possible if inflation reignites. others say we could move more aggressively lower if possible if you continue to get the economy in the labor markets performing. so it's a pretty balanced report, right? >> it really is, and i think the markets right now are pretty finely balanced. it's pretty close to a coin flip in price in the market right now. >> so cut to the chase. in december, what do you expect? >> i think they'll cut again. i think they feel like they are still pretty far away from neutral so they feel ike they still have some distance to go and they'd like to get another notch in their belt on that. >> we heard fed governor michelle bowman say that progress on inflation has stalled. given the headlines that steve policeman just brought to us, does it sound like that was factored into the discussion in the last meeting? >> i think there is starting to be a little difference of opinion among fed officials. i think powell and a number of others on the committee are feeling pretty optimistic about inflation with some of the more hawkish members like governor bowman starting to question a little bit. >> steve, what are you seeing

on that front? are you seeing those echoes we heard from the fed governor? >> when they say almost all risks balanced that may mean that it's just bowman or maybe bowman and a couple others who are a little more concerned about inflation. but i think the operative phrase, i was just rereading it, contessa, to make sure i presented it correctly. i'll just reading it to you. in discussing monetary policy participants indicated that if the data came in about as expected, with inflation coming down to 2%, the economy rating their maximum employment, it would likely be appropriate to move gradually toward a more neutral policy. so what does that tell you? i think that tells you that it's going to take a bit to shake them off of this trajectory there on. they're moving gradually. they're in no particular hurry to get there, but still, the direction of travel has not changed and i think it would take a pretty market changing what's going on with inflation or for example, acceleration in the labor market, that would alter them from this path they created >> you said that there was some question over determining the neutral rate.

the neutral rate, what goes into that? >> well, as chair powell has said, you know the neutral rate by its work, so you set the policy. you see how the economy behaves. you look at the numbers coming in, and if the numbers are higher than you expected, well maybe the neutral rate is higher than you thought it was. if it's lower-than-expected, maybe it's lower than you thought it was. maybe you are less restrictive than you thought you were. i think there is good agreement on the committee that they remain restrictive. this really gets to stephen stanley's point, which is that the fed feels as if they have some ways to go. how much is unclear before they hit that neutral rate. i'm looking now, contessa, by the way, at the probabilities. pretty much unchanged. i think askari, that he should consider a rate cut in december moved it up a little bit so we are now to 59, call it a 60% probability of a rate cut in december. that's about where we are and and that would be followed along. it looks like the market is not sure what happens in march.

remember the way it happened twice was cut in december, pause january, cut march. now it's pretty much cut december, pause in january, and we don't know what's going to happen in march. >> stephen, let's talk about two particulars. one would be your outlook on inflation. is it moving in the direction you would hope it would? and how much progress is being made there? and what do you think overall about the economy, as we are in this fourth quarter and moving into the first quarter of 2025? slower, steady as she goes, faster, what? >> so on inflation i think we are moving in the right direction, but i think it's pretty slow, and it feels like we've seen these fits and starts. we have very low core inflation second half of last year. than it really accelerated to start 2024 point been a little slower and now it feels like we are in another one of these upticks, so we had high inflation numbers in september and perhaps again in october.

so i think that gives the fed maybe a little bit of concern, but in general i think they feel -- most of them seem to feel pretty confident that with time, inflation will continue to come down. on the economy, i think we are heading into a little bit of a soft patch. we were hearing a lot from businesses in advance of the election, that they were pulling back on investment, to wait and see what happened in the election and then what policies might look like going into next year. i think this investment is probably going to be pretty slow in the near term, and then pick up as people reengage with a cooler labor market. the consumer should still be healthy but maybe a little slower than what we've been seeing. >> when you look at the question marks surrounding the incoming president's policies, the tariff proposals that we've just been hearing about today -- and we'll get into that a little bit ahead in this hour. but it's unconventional. the thought leadership that will come out of the white house is unconventional. can the fed interpret an

