which is testing today. and then from there it's 352. and if that breaks, that confirms a big trend. but even more so we've got a big base breakout, which tells me that this is on a. >> breakout, says slippers inskip. thank you very much. appreciate it. instep. thanks for watching power lunch. >> it's going to be a busy weekend. closing bell starts now. >> all right. welcome to closing bell i'm scott wapner live from post nine here at the new york stock exchange. this make or break hour begins with this late day weakness in the market. the white house says tariffs are coming this weekend on mexico, canada and china. take a look at the majors with 60 to go in regulation nasdaq now red. the dow down about two thirds of 1%. s&p is negative as well. all of this really happening within the last hour. after those headlines hit the market got progressively weaker. we'll see where things head over the final 60. we will ask the wharton school's jeremy siegel what all of this means. now for stocks. the other big story we are watching as well,

nvidia ceo jensen huang at the white house today. with that stock really on the defensive. the worst week in many months. on fears over new ai competition. we'll have the very latest there in just a bit as well. meantime apple shares well they are in focus today. following that earnings report. the stock initially positive not so much anymore. giving it all back star apple analyst eric woodring of morgan stanley here in just a few for his first reaction to that important quarter and what the stock is doing. it does take us to our talk of the tape tariffs, trade wars and stocks. let's bring in our megan cassella. she is following the latest developments from dc. our senior economics reporter steve liesman with us as well. megan, first to you, what do we know? >> scott. as of last night, we still thought there was room for negotiations with canada and mexico and especially with china on these tariffs taking effect. but today, the white house press secretary, caroline leavitt, was clear that tariffs on all three of these countries will be taking effect tomorrow. i asked

her specifically whether these would be going into effect right away, or whether there might be some lead time. she was clear on that point. take a listen. >> the president has. >> made it very. >> clear those tariffs are going to be implemented in in. >> effect. >> if the president at any time. >> decides to roll. back those tariffs, i'll. >> leave. >> it to him to make that decision. but starting. >> tomorrow. >> those. >> tariffs will be in. >> place now. no clarity yet, scott, on whether there might be any exemption process for these tariffs, whether anything might be carved out, especially oil. there had been some expectation after the president spoke yesterday that oil could be carved out of this. we do think that negotiations with the two countries could be ongoing. but as of now, the latest we can expect from the white house is that final fine print should be out on this tomorrow, that that should be published within 24 hours. and we can likely expect the president to be making a formal announcement on this from mar-a-lago over the weekend. scott. >> megan, the question obviously is retaliation, and we are going to see clearly in the days ahead how these countries respond to what the white house is doing. >> absolutely. and they're very

likely to respond. both countries had been vowing that they were getting their product lists ready. we both saw them retaliate in 2018, when tariffs were first put in place on steel and aluminum from canada and mexico. so we know that that's coming. the press secretary was asked about this as well and what that would mean for prices. for example, the canadian energy ministry has been out there saying that oil tariffs plus retaliation will lift gas prices by some $0.75 a gallon. but the white house says that the president has your back, that they will ensure that consumer prices aren't hit too hard in this, but definitely something to watch. scott. >> we will. megan. thank you for that. steve liesman to you on what the fallout might be for the economy. how are you thinking about this? it's not a surprise. >> no, it's not a surprise. most of what i'm seeing, scott suggests lower gdp over time as a result of this. higher prices, though not necessarily inflation, with a real question mark about jobs. all of a sudden there are people working on both sides of, for example, the canadian and mexican border, whose jobs may not be the right jobs to have if they're not buying the products because the products are 25% more expensive.

so it's a fascinating question. right now we're thinking about how companies will respond. do they find other sources? is manufacturing move to the united states to consumers, go by other products and go around? can they even buy other products? and can these things be made in the us? and what kind of time frame that takes? it's a really uncertain thing to try to put into an economic model. it's the reason why the fed has paused here. it's the reason why i'm seeing estimates of -0.3 to -2% in terms of, say, a ten year impact on gdp. note that i haven't seen any positive gdp impacts. i will say one thing, scott, which is that one thing i've heard the trump administration say is that, well, you all all you economists, you warned about terrible inflationary effects in 2018 and it didn't come to pass. well, first of all, it seems like those 2018 tariffs were designed not to include products in the consumer price index, but more so that was a time of low

