insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. ♪ and welcome to "power lunch." i'm brian sullivan along with

kelly evans. stocks a little bit higher this afternoon, but a bunch of billing tech down again. is it all high? is it all because of borrowing costs? >> good question. 4.8 on the ten-year, we are watching the bond yields after this inflation report. we were 0.2 on the headline, alf as much as expected. core flat. cpi comes out tomorrow. >> all of this may cost you, the taxpayer, more money as debt and deficits keep going up. the higher borrowing costs could take a bite out of everyone. >> absolutely. fair point. also, following this trickle becoming more of what is the next step after a trickle, a flow? united rentals buying h and e equipment services for nearly $5 billion. >> stream. >> you are welcome. >> it's up 105% to the today. breaking news out of the federal reserve. steve liesman, what's the story? >> we have the minutes of the discount rate meetings with the

federal reserve. what we learned, kelly, was that only eight of the 12 banks leading into that december meeting requested a cut in the discount rate. that is the board of directors. they meet. this is an indication perhaps of where the president of the federal reserve bank wanted them to go. sometimes they direct them. sometimes they don't. but only eight of 12 wanted it, which four did not, kansas city, megacap, dallas and st. louis did not request a quarter point cut in the discount rates. that suggests that four of those presidents are a little more hawkish, at least the boards are, perhaps the presidents as well. some directors were cautiously optimistic on the outlook. others, however, most directors cited uncertainty about potential changes to trade, fiscal and other government policies as affecting their outlook. importantly here, two of the four banks that didn't request the discount rate are headed -- kansas city headed by jeff

schmidt and st. louis, both of them have votes this year on the federal market committee. so those two guys, you can look at it, potential staking out a kind of hawkish position or hawkish wing of the fomc this year. >> in other words, would the discount rate be news or is this news because you think there is something to read into about the next direction on interest rates? >> yeah, the latter of that, kelly. usually, okay, an example. in september, all 12 discount -- all 12 banks requested a cut in the discount rate. not all requested 50 basis points. for the november meeting, ten of the 12 did. now we are down to eight of the 12. so i think this tells you how -- remember when powell said it was a close call? it was a close call, more banks did not really seem to be onboard with that quarter point cut. then i think it's also important that both st. louis and kansas city, those banks did not request the cut and they are

headed by two guys who have been a little mo more on the hawkish side of late. >> appreciate it, steve. steve liesman with the it's least from the fed. and in terms of the markets, we are at an inflection point. no, good news is bad news. recent economic data does make a january cut and about a two weeks time, unlikely. the chief investment officer for public investing at goldman sachs asset management. great to see you. we don't want good news to be bad news. we want good news. it's odd. even this morning you got better news on the ppi and battlefields go up. nothing is what you want it to be. >> it's not as bad as it sounds. but what we're hearing and what those fed presidents are telling us is that the labor market is robust, they are seeing kind of good outlook on growth. so the cuts that have been made probably don't need any more in the near term until the economy slows further.

>> is that good news? people say we were supposed to get seven rate kidults last year and got two or three and the market did incredibly well. >> it could be good news but it probably changes the outlook versus spechting 100 or 150 basis points of cuts. it's one of the reasons we are focused in our bond strategy, being dynamic, taking advantage of relative value opportunities there, but in our stock strategies being more about income and the question, how do you generate income from your equity portfolio. >> if you want an income, you can get 5% on a ten-year right now. >> yeah, you certainly can, but -- >> it's free in some cases. >> well, you are still paying taxes on the treasurys. >> you know, there is some benefits. >> then you take the volatility of the bond market and a lot of investors if you are investing in the long term that's not what you want to do. besides, you already have stocks. so the question is, how do you make sure that the stock allocation in your portfolio is generating income.

