>> and health care. play a little bit of offense a little bit of defense. and if steph's right and we're close to a tops on mlw's, macos might even look attractive. >> all right steph. >> fingers crossed. >> steph what. >> do you got. boeing it was a bad quarter but free cash flow is positioned to recover. >> for the year. all right. stock up 5%. just about. i'll see you on closing bell exchanges now. >> thank you very much, scott. and welcome to the exchange. >> i'm kelly evans and the nasdaq. >> is powering. >> back today. >> after it got. deep six. >> yesterday president. >> trump saying he welcomes deep seeks i breakthrough. and shares of nvidia are on the mend. but our guest isn't. >> convinced with. >> tech the only sector in the red this month. jan vanek. >> sees more pain. >> ahead for nvidia. and we'll talk about it. >> potential beneficiary of tech's weakness could be health care, at least according to barclays and. >> the market. >> yesterday their analyst was here. >> to. >> tell. us why. >> and which names he thinks we should buy. plus confidence weaker than expected. consumers still pessimistic about their.

future employment. all of this against looming trump tariffs. we'll dig into what it means for the fed's next move. first over to dom chu with today's market action. do tell. >> dom. >> all right. so markets are in recovery mode as you point out. but they've got a long ways to go to make up for yesterday. we're going to start with the epicenter of the recent action. that's the tech trade. the nasdaq composite right now lost over 600 points yesterday. it's gotten back over half that amount so far today in midday action. right now that composite index at 19,668. the s&p lost 88 points. it's gotten back half of that amount to a level right now of 6060. and the dow is up now two days in a row tacking on 130 more points to the 289 yesterday. the blue chip index right now 44,867. let's check in on some of the stocks that got hit the worst during the sell off. that's chip giants like nvidia and broadcom rebounding but still well below where they closed at the end of last week. remember nvidia shed roughly $600 billion in market value making it 17% drop yesterday. the single biggest decline of

market value in a single day in history. megacap cloud computing software ai company oracle also got hit hard recovering today. and of course, large scale power utility players like vistra and constellation energy trying to bounce back there as well. so generally green, although constellation energy is down about 1%. let's round it out with earnings stories. royal caribbean cruise lines the best performer in the s&p. better quarterly results meanwhile general motors down despite an earnings beat as well. a couple of defense contractors also moving in opposite directions. rtx lockheed martin both on the move. kelly that's the market in a nutshell. i'll send things back over to you. >> some big moves there, tom. >> thanks. >> we'll circle back. >> to that. dom chu. the senate yesterday confirming scott. >> bessent for. treasury secretary. now. >> among other policies. >> bessent is reportedly. >> an advocate of. >> universal tariffs. >> starting at 2.5%. >> president trump. >> of course, saying he wants much. bigger ones, pledging sector. >> specific tariffs on chips, pharmaceuticals and. >> some industrial. >> metals in a speech last night. how will that impact the fed's fight against inflation?

>> let's ask. steve liesman. >> for the latest results of cnbc's. fed survey. steve. >> hey, kelly. yeah, higher inflation but also more growth. that's the assessment of our respondents to the cnbc fed survey. when we asked about the effects of president trump's expected suite of all the policies. well, 64% are saying that they believe the trump administration's policies will likely be either somewhat or extremely inflationary, most of them in the somewhat category. how about for growth? somewhat or very positive for growth? 60%. again, most of them in the somewhat a bunch though think it could be possibly negative for growth. look at individual policies. let's look at tax policy. you can see very divided here being something that's worse for inflation. some say it's better for inflation. deregulation though that's seen as something this is something the administration has talked about as better for inflation. not so immigration and tariff policy where they're pretty definitive that there is that those are worse for inflationary outcomes. how about for growth. let's let's let's let's take a

look at the individual policies. what you see is tax policy and deregulation both seen as better for growth. again not so sure on immigration and terror policy seen as worse outcomes for economic growth. carla boss of janney montgomery scott writes in reasonable economists can disagree just how inflationary tariffs or reductions in immigration might be, but they are inflationary. richard cecil of the philadelphia trust company. he emphasizes that optimism and risk taking have increased lower taxes and less redundant regulations, along with the ongoing success of technology innovation, promote more efficiency and profits. overall, the fed expected to cut twice this year, though respondents have less confidence in those cuts now. but because of the uncertainty, the fed is not expected to act much before june the 1st time, and then again between september and the end of the year for possibly a second cut. kelly. >> so losing confidence in. >> two cuts and maybe. nothing till june. >> steve. >> come on over. >> our next guest says the fed is. >> clearly worried that tariffs could be more inflationary this.