unconventional fiscal policy through conventional fed policy? >> sure. so i think one thing we know is that the fed is not going to try to forecast or get ahead of what the administration is going to do. chairman powell is very clear about that in november, and i think for political reasons, if for nothing else, they have the kind of play it that way. the fed -- they need to keep their eye on the ball. they're supposed to be focused on inflation and the labor markets. i think they continue to do that and just conduct policy the way they would in any other environment. >> steve liesman, final word to you. want to sum it up for us? >> i think what stephen staley said is what i was going to emphasize. maybe the reason why there is there uncertainty in the march probabilities is because we don't know two things. we don't know exactly what the administration is going to propose, how it's going to

affect the economy, and of course the outcome from that, how the fed will react. it may be way down the road, if stephen staley is right in how he's thinking about powell. i have no reason to think that he's wrong. then, what you would do is you would have a policy connected. it would hit the economy, and then after some time, it would show up in the data. so you can imagine the fed not necessarily reacting to this, if it's just reacting how it affects the data, to maybe a year from now would not be a crazy thought. now it will change the outlook it will create more uncertainty and that may cause the fed to move more gradually. i think that's probably the best measure. >> steve liesman, thank you very much for bringing us that coverage. stephen stanley, you're going to stick with us. let's get into that tariff discussion and just a little bit. thank you. let's get to rick santelli now in chicago for a look at how the bond market is reacting to what we just heard from the fed . >> you know the markets do have an opinion here. if you look at one chart on an intraday, what should jump out at us is several things.

first of all, two year lead to move lower, short maturities, because of the implications of the fed. they are down about three basis points from where they were prior to the minutes and that was around 4:29 point we are down about a basis points, actually 10 is now back right where they were, 4:31. they haven't moved much and that makes sense because when i look at the minutes i think like the market thinks, at this point. there's a bit of a rethink going on. didn't read anything about weakening the labor market. i understand we didn't see much about the election and politics. that makes sense, because nobody really knows how things are going to happen after the president is sworn in. he's already making a difference without getting sworn in by floating some of the tariff ideas with regard to issues like mexico, and on the neutral rate, you know u.s., how you comput calculate a neutral rate, there really isn't an answer. its guesswork. they think it's a lot lower and they said that in the past. they didn't say a lot lower this time so there are question marks. but if you look back to friday, even though rates are up-to- date a bit from friday, we can see how monday really took the

wind out of the sails of higher rates and stopped the attempt right at resistance at 4.5%. and when you put all three on one chart, dollar index, twos and tens for a two month chart, which encapsulates the run operates in october, you can really see that for the most part, the issue that the fed should think about is that maybe they are looking for less fed, because it certainly seems, though, there is a sideways stickiness to rates, very similar to year-over-year inflation core numbers. which, by the way, we'll be getting more of tomorrow morning. contessa? >> and you'll be all over that, i know. rick santelli, in groupthink with the markets. that was my take away thr.ei rick, thank you. coming up, not so free- trade. president-elect trump expanding his tariff targets beyond china, onto north american allies canada and mexico. what happened to our deal? we'll discuss the impact on the economy, next.

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president-elect trump threatening to hit not just china, but canada and mexico, as well, with tariffs on his first day in office. let's bring in amon jaber's now for a look at what mr. trump said and also the mission behind it. amon? >> the president-elect's flurry of social media posts are raising the question what he's up to here is the bar he's sitting for compliance by foreign countries is almost unobtainable. trump took to social media to complain about human migration and also drug trafficking in suggesting that he'll imposed tariffs on canada, mexico and china until the flow of fentanyl, in particular, has stopped. trump said he will impose a 25% tariff on all products coming into the u.s. from mexico and canada. he also wrote drugs are pouring into the country, mostly through mexico, and until they stop, he'll charge china an additional 10% tariff work of

