world's largest portfolios for decades. start growing your real estate portfolio today with the fundrise flagship fund. >> welcome to power lunch. i'm kelly evans along with bryan sullivan. tariff talk has subsided. mexico and canada get a delay. china hitting back but not too hard. and tech is leading the way. that was almost a poem, wasn't it? the nasdaq gaining more than 1% leading the way. brian. >> but kelly some big pharma and makeup. oh my slamming investor money. look at merck down almost 10% on new concerns around china. and estee lauder also crushed because of china and more job cuts. they're on the way. >> 7000, in fact. and palantir is up more than 20% and on track for a record close, getting a

huge boost on earnings demand for ai. the stock is now, can i say sextupled in a year it's up 500%. >> is that what that is? >> i think so. sextupled quote me on that. >> sextupled. all right, let's start now with meta. you may not know the parent company, but you know its brands facebook, instagram and whatsapp. and whatsapp apparently is what's up, at least when it comes to the stock markets there. kelly. because this is the red hot stock story that others are not talking enough about. all right check this out. today is the 21st anniversary of mark zuckerberg launching what was then called the facebook. it was a web page to, let's be fair, hit on other college students. it's now closing in on being a $2 trillion idea. it's up again right now to $706. and with this move, meta shares are now up 12 sessions in a row. this one of the greatest runs in the history of the stock market. and money

invested at the ipo. call it ten grand is now nearly $200,000. and here's an rbi for you kelly. meta's last down day as a stock was all the way back in the biden administration a couple of weeks, but meta has never been down under the donald trump administration. and maybe that's the point, because some suggest that mark zuckerberg's transformation from really a guy that wanted to keep his head down during covid to an in-your-face, ceo based zuck, he's one of the reasons that facebook meta has been on a run. let's talk about it all. and what exactly is going on with steven levy? he is the editor at wired at large or wired editor at large. at wired. i just gave you, like, a weird new promotion, stephen. thank you. and author of facebook, the inside story. and sheera frenkel, tech reporter at the new york times and author of an ugly truth inside facebook's battle for domination. so this

is a hell of a story. stephen, i want to start with you because they weren't moving. i called it their new coke moment. you got to be of a certain age to know what that even means. but you know what i'm talking about. they changed their name to meta. they talked about the metaverse. you could buy, you know, fake land with real money. that seems to have completely vanished. i don't know what the company is now. maybe you do. and why it's suddenly red hot. yeah. >> there's a few reasons, you know, one is that, you know, the metaverse thing, which, you know, people mocked, but they actually wound up coming out of that with a pretty decent growing business with, you know, instead of big heads, heavy headsets, which they still make with the glasses, which give you internet, the ray-ban glasses, which are pretty popular. but i think the biggest change in the company is they're still raking it in on social media while trying to get past all the problems they had with the content there, and that happens

to align mark zuckerberg with the trump administration, which for years had been urging it to, you know, do what they call free expression, which means, you know, basically let all misinformation flow on that. and mark has not only embraced that, but he's embraced sort of like the manliness aspect, the manosphere thing of the trump administration, too, because he feels that he's beyond the criticism. well, he doesn't really worry about it anymore. >> and sure. and that's it. and what who do you think is the real mark zuckerberg? because i don't know. >> i think people close to mark zuckerberg see that the version of him who's out in the public now showing off his interests in sports, showing off his interest in, in fighting in, you know, the various sort of outfits we've seen him in. that's the real mark zuckerberg. and they say that's who he's always been. that in his early 20s when he left harvard and sort of started

this company, that he was this version of himself and that he was convinced for many years to be a quieter version, to sort of find the middle ground, to reach out to the american people, to be apologetic for mistakes his company made, and that he's now really come full circle to some of his sort of his origin story as it was. >> so i'm curious, i was going to say, shira, about the stock. i mean, from investors point of view, the reason why i has been so transformative is almost this kind of, you know, businessy thing of they get to optimize ad load, right? they can they can figure out the algorithms better. they can deliver better ads for you. they can command higher dollars. and yes, they're doing a lot of other things, you know, in the works as well. but that's what it really comes down to, right? >> well, i mean, anyone out here in silicon valley has got to put ai into their pitch at the moment if they're trying to sell their company. we've heard meta discuss how ai is going to solve everything for them, from removing misinformation, disinformation from the platform, helping them sort through hate speech, improving ad revenue goals. ai is the hot