>> time around than they were back in 2018. >> here's why. >> we're still. >> dealing with pandemic inflation. >> supply chains. >> are longer now and more vulnerable to retaliation. and that's why she thinks the fed is more likely to pause than push for more rate cuts right now. here with us at the table is diane swonk, kpmg chief economist. diane, it's great to have you in house. first of all welcome. >> it's great to be here. >> we should make this like a traveling show or something i don't know. but for the time being and ahead of the fed's move tomorrow, why do you think last time around. >> they. >> ended up cutting rates by 2019. so tariffs were not that inflationary. why do you think this could be different. >> so you know. >> in 2019 there's actually a. great fed study on this. we saw that the price increases. >> on the. >> specific goods. not only washers. went up in price but dryers because they are bought together. so there was a contagion effect. however, it was a different economy and the increase in. tariffs was a very narrow increase. the actual effective tariff rate, just a little blip up in the national tariff rate. they're talking about a much bigger breadth of interest, but we're against a backdrop. context matters. we have. embers of inflation are

still burning. we've not yet beat inflation. >> and we. >> have those longer supply chains which were made in part to avert existing tariffs and to hedge against political risk. but that makes them more vulnerable to supply shocks and retaliation. and we're the 800 pound gorilla in the room. if we do tariffs, countries that retaliate are going to try to exactly hit those supply chains. >> hit us. so there's that issue. i've also heard steve, people. >> say last. >> time around we got corporate tax cuts. then we got tariffs. so companies were able to absorb the. >> tariff hit. >> a little bit more, maybe not have to pass it along. but the sequencing. >> could be different now. >> and this. almost like. psychological effect where now that we've seen costs passed along because of the pandemic, companies and consumers, we're a little bit more. built to do that. >> i actually call it the cultural dimension of inflation, which is back in 2019. you did not raise prices. somebody came to you with a price hike. you said, go back and do your numbers again, okay? because i am not going to go upstairs to walmart and tell them 5% more. you go, give me back 5% less.

now it's a little different. they've done that. the kind of dam has been broken on raising prices. and i think the trouble this time also is people have not forgotten the inflation they had just very recently. and so like i think i yelled at you yesterday and i said the fed is not going to make monetary policy on egg prices, right? that's true. no, but put together eggs and a little bit higher on gasoline these days, a little bit higher on tariffs. and then they might become concerned about what happens to inflation expectations. and sorry for yelling. >> at you. no no no. >> i mean. >> then i had people all day sending me pictures of the egg shortages. no, i think i do think psychologically it's a big one right now. but the larger question, i'm glad that you two are here because i can ask it even if prices go up. is it inflationary or is it contractionary? so. so for instance, let's say mexico-canada tariffs, which we haven't experienced before. if those are fully passed along, they could raise cpi by a point according to some estimates. >> and slow growth. >> right. well but. >> that's my point.

>> so the only way that you get broad based inflation is either from what the fed i mean i guess you could argue maybe fiscal if we don't. >> have an. >> accommodative fed, then those price hikes are just going to come out of the consumer pockets somewhere else. right. that's what i'm trying to figure out. it is a it. yes. but i think there is this issue of first of all, we see consumers saying and this gets to the cultural issue and that we've not forgotten inflation. 67% of the labor force was born after 1982 or 1982 and beyond. they've never experienced inflation until we had this pandemic inflation. but now they do. and you see it in inflation expectations and the fact that they're willing to buy ahead of price hikes in a way that we did not see in 2019. also in 2019, the damaging effect of tariffs on the manufacturing sector were quite acute. the federal reserve has a study of that. so in part they could look through it as they studied it, the increases in tariffs because they weren't broad based and they were targeted. but also it triggered

a manufacturing recession as well. so it did not. >> i want to back up what you said. there are people out there who say the right response of the fed to tariffs could be to cut rates. >> to ease. >> that's what is out there as an idea, which is dangerous, reactionary nature. >> if we're wrong and they ease, then that's exactly what would fuel broader inflation. but if they slow the economy, then why? it's why they can't front run. >> but i would just point out that if your argument is should the fed be hiking rates because tariffs are inflationary or cutting rates because they're contractionary, you haven't yet enunciated a good reason for tariffs. you've given me two lousy reasons. >> point. no i'm. >> just saying i'm just saying you give me if it's contractionary or inflationary, neither one nor is well, to the benefit of the. >> economy to, you know, stop the hollowing out of the u.s. manufacturing. we've been in this manufacturing recession for ten years, and we actually saw, you know, the foreign direct investment into the united states has increased quite dramatically. but that was related to renewables, battery plants and a lot of subsidies.

and those have now been stopped, at least temporarily. that's important because, you know, just saying we're going to reset cards and go back to my childhood, growing up in the detroit area where we built vehicles and we were the vehicle builders of the world, that doesn't happen and it doesn't happen overnight. and it also happens with a different set of skills of workers. i mean, the uaw contracts that just went through, they had all those pay increases. but at the time the contract is over, it's back to 2007 levels of wages. wow. and so and a lot of manufacturers that i deal with are competing with retailers, which tells you what's happened to manufacturing wages. right. so it's not you can't go back. and the question is how can we do something about the fact that we've displaced so many workers and make them feel whole again and make them a part of the economy? and that's where i think the consequences of the last, excuse me, five decades of free trade and globalization