inflation. this is a different time. and so what we could be seeing are potentially worse inflationary impacts from these tariffs which are one time price increases. but they could bleed more broadly into the inflation numbers. >> those those steve the commerce secretary nominee howard lutnick just a day ago, maybe it was two suggested that it was quote nonsense that tariffs across the board are inflationary. sure you may get an increase in a product here or there, but the notion that it's going to have a dramatic effect was, in his words, nonsense. >> there's a lot of phd folks that are talking nonsense then, scott. i mean, i'm a little lost as to in which world you put a higher tax on something and the price doesn't go up. now, admittedly, there are several routes or or avenues to attenuate that full price increase, for example, exchange rates. take a look at the dollar. the dollar has already offset some expected impacts of

tariffs. you can have producers eat some of the cost and the importers or the exporters, but at some point in time, somewhere, somehow somebody is going to be paying 25% more. that money will not magically appear in the us treasury coffers without somebody paying it. and most of the economists speaking all of that nonsense with their phds suggest that it is the us consumer who will pay it. >> that was the considerable debate the first time around. so we will have it again, apparently. steve, thank you very much for that. that's steve liesman, our senior economics reporter. let's bring in the wharton school professor and wisdomtree senior economist. now, jeremy siegel, professor, it's always good to have you, especially when we see a market doing what it is on these headlines. your reaction is what? >> well. >> i think. >> you know, tariffs. >> are the. only negative. >> of trump's economic agenda, most of which is very good. i also. >> by. >> the way. >> wouldn't completely give up hope. on a settlement.

>> i know a number. >> of people, including. >> myself, that have. >> been in a jury room, selected for a jury and were ready to go. lawyer comes in the last minute and said, hey, we have a settlement and we all leave. i can't guarantee that. but, you know, you know, the art of the deal for trump. let's push him to the edge and see what happens. but clearly if there if it is 25, 25 or and then ten on china it that is a negative impact on the economy. and i think on stock prices. >> but then why do you have people like jamie dimon who i think it was in davos, said, get over it essentially as it relates to tariffs. lutnick as i said, the proposed commerce secretary saying the notion that these are just across the board inflation is nonsense. >> well, you know there it's not nonsense. there is some positive

effect. is it a disastrous effect on prices. probably not. i mean, i've seen some research that suggests that all those tariffs come in. and don't forget, trade is only, you know, 10% of gdp. and if all those tariffs come in and might raise the price level by a half or three quarters of a percent, and that's a one time increase. so, you know, i wouldn't call that disastrous. but that certainly reorganizes supply chains. all sorts of sourcing situations. and it really depends on how long it lasts. i mean, you know, if he puts it on saturday, i think a lot of people are going to defer for a few days. and then he could reverse it on monday or tuesday if another concession is wrangled from mexico and these other countries. so it's a it's a bargaining tool. are you going to get enough in exchange for the negative effect of the tariff in and of itself? and i don't think this play is over

yet. >> it's been a wild week, to say the least, given the deep sea story, the headlines, the sell off in tech, what happened earlier in this week and where we are now. so how does that color your opinion of the stock market here? >> well, i think that, you know, cheaper is better for the economy. cheaper is better for any ai user. what cheaper isn't better for are the are perhaps the high end chip producers? of course we all think of nvidia as that. and you know i i'm not an expert in tech. i've been hearing all sorts of stories. you know, can advanced ai be done on deep six program. does it does it mean advanced ai can be done without the blackwell chips? i mean, all these questions need to be answered. you know, autonomous driving robots, all that can that be done with deep sea type of

transformation. so i think there's still a lot of questions out there. the basic thing is certainly anything cheaper. a ai wise is good for the us economy and good overall for the us market. >> yeah, you may not be an expert, as you say in ai and tech, although you sound well versed. i will just give you that. and you are an expert. professor siegel, on stock market valuations, to which the fed chair himself this week, when asked directly about economic conditions, financial conditions called valuations stretched by almost any measure. now he was zeroing in, of course, on tech and on ai and those stocks that have done quite well. but what was your view on that comment? >> well, so, you know, we talk about 22 as a forward looking p e on s&p. i mean x mag seven which is the you know, 493 other stocks. it's around 19 which i