you are not as exposed to the volatility we have seen the last two weeks where stocks are up, down, but you can take of advantage of high dividends in europe or selling calls against your positions which you can do in etf form now in a tax efficient way. >> here is the dirty reality of wall street the last year or so. if you just bought, like, amazon, nvidia, if you bought, like, the qqq etf, you outperformed about 95% of hedge winds. multibillion-dollar hedge funds with gigantic homes in greenwich, connecticut, you have done better than them. that, i think, will change. higher rates will hurt that. so, how do we look smart and make money in the stock market and please don't tell me just buying the triple q again. >> no. so, i think you are right. i will add another one to do you, that the valuations are

higher. guess what? this is the highest level of optimism that you have ever seen when it comes to retail and investing in equities. what we are really talking about is that the story about last year, we know this happens all the time, where people look back to last year and they try to rinse and repeat. we don't think that will be the case. we think you want to be invested and we think that the places you are going to go, right, go to bond to be dynamic and generate income -- >> did you say bond and dynamic in the same sentence? >> i did, because -- >> maybe james bond. how in the world are bonds dynamic all of a sudden? you are a dynamic guy. >> if you are actively managing a bond portfolio, most people are investing in active strategies, you know, things like the heavy deficit you highlighted create opportunities in steepening curves in the bond market, and you can actually

make money without having to pick the direction or time the fed. on the complete opposite side, if the fed started cutting tomorrow, right, the place you are going to benefit the most is small caps. and we've talked about small caps. there is an additional reason to love small caps in this environment, is suddenly the deal environment has changed and you just highlighted it. >> i know. but the problem is -- >> she is obsessed. >> when they did rate cuts, the long rates went up and the small caps have not been able to keep up. >> that's right. that's why you have a diversed portfolio because the small caps? their time because as you highlighted, brian, last year the nasdaq went to the moon. the mag seven has driven this. this year it's going to be, if the fed actually does pivot, small caps will be the place the money flows. if that doesn't happen tearing income out of your large caps is going to be what you want to do. by the way, the u.s. is unique,

right. u.s. is beachfront property, i said it the last time i was here. we are exceptional in that we have technology and commodities in energy, which is in shortage. and so when you think about the world and investing, you can look outside the world for bonds that are not u.s. bonds and that's where the big rate cuts have been happening. >> all i say, if you owned the qqqs in 2015, they were trading at a hundred. they are 500 today. i am not sure this sta a story of the last couple of years. it's what you said. the exceptionalism, innovation. we had new announcements from chatgpt. they will let you go -- chatgpt will now roll out a beta feature where you schedule your own tasks to be performed at a future time. i think the secret is, maybe stick with the qqqs or into area of technology versus trying all these strategies where you are bending over backwards to make sure that the timing and conditions are right. >> you are highlighting a really, really important point, which is chatgpt is not an openai or not actually in the

nasdaq today. >> i know, but a lot of the beneficiaries of their rise are. >> no. you are highlighting the important point, which is now it's about the applications of a.i. not the infrastructure. right? it's not just about nvidia chips. it's now what do you do with all that processing that happened. how do we generate revenue out of it, which we all know that revenue is the end game. we saw this in the dot-com bubble. we are not saying it's a bubble, but you see this migration from infrastructure to application, and we think you are going to start to see -- >> remember global crossing? >> i do. >> they spent tens of billions of dollars building fiber-optic cables on the sea floor. we couldn't operate today without them. they bankrupted themselves building those cables we still use today. i worry that a.i. is that same thing, a lot of these companies will bankrupt themselves. ultimately, we use their technology as long as it's not

money not getting wiped out. >> here is the thing. the hyperscalers today are actually doing the investment out of free cash flow. right? that's the difference. people, like the large companies investing in this space, microsoft is investing $80 billion in 2025 in a.i. infrastructure. and that is coming out of cash flow. it's not the startup. there are startups in the space. some come. some will go. we see a broadening of the space. by the way, a lot these companies start off in the small cap universe. >> appreciate it. so let's stay on this borrowing costs and debt and interest rates story, talk about bonds and bond yields, which bond yields so much higher than a couple months ago. everybody thought they were going down. apparently, the bond market did not get the memo. let's get to rick santelli out in chicago with more on where bonds and what bonds are doing today. rick.