buzzword, but i think part of the reason that that meta specifically is doing so well right now is really mark zuckerberg's ability to align himself with trump, to appear publicly with trump, and to show people to show the public that some of those trust concerns, some of the concerns that meta had as a company in washington, dc, aren't going to exist in the trump administration. >> and by the way, we lost stephen hoping to get him back. but but, shira. so we'll stay with you. i get that, i guess. but what i'm trying to understand is, and i know you're not a stock person, don't worry. you don't have to answer it directly. but how does that benefit the stock. the stock's up 12 sessions in a row. that's what we talk about. how does aligning with trump further. meta's interests as a business. maybe it has something to do with tiktok's future. >> it could be it could be that people are looking at meta and saying, right, well, mark zuckerberg is close to the trump administration. he's not going to have the same sort of antitrust concerns in washington, dc. he's not going to face congressional hearings and fines for some of the

problems on his platform. and trump could force tiktok to still sell. i mean, they could. the main sort of threat to meta as a company has been tiktok. and if that's off the table, then the growth for meta going forward could be unprecedented. >> yeah. and i think also just what i've kind of been impressed with, shira, is the willingness to completely i mean, he renamed the company meta. and now no one cares about the metaverse, right? >> i don't even know what it is like. i can buy fake land next to snoop dog or something. >> that's that's pretty embarrassing. and so he just said, all right, well, we're just going to move on, hop on the next bandwagon, which is much more profitable for meta. they're benefiting. and so like, let's not pretend that he's some visionary. i think he's just very practical. okay. now trump's president well now we're going to jump on that. >> you know what i think people should look at when they think about that renaming of the company, when they think about facebook. changing its name to meta is really just mark zuckerberg's ability to hop onto the next big thing. it's his ability to pivot his company quickly because of the way that the company is structured really under his control. this is a

company which is which answers to one person. it answers to mark zuckerberg. so if mark zuckerberg says jump, the engineers say how high? he said, we're going for the metaverse. they went for the metaverse. that quickly proved unpopular. so now they're moving on to ai. it's investors like that about meta. and i think that mark zuckerberg is really leaning into that for them. >> it's quite the transformation. and that the kind of the based zuck has. listen, i don't know if it's going to ultimately benefit investors or not, but for the for the last 12 days and longer than that, sure. it certainly has. steven levy, if you're out there somewhere, we love you. we'll get you back on again very soon. steven levy, sheera frenkel talking about it, thank you very much. and just a reminder, kelly, because, you know, we have long memories here. mark zuckerberg made his first appearance ever on cnbc. he 21 years ago. here it is. >> what is the facebook exactly? >> it's an online directory that connects people through universities and colleges

through their social networks. there you sign on, you make a profile about yourself by answering some questions. >> it was an interview with becky quick. >> adorable. >> 21 years ago i was on a street corner in singapore randomly talking to people. they recognized me. turns out the guy was eduardo saverin, his roommate at harvard. eduardo, of course, one of the co-founders of facebook. they got in a fight. he ended up moving on a street corner in singapore. i randomly met the roommate. >> it's been for those of us who remember when the facebook.com came to our college campus, and what a big deal it was to see him take it from that. >> which you're bragging. >> well, since i'm so young, you know, to take it from what could have been the next, what was the failed media. >> social myspace. >> thank you. it could this that that platform should. >> have was hot in my day. kelly. >> yeah it should have been the next myspace to see him transform it into what it is today is a testament to the fact that he can continue to reinvent himself and this company, to stay with the times and even stay ahead.

>> and saying, oh yeah, we did get censored during covid. and he goes on joe rogan and he's got the hair and he's got the videos of himself chugging a coors in a tuxedo while surfing off kauai, which i think he bought. or he partially owns one of these islands. it's a hell of a story, but if you've invested in meta, you've made a lot and lot of money. >> especially lately still to come trumping the norms. nothing is ever certain in the markets these days. now, there is one certainty that the president will dominate the headlines and move stocks. so how do you navigate this tariff landscape that is next. >> the bond report is brought to >> the bond report is brought to at ameriprise financial, we know our clients are so much more than clients. they're conquerors and champions, and what matters most to them matters most to us. it's no wonder we have a 4.9 out of 5 client satisfaction rating. ameriprise financial.