don't think is an unreasonable pe given the entire economy. so the question is can the mag seven which is done unbelievably brilliantly over the last two, three, five, ten years, maintain its prominence? and of course, what happened monday says, well, maybe, maybe margins can't stay as high for some of them. but then again, some of these others are going to be users of it and actually have have gone up after the deep sea. so not all mag seven is, is going to be negatively affected. so yes, mag seven is a singular event. we've never had it in in the 200 year history of the us stock market x the mag seven. i do not think the stock market is overvalued, but. >> does this threaten that trade which many people have obviously gone heavily into over the last 18 to 24 months? >> yeah. well, you know, when you, when the trend and the ai

narrative is extremely strong, my research shows that it's very hard to topple a trend. it usually takes more than one blow. you know, it's like a prize fighter up there, takes a blow at the head and all right. and continues on. it would take something else. and then it's like a tipping point. i'm not saying that tipping point is going to happen, but if all of a sudden people say, hey, i can reproduce the blackwell performance with cheaper chips, well, then you're on the next side of that story. and if margins go down on some of these other mag seven stocks, that becomes the other side. so this is usually need 2 or 3 blows to break a trend that is as strong as the ai narrative is. and you could say monday is blow number one doesn't mean that 2 or 3 are coming soon, but it means you've

got to be on alert. >> i mean, wednesday may have been blow number two in terms of this market, thinking that you're going to get a lot of rate cuts this year, right. >> you know. >> the fed. >> chair, we've talked. >> about. >> the fed chair. and i've been doubting that for a long time. actually, if you want to know the truth, i thought that powell's presser was more dovish than i thought. and he said, yeah, i still think we're very restrictive. and i mean, because not every fomc member actually thinks that. i mean, really let's let's face it, it's 1 to 2 cuts at most this year. and i wouldn't be surprised at zero. i think what's much more important is what happens to the ten year. and by the way, i think the ten year is really going to be dominated by what happens on the deficit and particularly taxes, which we know, you know, they're an omnibus bill, so to speak, is being formulated by the trump administration. how much are they going to include of all the trump tax cuts? that's when the

bond vigilantes are going to be looking out and saying, hey, you can't put all the goodies in that you wanted to do you. think we're. >> going to get another. >> rate scare, important on the interest rate front than whether we're going to get 1 or 0 or, or even 225 basis point cuts on the funds rate. >> do you think i'm forgive me for talking over you, professor. do you think we're going to get another rate scare, a backup because, you know, it looked like the ten year was going to knock on the door of 5%. now we're at 456 on the ten. the two is at 422. so how do you see that? because that spooked the stock market for a little while. clearly they came off the boil and then the market felt a little bit better about where we were. >> yeah. and really no question that higher yields are are a challenge for the market. but we also have to remember that throughout history, the ten year on average is 100 to 150 basis points above fed funds. i mean, that's over a half a century.

average fed funds are now 433. so you're really talking about, you know, five and a 4:45 and three quarters would be the normal range of the ten year. so i you know, my feeling is i'm not i you know, i would be surprised to see much of a decline in yields, even though i'm relatively more optimistic about inflation. i think the deficit and economic growth. and by the way, i is a if that cheap ai promotes economic growth, that's great for the economy. but it also means higher interest rates. higher interest rates mean more are caused by that higher growth. so, you know, i think the challenges are still on the upside for yields. and we're not yet at a normal term structure. >> professor stay with me. just a quick market check. dow down 328 as we speak. almost three quarters of 1% s&p negative by a half percent. and then the nasdaq which was up is now red. and we'll track all of it as we

bring in jp morgan asset management's meera pandit and bmo wealth management's young umar. it's good to have you both. it's nice to have you here, meera. you've heard what the professor had to say. you've seen the news that meghan costello delivered to us and the analysis that steve liesman brought us as well. what's your view? >> i use. >> 2018 as a. case study of how. >> we think. >> tariffs will impact the markets. >> so you had. >> this drip feed. >> of tariffs throughout 2018. >> and while that. >> did cause episodes of volatility. >> in the markets you're seeing that today. and right now ultimately. >> we also. >> had a massive. >> tax cut. >> both for consumers and. >> for businesses. >> and that resulted. >> in. 21% profit growth. >> and that really. >> supported the. >> market for. >> the majority. >> of 2018. >> and this year analysts expect about 15%. >> profit growth. >> so that could. >> continue to support. >> the market. >> those types of fundamentals. however. >> the cautionary. >> tale of 2018. is that we expect politics to be unpredictable. >> therefore. >> volatile markets. >> could digest that. >> we don't expect. >> monetary policy to. be