>> you know, i find it so fascinating. if you look at the data where all of this started this morning 8:30 eastern, if you took the month-over-month numbers, we made progress. let's look at month-over-month ex food, energy, trade. you see the chart there. it goes back a couple of years. we are down. it was 0.10 today, and that's good news. but if you look at the year over year numbers, and this is the year over year ex food, ex energy, ex trade, the true core, you could see that even though it came down, and that was a late revision from 3.5 to 3.3, it's still elevated. as a matter of fact, all of the year over year numbers are over 3%. what did the markets do? ? this is really fascinating. twos and tens on the same chart, basically the ten-year is higher in yield. after it had volatility. but if you look at where they were at 8:30 eastern, and i was

there, we are at 437 plus or a basis point lower in twos, exactly at the same place in tens at 479. granted, it made a play for 480 and surpassed that briefly. there are clues here. even though the market is unaffected by the cooler than expected ppi, the curve steepen on this. the curve steepens when you get better growth or you are a little nervous about inflation generally, so you could take your pick or take both. come's cpi is, obviously, going to have a larger affect on the treasury complex. but i think it is noteworthy that we are co-existing at this level of year over-year inflation with positive equities for the most part and interest rates that continue to make progress, progress to the upside almost on a daily basis. remember, the low yields of the year, brian, were made on the first trading day of 2025. back to you. >> rick, thank you very much.

we have got one block down. a lot more to go. facing down the government's debt problem. former house financial services committee member patrick mchenry about that coming up. plus, starbucks making a big change, saying do this or get out.

finding the right path

takes experience. as a national leader in municipal investment banking and wealth advisory services hilltopsecurities can help you find the best path to reach your financial goals. with the backing of a diversified financial services enterprise, deep industry knowledge, and a 75-year history of innovation, we don't follow the herd. we lead it. z's bakery is looking to add a pizza oven,

arissa's hair salon wants to expand their space, and steve's t-shirt shop wants to bring on more help. with the comcast business 5-year price lock guarantee, they can think more about possibilities for their business and not the cost of their internet. it's five years of gig-speeds and advanced security. all from the company with 99.9% network reliability. get the 5-year price lock guarantee, now back for a limited time. powering five years of savings. powering possibilities™. welcome back. a lot of breaking news over the last couple of minute. first, some breaking news out of blackrock. leslie picker joining us with that. >> yeah, so i got off the phone with a source who confirmed some reporting from other outlets that mark weidemann is leaving blackrock. he was widely seen as one of the top successor candidates to larry fink on fink's departure down the road. that's not something that has a

specific date yet. however, weidemann was head of the global client business there. he has done kind of the whole circuit at blackrock. he led ishares, he was the global head, as i mentioned, of client businesses. he helped stand up their fma advisory business as well. i'm told this was his choice. he has been a long-term veteran of the company, but he -- it's not clear where he is going, what he is doing. but it was his choice to ultimately leave the firm. >> these stories, you never know what to read into it. obviously, in the case of jpmorgan where this morning daniel pinto said he will be stepping down at some point at the firm. is this the end of an era? is it just, you know, hey, we have some earnings coming up? is there anything to read into strategically? >> both companies report earnings tomorrow. it's not necessarily a coincidence those news items of

only og out today. the weidemann news was expected a little bit later. it's not like there was a memo that circulated or anything like that. i haven't gotten a hold of any specific details internally from the company. that said, you know, you have got this kind of inflection point where you have got these leaders and you have got the kind of bench of people, bench of candidates who could ultimately take their job. larry fink and jamie dimon are well respected, very eloquent leaders that have just driven tremendous change within their respective areas. and so kind of the parlor games of who will fill that seat, if you are looking around and saying, well, this may not happen for a while, it's just going to be time for me to go and/or if you, you know, at some point you kind of get to that age where it doesn't make sense to be the successor anymore if you are in your 60s. i think it was a case of that for both instances. >> all right. leslie, thank you. more breaking news. this time out of washington. the look at how much the federal government is spending. megan has the details.