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available now at graco. >> welcome back. it's like the market's version of keeping up with the kardashians. investors need to tether themselves to trump. yesterday, stocks started deep in the red because a trade war seemingly had begun. by the end of the day, it was pretty much resolved, at least for now. but the president continues to

dominate the headlines. we're in the middle of a transformative period for the economy to investing norms. are they getting flipped on their head or is high valuation here to stay? is growth still the backbone of this market? it's not a clear answer, given some of the problems of late. or is a rotation to value on the way? it's early in the year, but look at the vanguard value etf. it's outperforming the vanguard growth index. is that just a hiccup or an emerging trend? joining us now to discuss and maybe debate, cole smead is ceo and portfolio manager at smead capital management. and chris grisanti is here on set with us. he's the chief market strategist at mi capital management. i think of cole as a value guy. but chris, i sort of think of you as a value guy, too. >> it's true. we're going to be singing to the choir today. >> okay. value versus value. what kind of value stocks are you in right now? >> so i'm really liking health care here kelly. over the last two years the s&p is up 54%. health care sector is up 2%. so and the earnings have come through. and with all this trumpian angst what we're looking for is reliable cash flow, reliable dividends. and

that all kind of feeds into cheap health care stocks. >> are there any growth stocks that you would look at what we would traditionally call growth stocks. but you know i know you're often looking for a bargain. i don't know if there's many. microsoft has been a little bit of a more challenging story. some of them have lower valuations. >> anything there. well and i'd be careful. i mean it's kind of a not correct that value investors don't like growth. love growth. just don't want to pay a ton for it. so we. i love google. google, at least until it had its recent run, was the only mag seven stock that was selling below a market multiple. so it's nice to go there. it's love to have both growth and valuation. don't get it a lot but but there's still some out there. >> cole i don't take you as the type who's like all that excited to comb through the mag seven. you know ever or at least at these valuations. where are you looking right now? >> yeah. thanks for having me kelly. i think a really interesting theme that we're going to dig into a lot more in discussion with investors is talking about asset light businesses who produce low returns versus capital intensive

businesses that are producing attractive returns. so let's just use your discussion a second ago of meta. if i back out the stock based compensation out of what the street expects meta to make this year, they're not going to make 43 billion in free cash. they're going to make $26 billion in free cash flow, a 40% reduction, because that's how much stock based compensation costs them last year. now, that's still a lot of money, admittedly kelly $43 billion. but when you compare it to the book value of the business at $180 billion, it means it's producing about a 15% return on capital. when you look at cash returns now, that's fine. but when you trade it 8 or 9 times book, that's impossible to compound money. now, why i say that, kelly, is because i can go out and we as our investors can go out and buy oil companies on either side of the border that are producing mid-teens returns on capital with cash. yeah. and so why would i go out and take that kind of risk. and ultimately the stock market is functioning in a way where if your stock goes up,

everyone rewards you and thinks you're more intelligent. if your stock doesn't go up, you're an idiot. and the problem is, neither may be true. >> but cole, here's where i get stuck because i listen to your math and i go, well, that sounds sort of sophisticated and important. and then i just look at the performance and i go, i don't want to own energy stocks that go nowhere, right? even health care, i get a compelling argument. but okay, until a few weeks ago, not much to show for itself. so how long am i waiting to see these returns or am i not? is the price return not capturing it? is it really total return? do i have to look at the dividend or is it a matter of time? >> meta does higher capex as a percentage of sales than us steel does. that's bizarre because one's capital intensive and one is asset light. kelly never forget you canes with a bull market. we're doing that. and ultimately we're doing that on the back of american exceptionalism which is the largest debt binge in our history. we are not exceptional. we're the borrower. and that's what the rest of the world hasn't done. we're going to wake

up just like we always do, and find out we're human and we have folly. and our casino is just pretty big right now. >> oh, other than that, how was the play, mrs. lincoln? so pretty strong words from cole. chris, your response? i mean, do you think that some of these crazy mag seven or tech stocks are just kind of a stupid run? >> i'd push back just a little there, and i'm a value guy too. i appreciate what he's trying to do, but but what i would say the difference between us steel and meta or amazon, which is another stock that looks expensive but that we like, is that they can dial down capex any time they want us. steel couldn't do that. they got to build their plant. they got to buy the coal. so what we have here is an adjustable metric. so if the economy slows or ai doesn't pan out, microsoft and meta, they're all going to be turning the dial and save tens of billions of dollars in capex. >> here's where i disagree. here's where i disagree with you. satya nadella said i'm good for $80 billion. if you look at the plant, property and equipment at microsoft, that's a