unpredictable. >> and what ultimately unseated. the rally in. >> 2018. >> because we had 19 new all time highs. >> in 2018. >> was the fact that the fed got a little more hawkish towards the end of the year. >> markets got spooked. >> the fed wanted to continue to cut into 2019, and that's how. we ended up with a down year. so expect that monetary policy could be the unpredictable and unexpected dark horse this year. >> hello volatility young you i think that's the point of what myra is getting at. maybe you know the longer destination is still in our sights. but it could be some twists and turns along the way. >> yeah thanks scott. >> great to be here. >> we do think that's probably going to be the course of the trajectory this year. bouts of volatility, underlying fundamentals both with consumers and corporations still healthy productivity really kicking in and helping to spur that economic growth. probably actually in our estimation, moderating inflation. we think productivity will help to alleviate some of the labor market pressures that might

otherwise have been there with that degree of growth. but we do think that volatility is going to be significantly higher this year, but probably higher in the first half of the year as we're working through some of these initial deals, initial negotiations that could drag out a few or even several months, it's probably going to be a bumpy path. and this today's announcement, although to some degree there was some surprise that some elements of the deal were not reached, or at least not alluded to. we do think that terrorists is something that is going to be with us for some time. it's going to roll through region by region and country by country here. >> and professor, what happens if that's the case? in fact, what happens if these aren't temporary? what happens if this is no art of the deal? what happens if, as steve liesman points out to me to tell you directly, this is how the president wants to pay for his tax cuts. he wants to have revenue coming into the government to cover the cost of what he wants to get done fiscally, and he wants to get even more than he did last time.

done. >> well. >> first of all, if you do the math in any way, the tariffs can't pay for all the tax cuts that he has said that he wanted to even with, you know, 30, you know, 25 or 30, 30 on mexico, canada, europe. and he even talked about 60 on on china. he's starting out ten on china. and you know, he had talked tougher on china earlier on. it just it doesn't generate enough revenue to cover all the extra tax cuts and the extension of the 2017 tax cuts. we should also remember we went from 36% down to 21% corporate rate, a huge deduction, a reduction in that rate. what trump is talking about now is down to 15 for that

part of production. or firms that produce in the us. so the magnitude of the corporate tax cut is much lower going forward than it was in his first tax program. >> mara, are you reassessing the tech trade after the events of this week? i think it's the most important question in the market. with all due respect to the tariff breaking news and the impact of the market, which isn't even that dramatic, but this is the largest part of the s&p 500. it is probably the most crowded part of the s&p 500. the biggest market cap companies on this planet are within this group of stocks. >> if we. >> take a look at what's been happening from a broadening out perspective. >> the good. >> news is it's not a market crash and it's not a wholesale selloff. it is a rotation. and what you've been seeing is that rotation has been in train in 2023, 63%. >> of. >> the overall market returns came from the mag seven. in 2024 it was 55% year to date. it's actually zero. it's actually a

flat contribution from the mag seven. in fact, the mag seven are on two different ends. there's big dispersion here. >> where the top five contributors, half of those. >> are mag seven. >> the biggest. >> detractors in the. s&p 500, those ten. worst detractors. those are the other half of the mag seven. so dispersion in the mag seven is an important point to point out, because there are going to be winners and losers here. i do not think this is the end of the i trade, but it is phase two and this is the natural evolution of a technological revolution. you have a concentrated number of players, then you get more beneficiaries, more players, more different, different competitive landscape. and essentially i don't think that the capex that's going towards this innovation is unwarranted. as long as we can continue to advance the goals, the llms that we have now are just the building blocks. we need to have more advanced technology, and that is what's going to allow incumbents to stay in place. >> young you, what happens if these stocks, if nothing else, are just in the penalty box for a little while? is there enough

elsewhere to keep this market climbing, even in the face of this tariff news? >> well, i think there's probably enough there to keep the market treading water. but we do think that this tariff news perhaps changes the market psychology of looking at developments, whether it's the fed, whether it's spillover from negative earnings reports, changes that psychology from a glass half full to perhaps a glass half empty until some of this gets worked out. so the prospect for downward momentum in the in the stock market is certainly elevated or higher than it was just a few hours ago. but we do think under the hood, there are good things happening in the economy and with companies. corporations balance sheets are strong, consumer spending is healthy, and we do think productivity is really going to be something that is very impactful this year. and surprises to the upside. we think ultimately that's going to pull us through. but in the meantime, there could be some prospect of downward momentum if we get this tit for tat, especially with other countries doing retaliatory