>> this time it is more than ever. the government spending $1.8 trillion so far in fiscal year 2025. that's about 6% more than the first quarter of last year and setting an all-time record in spending for the first three months of the fiscal year. treasury took in 1.1 trillion, so the government set a record for the size of the deficit at this point in the fiscal year running at $681 billion. that's 26% higher than the first quarter of fiscal 2024. as for what's causing this record spending, a big chunk is interest on the public debt. the u.s. spending $308 billion in interest. the first three months of this year. that's a 7% increase from the same quarter a year ago. then looking across the agencies, they are spending more too. spending up $9 billion at the department of homeland security. most of that due to fema spending more on hurricane and disaster relief. spending at the department of veterans affairs up 13%, or 11

billion. that's a response to congress' move to expand benefits for veterans, social security up 6% this year, and epa also spent an extra $21 billion so nar this year to put towards the greenhouse gas reduction fund. guys. >> thank you. let's talk about that along with debt and deficits because as interest rates rise, you, the american taxpayer, may have to pay more, maybe a lot more if fund our growing debt. the u.s. national debt with $36 trillion, and maybe here is an rbi for you. that is $323,000 per taxpayer. that's what all of you taxpayers owe in the national debt. that just one of the topics at the frontiers of digital finance conference. along with digital currencies and a.i. may impact how you get paid, spend money and maybe even are tax by the government. former congressman and chair of the house financial services

committee patrick mchenry is the keynote speaker at the conference. joining us now from it at the university of miami. congressman mchenry, we just had the breaking news from megan, a lot of numbers there. but the bottom line is this. we are debts and deficits are going up. cnbc.com story from jeff cox broke moments ago, the deficit wept up 40% spending. it's out of control. >> so, it's clear that we have a federal government that's too large for our capacity to pay for it. we are a great and growing economy, yet we have record debt and deficits. this is unacceptable. we have just a year and a half ago negotiated the raising of the e.l.f.debt ceiling. speaker mccarthy had me negotiate with the white house and bring them stubbornly along with spending reductions. unfortunately, this same

congress has gone beyond what we were spending before that debt ceiling, but what we negotiated in the debt ceiling agreement. we had key changes to the environmental regulatory policy and welfare reform connected with those debt ceiling increase. we also got year over year spending reductions. it was specific in the first year, not successful in the second year of delivering on the debt ceiling agreement. we need to have a structural change in how we fund our government and we need a structural change in what our government does and how we spend money. >> i'm going to -- >> it's high time we do this. >> i will tell you something you know. politicians get elected by promising to give people stuff. not taking stuff away. i say this dearly as a lot of friends that work for the government. the hope -- a lot of friends, in that area all you need to do is go to d.c. and realize how rich it is. winchester, virginia, is basically a suburb of

washington, d.c. the money goes -- six of ten richest counties in america are around d.c. i don't want to knock the area. i bring it up as the point that do you see spending ever going down because all of that -- >> yes. >> it's funding now lifestyles which are not going away. >> okay. so let's rewind. the debt ceiling agreement i am talking about from may of 2023, we had spending reductions without help from anyone. speaker mccarthy is the only game in town, house republicans only game in town. now republicans run the house, senate and white house and we have elon musk on the case with doge. this level of attention from significant leaders that want to drive change in to our federal footprint, that is how you get change. when you take politicians -- and i am a restorming politicians, served 20 years in congress. when you bring attention to that, you shine a spotlight on it, you demand change and the markets demand change,

politicians follow. that level of attention and import with elon musk running doge is a welcoming good thing. i want them to be successful. i hope they are successful. we desperately need it. >> i mean, to kind of build on that, there are people on wall street kind of desperate for a signal that we are bending the curve and it's just unclear where that is coming from, what that's going to look look. when interest costs are this high, congressman, what do we do? not doge, but the real meaningful programs. how do you fix that or raise revenue or -- what is the answer? >> so the largest drivers of our deficit and growing debt are health care and health care related. obamacare has been a disaster. we know that. i don't think -- i won't keep litigating that. medicare and medicaid are the two largest federal government programs. that's where congress' attention needs to be focused and needs to be a part. reconciliation packages that