50% increase in what the existing business did. so the problem is they've all committed to everyone. they're going to spend a lot of money. and the problem is there's no incremental return yet. and if there's not, people are going to be really disappointed. there is no profitability off of ai. it's something to say, but we will see what the cash returns bear and like using the internet. change your life. it did. it just took over a decade to really profitably change the metrics of businesses. if it takes that, there's a lot of folly going on today. >> would you, chris, be you know, the energy argument is one we've heard and obviously, you know, it's been a fruitful area for some companies, not for others. are there names there that you like? >> yeah, i find energy very difficult to invest in simply because it's so dependent on external factors. price of oil obviously, and regulatory issues. so, so i, i'm more afraid of that than i am of health care by a long shot. i think the cash flows in health care are much more reliable. so energy, especially if trump does what he says he's going to do and increases oil production. >> but don't you fear rfk jr

when it comes to health care? it's not a political comment. no, i understand, in fact, i'm going to pitch a segment for tomorrow's show, by the way, about health care and rfk jr, because we don't know what the new hhs, if he gets confirmed, is going to do. >> so our job, brian, of course, is to take that. those stocks are down on exactly that news and say, is it in the stocks or is there more to come? can he really beat up on the drug companies, for example? and we think, for example, pfizer at eight times, merck now at nine times we think it's in the stocks. so you know we'll see. >> cole quick last question to you. same one i was going to ask which is you know kind of looking at stocks the way you do. does health care come up. i mean are there names there that you think absolutely you'd want in the portfolio? >> yeah, we own merck and amgen and we like those businesses. so we think i agree with chris. that's the one thing we probably agree on. but to his point, you know, where i would be scared of oil is if capex climbed. trump can say drill, you can't find anyone drilling. so this is not the first admin that he's dealing with. drill, baby drill died a while ago in the pandemic. it ain't coming back.

that's how people make money. no one's drilling. >> i know you've been looking at. are you still holding coal? those canadian producers. because now we don't know if there's ever going to be canadian oil tariffs. >> smiling ear to ear kelly with meg strathcona and cenovus i just had john mackenzie their ceo came to our investor oasis yesterday. and you know what this is going to eat into us refiners too. so the idea this is only a canadian problem. this is a united states problem. the question is who will eat the costs. yeah. >> but you think cenovus is up 6% today strathcona as well. so it could be a beneficiary. those price pressures go in their favor cole thanks. appreciate it today cole smead smead capital management chris, we'll see you for three stock lunch. >> great. >> nice to be here. all right. meantime, the job market nationally continues to weaken the federal government. just reporting that the number of job openings fell to 7.6 million last month. that, my friends, a stunning drop of 1.3 million open jobs from last year and is now down by 4 million open jobs in just three years. let's talk about that. the bond market.

anything else rick santelli wants to talk about with rick santelli? >> well, i'll tell you what brian. you nailed it. 556,000 jobs less than last month. 8,156,000 to today's 7,600,000. that's a whopper of a drop. and it definitely fueled roughly a three and a half to four and a half basis point parallel shift on the yield curve. yields down definitely yields down. brian, i want to ask you a question, brian. one year ago today, february of 2024. do you think most people thought that trump would be in the white house today? yes or no? >> no. >> okay, now all the following charts are one year old. and i want to keep in mind that the only way you really make money trading is if you know what moves the market. now, i thank chris for giving me the term i needed. trumpian angst. trumpian angst is everywhere. publications on tv and magazines everywhere, especially the last

72 hours. but as you look at a one year chart of two year rates, ten year rates, dollar index, and five year break, even, every one of those charts shares something that the catalyst for every one of those moves is right in the middle of each one of those charts. september of 24. the action was the first rate cut of 50 basis points. the financial reaction is what we're still in. all of those moves started and all these trends still in place from that september move. so we could talk about the new administration and maybe things will change, maybe what looks like a tariff negotiation will change. maybe what's going on with china will make the markets move more. even though we're extricating ourselves from china, from globalism in general, those charts tell the real tale. if you want to trade the markets, keep your eye on the finance side. and that means keep watching the central bank. brian, back to you. >> well, it's a good it's a good

take. and the market that's what we do here. we look at data that we react to it and we put it out there. and some people hate it and they say, well, that's garbage. say maybe it is, but that's what the market says. and that's our job and our edict here at cnbc. rick santelli, no one does it better than you. thank you very much. all right. coming up we're going to tackle one really key tech stock. its earnings are out next week. this week it's in market navigator. week it's in market navigator. next as is the name. (grandpa) i'm the richest guy in the world. (man 1) i have time to give. (man 2) i have people i can count on. (grandma) and a million stories to share. (vo) the key to being rich is knowing what counts. business. it's not a nine-to-five proposition. it's all day and into the night. it's all the things that keep this world turning. it's the go-tos that keep us going.