retaliatory tariffs. >> we'll see what happens over the weekend. and then as we begin a new week. good weekend everybody. thanks for the conversation. i appreciate it, professor. we'll see you soon. mirror of course. and young you as well. to seema mody now who is tracking that other big event this afternoon, nvidia ceo jensen huang at the white house today. what are we learning here seema scott? >> we've also learned, according to a source, that in addition to meeting president trump, nvidia ceo jen-hsun huang also meeting with commerce secretary nominee howard lutnick at the white house, where he's discussing china restrictions and ways to revamp the chips act, which is seen as key to our country's national security. the trump we know has been meeting with a number of tech ceos in recent weeks, but it is the first one on one meeting with jen-hsun huang since trump took office. we're told huang is keen to discuss the new chip licensing requirements that were unveiled by the biden administration that would severely impact shipments of graphics processing units to a long list of countries, including countries like israel, which is considered a us ally. trump does have the power to

reverse this ruling. the question on wall street is can huang convince trump to do so? we know deep sequel is expected at least to be a part of the discussion between trump and huang and how it informs us policy on artificial intelligence, as the white house tries to figure out what type of restrictions and export controls on china would be most affected. scott. >> all right. we'll see how all of that transpires to a few weeks away from earnings. quiet period. not much they can say. and to some that has been a little unsettling giving all this important news this week. seema. thanks seema mody. we're just getting started. up next star analyst eric woodring is back with us. we get his first reaction now to apple's earnings stock move as well, which has been a story in and of itself. he joins me right after the break here at the new york stock exchange. you're watching exmy name's dan and i live here closiin san antonio, texas.

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tablet at wrexham.com 30. >> better than feared. that seems to be the major takeaway from the market. on apple's earnings. the stock giving up earlier gains, though, despite beating on its guidance. offsetting weakness for the iphone sales in china for his first comments on the quarter. let's bring in morgan stanley star analyst eric woodring. welcome back. it's good to have you back on this day. >> thank you scott. >> thanks for having me. >> on the price action. for starters, what do you make of the stock up then roll. >> sure. so stocks opens about 3%. less than. let's put. >> that in context. my estimates went up. about 1. >> to 1.5%. >> so 3% felt like a. >> bit much. >> but at the same time what. >> have we heard now? we've heard about the. >> implementation of tariffs where. >> it is. apple sourced. >> most of its product from china. >> the natural. progression of. tariffs on canada. >> and mexico progressing to china. >> is a headline negative for most of my group, inclusive of apple. just given where their

where. >> their production stands. >> so i do think. >> that the fade in. >> the stock is more. reflective of. what we're hearing, what. >> we're hearing from the macro. >> side of things, as. >> opposed to micro or reaction. >> to earnings. >> your own takeaway was better than feared, correct? >> it was exactly right. and maybe just to explain that an inline december quarter, largely. >> as we. >> expected, really strong gross margins, impressive services, growth of 14%, a bit better than we expected. and then for the march quarter, you know, we had expected a guide down. we were we were 2 or 3 percentage points below consensus. we got a guide. >> that was about $1. >> billion higher than than where we were. i would consider that better than fear. there are. still challenges that apple faces in. >> the near. >> term that they do need to overcome. but in light of where expectations were, you know, a midpoint of 94 billion for the revenue guide was. >> as i. >> termed it, better than feared. >> your bull case is 350. how do we get there?

>> you need a cycle. >> you. well, i should say this. you need three things to work in tandem. you need. >> an. >> iphone cycle. that would be both iphone unit growth and iphone asp growth. that comes from both apple intelligence upgrades, pent. >> up demand. >> and new form factors. you need strong services growth, right? apple just added 90 million new users in calendar year 24. you need those users to spend. if you say that those users spend as much as the existing apple user, that's about $30 billion of incremental revenue, not necessarily just in fiscal year 26 of course, but over time. and then the third thing that you need is gross margins. you need gross margin expansion. right now, i think we're looking at some real nice gross margin expansion, obviously in the company. that's kind of a check. the box services is outperforming expectations. the question comes back down to iphone iphone units in particular. >> you didn't say china. there