the chinese embassy in washington responded with a statement of its own, sayingno one will win a trade or tariff war. the idea of china knowingly allowing fentanyl precursors to flow into the united states runs completely counter to facts and reality. now the stakes here are enormous. $130 billion in u.s. vehicle imports from mexico in 2023 and billions more in electronics, machinery, and other goods. the big-ticket items coming in from canada include more than $130 billion in mineral fuel oils, distillation products, along with vehicles, commodities, plastics and so much more. so this may be an attempt by trump to speed up a renegotiation of the u.s./mexico/canada trade agreement that he signed in 2020. that deal is up for renegotiating '26 but trump may be calculating here if he can bring all sides to the table earlier, using the leverage of

tariffs, and that's what we are seeing playing out on social media over the past week. what i see here is what we know, i think, about president trump, and that he is about making deals and he is about applying leverage wherever he can. and this is leverage to try and get trump -- from china, from mexico, from canada the kinds of concessions he wants, and he's using an economic weapon to address things that are, in some cases, really not economic threats like fentanyl. >> i think that's exactly the right way to look at it, tyler. the problem for trump here is that he can't have a win/win. he wants the tariffs and he also wants fentanyl out of the country. in theory, imagine that fentanyl could be shut down by these foreign governments coming into the united states. that's debatable. but except that for a second, if the tariffs were to do that, then more the merrier, right?

but ultimately, if you have the tariffs in place and you have the fentanyl coming in, you got a problem. you can't win on both sides of this argument. >> what's the reaction from canada and from mexico? >> we'll see. there was an interesting point from justin trudeau that said that this relationship requires some maintenance and that's what we're going to do. we are going to put in the work. so clearly mexico, the leaders of mexico and of canada have seen this movie before. they know who donald trump is. this is not an unknown character coming into the white house, so they'll have a plan of their own to deal with t. >> that's like the understatement of 2024, probably. amon, thank you for that. let's get more on how trump's tariff plans would affect the markets, once again stephen stanley, chief u.s. economist at santander markets joins us and let's also bring in malcolm average, managing partner of capital area planning group and a cnbc contributor. malcolm, the tariffs have long been telegraphed by trump. how is that for alliteration? what do you make of the targeting of canada and mexico in this case? >> yeah, can tessa. i am not as sure as tyler and

amon seemed to be just then, in that last conversation about the fact that it is 100% meant to be a bargaining chip and part of the reason i say that is the answer to your question. in fact, we are now rubbing mexico and canada into what, to this point, has been a conversation about china. and i think the global markets seem to be a bit torn in response, too. traders in the u.s. have been fairly muted today. maybe positive. and of the dollar has been rallying, which is sort of the opposite impact i imagined that the incoming president wanted to have her go but currencies are steadily falling all across the other countries that we are talking about. so americans might be used to trump and his hot and cold temperament, and big commissions when it comes to negotiating, but the rest of the world obviously is not. >> let me push back a little bit on the bargaining chip point. we raised the idea that reason the tariffs on china might be employed as a way to get china to restrict the flow of fentanyl and its precursors

into, through mexico, into the united states. but the same could be said here about tariffs being applied to mexico. they want to stop the fentanyl that's coming across the southern border, in precursor for more in final form, so that could be a bargaining chip their. and they also want to control the flow of refugees and immigrants across the mexican border, and an economic penalty that causes pain and mexico might induce the mexican leadership, a new leader, by the way, to take stronger steps to control immigration. so it's not merely economicfor tat. it has to do with these other -- let me call them, for lack of a better term, more social objectives. >> the concern there that i would have as an investor, or the implications that all of those tariffs would have on inflation. so the last 2 1/2, let's call

the years, the fed has been doing the one thing it can do to bring down inflation. and in the middle of us easing, we're in the middle of a cutting cycle on interest rates, everything that we are discussing right now, presumably, would be inflationary. so i understand the idea that it helped solve one piece of the agenda from a social perspective, but it also stands to undo a lot of what has been done by jerome powell and crew. so i think there has to be a balancing act. >> don't disagree at all about that. do not disagree at all about that. >> stephen and i were having a conversation before we came out for power lunch today. >> you talked to him before, without me there? >> i invited you. i couldn't find you, but the conversation was about insurance, which i covered fairly closely, and all the complaints that we've been hearing about. premiums for car insurance and for homeowners insurance. part of the reasons those premiums have skyrocketed is because the cost of replacing homes, or your roof, or repairing your house, the cost of replacing your car or repairing your car, it all shot up. we can see it in the cpi. and so, my question was, is it