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stop waiting. start investing. e*trade ® from morgan stanley. here first. >> a wild hour of earnings. >> earnings season special coverage all this month on cnbc. >> well guess what. the 24 hour trade war apparently is over, at least with canada and mexico. we'll see. and that's benefiting stocks the nasdaq big tech stocks you might have heard about like an amazon a microsoft a meta whatever up 1.25%. and oh by the way, some of those big tech names are on the docket to report their results this week. we don't mention that by accident. we mentioned it because this guy right here, it's got cue the animation market navigator, dom chu, who's taller in real life than he looks compared to the cube because on the cube.

>> but i'm. >> not as tall as you are. you were. you were a tall man, brian. >> i'm a. yeah. there's a lot going on. >> are not good. it's not good. it's not good. all right, let's get back to business here. because as brian mentioned, it is a big week for tech earnings. amazon is set to release their fourth quarter results on thursday after the closing bell. those shares are already up 40% in the past 12 months, and more than 135% over the past five years. so our next guest says the online giant and web services cloud computing giant has a big base for a possible breakout, and she believes those shares have room to run. so joining us is jessica inskip, director of research over at stockbrokers. com jessica, this story for amazon is one that's a ketchup story right? it had been lagging for a number of years to its mag seven peers. but now it's finally caught up. but you think there's more room to run? i'd like to know why. >> absolutely. it's looking at the chart from a relative basis. so i'm looking at amazon relative to the broader market, s&p 500. we had a large area of

resistance that was formed around the beginning of 2020. then that contributed to a lower high in the 2022 decline that we had for all of tech. and then that was a key area of resistance for 2024. so we just broke out of that through the end of the year, and now it's been tested once more and has been support. so that is a huge what i like to call big base breakout. when we compare it relative to the s&p 500, kind of like a technicians way of pe ratio. >> all right. so if you're looking at it that way then okay. that means buy the stock. right. but you're thinking not necessarily just buy the stock but get exposure another way. >> absolutely. so earnings is coming up this week for amazon. and when we're looking at options and we want to utilize options to deploy any type of strategy. there is a other component that inflates premium which is implied volatility which happens around earnings. right now there's an implied move of about $16, which means it's reflected within the options pricing even if we're

going out further. so the way that i want to position this is actually to pay for long directional speculative exposure via a cash secured put through what's called a long synthetic stock position. it's two options trades that i'm happy to walk you through. >> so yeah. >> go go ahead. go through. yeah. so i'm looking at about 38 days out close to the money, which just means the same strike price as the stock price. so 240 earlier today if i were to just buy those calls expiring march 14th it would cost me around $12. i have unlimited upside, but i'm actually not going to start capturing that once that volatility crush happens, post earnings as in premiums are going to deflate, which means i need the stock to move $12, which it could do. but that's still a big move just for me to break even. so the way that i want to fund that is i'm actually going to sell a cash secured put. i'm going to the same strike, same expiration. i'm going to collect about $11 for that, which means altogether, it's going to cost me $1.45 per share. so 100

shares, $145 total to get a directional exposure with unlimited upside like that long call has. i still have of course, stock ownership risk if it were to move adversely. that's why the profit and loss diagram looks identical to owning a stock long. however, if you utilize options this way, i can set aside my cash and t-bills. it doesn't have to sit in the stock, it sits as collateral until i am assigned. if i'm assigned otherwise, i capture the upwards potential. if there is a bullish earnings move with very, very little cost. >> all right i like it jessica. using those components to build what would effectively be an ownership position. jessica, thank you very much. we'll see you soon. >> have a show called options action. >> there should be something. >> we have when we walk through what. >> we had one of those. >> we walk through that. it looked like a mondrian painting the green and the red, and then the 12 bucks and it's cash secured. >> i think it's great. i think the idea of being able to visualize being long a call and short a put, but then looking

the same as if you own the stock, is a great way to kind of visualize how options can. >> i have no idea what either of you just said, but it sounded great. all right. there you go. amazing, kelly. >> thank you both. after the break, look at shares of merck down 9% today a huge move as we were just talking up some positives about the health care space. but their full year guidance was short of analysts expectations and it stems from a vaccine issue. we'll talk about that next. >> market navigator is sponsored >> market navigator is sponsored knock, knock. #1 broker here for the #1 hit maker. thanks for swingin' by, carl. no problem. so, what are all of those for? ah, this one lets me adjust the bass. add more guitar. maybe some drums. wow, so many choices. yeah. like schwab. i can get full-service wealth management, advice, invest on my own, and trade on thinkorswim. you know carl is the only frontman you need... oh i gotta take this carl, it's schwab. ♪ schwaaaab! ♪