wasn't a fourth. i mean how do we assess this continued weakness in china with really no roadmap to get it better anytime soon? >> sure. and you know, when i when i say that apple still faces near-term challenges, i would put china at the top of that list. so what did we learn last night? you know, we did learn that china revenue was down 11% year over year off of a -13% year over year compare. so not a good not a good performance in the quarter. we also did learn that demand in china was better than revenue because apple drained channel inventory in china, as some of these local subsidies took hold at the end of the quarter. so china didn't necessarily perform as poorly as the headline number would imply. but china is still down, right? there is still a challenge that apple faces in china. it's why i posed the question, is this a is this an issue of western technology falling out of favor, or is this simply apple doesn't have apple intelligence in china, and therefore there isn't a strong reason for upgrading the work

that we do. the survey work that we do would would push back on the threat of domestic operators taking share from apple. it would support, though, the notion that chinese consumers are looking for apple intelligence, but they can't have apple intelligence. and if they can't have apple intelligence, they aren't upgrading their iphone. and what that means is that not upgrading your iphone leads to iphone revenue declines. i think that is the challenge that apple faces. and what we did not hear last night is any real concrete timeline for when apple intelligence does come to china. we know that apple intelligence will support simplified chinese starting in april. that's a good step forward. but scott you need apple intelligence in china that consumers in that market want it. but until they get it i do think that that that china faces a challenge. unless of course, either subsidies work or discounting does help to drive demand. >> can you can you get even to

your base case of 275 again, i said your top case your bull case was 350. can you get there? if china just remains this prolonged weak spot. >> you can't get there. if china remains on the decline in fiscal year 26. it's the single biggest risk that i think about when i think about my iphone unit forecast. can you get there? if china is flat to slightly growing, you can, but you need a really strong americas. you need really strong emerging markets. if we said that china was growing, say 5 to 10%, i think that apple would have it in the bag. that's kind of how i think the different scenarios associated with it. but again, the challenge is it's kind of incumbent upon apple now to bring apple intelligence there. right. right now apple faces challenges. it is not in the it is not in the leader seat, so to speak, when it comes to accelerating replacement cycles. >> all right i appreciate your time as always. we'll see you soon. good weekend eric. thank you. >> thank you. thanks so much scott. >> that's eric woodring morgan

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(♪♪) thanks, grandpa! get good at money. so you can be a little bad. empower. doing my own reporting to share insights, information, and all of the details that you need to be able to make money weeknights. >> i believe apple is an amazing company with amazing management. whatever goes wrong will be fixed. i just don't know when it will be fixed. historically, you're better off sitting tight than trying to trade this one. >> mad money weeknights 6:00 eastern. cnbc. >> all right. welcome back. value stocks are off to a pretty good start this year. the question is where are the best opportunities right now in that space. let's ask scott black. he is president and founder of delphi management. it's nice to see you. welcome back. >> thank you for. >> inviting me. >> we'll get to stocks in a moment. but generally speaking, how are you feeling about value when the week itself here was so

dominated by questions about growth stocks? >> to be. >> frank with you. if you. >> look from the statistics from 2007 on value hastematically led growth and large cap has dominated midcap and. >> smallcap by. >> a wide margin. but what we do is we bottom up stock pickers. we're indifferent whether it's large cap, small or medium. we're just looking for high. return on equity companies that generate cash that can be bought at low valuations. so that really hasn't changed over the years for us. so it's not about picking the homogeneous risk class that's going to do well. >> i think that's why our viewers like hearing from you. you you cut through all the noise and just get to bottoms up stock picking. let's talk some names if we could. you have some stock picks for our viewers s x td synnex. tell me about it. >> yeah it's. >> probably the quietest $61.6 billion revenue company that nobody ever heard of. it's an it

distributor. it's based in california. and essentially they distribute computers, peripherals, etc. they also have a manufacturing process called high hiv. i've been to it. i actually visited it where they configure basically cpus. and gpus for companies like meta, for example. and that's a better business. so the company should do approximately 1285 for the coming year. that's based on our own model. the stock is around 141, which places it on 11 multiple. if you want to take out the $0.80 and stock based comp, it's in about 11.8 multiple. the company will do about 13% return on equity and about 10% return on total capital. and over the last few years, they generate more than $1 for dollar in terms of free cash relative to net income. the last couple of years, that generated over $1 billion in free cash, and they bought back $1.2 billion worth of stock. they have a leveraged balance