they will have to extend tax reform to deal with a in am of border issues. 14 the piece of legislation for this year in congress, and it needs to have significant spending cuts and reforms to these programs to have any credibility to extend the tax cuts. >> maybe medicaid, but the president didn't he campaign on not touching medicare? >> yes. and you can take and have substantial reforms to medicaid, which we hadn the first repeal and replace bill in 2017. this is not a new policy set. this is not something -- all you have to do is dust off the old policy and you get significant. hundreds of billions of dollars of savings the next decade by putting in simple reforms like handing medicaid over to the states with a growth rate that is significant but not gross and generous like it currently is. reforms like that have to be a part of this reconciliation package for us to have any credibility with the market that we are going to do important and

big things. >> interesting that it's going to be one big bill. if all of that has to go in it, what is -- like a two-seat majority or something? >> didn't say it was easy. from my cheap seats here, i can tell you this is a part. conversation on capitol hill. and it will be necessary for this package to pass. >> if not, that digital finance conference behind you, they have some alternatives, i think? >> exactly. we need small business lending and we need new ways to do that. that's why we are -- digital finance is here to say. >> digital finance, former congressman patrick mchenry, thank you very much as always. >> thank you. >> quickly, i want to alert our viewers. you often hear that the deficit is down, right? we hear that a lot from specific politicians. no names. no parties. you hear that. here is why it's technically true but misleading.

it's not down compared to a couple of years ago except for covid spending. if you count two years of massive trillions to covid spending or spending around covid, the deficit is down. >> let's put it this way. we are running the biggest deficits outside of wartime or covid in history. >> they can say the deficit is down, it's a trick of the words because it's only down from trillions of spending related to a once in a 50 to 75-year pandemic. >> the last couple of years which haven't featured a pandemic or war, 6.5% budget deficits, the largest outside of those circumstances. based on the data, the first three months of this fiscal year the incoming administration has a huge ship to turn. after break, health care stocks trying to find a footing after a tough 2024. which names might deliver gains in market navigator right after this. wer e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills,

you can stay on top of the market from wherever you are. e*trade from morgan stanley. power e*trade's easy-to-use tools make complex trading less complicated. custom scans can help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. ♪♪

all right. i don't have to say it. i think the animation says it all. time for our market navigator brought to you by charles schwab. you're dominic chu. >> i am. and you are brian sullivan. >> hi. >> that was kelly evans over there.

anyway, the health care sector starting off 2025 with smaller gains but on a relative basis outperforming. it's got a long way to go to make for a tough 2024 with jpmorgan's health care conference wrapping up this week, our next guest is taking a look at the sector and has thoughts where it's headed and which names may be in for a healthier return this year. >> no. >> i did it. i went there. joining us now, mr. sullivan, is carter worth, the founder and ceo of worth charting. it was the worst performing, single worst performing sector in the s&p 500 over the last 12 months. so is it due for a bounce? >> yes. thank you. good to see you both. the question here, of course, is it right to play this laggard? times also weaknesses to tay away from and weakness to take advantage of. my hunch is the latter. start with the first chart, over the past ten years basically

you're talking about an aggregate, one of the parts, that am composes the hole, up 100%, orange line, health care, where the market is up 200. so it's not only been a real problem over the past 12 months, but over a long period now. which is to say the relative performance of the sector peaked to the market in 2015. the question is, what to do? it's the fourth largest sector in the s&p. i think there are individual names that. take advantage of. we have two here to focus on. so the first to look at would be isrg. this is a steady orderly up trend. it's bounced off the trend line to the penny, to the penny, to the penny. you know, the relative strength, momentum very much intact. it's a case of stay long, be long. by my work. now, another smaller stock but still both very large cam is striker.

but the same circumstance here. the importance of respecting trend and then trying to take advantage of weakness that leaves a stock or currency, commodity, index back at a trend line. both stocks playing for a bounce here within a sector that is very depressed. >> all right. carter worth with the moves there. thank you very much for being here. we will see whether health care makes that turnaround. it is an important sector as he points out. the further biggest in the entire s&p and how many times have we talked about eli lilly and glp-1s and big trends happening. so maybe there are at least names that you a have to look at outside of just the ones that are doing -- >> i will make up a stat. being a tv anchor, it will sound like i didn't make it up. >> okay. >> authority. say it with authority. kelly has a computer. i think 22% of the american economy is now directly or indirectly related to health care. some would say health care is not part of the economy. you could say that health care