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trades will be allowed to either close their positions or take them to a resolution. 15.4 million people watched the grammys on sunday night, according to nielsen. viewership was down nearly 10% from the year before, snapping a three year streak of ratings growth for the awards show. grammy producers said they did not expect to see record breaking ratings as they scaled back marketing for the awards in the wake of the los angeles wildfires. kelly, i'll send it back to you. >> all right, leslie, thanks very much. shares of merck are getting crushed today on pace for their worst day since 2021. despite posting a top and bottom line beat last quarter guidance. the issue. the company saying it's going to temporarily halt shipments of gardasil vaccine to china after lower demand there. joining us now is guggenheim securities biopharmaceutical analyst vamil devon vamil. welcome. and this is, i think, not something a lot of people had on their radars, which explains the stock reaction. why is there very little demand in china for this vaccine? >> yes, it's been a problem for

a few months now. back in the second quarter call in july, they mentioned they're seeing a slowdown and a build up of inventory. and then again on the third quarter call. and now again today. and it's somewhat ties to the macro economy there. and just the discretionary spending a lot of the vaccine spending there would be out of pocket. and people are just not comfortable spending right now on this vaccine. we've seen that with other companies and other sectors as well. so that's definitely a big part. there is some additional competition there as well. and then a little bit of some concerns around just the value of the vaccine is not being communicated properly in china. so a range of factors but ultimately just not enough demand inventory is building up. and so yeah, they're halting the shipments. and it's a problem. again it's sort of driven the stock from 120 down in stepwise fashion to where it is today. but i think at least that sort of sets a floor probably now that there's really sort of stripped it out, they're not shipping any more. and now people can focus hopefully on the rest of the business, which does have some positives that are being offset by gardasil

right now. >> so and some other analysts have said, look, overarching this is kind of like that compounds the existing problem, which is what happens with keytruda in coming years. so kind of what is the bigger picture. how can merck kind of show the community that it has exciting growth again? >> yeah. so that was even before gardasil started their biggest product, keytruda. for oncology, $30 billion product is going to lose patent protection in 2028. and the price for that product is going to come down. we know that's going to happen. so they already have this issue to deal with. gardasil was one of the big drivers to get them through that issue. now that that's slowed down or really sort of stopped growing, they need to replace that. they need other assets there. there's some stuff in the pipeline that's attractive. they do have a new product that they launched last year called wind river, which is attractive. also, it's tracking to be probably 5 or $6 billion product, but they need more. i think that's where those questions on the call, and i think regularly they're getting asked questions now that whether it's internally or buying

external assets, they need to give investors more comfort that they can grow later in the decade, because keytruda is going and gardasil, the number two most important product, is having issues. so we need a couple more products probably to offset the issues that they're facing now. >> i interviewed rfk jr. i don't know about a year and a half ago, and i don't want to bring up politics into this, except the fact that he's likely going to be the health and human services. i mean, if he gets nominated and it's about a 90% chance on online betting boards that he will. and he told me and he said this many other times, that that his whole family is vaccinated for pretty much everything but covid. so, you know, it's a weird thing because he gets labeled this, he gets labeled that. again, i don't care about any of that except as an analyst looking at companies that have heavy exposure to vaccine sales. is there any way for you and your team to model this? who wins? who loses? >> yeah, it is very challenging, i think for sure. so merck doesn't have the covid vaccine exposure that gardasil and other vaccines, certainly a part of

their business. pfizer reported this morning also, they do obviously have a big covid vaccine business. i think we try to be appropriately conservative as we go through the process. i think it's pfizer mentioned this morning, you know, vaccination rates in 2024 for covid were similar in the us to what they were in 2023. we sort of assumed a little bit of a haircut on that going forward, whether it's because of actual changes in policy, which we think are somewhat less likely, but just the rhetoric and the sort of maybe less pushing of the vaccine leads to fewer people getting vaccinated next year or in this coming in the, in the coming fall, winter season. so, so yeah, we just tried to take a little bit of conservatism there. i think that's been a problem for pfizer to just the uncertainty of both the covid vaccine sales and their sales from paxlovid, their antiviral for covid, has just given investors sort of concern on what's the longevity of that revenue stream, because unlike just like pfizer, just like merck, there's other products that they're going to lose patent protection on in the next few years. and how do they grow through that? so it's somewhat