sheet to begin with at 0.35, and it's a triple b minus. so it's an investment grade company. so there are two divisions to the company. the first division a mundane businesses like selling pcs and iphones. and that constitutes about 43%. the more upscale thing is configuring. it's doing stuff like networking and cyber. the hive business, which is making, you know, upscale computers cheap. that's about 57%. that business has much better margins. that does gross margins over 8%, whereas the regular distributions of 4.4%. so overall margins are lifting as they go more into the advanced business. and now somebody's going to ask because we just see retaliatory tariffs coming. are they big in china? the answer is no. they only have about 6% of their business in asia. most of it's japan. they have almost no business in china. so you don't have to worry about doing business there okay. the bulk of it, the bulk of the company is in north

america. 60% of the sales in europe is about 33%. so i guess, you know, you're buying something in 11 multiple. >> top line. >> revenue growth, 5 or 6% this year. bottom line is about 10%. it's pretty good value considering the s&p multiples is 23 times. you're going to get a half the multiple of the s&p 500. >> all right. let's do one more. ultra clean holdings. the ticker there is ust. yes. we already own applied materials kla and lam. but those were all 19 to 23 times. this is a surrogate play. they're big with both amat and liam lam is their biggest customer 31% applied materials 21%. what they do is they make subcomponents. for amat and lam. these are critical things like gas, gas, chromatography, chemicals, that type of thing. there's not much competition for them except the parent companies themselves occasionally do it, but they outsourcing it. there's

a little company called ichor, which is about 40% the size of ultra clean on a multiple basis. it's a $36 stock. we think they're going to run 285 at the low end. that's my own conservative estimate. having spoken to the management, it's about a 12 seven multiple. the return on equity on this one is 14%. the net debt equity is about 0.19. so the return on total capital is 12%. this is a smaller company. it only has, you know, a 1.6 billion market cap. but they'll still generate about 125 million in free cash. it's a well-run company. i've had the management visit me in the past, and i think it's a decent value. it's selling at roughly seven multiple points lower than amat, kla and lam. >> all right, i appreciate it. we'll talk to you soon. scott. >> thank you very much. have a nice weekend. >> yeah, you as well. that's scott black. up next we track the biggest movers into the close today. pippa stevens is standing by with that for us once again. pippa. >> hey, scott. well, investors are. not shopping for one retail stock after earnings. the name

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the company's broader long term. turnaround efforts. evercore isi estimates the move could free up about $650 million in full year 2025. >> and deckers. >> is sinking. q3 results did top estimates, but guidance came up. short of expectations. truist saying that short term headwinds are overshadowing meaningful momentum and growth opportunity for the maker of uggs and hoka, and to be buyers. on the weakness, though, shares down 20%. scott. >> pippa. thank you, pippa stephens. still ahead a double dose of pharma movers today. we'll tell you what's behind the bounce in abbvie and vertex coming up. we're back on the bell right after this break. >> how's the quarter. >> coming along kate? >> what? >> he thinks your name. >> is kate. >> and hates. >> when people correct him. >> pretty great. >> define pretty great. >> we added coopers ai powered total. >> spend management platform. >> so we're finding new. efficiencies and. >> multiplying margins. >> so you can mind your business. >> so you can mind your business. >> no, that's not.

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>> all right. we're now in the closing bell market zone. cnbc senior markets commentator mike santoli here to break down the crucial moments of this friday trading day. plus, angelica peebles tells us about two big movers in health care. jeffrey stevens with the main takeaways from big oil's earnings. mike, we begin with you. all right. i mean, we knew tariffs were coming. yeah. and if this is it for the you know, at least the beginning of the market seems to be dealing with it reasonably okay. it's not too dramatic. no it's. >> not dramatic in terms of magnitude. it's a 1% drop intraday from the highs. i think there was a sense out there that maybe the notion of imminent tariffs was at least a cap on the market, but not necessarily something that all of a sudden absolutely undercuts the bull case. the thing i would be aware of, i mean, i mentioned earlier about this absolutely tenacious retail investor bid in this market, and it has really kept things moving, especially on the tech side, crypto, all the rest of it, as professionals maybe have backed off a little bit.