have come home to roost. we had a brief moment there in the late 90s when income inequalities were narrowing and consumer confidence. not surprisingly, consumer attitudes hit a record high in january of 2000. never hit that again. >> i think your concerns are well placed and worth debating and discussing. the idea of how much manufacturing, what manufacturing should we do here, and what manufacturing can we do here, and what manufacturing, if you go by what adam smith told us is better done overseas, if i'm putting together a bunch of widgets, but i can get cheap screws from from vietnam or china, well, that kind of helps my manufacturing. it also helps me create an item that might be better and more better, better price for export, right? >> the one you. >> know, this goes back to, you know, 17, 20 years ago coming in and writing about that, people would say, you know, the economy, the u.s. economy is a little imbalanced. >> consumer spending is 70%. >> you know, manufacturing is not big enough. it's almost like we like nobody talks about that anymore. >> do we. >> all. >> just now accept what we. >> think is. >> a good status.

>> quo. >> but we don't talk about but need to talk about? is are we really attacking the right culprit here? the vast number of manufacturing jobs are being lost to automation, much more so than to mexicans or chinese workers. >> and in all fairness, the. >> automation more will be. >> yes. and in all fairness, the automation was in response to increased competition from abroad too. so, you know, and so i think subsidized. >> competition, you know. >> this is what's interesting to me about that. and that gets to the making, the free trade versus unfair trade. i don't think that's the wrong argument to have. it's just the fear of law, of unintended consequences, the need to the desire to pull in, especially after a pandemic, has amplified and accelerated that desire. but this is the tribalism, the divisions we see. this is a symptom of a larger issue. we've had inequalities going up, with the exception of the late 90s, for a period of time, for over five decades. >> they and i have to ask you your opinion, though the 2.5% idea, if you don't mind me asking. >> the universe. no. >> yeah. like the idea of doing it incrementally rather than one fell swoop. >> yeah. it's kind of like, you know, chinese water torture. i mean, it's, you know, and i

guess it's the wrong term. >> pun intended, right? >> pun intended. but, you know, the bottom line is, if you're and i just spoke to a large group of cfos and ceos this morning and they all nodded, and i said, if you know that tariffs are going to go up every month by 2.5%, what are you going to do by a head? that is a self-fulfilling prophecy of hoarding, which creates price hikes. so it actually, you know, causes the system to be more inflationary. >> some people said some people said the durable goods report this morning may have some which was signs, symbols though of hoarding in it already. >> so, you know, i take that with a little grain of salt. we did see hoarding before the tariffs that biden passed under the i mean, this is continuous. we saw some buying ahead. but i would argue most of what we saw in the durable goods orders were probably in advance of the port strikes that did not occur. interesting. >> i wish we had more time. like i said, we'll take it on the road. >> did we solve anything? >> i don't know, i think i see

why the fed's. >> going to do nothing for. >> right now. it's wait and see. it's wait and see. it could be months before the data. >> clearly breaks. >> we got. >> to run it. why not run it? >> one caveat to that though. tell me quickly if inflation goes down definitively, if some of this better rent data we've seen show up in the cpi, i think the fed could cut, that would be an early long call on a march cut. if you get a couple three months of good inflation data. >> i think that's very possible on the table. i think march is more possible than later in the year. interesting. well, on that nice provocative note, diane. appreciate it steve. thanks, diane. >> swonk and. >> steve liesman. let's turn back to the markets now where the chip stocks are in the green after their worst. >> day since 2020. >> yesterday the. >> sm was down earlier. >> it's now up about 1.3%. nvidia is. >> now rebounding. >> by nearly 7%, but my. next guest sees more trouble. ahead for the chip giant and says the. >> sell off yesterday. >> was not just a blip in the bull market. let's bring. >> in jan. >> van eck. he's ceo of van eck, the company that manages the sm.

and jan, it's always great to have you here. i think last time we were doing a deep dive on bitcoin. so i'm very curious your take on nvidia. >> here kelly. >> i mean listen i think investors are well served. if they take a longer term perspective on these trends. and let's take ai. >> so last summer. >> we said we have an inflection point because valuations. >> hit an. >> all time extreme. they were basically at dotcom valuation extremes nvidia great company. but what i said great company bad stock. it was trading at 50 times sales last summer. and so of course the company will continue to grow. but is it really that great a stock. and sm which you just showed has basically been treading water for since then with deep seek, i think. >> we hit another. >> major inflection point, which is. we knew competition was coming to nvidia, maybe 2027 from startup chip companies. obviously there are other chip manufacturers in the world, but what i love about deep sea is the new competitor to nvidia is