is the economy. >> you could say over the next 10 to 20 years it could be approaching half of american economic out put is going to be tied towards spending around health care and pharmaceuticals. >> 17% of the economy, according to kiser, brian -- >> typical tv hyperbole. >> add an indirect, there you go. >> what's the projection for 30 years? we keep spending on this trend? >> totally. direct to 17, i feel confident in the 22% number. >> you're direct according to this tv anchor. bridge bio, it's up 30% in a month. seeing strong demand for the heart disease medication. the ceo next. carl: what's up, carl nation! it's your #1 broker with the best full-service wealth management skills in the biz. tech asst: actually i'm seeing something from schwab.

(uh-oh) producer : yeah, schwab lets you invest and trade on your own. and if you want they can even manage it for you. not to mention, schwab has a team of specialists for taxes, insurance, and estate planning. both producers: all with low fees. carl: we're experiencing technical difficulties... uh, carl... schwab! schwab. a modern approach to wealth management.

doors lead us to new opportunities. your dedicated fidelity advisor... -surprise! -for you, mama. ...can help you open those doors. by proactively reviewing your entire portfolio. with an eye on taxes and risk. doors were meant to be opened. ♪ welcome back to "power lunch." i'm bertha coombs with your cnbc news update. more than 88,000 people in the los angeles area are under evacuation orders today as

firefighters battle the large palisades and eaton fires. the region is bracing for extremely critical fire conditions brought on by the return of the dry santa ana winds. it has prompted the national weather service to issue a rare warning of a particly dangerous situation. president biden will remove cuba's state sponsor of terror designation just daze before he leaves office. according to the associated press. the state department reinstated the designation in 2021 as then-president trump was in the final days of his first term. the trump administration said cuba repeatedly provided por support for acts of international terrorism and granted safe harbor to terrorists. a new fda proposal could change how we get nutrition information on our food. it would require food manufacturers to display levels

of saturated fat, sodium and added sugar on the front of the packaging rather than the back. if approved, shoppers could see that change as early as 2028. you know, when i was in mexico, i noticed that you had a soda or something, it would say this is a very high sugar product right on the front of the label. >> i think we will start catching up to a lot of those other standards, rest of world. shares of bridgebio surging 20% this week, up nearly 7% today as the company announces strong demand for a medication used to treat a type of heart disease. that coming out of the jpmorgan health care conference in san francisco. the company's ceo neil kumar is standing by with angelica. >> hey, kelly, that's right. we are here with neil. thank you for joining us. appreciate it. you just got this drug approved for attr carbon dioxide. talk about the opportunity and how that launch is going.

>> sure. thanks it affects some 300,000 americans, one of the most common causes of cardiovascular disease, which is the leading cause of death in the united states. and it uniformly arises if the destabilization of a protein and all we are doing is gluing that protein back together. the opportunity here is to really stave off death and cardiovascular hospitalization. that's what our product does. >> you are competing with pfizer. so how do you sew that competitive landscape looking. >> pfizer has done a wonderful job the last five years. what they have is sort of a semi potent glue, if you will, gluing that protein back together. we have a superglue, if you will. the only compound with near complete stabilization on the label. the impact of the druk as early as three months, never seen that before in this space, and 42% reduction in cardiovascular hospitalization and death at 30

months, again something we haven't seen before in the space. we like what this drug can do. >> it's interesting. a few years ago you had some data that look like this drug wasn't going to work out. it was almost a near-death experience for the company. what did you learn and we haven't seen a lot of optimism in biotech. what's your outlook for the sector? >> this company was designed to get through those setbacks. it was a difficult time period. i think what we learned was we will always be able to find capital if our ideas are pragmatic and can really serve patients. so actually the battle testing that occurred then gives me a lot of promised to that we are going to be able to help tense of patients with this program and our other three programs in the pipeline. >> tell us about those programs. >> three phase three in multibillion-dollar markets affecting tens of thousands of mostly children, a rare renal disease. the most kmorn farm of dwarfism

and muscular dystrophy that affects children. >> thanks for joining us. appreciate you having, making the time for us today. brian p back to you. that was neil kumar of bridgebio. >> thank you. >> thank you very much. quick programming note. don't miss "mad money" tonight. jim will have interviews with some of the biggest names that are at the health care conference kicking off at 6:00 p.m. eastern time. don't miss that. on "power lunch," a live report from the ground in california with an update on the devastating wildfires in los angeles. we are back in two minutes. >> announcer: crypto watch sponsored by crypto.com.