inflationary, even for an industry like insurance, if you're putting tariffs on cars and car parts and things like that, that are coming from mexico. and you had a really interesting answer for me. >> so you have two -- well, if you're an economist, a layperson would have a different answer, but as an economist you make a distention between the level of prices and the rate of change of prices, which is inflation. and the fed has often said that they tend to look through one time changes in prices. so if there's a one time tariff hike that raises the level of prices, but it doesn't change the longer-term trend of inflation, so the fed has had in the past they would look that. oil shock would be a good example of that, in the past. >> so it's not -- tariffs are not necessarily inflationary the >> they are not necessarily inflationary but they can be -- if there isfor tat, we go back and forth and there are multiple rounds of retaliatory tariffs, or if the initial imposition of tariffs leads companies to raise their prices by more than the amount of the

tariff, for example, which would have probably never happened in 2018, but given the inflation we've seen over the last few years, could happen this time. >> when you said you see a softening patch coming ahead, as companies maybe hold back from x investments, so they like to see the new president, the new policies play out. how do you see tariffs playing out in the overall impact on the economy? >> i think there are pluses and minuses from the business perspective. lower taxes obviously a plus. deregulation obviously a plus. tariffs definitely a minus and potentially, if you go back to 2018, i would make the argument that the biggest impact that tariffs had in terms of eroding growth was the uncertainty that they engender, right? because you start out by saying i'm going to put tariffs on this industry, for this reason, but the from messages from last

night suggest he could use tariffs for any purposes. so if i'm a business, i may think i'm safe from a trade war, but maybe i'm not. >> it also complicates, i think, malcolm, when you have certain industries who make decisions. so you are in an industry, a textiles industry that moved from china to vietnam, so that you can take advantage of more favorable trade policies. if you don't know what's coming down the pike, if you don't know whether mexico, which is a favored trading partner today, might not be next year, it's very hard to plan for the future. >> i think without some sort of offset, right, to ensure that business back from wherever in asia it might be, to the u.s., which i assume is also part of the trump agenda and what they really would like to see, there is a lot of these companies that have left the u.s. and ultimately those jobs also left, come back into the country. so if there is some sort of offset that allows those companies to benefit from bringing that in house, where we would be able to predict a little bit better control, a

little bit better, because you wouldn't have the destabilization of currency exchange and all those sorts of pieces. i think that would be a benefit that people could get behind, but just simply the rhetoric around ideas of tariffs on countries across the board, carte blanche, causes way more instability than i think maybe is intended today. >> a couple of your stock picks, malcolm, have nothing to do with tariffs. they have to do with cybersecurity palo alto and so five point give us quick thumbnails of both those and why we like them. >> so i'll go with palo alto first because it does tie slightly into the conversation that we are having. the pullback that we had in response to the earnings last week presented a great buying opportunity, actually added shares, because there's a lot of rhetoric that's happening against china from the u.s. currently, the incoming administration. we already know that one of the more hostile bad actors when it comes to cyber is china, and so i think that palo alto being one of the largest fisheries of federal spending on cyber defense is going to be even

more benefited from those contracts coming their way. >> that could be a part of a bargaining chip, a tariff to pressure china to cease its whatever cyber mischief they are doing. malcolm, thank you very much. stephen stanley, thank you for being with us for 25 minutes, from the start of the show. that may be a record all-time. >> he's like that, that's a lot out of my day. >> and then you talk to him off- line. >> i took up some of that, too. we appreciate it. is amazon primed to take the lead in the a.i. race? our next guest says the company's deal with anthropic could be a game changer. the market navigator is next. sent! okay, oop! even bigger. sent. [sending swoosh, notification alert] still bigger. okay, yeah i'm not doing that— [typing noises, sending swoosh]

i think it still looks good! [notification alert] oh — even bigger.