nvidia, meaning their older chips maybe can still be used effectively by some of these tweaked models. so we. >> are now. >> at a new phase in the ai trend. >> well, i've heard too that. >> maybe those nvidia chips that powered deep sea were the high power ones, that they were briefly getting through export controls, and now they have to export just the lower power ones. be that as it may on, a lot of people would look at this and i think of you as someone at the vanguard of new tech, right, and bitcoin and all this stuff and would look at this and say, what a great opportunity to pick up, you know, 20% down. come on. they're going to be a pillar of the ai revolution. why? i mean, i'm sensing it's not just nvidia, but that you seem to broadly have a little bit of concern about, you know, the strongest parts of the market. >> well, we don't really. >> know the. next shoe to. >> drop on. >> the nvidia deep sea news is really the. guidance that we're going to get from some of the hyperscalers. will this really affect their demand or not. >> but we might not. >> even know until. next

quarter's earnings announcements until we get guidance. >> so i. >> just don't like pounding the table right when you have this big cloud over our heads. >> go ahead. >> yeah. >> no, no, no, i mean, there are other parts. >> of this. whole story like constellation energy right. and utility company that was up three times in the last year. i mean, that is just set up for a big correction. so i think some of these trends, i think electrification will continue. but but you know, these stocks really needed to correct. >> that's exactly what i was going to ask. >> you actually. >> let's take a quick listen to this, because those power names were among the biggest losers yesterday. down 2,030% ge venmo among them. now that company is rebounding today on a chevron partnership involving engine number one to power data centers. and here's what the ceo told squawk on the street about yesterday's price drop. >> we're certainly appreciative of the market's response. over the ten months we've had as a public company, that shows its confidence in our future to grow

and grow profitably. >> grow and grow profitably. on what do you think? >> yeah. >> i really do feel that the. need for more electricity and data centers is something that not only is the market asking for, but i think the administration will support and that does benefit the whole nuclear story. and it benefits natural gas as well. that's something that we've been talking about. so, you know, i just think when you look at some of the pockets of the market, they were just so way extended like the smr companies. i mean, they they're they're looking for, you know, revenue traction, which could be years away. >> i'm an optimist. >> i think it will come sooner rather than later. but even so, they're just they could easily hit more air pockets. >> so you've mentioned the losers here are kind of the equity names. when the market was over distorted to growth. we talked about nvidia. we talked about the utilities the not losers. you say bitcoin part of the nuclear story actually the uranium miners saas companies

like salesforce with competitive moats. and let's throw cme in there. >> yeah cme. >> is sort of the natural gas story. you know it's a little attenuated to the power the demand for power and data centers. because obviously there are a lot of other factors that go into natural gas. but it's a story that i kind of like in the medium term. and you just had a big sell off yesterday as well. so i'd be sort of nibbling at those names, turning to bitcoin really quickly. i hate that there are these one day correlations when bitcoin went down with the market, but i think it's an asset that gives you investors protection against the other big trend, which no one has talked about in the last 48 hours. but to the big federal budget deficit. >> yeah. >> and will trump be able to cut there. and if. not then you want gold and bitcoin as hedges in your portfolio. >> well i like. having you. >> on with the playbook after sort of market carnage day. so hopefully we don't have more of them. but if we do i know where

to come. john, thanks for your time. really appreciate it. >> good to. >> see you. >> jan van eck today. >> coming up, why has the. president suddenly gone soft on china redirecting. >> his tariff. >> threats toward. mexico and. >> canada now saying he's not too worried about deep six ai advancements? we'll talk to hayman capital's kyle bass about that. plus his big tech's pay. >> and. >> health care's gain. health stocks are coming off their best day since august, and barclays will tell us which names they think have the most upside. stay with us on the exchange. with us on the exchange. >> this is the exchange on it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! 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. ♪♪

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living thuma. >> welcome back down in miami, the house republican issues conference is underway. typically a time for lawmakers to lay out their agenda. although the emergence of china's deep sea prompted house speaker mike johnson to label it a serious threat. while president trump, speaking at the conference last night, suggested lower ei costs should be viewed as a positive. emily wilkins just sat down with the former chair of the house eye task force and has more on this developing story. emily. >> hey, kelly. well, yeah. the rise of deep sea is leading lawmakers to grapple with, really how to respond to a technology that could pose a threat to national security, as well as the future of u.s. dominance in ai. and i spoke with congressman jay obernolte. he is probably the best expert that congress has on ai. and he said that there are some parallels between this and the threat that was posed by tiktok. >> if you look at the fact that.

deep sea tech has climbed to number one on the apple app store rankings. >> in the last. >> 48 hours, i think this illustrates. >> the danger of. >> having millions and millions of americans relying. on a chinese piece of software that could. ultimately funnel their. >> data and pierce their. privacy in ways that are. >> detrimental to our. >> national security. >> obernolte has discussed next steps on the technology with trump i, czar david sachs and head of the white house office of technology, michael kratsios. on what trump can do on ai. in addition, congressman is pushing legislation to bolster research for ai to keep the u.s. on the cutting edge. obernolte said ultimately, government should play a role in protecting americans against the largest dangers of ai. >> the way. >> that i can be used to steal people's private data. >> the way. it can be. >> used for cyber theft and cyber fraud. the way it could