pull fast, not hard. don't be afraid of the birds they're just as scared of you. can i ask you about some financial stuff? you know i hate giving out advice. talk to a financial professional today. feel comfortable about tomorrow. massmutual.

(auctioneer) let's start the bidding at 5 million dollars. feel comfortable about tomorrow. thank you, sir. (man) these people of privilege... hoarding the financial advantages for far too long. (auctioneer) 7.5 at the back. (man) look at them — unaware that robinhood gold members now enjoy the vip treatment — a 3% ira match on retirement contributions. (auctioneer) 11 million sir. (man) once they discover their privileges

are no longer exclusive... their fragile reality will plunge into disarray. ♪ welcome back. strong winds returning to los angeles, potentially creating another dangerous situation amid these wildfires. many of i are still burning. contessa brewer taking a look at how fire crews are handling the situation where change is not

just day to day, contessa, but hour by hour? >> reporter: yeah, and some cases minute by minute, brian. i am in upper brentwood now along a fire line where firefighters are actively working. and you can see he what an amazing shot they have, what a beautiful view of the pacific ocean here. this neighborhood was spared, but it is like the line that, of interface with the wild land. turn over this way and you can see mandeville canyon, and how it looks like a moonscape now. it is completely charred. the fire coming down here. and i talked with one of the residents who said, look, i was here, i was watching it, hosing down the neighbors' houses, but it was the fire retardant, you see the line here. then over here can you see the large defensible space that has been cleared out of this hillside? firefighters say that likely saved not only these homes, but all of the homes below because there was nothing for the embers to catch on to at that paint 30.

in order to get, i had to do a ride along. i got to do a ride along with cal fire, and here is a little bit of what we saw driving up to this site. >> so these are all the engines that are staging for this community here in case a fire were to reignite or ignite somewhere sheer along this fire line. there is a lot of houses in this area, and we don't want to have that reaction time that it takes for the engines to come from base camp. those winds were something like i had never seen. they were catching husbands ous fire many blocks over from where the firefight even was. >> reporter: what we have seen out here is the firefighters going through and looking for hot spots using pick axes and shovels. they use infrared to go and detect this. they tell me right now, guys, no active fire situation, no flames actively burning either in the

palisades fire or the eaton fire. it's just that in order to get to 100% containment they got to go through and make sure that every hot spot is put out. and you can see the wind is picking up a little bit, but this is wind off of the ocean, not the santa ana winds, which gives them a sigh of relief because this is not the one that they are worried about. also, for the time being, because so much has burned here, it gives this particular neighborhood some respite from the worry. >> and we -- it's just unbelievable the level of the damage. i have a lot of friends that lost homes out there. as i understand it, we still don't know what caused the palisades fire, correct? nbc reported last night they are investigating, human activity, i think humans cause most fires. they don't know the exact cause of at least the palisades fire, correct? >> reporter: yeah, they don't know. and that's something that's ongoing. that could depend, for insurers that's important. they got to know where to put the blame.

>> contessa, look at that. thank you. all right. three stock lunch is next.

(traffic noises) (♪♪) the road to opportunity. is often the road overlooked. (♪♪) at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. because we believe the more ways we all have to move forward. the further we'll all go. (vo) fargo is your virtual assistant from wells fargo. (woman) oh, come on! come on! (vo) fargo lets you do this: (woman) fargo, turn off my debit card! (woman) i found it! i found my card!

(vo) and also, this: (woman) fargo, turn on my debit card. (vo) do you fargo? you can, with wells fargo. what else can fargo do? quickly tell you what you spend on things like food. (dad) fargo, what did i spend on groceries this month? (son) hey dad, can the guys stay for dinner? (dad) no... (vo) learn more at wellsfargo.com/getfargo.