welcome back to "power lunch". there you are seeing green arrows across the board although the dow is flat. the s&p 500 p a third of a percent, same for the nasdaq composite. we'll keep our eye on that throughout "power lunch". now let's get to today's market navigator. dom to joins us.

what's in it? >> we're turning out to the a.i. race, what else. amazon announced last week it will invest an additional $4 billion in anthropic after the artificial intelligence startup founded by ex-research executives. our next guest inks that positioning amazon to take a leading role in the space, despite all the open a.i. talk. joining us now is just inskeep, the director of investor research at stockbrokers.com. jessica, this is a multi-horse race why is it, in your mind, that amazon is the one that we really have to watch? >> i think the narrative is a little incorrect, saying that the big competitor now emerging is in vega, and i really think this anthropic investment with amazon emerges a new competitor, which is microsoft. it makes it -- amazon has the infrastructure but lacks the intelligence to become an a.i. titan, so thisbillion investment, it brings chat gpt's main rival, which is quad, to amazon. we have to remember amazon has a lot of devices. it has the infrastructure, and now it just needs this large mike wood model. it doesn't necessarily have the

clientele that chat gpt does, but because of this infrastructure, think 2026, especially with the news of nvidia today, it's going to really heat up the a.i. wars. >> the nvidia is audio, generative a.i., everything is getting some aspect of it. what exactly than is the trade that you would make on amazon if you feel as though they are the best positioned? >> first i want to define my sentiment, which i definitely want to use the technicals to do, and the technicals are certainly in harmony. there showing a bullish trading cycle. dom, you know i like to look at the 13, 26 and 40 weekly moving averages because that represent one, 2 3/4 worth of prices. i want to see that increase as we look at the market quarterly. that's acting as support right now to a lower level, around 193. my near-term resistance is around 215, which is that i made back in november 11th so i really have a bullish sentiment, a bullish backdrop on this. i just want to see a continuation of the rally and of course i'm watching the strength of the trip so this is the one thing i'm flagging.

i utilize bands to look at momentum when i'm looking at a weekly chart because it represents two standard deviations. if i have to trend momentum i expect it to stand at the higher end of those deviations. that waned a little bit but i see us heading toward the upper end of those bands. so if we were in the upper end of those bands, that's going to get the strength. so meaning i am neutral short term, bullish long-term on amazon right now. >> what does that mean in terms of your strategy? how exactly would you position yourself to capitalize on these particular moves? >> to deploy that i'd like to add it to my longer-term portfolio. i love to do that as an option trader by utilizing a cash secured play. i essentially am selling the put, creating an obligation to sell the stock on my strike price so i'm selling the general 17th 205 strike looking for something closer to the money. that gave me about $6.65 altogether. i'm risking that entire exercise value of $205 per share. however, it's offset by that upfront premium realizing $6.65

point >> so you're using that cash secured put. you make it a little bit cheaper to get amazon stop. just inskeep, thank you very much. see you soon. happy thanks giving. this is an interesting play because there are so many kind of crosscurrents and channels. there are people who are allying with each other, investing in each other. the large-cap picture for tech very muddled by all these investments in a i. >> the other thing is if you look at google, amazon, microsoft, capturing two thirds of this market, it would be interesting to see, of the other third that is chopped up, who's got an opportunity to make a run at it and make a go of it? >> i would say this, contact a. i think of all the mega cap tech companies, amazon probably knows the most about it. >> thank you, don. tyler? >> thanks, guys. after the break we'll stick with the a.i. space. it's been two years since chat gpt launched. how far has a.i. developments, and are we ready, or already moving into the next

big thing, and what could it be? "power lunch" will be right back. >> market navigator is sponsored by charles schwab. trade brilliantly. the type a cpa. the boot strapper. the boot maker. hee-ha. but many do have something in common. we all trust schwab with our wealth. thanks to our award-winning service, low costs and transparent advice, every day, over a million multi-millionaires, trust schwab with more than three trillion dollars of their wealth. ♪♪