use by or be used. >> by. >> our geopolitical adversaries. in ways that. disadvantage our country. those are all. things that, taken together, are kind of equally consequential. >> to. >> an army of evil robots. >> despite trump's optimism last night, it does seem the white house is taking this issue seriously just moments ago. white house press secretary caroline leavitt told reporters that the nsc is looking at what national security risks the app could pose. kelly. >> kelly. >> thanks. >> very much. emily wilkins. our next guest is quite clear on his stance on daca, saying it's another way china is undermining american players, copying what they do, then flooding the market with a cheaper option. joining us now to discuss in today's tech jack heyman capital management's kyle bass with our very own deirdre bosa. deirdre kick things off. >> hey kyle thanks so much for being with us now. many leaders in silicon valley and tech who i know you talked to also they actually see deep three deep seeks breakthrough as a positive development because it's open source because it advances ai as a whole. so where do you

disagree and why do you see it as a threat? >> well, i. >> mean, if you look at what china has done with tiktok. >> what they're doing. >> with deep. >> sea. >> i. mean this $6 billion number. >> and this. young man. in china saying that he created this. >> model with it. >> i mean, it it has not been audited. china lies all the time. it's likely this is a lie. i mean, if you look at china's. own press release, they just recently said that china unveiled a. >> trillion won. >> $137 billion worth of. stimulus to. stimulate chinese ai investment this year. >> so this. >> $6 million number is dubious at best. it's most likely a lie. >> and it's. because they're trying. >> to use economic statecraft or. economic warcraft against us. they're trying to make us double, i guess, rethink what we're paying for. >> our models. >> if you look at google. meta and amazon together, they are set to spend about $240 billion in capex this year on ai alone. you can't. tell me that a young man in china can put something

together for $6 million that these three companies are spending. hundreds of billions on and getting to call it the same place. i mean, what china is really good at is a lying. and b. introducing things. into our. >> market way. >> below real cost. >> i mean, who's to say. >> that the chinese communist party didn't buy 50,000 a100s from nvidia, which would cost about a billion. >> and a half. >> dollars and develop this for them and then push it out to him and push a narrative. >> that narrative. >> is being pushed all over social media today. deirdre. >> right. kyle. but there's kind of a distinction here, right? because deep tech is open source, we can see how it was built, even if it wasn't $6 million. you're actually seeing other players come onto the market now creating similar competitive models that outperform, you know, the biggest, most expensive american ones for as little as $450 out of berkeley. so, like, is this just a deep sea problem? how do we also i mean, what is sort of the action item around this?

it's hard to put the pandora back into the box now. >> you know. so the house committee. >> on oversight in october of 2024, i guess, distributed. >> a pamphlet. >> entitled ccp political warfare. federal agencies urgently need a government wide approach. when you think about what you just said about someone from cal berkeley spending $450 and making it better, you know, the. fact that we are. >> being challenged. >> by an intolerant opponent with our tolerance and our openness, is affording our mortal enemy a battlefield asymmetry that we shouldn't be affording to them. so this concept of open source, i think, is something that will end up being used against us. we have we have made a lot of ai open. >> sourced. >> and i don't think it should be open source. i'd imagine many people in our government. >> don't. >> believe it should be open sourced. we're sharing our best and our brightest with our mortal enemy. and you say, well, are they. >> our enemy? >> are they our strategic

competitor? go read the threat assessment that the 16 intelligence agencies in the united states publish every march about the largest threats to our national security, our way of life. it's led with china unambiguously the last five years running. and then go read some of xi jinping's speeches where he says we must dominate the smokeless battlefield. this is exactly what he's talking about, kyle. >> why, then, do you think that president trump is willing to see deep seek as competitive and what he called a potentially positive development? and there's been rumors that you might even be joining the trump team. what would you be telling him? >> look, first of all, as you know, deep seek is not my area of expertise i'm giving you, i think, economic statecraft and also the composition of markets are where, let's just say the. way sovereigns interface with one another, i would say is one of my expertizes. this is a specific example of something that have you have you looked at deep seeks terms and conditions? deirdre? have you have you read through them? i happen to read

through them this morning. they read just like tiktok's. when you accept their terms and conditions, you accept their ability to come. >> into. >> your phone or into your computer and look at all of your chats, all of your keystrokes, the manner in which you operate, your passwords. you give them permission to do all of that. it's another digital trojan horse. and if they. >> make it. >> for free. >> and they make it cheaper than chatgpt or openai's or grok. >> or whatever. >> we're going to talk about here, it's a real problem. >> it's kelly here, and i didn't want to jump in, but now i have to. i just have a simple question for you. how does apple let all of this happen, whether it's tiktok or if i download look, i even i downloaded deep seek. i wanted to mess with it. an hour later i said forget it. i got off the phone. our security expert yesterday said, you keep the stuff on your phone. it's not whether you open it or use it. if it's on the phone, you can in real time. that data is going back to china. it can be literally training their ai models and so forth. can can't apple stop this from happening? >> i mean, look, if i always say. >> i always make a joke in our