♪ >> announcer: catch the markets on today every weekday on "closing bell" sponsored by e-trade from morgan stanley. to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley. power e*trade's easy-to-use tools make complex trading less complicated. custom scans can help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. ♪♪

[city noise] investment opportunities are everywhere you turn. do you charge forward? freeze in your tracks? (♪♪) or, let curiosity light the way. at t. rowe price, we're asking smart questions about opportunities like clean water.

and how clean water advances can help transform our tomorrows. better questions. better outcomes. t. rowe price ♪ welcome back. it is time for three stock lunch. three different stock stories and why they might matter. here with the trades is a new guest, rebecca waltzer. welcome. we will be very nice. great to have you on. kelly is nicer than i am. jpmorgan chase, earnings tomorrow, big shake-up. what do you think about jpm? >> i think it's a hold. we have long-term stability here with j.p., a leading -- but we are expecting m&a activity to pick up, their investment banking revenue for 2024 will increase, or 2025, over 2024. and we have had with the fed

policy and those things, looking for a big m&a. we are a hold on jpmorgan. >> all right. punchy answer. a hold. robinhood agreed to pay this $45 million fine with the fcc to settle investigations into a 21 data breach, other issues. the shares are up 8% and they have now -- almost quadrupled the past year. do you buy it here? >> yeah, no. we are a sell, actually, on robinhood because we are expecting volatility and liquidity constraints in 2025. that is with the process that robinhood uses, we are expecting volatility concerns and if you look at their own projections, they are -- you are talking about 4 #% growth on the last, you know, little bit here, we are expecting that to go down to 12% for 2025. so on this one also their valuations -- 67 pe. so we are a sell on robinhood. >> all right. finally, kw home. you are in tampa, they are all the way out in california, is where they are headquartered. they are a home builder.

big fourth quarter beat last night. 17% jump homes sold last year. do we need to own the stock? >> we are a hold. 17% home delivery growth, 19% year over year home orders. we are expecting 2.8 billion of land acquisitions for 2025. they are projecting to have higher and we know systemic house something a shortage problem in america. large builders that buy the land and create the neighborhoods are going to be in demand. we are a hold on kb as well. >> how great was that? rebecca, that was like phenomenal. first time ever. i don't believe it. maybe on this program. >> i don't think first time on tv. first time for "power lunch." >> you can come on the set. love to have you here. >> thank you. >> i think there is a direct flight from tampa to newark. somebody told me that once. serious news here. everybody stay calm. don't run out and fill up with

gas. the colonial pipeline now has shut down. the main pipeline. a main pipeline from houston, texas, to new york and new jersey. almost every drop of gas you put in your car in new jersey comes from the colonial pipeline or something carried on it. they are looking for a leak in georgia. we confirmed that. probably back on tomorrow. this is the pipeline that was hacked in 2021. >> that's why the -- >> calm down. we won't see a spike in gas prices because there is plenty of gas in storage. right now line one in georgia shut down. something to watch. >> how many lines are there? >> a main line, the torso, all these things that spring off of it. >> this is the main line, basically? >> yeah, line one, there is sprigs, streams. >> possibly trickles? 12-hour shutdown. >> that's what they say. >> how does this compare to 2021? >> eamon javers is all over that story. hackers. that was a big deal. that's when you take the minivan

out and do the -- by the way, when is new jersey getting rid of this full service thing? it's got to get over it. it's over. >> now every other state should bring it on. >> it was oregon and i think they killed it. >> they did. >> oregonians, let me know. thanks for watching "power lunch." >> "closing bell" starts right now. welcome to closing bell. i'm scott walker live from post 9 at the new york stock exchange. this make or break hour begins with the road ahead for stocks amid rising rates and pickup in volatility ahead. we ask our experts how to navigate the changing environment. we will show you the score card with 60 to go in regulation. we have the dow now green but s & p 500 and nasdaq is red, cooler than expected ppi sending all three major averages higher today. yields did not budge that much. that's why we look inway we do. there is the ten year below 10.80 an