and then the really baroque rotations that we've seen, right. majority of stocks being down on a given day when the index is up and vice versa. they're all healthy as long as they last. otherwise it could be if they exhaust themselves, it could be fragility out there in the market. and you know we're up 3% for the month. it's really being down 1% for the week on the s&p 500. it's probably a net win. when nvidia completely broke down and you had some kind of underwhelming results from apple and microsoft. and yet you kind of power through. so yeah i agree. it doesn't it's not a game changer. and by the way, it's almost like the threat of tariffs might be worse than the reality of them if we finally get there. but it does keep the market from getting too comfortable. >> yeah. alphabet amazon next week. so we still have a lot in front of us. angelica peebles we do have two big movers in health care. tell us. >> yeah. >> scott two of the names we should look at today are. vertex and abbvie. now let's start. >> with vertex. >> they had their drug for acute pain approved. >> that drug. >> generics came with a broad label. and there was a little.

bit of. >> you know. >> some concern that the fda would limit it to only be. >> used after surgery. >> and so that broad label helping. the company did price that at. $15 a pill, which was in line with what people were expecting. so really good news on both fronts there. and then abbvie, they raised their long term sales outlook for rinvoq and skyrizi by $4 billion. now remember, these two drugs are the key to life beyond humira. and that was abbe's biggest drug. and that started facing biosimilar competition in 2023. so they've had a lot of questions about what'st. and now it looks like they have an answer. scott. >> angelica, thank you for that. pippa stevens on these moves in energy today. what do you see? >> yeah. scott. >> well, profits have come down substantially for exxon and chevron amid softer oil and gas prices. but a bit of a divergence for the two. exxon beating on the bottom line helped by strength in its international upstream notably guyana as well as cost cuts. cost cuts a miss for chevron. however, thanks to weakness in the refining business, which did also impact exxon. now, exxon ceo darren woods was asked about

deep seek on the call, saying it hasn't impacted the conversations to date that they're having with their customers, adding there is still a lot of interest in gas and carbon capture for data centers and for chevron. the hess acquisition is still an overhang, with ceo mike wirth telling squawk box today that he remains confident hess will prevail in the arbitration, saying there is a line of sight to resolution later. >> this year. >> guys. >> okay, pippa. thank you. pippa stephens, we're getting more news out of washington. a busy afternoon megan costello joining us now with these new details. megan. >> a few more details scott on tariffs. the press pool is back in the oval office right now with president trump. we have not yet gotten the tape feed from that. but just based on the headlines that we're getting from the wires, it appears that he's saying now that oil and gas tariffs will take effect by february 18th. it is not yet clear if that is only on canada and mexico, or if canada and mexico. oil and gas tariffs could be earlier. but we will be getting some oil and gas tariffs, he says by february 18th. he's also saying that nothing can forestall at this point those tariffs taking

effect on canada, mexico and china by tomorrow. he also says those 25% and 10% levels respectively could increase. and then he's also talking about additional tariffs. it looks like he mentioned steel, aluminum, copper and pharmaceuticals as different commodities where he might be considering further tariffs as well. scott. >> okay, megan, thanks for that update. megan cassella got about a minute to go. we obviously are red still across the board. we'll see what we do as we creep here towards these final minutes of trade. not a big surprise about about this either. >> it's not a big surprise, although it is very telling that, you know, people woke up to this story in the wall street journal saying, oh, maybe the president had been persuaded to kind of defer any decision until march 1st. so you still see the internal tension, you still see the residual hope among some short term traders that maybe we can avoid it. maybe it really is just posturing, i guess not. in reality. you have to just pay attention. the volatility index was in freefall for much of the

week, and it has just perked up ahead of a weekend because you have to be aware of, you know, the swinging headlines. >> all right. you have a. >> good weekend. >> you controlling. >> all of you as well. >> we'll see on the other side earnings. >> and really getting into the bulk. >> of earnings season. >> and then we'll. >> continue to follow. >> the story as well. >> and overtime. >> not down. watch the end of regulation for the week. church and dwight ringing the closing bell at the new york stock exchange cme group invesco and proshares doing the honors at the nasdaq and a downbeat finish on wall street as the specter of fresh tariffs looms. stocks mostly lower for the week after the deep seek volatility, the fed meeting and a wave of big tech earnings gave investors plenty to consider. that's the scorecard on wall street. but winners stay late up in the closing bell overtime i'm jon fortt with morgan brennan. >> well coming up this hour liz ann sonders from charles schwab joins us with her take on where stocks head next as we wrap up trading for the month of january. also, the biggest cataly