office if our national security was left up to the private sector, we'll all be china tomorrow. what you need is leadership. kelly. you can't expect a private company to shut it down. what you've got to do is you've got to have leadership at the national security council through the through that, through that edifice. you've got to he a leader say, we're not going to allow this to happen in our country. we're not going to allow tiktok, a foreign adversarial program, to be able to broadcast directly into more than 100 million households. it's insanity. and at some point in time, everyone is going to realize it. so to your point, we should never have things like this on our phone. >> all right. i you know, i just had to ask. the more i think about this and it's hard because a lot of users are like, look, i like tiktok. i'd like to just use it and not have to worry about this. >> and deep seated is still number one on the app. >> is it really? >> it's still. number one. >> it's. >> digital crack. >> if you leave it. >> up to. >> everyone they're. >> going to they're going to go and. follow the. >> thing that they use the most

that they're. >> hooked to. >> yeah. and it's our job as. >> leaders to. >> say we're not going to allow our number one adversary to create things like this, that sucker our whole population. and by the way, they can activate this and get everyone to call their congressman. they can get everyone to really lobby their congressmen for keeping it alive. >> and i. >> have. >> a friend. >> a friend of mine jokes she's going to move to china if they ban tiktok. that's how much people love it. well, thank you both very much for joining us this afternoon, deirdre. appreciate you bringing that to us, kyle, great to hear from you. with all of this going on kyle. >> bass, deirdre. >> bosa still to come, one of the trump administration's first moves was ordering federal workers back to the office. but will silicon valley and wall street follow that lead. we'll ask two players in the office market making a big bet on the rebound in commercial real estate. >> techcheck is sponsored by co policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. call coventry

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order, arguing the directive has no legal standing. the supreme court will decide whether the fbi can be held responsible for a mistaken raid. the family at the heart of the case sued for damages from that raid that targeted the wrong house. but an appeals court ruled last year that the federal government had broad immunity from being held responsible. >> for the error. >> the family argues the appeals decision is. wrong and that congress had a solution for this kind of situation. through a law passed in 1946. and senators on both sides of the aisle confirmed sean duffy to lead the transportation department. the former wisconsin congressman has promised safer boeing planes and less regulation for u.s. companies developing self-driving cars, while not giving elon musk a key player in the industry any breaks. kelly, back to you. >> all right, pippa, thanks. coming up, more than a fifth of the health care sector is near 52 week highs. and my next guest says the space stands to benefit from any further weakness in big tech. he'll tell us which names

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the benefits. and barclays says buyers are getting them at a discount because health care was down nearly 11% in the fourth quarter. a lot of that on election policy concerns. joining me now is andrew mock, director of equity research covering the u.s. health care space at barclays. so, andrew, a lot of people are loathe to go into a sector that has chronically underperformed. why could now be a bigger tipping point? >> well. >> i think there's. >> thanks for having me kelly. we saw nvidia lost $600 billion in market cap yesterday which clearly impacted the tech sector down almost 6%. but that we didn't see that pressure directly impact the rest of the s&p 500, which you often do see during big volatility events. so ultimately, we viewed that as a positive indicator for health. care and any potential weaknesses that start to form in the broader. >> ai narrative. >> will prompt. >> investors to revisit their thesis and sector allocation, which could benefit underweight. sectors such as health care. we saw nice moves yesterday in the facilities like hca, the services, cigna, cvs, davita. i

mean, even as i list these names, i can sort of think of the warts on all of them. you know. yeah. and there's no doubt there's reasons why this sector has been under owned for the past few years. first, you've seen the big tech allocations rise alongside ai. but we have seen big fundamental cost and reimbursement issues. >> in the. >> aftermath of covid, particularly in government health insurance programs like medicare and medicaid, which has led to negative eps revisions throughout 2024 for a number of health insurers. so, you know, the headline risk so far has been real. the post-election policy uncertainty is high, and the market was quick to price in a lot of that uncertainty. but there are reasons to be optimistic, particularly on the managed care side. sure. before i dive into that, i just want to note we can show the one year performance of some of the group. look, davita is up 65%. so that people would be thrilled. is that a name? which of the names that screened the best for you, where you think you'd have the highest conviction? >> i think. >> the names that screened the best for us at least lean on the managed care. managed care.

stocks that are under under owned today. fundamentally, health insurance is a short tailed insurance product. so any mispricings in one year can be corrected through pricing actions in subsequent years. right now, the market is capitalizing depressed earnings stream across a number of health insurers, and those margins are now entering a recovery phase, driven by more stable utilization patterns and upward revisions to reimbursement. and a couple of key important developments have already occurred in january that should help to restore investor confidence in health insurance. earlier this month, cms released the 2026 medicare rates, which was the best rate we've seen in three years. so that's a big positive catalyst and a very bullish sign that should help accelerate the margin recovery efforts at companies like cvs, humana and united. interesting. final question then. what if i own this space but the rest of the market gets its mojo back? you know, we get positive ai momentum. we're back to you know, maybe earnings season as catalyst i don't know. do i can i only own them if the big