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russia escalate using crane emergency meeting. kyiv called the meeting following russia's launch of an experimental, indeterminate range ballistic missile last week. naito called the attack another russian attempt to intimidate ukrainians. texas's land commissioner announced today that morland will be available to the incoming trump administration to use for detention and deportation facilities on the southern border. it comes ahead of trump's promised mass deportation once he takes office. state officials say they purchased a 14,000 acre ranch for this purpose and said of the properties have already been identified for federal use. and dictionary.com named demeter as its word of the year. searches for the word exploded in august following a viral video from tiktok or jules lebron. dictionary.com says it saw a 1200% increase in usage in digital web media alone. other words that made the

shortlist were brain rot, brat, and extreme weather. tyler, i guess the kids are learning some vocab on tiktok. >> that was a very demure report. thank you very much, pip. it's been two years since chat gpt was released to the public, kicking off an a.i. craze that has sent stocks soaring. the nasdaq 100 is up 77% over that span but could the a.i. fuel rally be running out of steam? kate rooney joins us now from san francisco. what say you, kate? >> that is the big question, the launch of open a.i.'s chat gpt about two years ago really did kickoff this a.i. rally. it created sort of these haves and have-nots intech, when higher interest rates were really eating into growth and valuations. a.i. memes in the past two years or so. our data team looked at the global x a.i. tech etf. that's jumped in value by about $11.5 trillion, roughly doubled over two years.

that's across 84 stocks. if you look at just nvidia, microsoft, amazon, apple, meta, those six names added $8.4 trillion, making up most of that in market cap. the big question, as you mentioned, is the solid bubble? what's going to happen next? most investors i've been talking to say there are some bubblelike pockets of this market but overall they think we are still in the early innings of this tech week. they argue it is not likely.com many of the late 90s. cap ex is one signal, as long as that keeps climbing as the hyperscalers, those big tech names i mentioned keep spending, he said they are all in on this and that is a positive signal, also pointing to multiples. microsoft and nvidia are trading below 30w■026 earnings. says that does not signify a bubble in his mind. adam parker also in the no bubble camp, points to the broader rally. but energy and infrastructure beyond just tech. what he says would end the a.i. party would be any sort of sign of lack of demand from nvidia and tsn, some of the chipmakers. he's also watching for a.i. earnings, any companies

increasing margins that may need to hire would be a bullish sign and nicole is telling me it does have some of the vibes of the 1990s he says the.com bubble there but he says without the scores of ipos we had in the fact that we have not seen the amount of ipos tells him the bursting of any sort of bubble is still some ways off. the bubble does seem to be happening in private markets. >> speaking of private markets, i know you had some reporting this afternoon on data ricks. >> and tessa, data brix is one of these a.i. darlings out here. i'm told by several sources it's in the middle of raising between $5 billion and $8 billion, which might break a record. remember open a.i. raised about $6 billion. this could top that if it ends up going at the high end of that range. it would be a $55 valuation and we talk about the bubble. a $5 billion-$8 billion round

is massive and it seems like we reporting one of these every other week. the numbers are just eye- popping and it really has become the norm. you talk to some ceos out here, they worry about a bubble. they worry about going public, actually next year, at the peak of a bubble. you remember in 2021 when interest rates were at zero, a lot of companies went public. they look at that is the example of what not to do. if you go public at the top, your investors end up losing money. your employees end up losing money. they really don't want that so that's some of the conversation i'm having with ceos. they do worry about it. i would say also in venture capital, the mindset is they willing to let 9 out of 10 companies failed so there is this fellow factor that's sort of baked into the venture capital investment in general, just the mindset, and they're willing to kind of chase the next big thing, as long as they get that 10 bagger, as long as they get that one out of 10, they're willing to let some fail. so a bubble is kind of a part of the boom and bust aspect of this. >> it sounds like gamblers, like that's the mentality of gamblers, too, in las vegas and elsewhere. but if investors are looking for the next big jack pot, it sounds like they're really