of a similar story between the two now where they have big patent issues coming up. their growth drivers are some uncertainties around. so again, for both companies need more from the pipeline. and we need more externally brought in to get people comfortable that they can grow through these uncertain times. >> that said, you have buy ratings on both of them with price targets, i don't know, call it 30% above where they are now. why? >> yes, i think some of that is the pipeline. i think pfizer, we do think there's stuff in the pipeline. they talked a lot about this today too, in oncology, outside of vaccines, in the oncology side specifically, they're working on some stuff with obesity metabolism that could be attractive. so we think people are overlooking those assets and they're not giving them enough credit. i think just because there's so much scrutiny on the covid side of the business. so it's overshadowing what we think is good progress in making elsewhere interesting. but merck is a little more challenging. >> go ahead. yeah. you were saying it's. >> just given the. >> ongoing issues they're facing. i think that's where i think us and others are looking

at what can be in the pipeline. there's nothing near-term. if you look out a year, a couple of years from now, there is some stuff. it might just take time to recover from these setbacks. >> understood. appreciate you joining us this afternoon. emil. emil deevon with guggenheim. >> thanks. >> all right. coming up next, could trump actually create a sovereign wealth fund, even with u.s. debts and deficits that are going up? we're going to dive into that hot button issue coming up. and a reminder, we are taking nominations for our 13th annual disruptor 50 list of private venture backed companies. you want to nominate somebody, you go ahead. you scan that qr code right now. unless you're doing something incredibly dangerous, then don't do that or go to cnbc.com/disruptors. we're back after this. >> crypto watch is sponsored by crypto.com.

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executive order to clear the way for maybe the creation of a sovereign wealth fund. the eo was basically to explore the possibility of creating one. anyway, the idea is well into its infancy, but the idea is still out there. still a lot of questions. but number one, for many people out there on the internet and even in person, is where is the money for a sovereign wealth fund going to come from? well, here's what commerce secretary nominee howard lutnick said about the issue. >> if we are going to. >> buy 2. >> billion covid vaccines. maybe we should have some warrants and some equity in these companies and have that grow for the help of the american people. >> and your next guest wrote a piece questioning the idea of a sovereign wealth fund. when trump first floated the idea on the campaign trail, he actually talked about it in his first time in office. biden then also talked about it, and now trump is talking about it again. you follow all that. joining us now

is douglas holtz-eakin. he is the president of the american action forum. douglas trump was sort of hot on it in his first term. biden actually floated the idea last year. now president trump is signing an order to explore the creation of it. why wouldn't it be a good idea? >> well. >> it looks like a solution. searching for a problem. you know, they've mentioned a bunch of uses of the sovereign wealth fund. so vaccines. well, we have the nih and you can fund that infrastructure. we had a bipartisan infrastructure bill. we can do more of that, counter the belt and road, the chinese initiative. well, we have the international development finance corporation put more money in that. the reality is we have programs and national priorities, and they can be funded. and the source of that money is ultimately going to be the us economy and the tax power of the of the federal government. so i don't know what problem we're solving. if we were to create this and to create it, you have to raise

taxes and stick it in the fund, not spend the money. and that is not something this congress or administration does very. >> well. >> because the countries that and for people not listening. a sovereign wealth fund, for lack of a better term, is a government that is generally a rich government puts a bunch of their excess cash flow into an investment idea, and then they go out and buy stakes or buy companies. singapore has one, norway has one, saudi arabia has one, a few others. but those are the big three. the difference between us and those three nations is they're not running gigantic and growing debts or deficits. correct. >> you used the word surplus. we haven't seen that since 2000. and so our problems are the reverse. we don't we don't are trying to struggle to figure out where to put our surpluses. we need to control the growth rate of big federal spending programs, provide taxes sufficient to fund the ones that we were holding on to. and that is the challenge for the united states not dealing with excess funds. >> we. >> is there any scenario under which this could make sense?

>> it's hard for me to imagine it. and i know i don't want to rain on the president's parade and secretary of commerce, but, you know, the idea that we're going to have warrants equities hold to do a covid vaccine, that's called nationalizing a pharmaceutical company. and i don't think that's something that they intend to do. people like to do equity investments, but they're also risky. and so you're putting the taxpayer dollars at risk. i you know, we've gone through this same discussion when we talk about funding social security and using equities. we go through this discussion all the time and there's no magic here. you cannot do financial engineering to solve our fiscal problems. you need to raise taxes, cut spending and make things balance out. >> you know, i'm also curious, that kind of as a parallel argument to the one over the years about allowing social security to invest in the stock market, which i kind of like. maybe i'm the only one, but it just it seems the idea that building wealth in the long run kind of comes from that exposure. and yet we have this massive kind of wealth pot that