stories the big leading stories fall apart. >> no i think. >> fundamentally you are seeing the recovery. like i said, the margins should be better over the next few years in these managed care stocks that are under owned today. and i think the part that was so assuring yesterday is that you just need people to start doubting the sector allocation and rethinking those investment strategies. right. just having this, you know, having slightly lower conviction levels in ai forces, companies, forces investors to rethink their sector allocations and revisit their confidence levels across healthcare. >> so. >> you know, yes, i think the fundamentals and the and the fundamentals are on the on the recovering side of this. and i think any doubts in ai should help healthcare broadly. s&p was down 1.5%. health care was up 2%. and we'll see if the rest of the year's performance follows suit. andrew, thanks so much for joining us to dive in. >> thanks for. >> having me. andrew mok with barclays. and president trump signing an order on his first day requiring federal employees to return to the office. lots of companies are already working on

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going to make people safer, that are going to make environments better, that can be good for business, good for people, and good for the planet all at the same time. >> welcome back to the exchange. >> i was just. >> checking the performance here. look at this 1.6% rebound in the nasdaq. it's not everything, but it's something. we've picked up a little steam this afternoon as well. the ten year treasury there around 455. the russell is only fractionally lower. we're higher everywhere else. but shares of gm are having their worst day since 2020. check out this down 9%. they beat estimates on the top and bottom lines. forecasted strong guidance. analysts are pointing to a lack of investor appetite for the whole industry right now with all the regulatory uncertainty. gm ceo mary barra told our phil lebeau today that specifically related to mexico, they've planned a lot of different scenarios, and she's confident they have many levers to pull to not have as great an impact as some are forecasting if there are tariffs on mexico. that deadline is looming on saturday, which may help explain some of the

nervousness in the stock today. still ahead, a check on the health of commercial real estate. cbre making a big bet on the office market as the trump administration eliminates work from home for all federal employees. will the rest of the employees. will the rest of the country follow suit? that's check in time is 3:00 it's 2:55. i know. is this what he's doing now? as your host, i have some rules. first, no showers longer than 5 minutes. this isn't a spa. no games. no fun. yes, coach. (♪♪) meanwhile, at a vrbo... when other vacation rentals make you share your turf with a host, try one you have all to yourself. world's largest portfolios for decades. start growing your real estate portfolio today with the fundrise flagship fund.

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living therma. >> welcome back. federal agencies are now on the hunt for space, after president trump has called all government employees back to the office. a lot of companies have announced either full or hybrid return to work in the private sector as well. will the order ramp up requirements? kind of broadly speaking, and if so, what will that mean for the beleaguered office space and for the growing market for flexible space? cbre just made a big bet on that sector. actually, diana olick is here on set with us and has brought two special guests along. >> i have. >> as well. >> as the news. >> kelly. >> which is that cbre. >> purchased industrials, which was a major. >> player in the flexible. >> office space. >> and that's why i'm thrilled. >> to have. ceo jamie. >> hodari of industrious. >> as well as brendan wallace. >> of fifth wall. >> which helped facilitate the deal. >> but jamie, let's start. >> with you. what is cbre investment say about the state of office right now and the recovery? we're still. >> at a record. >> high vacancy rate. >> i think. >> what it's saying. >> is people talk a lot about space and vacancy percent and things. >> like that. >> and this is actually.

>> about experience that you look. >> at the buildings. >> people want to be in. and they don't have one square inch of vacancy. and so. >> the name of. >> the game moving forward is how are you running that building? >> what are the operations? what are the what's the experience. >> in that space to make it a place people want to come to three, four, five days a week. and cbre is reorienting the company around the delivery. they're the largest operator of buildings in the world. >> but we think. >> about flex. >> space and we. >> think of wework. >> which failed. >> pretty spectacularly. what makes industrious make. >> it better? >> and why. >> did. >> cbre see. >> that potential? >> so industrious. >> had two things that made a difference. one was we do management agreements so it. >> is a. >> more sustainable, safer kind of business than competitors that did long term leases. but also it is an outsourcing business. industrious has spent 12 years saying, you're a big bank, you're a big tech company. let us create and run your 100, 150 person teams and below for you. and i promise you, you will have just as good, if not better.

>> of. >> an employee outcome than when you do it yourself. we were really the only. provider in the space doing that, and that's a capability that i think the whole world wants right. >> now, just so i understand real quickly. so you're saying what? but you're you're a flex workspace. so what is it like for 150 seats. what is it that you're offering for that company. how does it work. >> you're you're. >> getting it on a subscription. companies are coming and saying it's industrials. got it ready to go for me. and i'm going to subscribe on a rolling basis to have my tampa or my new york offices be in an industrious. and i'm going to get an amazing experience when i do that. >> and. >> brendan. you did all the work with cbre. >> on this. first, i want. >> to. >> let you make an announcement. >> but which. >> is exclusive. >> to cnbc. >> but also. >> i want to understand. >> what does. >> this say about. >> cbre in reorganizing itself. >> to get. >> into flex office. >> yeah. so at first of all, we were obviously incredibly. >> proud and excited to be investors. >> and industrious. and now we're announcing. >> fifth. >> wall securities. >> which represented. >> industrious on its sale to cbre. >> and i think. >> what this shows is that cbre has really lapped its peer set when it comes to innovation,