focusing on quantum computing stocks. we've seen those names really soaring in the past week after amazon web services launched quantum and bark. it's a program that helps customers prepare for the era of quantum computing. is this the next big thing, kate? >> no, it's a great question, can tessa. quantum computing, i think a lot of people look at this as they were trying to find the next nvidia. they are trying to find the next sort of picks and shovels of a i. this is seen as one but quantum computing has been around for decades. it's been around about as long as a i. it's really deep technology and there's not that many publicly traded ways to get into this. what those stock charts are going to buy, to me, is a little bit of phono, a little retail chasing the next big thing and it is something that's talked about. you've got amazon, google, a lot of the big tech companies trying to build their own supercomputers and quantum computers. there is an a.i. aspect that makes sort of improving these models a lot

easier and a lot faster, so yes there is sort of some optimism around that, but i would say what's happened to the stock charts is more a symptom of phono, of retail chasing, and a little bit of the frothy cl there. there. look at something like (♪♪it's going. that's another symptom of some of that underlying sentiment. >> all right, kate. good to talk to you. thank you. >> coming up, amgen announcing its expert mental weight loss drug to help patients with obesity dropped 20% of their body weight after a year, but that news doing nothing to lift the stock today. one of the biggest drags on the dow. we are going to get the full story here. >> it's losing weight. >> it's losing weight in the dow, down 6%. we'll be right back.

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welcome back to "power lunch". you are looking out at the markets. you see the s&p 500 up almost a half a percent, the dow industrials up a 10th of a percent and the nasdaq composite up .3%. the dow had just turned positive despite what we saw was a big drop in amgen. angelica people joins us now with more. you would think if you said, okay, you're showing some real improvements in weight loss, that would be enough. instead, the stock moving in the opposite direction today. >> executive, and i think it just speaks to the competitive dynamics that were in here because you do have these two

effective treatments on the market from lily and novo, so the bar is higher. amgen did say people who took merritt island lost on average 20% of their weight but the street was looking for closer to 25% so already there's a disappointment. and with the side effects, 11% of people dropped out because of any side effects and 8% specifically because of gastrointestinal issues, things like nausea and vomiting. they are common with these drugs together, that brings a mix that raises questions about really how competitive they can be here. again, lily and novo, who have a big head start. so there were also some questions about really what's next for amgen, what their plans are for the phase three, and they didn't answer a lot of those questions yet because they are saying they are in conversations with regulators. but i think, as a whole, investors are kind of looking and trying to figure out what

is next for them. but you are seeing the stock pair back some of those losses. it was done closer to 10% earlier and now down 6%, so maybe people are getting a little bit more comfortable as they digest these >> i'm just curious, were you satisfied with how much detail you got in the report, or was there some reluctance on the part of amgen to share everything that might be of interest to investors and alt/journalists? >> that was a big question that did come up today on the call. there was a call for investors and also a call for reporters. and we were trying to ask basic questions like can you tell us what can you tell us about the side effects here and about the doses that you're seeing? where are you going from here? and we didn't get a whole lot of detail. even things like trying to specify exactly, can you talk to us about the rates of nausea and vomiting, and how those compare, and it seemed like a little bit of they were not given straight answers, and i think that was frustrating for people. they just kept reiterating, these data look good. we are seeing weight loss that's going to get better over time, things like monthly or every other month, because they explore both of those and i

asked them specifically, if it's working for monthly and every other month, why not just do every other month? and you know we actually talked to regulators, which is a fair point. i think that just adds to this confusion today. >> comparing the side effect profile, and the side effects can be quite distinctive. >> there is a problem that we've seen with all of these drugs but people are trying to parse out exactly how it compares from the tied with what we already have on the market. evercore put out this list of just taking down all of the percentages of -- >> g.i. side effects? >> if you feel sick or you want to be skinny. >> that's not to discount the fact that this is a monthly, possibly even less frequent injection because actually just heard from an obesity doctor that we talked to that said that is something that's valuable for patients, and the

fact that maybe if you do lower the dose, the starting dose, that maybe you can decrease some of the side effects. but again, this speaks to just the state that we are in, but it's not enough to show 20% reduction in weight. you need to think about everything. >> i bet when that analyst was in business school, he never thought that he was gog toin be listing out the side effects -- like what's the percentage of these sort of gastrointestinal side effects? thank you for covering the story so well. appreciate it, angelica. >> still ahead, we will trade some names who could see a big ripple effect on president trump's trade and tariff threat. a special three stop lunch is next. we'll be right back. we've got you. with verizon, anyone can trade in any phone, any condition. and get iphone 16 pro with apple intelligence. get four on us. only on verizon.