we need to grow its wealth and it can't access that. so i know there's many more sophisticated arguments against this, but is there a way in which social security could kind of, you know, try to act out some of this for to kind of shore up its own funding and to solve some of those debt and deficit problems that a lot of people say the sovereign wealth fund wouldn't solve. >> well. >> i think there there are two issues there. the first is the using equities to fund social security. you know, we broached this idea under then-president george w bush. and, you know, a lot of people don't like the idea of the government having a big fund of equities, which telling people how to run their companies being majority owners, nationalizing companies. his approach was to let individuals make those equity investments. that sort of addresses the power issue, but it doesn't address the risk issue, which is equities are riskier than us treasuries. and as a result, you expose people with the possibility that you get a downturn just about to retire

and they don't have the money. and that argument ultimately, i think won the day back 20 years ago. will we take another run at it actually. i hope so, because we need to deal with social security, which is an enormous fiscal problem for the united states. and having that debate would be healthy. but i don't think, you know, it worked the first time and i'm skeptical would work again the second time. >> interesting. well, it's still kind of fun to contemplate. think about how what what could solve all of these issues then. doug, thanks very much today. thank you. douglas holtz-eakin, coming up, we'll bring back chris grisanti of my capitol, get his top picks for 2025 in 3 stock watch. >> in a world of uncertainty and disruption, how will your investments stay resilient? we've been navigating change for 125 years, always looking forward, anticipating risks and

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chris grisanti with my has our trades. let's start with pfizer. it was briefly mentioned earlier in the read disappointing start to the year despite health care being up. but you're sticking with it. >> yeah disappointing only in the sense that the stock was down today. but i thought that the earnings were actually pretty decent. and look kelly we're not talking nvidia or google. this is at eight times earnings. got a 6.5% yield. if they can get to 11 times earnings you hold it for a couple of years. you can make 3,040% on the money even in a crappy market. >> what about airbus? it's the foreign competitor to boeing. it's the opposite of boeing in the stock market. >> yeah i really like this one, brian. and the reason is there's a whole bunch of forgive the pun tailwinds here because you've got underperforming. there you go. europe has been underperforming is due for turn. and it's actually starting to turn. of course their main competitor pepsi to coke boeing is in the penalty box to say the least. and you know they're in a secularly growing industry and they have a great product and a massive backlog. so and it's a relatively cheap stock that's had some supply chain issues. but it looks pretty good right now. >> and from that to domino's. >> domino's i wanted to give you

three non-tech names. domino's. the stars seem to. >> be. >> finally landing. >> up, but they used to say this was a technology company that delivered pizza. >> right? they used to. >> yeah. who said that? >> domino's exactly. >> in the. >> 20 tens, was any stock better than domino's? they were like they didn't know they were been a different story. >> no, it has been. and do you know they're innovating pizza still? you think you could innovate pizza anymore? 15% is already stuffed crust. they are moving from uber eats to doordash. they got a lot of things coming. watch the earnings in late february for same store sales. but i think finally we're going to get some traction there. >> yeah, it's hard to keep innovating on the pizza category right. >> for 150. >> stuffed crust still considered innovation. >> no but but it depends on what you stuff it with. >> so what are they stuffing it? >> i can't say cheese. >> well cheese. the idea is they put cheese in the crust. why don't they come up with a tomato pie? you know what that is from trenton, new jersey. and you put the sauce sauce on top. >> no. no one under the age of 15 is going to eat that. no. >> it's papa's pizza in trenton

is. i'm telling. >> you, it's never going to happen. >> de lorenzo's tomato pies. you got to go. >> final parting thought on the markets. i mean, beyond what you've said, where you're looking for value. >> i think value continues to lead the way this year because there's more certainty in cash flow and dividends than there is in tariffs and everything else. >> we'll see chris. appreciate it. >> good to be. >> with you guys. that was fun. >> thanks for watching. >> closing bell starts right now. >> welcome to closing bell. i'm sara eisen in for scott wapner. we are live from post nine of the new york stock exchange. this make or break hour begins with alphabet shares hitting a record intraday high as it gets set to report fourth quarter results after the bell. we're going to break down what's at stake for the tech giant and the sector overall with our panel of experts in just a moment. but first here's a look at the scorecard with 60 minutes to go in regulation. the majors are in the green with wall street looking to find its footing following the latest developments on the global trade front. the nasdaq and the s&p 500 seeing gains. dow's actually joined them as well, up a third of 1% thanks in part