like they. have truly leaned into the space in a way that. >> their peers. >> just have taken. >> a very back footed approach. >> and i. >> think this acquisition is part and parcel of that. but you mentioned, you. >> know, why. >> is industrious or why did industrious succeed where we failed? >> and i. >> think it comes down to two things. >> they both. >> relate to. >> business model. >> the first is. >> it's a. >> david and goliath story. i mean. >> cbre basically. >> acquired industrious for $800 million, how much money we were raised. there is $13 billion. at their peak, they were a. >> $47 billion. >> business and they went bankrupt. >> and the reason. >> jamie and industrious succeeded. >> and what. >> cbre saw was a better business model because of short term engagement. and leasing. >> cbre is. >> just, i think, leaning into that. and that's supporting the whole flex mandate here. >> so let me zoom out. >> for. >> a second. i thought we were all back to the office. i mean, we're all sitting here in person. amazon's back to five days a week. maybe the government's going in that direction. i know there's pockets where we're not quite there yet. where are we though. because this all sounds like

it's representing a future of work that still is more flex sounding, a little bit more hybrid than it was in the past. >> i think there's. >> there's two places we are right now. one is more distributed. part of the reason there's a lot of demand for flex office is there are just more companies in the us and globally that have 60 people in denver now and 41 people in los angeles. and instead of making the whole company move to chicago, that obviously helps flex. and then you're getting a. >> more. >> diverse sort of cultural orientation of different. it's like picking a college. you know, some colleges are party schools. some colleges are a little nerdy. i think you're going to have in-office companies and you're going to have companies that are very remote and everything in between. and then people, when they decide where they want to work, that question of what's the office environment like and is it going to be part of my life? is going to be part of their decision set when they decide where they want to take. >> their career and from a financial point of view, then for the vacant office space, what feels? i mean, i know a lot of this is just going to get dinozord and mothballed, unfortunately, and it just hasn't kept up. but so it sounds like there's still going to be a

use for these buildings, but maybe it's just going to look different than it did. >> it's going. >> to change. i mean, people have predicted the death of different real estate asset classes since we've been around. there's the death of retail, which was like eight years. >> ago, and it turns out that was wrong. >> and now everyone is. >> predicting the death. >> of office. >> and the reality is, no, it. just changed. and the dynamics. >> are different. there was this false positive moment during covid, but the reality is this. interview would be worse. >> if we were remote. the reality. >> of in-person is powerful. >> so what's the next big deal? >> you're now saying that you're in the space, you're investing. >> you're now. >> facilitating deals, not just being the vc. >> fund that you were. >> what's the next big deal? >> so we're going. >> to continue to be a venture fund and invest in companies. but our thesis is that the largest real estate companies on earth. >> that. >> many of which are lps, are going to start to engage with and acquire these new innovative tech solutions companies like industrious. and i think exactly what cbre did, where they made a strategic investment starting in 2021, in industrious and then eventually acquired industrious. you're going to see that over and over. so this this collision

between technology and real estate is only going to accelerate. >> we're almost out of time. jamie, i just wanted to ask i don't know if you're active in the dc area, but what is the ripple effect of this return? i don't think federal, you know, organizations are using sort of outsourcing companies like yours. maybe they are. >> so a couple years ago, the federal government said, hey, we want to we want to put out an rfp and start using more flex. and we. >> were all. >> wondering interesting. now it's much clearer. i think the government is actually going to increase their use of flexible office so they don't get caught in, you know, ten year deals where they where they might want to contract. >> out cheaper in the long run. i guess for taxpayers. >> i believe. >> so, yes. >> and is that helpful if you have doge. >> which may. >> be pulling back. >> on actual. employee count. >> i think the government is going to have to work its way through this entire strategy. and at the other end of it, they are probably going to try to be much more rational in the way they approach. >> it's fascinating. >> you know, their occupancy. >> guys, thanks for coming. congratulations and all of that. thank you for coming here to talk about it. and i just really had no idea. so it's a good glimpse into this whole space.

jamie heydari with industrious brendan wallace, fifth wall and diana, of course. thank you as well. our own diana olick. that's it for us. thanks for watching the exchange. and i'll join brian sullivan for power lunch right after this quick break. >> in the world of investing, a beast lurks between. >> the numbers. some watch from the safety of the sidelines, but others saddle up and ride that one ton rowdy ribeye for all. >> he's got. >> if that's you, join. us on tastytrade. named best online broker for options trading. genius loves company. >> out here. no two days are the same. some days are for breakfast with friends at home, others for going out. the tractor supply will help you make the most of life out here. make the most of life out here. no matter how louis! okay everybody, that's lunch! (♪♪)

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