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you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! welcome back. time for three stock lunch. earlier in the hour we discussed president-elect's vow to add tariffs off can ka da, mexico. and now we'll talk about trades that can affected. victoria green, founding partner and a cnbc contributor. first stock is walmart and you say walmart is going to be better able to navigate these tariffs can use its size and scale to help offset the costs. explain. >> yeah. so actually walmart is a huge winner regardless.

everybody has concerns oh, my gosh, everything they sell at walmart is made in china. but the fact of the matter is, it's not going to be walmart likely eating that. it's all their suppliers. think pepsi, procter & gamble, kimberly clark, nike, anybody that wants to sell in walmart, walmart is the biggest retailer in the world and say you need to eat some of that cost. they likely make their suppliers eat the bulk of any tariffs and continue to provide discounting. we saw that work well during the inflationary periods of 2021 and-to-and 2022. i want the biggest bully in the world, walmart, giving me the best prices for their customers. >> i can hear the pr people freaking out being called a bully. you make a point. >> bully in a good way. >> right. >> yes. >> bully pulpit like the preacher. constellation brands, maker of corona and modelo, tied heavily to mexico. is that a problem? >> i think it's a huge problem.

some people are arguing this was part of the reason they have to keep the manufacturing there with the distribution deal they made about a decade ago, but i see this as a massive problem for them. 87% of their revenues are beer related and their beers are corona, modelo and it's estimated a 25% tariff is going to increase price to 12%. not only facing a potential tariff headwind but focused on mexico and seeing declining volumes. only reason the revenues have gone up because they're raising their prices but not actually selling higher volumes, specifically beer business which is a lot of their volume and most of their revenues is already a declining business with the younger cloud. they were facing secular headwinds with beer drinking in the united states going down, now they might be facing tariffs. i want to sit this stock out. worried it's going to hit new fresh lows and retest lows for 2022. >> did you say they had a beer named victoria after you? >> they do. >> so wow. >> named it after me.

absolutely. >> you ought to -- better serve it then. final name is general motors. could be big pressure on automakers to build at home and the industry on the hot seat. we have about a minute. >> yeah. so for me, this isn't just about the four manufacturing plants that gm has but all the parts suppliers based in mexico. may see upward pricing on cars and we've seen that be difficult. if we see upward pricing on cars, gm has to raise prices, seeing slowing car sales volume that's bad for them. they got called out by name by the mexican president and may get caught up in the tit-for-tat and they are the largest exporter, mostly in the u.s. and canada, and they are looking at a whole lot of problems if there's retaliatory tariffs. people overlooking how many parts manufacturers are based in mexico. even if gm can slightly avoid these tariffs all of the manufacturing and parts coming in likely more expensive. >> and that is where we got into car insurance and how down the

road, this could actually have an impact there as well. victoria green, thanks for joining us. happy thanksgiving. >> happy turkey day. >> we have a dow moving higher by 47% right now. russell 2,000 is negative. s&p positive by about 0.5%. the same for nasdaq. thanks for watching "power lunch." >> scott wapner and the "closing bell" start right now. >> yes, it does. >> we gyp with breaking news on "closing bell." welcome to our program. we are waiting on president biden to deliver remarks at this moment in the rose garden. momentarily. he is expected to address a possible cease-fire deal between israel and hezbollah. it is a significant development and we will take you live to the white house as soon as we do see president biden. want to update you on the markets as well. what had been a bit of an uneven day has turned green across the board not for the