reported yesterday. momentum looks like it's finally changed. and it should nine times earnings 9%. free cash flow yield mid-teens earnings growth ahead. they're breaking the company into two. and it should be great okay. >> it should be great. we'll see. >> i thought if i said what. >> they were going to. >> be it's going to take too long. >> all right i'll see you on closing bell. we'll follow meta. see if we can go 15. >> in a. >> row and the rest of this market to exchanges now. >> thank you very much, scott, and welcome to the exchange. i'm kelly evans a very busy morning so far. inflation steals the show after showing consumers are increasingly anxious about tariffs and high costs. even as we learn that wages rose sharply last month and unemployment fell. >> kpmg's diane swonk. >> has got a pretty hot take. >> she's now forecasting zero rate cuts this year. she joins us momentarily. >> and if at first you don't. >> succeed, frontier airlines is making another offer to buy spirit, this time out. >> of bankruptcy. >> frontier shares are also.

>> soaring today on an earnings beat and great guidance. this morning. >> we'll speak. >> exclusively with the ceo and it's the ipo du jour. >> but you might not have heard much. >> about it. it's not a tech titan, it's titan america. get this. >> the us unit of the. >> belgian cement producer and cement should be so hot right now. but the shares are below their. >> $16 ipo. price values the company around. >> $3 billion. >> we'll talk to the ceo who's. >> laying the groundwork for their expansion. let's start with the. >> markets though. dom chu. has the latest numbers. >> dom laying the groundwork i see what you did there kelly. very kudos to you on that one. anyway, we did it. we've seen both sides of the market so far, green and red. but some of the economic data, including the jobs report, some of the sentiment data, inflation expectations data really have helped propel the downside to the market overall. for the dow industrials, it's to the tune of 325 points, or roughly a three quarter percent loss to 44,000 for 22. the broader s&p 500 is at 6041. it's down about 4142 points. it's a two third of 1%

loss at the highs of the session. we were actually up around 18 points down 57 points at the low. that's the range tilting towards the bottom end of that. so we'll watch the s&p 500 and the tech heavy nasdaq composite index 19,578. that's down about 200 points. and one of the big reasons is some of the tech sentiment. we'll get into that in just a moment here. but of course amazon plays into that a big story of the day so far. late breaking in the late part of the morning here uber technology now one of the best performers in the s&p 500 today. not because of earnings but because hedge fund manager bill ackman tweeted out or exed out. i guess if you want to call it that, that they had started building and have now built a position of over 30 million shares of uber technologies, bill ackman calls it a very well-run business. uber shares up about 9% right now on that. so we'll keep an eye on whether uber gets some more momentum out of this. you can see the price action here. well off the lows that we've seen over the course of the past month or so. and then from a tech perspective elsewhere, amazon is the big driving force here. shares are

down 3.5%. that's despite an earnings and revenue beat. but its cloud computing division is still growing and even quickly, but just not as quickly as it has been in the past. they also say that foreign exchange headwinds will play into the current quarter going forward, the stronger dollar hurting some of the revenues there. expedia on the travel side of things up 15.5% better than expected earnings. they also reinstate their dividend. pinterest and affirm holdings, each of those stocks up 17 to 23% on better than expected results. pinterest growth and active users affirm holdings gross merchandise volumes surging, so keep an eye on all of these names. it's not all about amazon, but certainly these names here are not enough to counter that massive move in a mag seven name. i'll send things. >> back over to you. >> big movers today, tom. thanks. >> a smaller one, but. >> on a potentially big story, check out shares of u.s. steel, which are at session highs, up about 2% right now after. >> president trump said. >> he hasn't changed his mind, but will. >> discuss the nippon steel. >> deal with japan's prime

minister. >> it comes as. >> cbs news. >> is. >> reporting the. >> president is considering allowing nippon to. complete its $14. >> billion deal to buy u.s. steel, ticker x. >> those shares had plunged briefly 8% before now moving higher, broader, more broadly, stocks are falling after that strong jobs report has dashed hopes of any additional rate cuts from the fed. we added 143,000 jobs in january, a little less than expected, but the unemployment rate fell to 4% and average hourly earnings jumped half a percent just last month. >> and are up more than. >> 4% from a year earlier. >> my next. >> guest. >> says the data will reassure the fed that its decision to pause was justified, and she. >> thinks we get zero more cuts. >> this year. >> joining us is diane. >> swonk. >> chief economist at. >> kpmg and. >> cnbc senior economics reporter steve liesman. welcome to. >> you both. >> diane, i am going to go. >> right to you, because last. >> time we talked, just. >> a week or two ago, we. >> were still thinking. >> a couple of cuts. and now you think they're. >> are they really. >> off the table entirely? >> i think they're off the table. >> if we really believe that tariffs are coming through. and

i do believe we're going to. >> see some tariffs. now how much we. >> see in tariffs. does matter. >> and how much. >> they stay. >> on matters. >> how. >> long they stay on. >> but once you put. >> tariffs in motion and. >> once you actually apply them they're very hard to peel back. and the escalation. >> as. >> we saw. >> even with. >> just a few. days of. >> escalation that. >> we saw in the. >> beginning of february. was pretty dramatic. so things are moving at a fast pace. but this is important because the fed has enough information today to feel confident. >> that they. >> move to the sidelines. >> the economy is on solid footing, the labor market is still strong, and that the. >> revisions that we saw to. >> 2024 were more for the first half of the year. >> the back. >> half of the year actually saw upward. >> revisions, especially late in the year, which underpinned the strength. >> that we. >> saw in consumer spending, notably in services. that's really important because that's. >> the part. >> of inflation that's been the stickiest. >> yeah, absolutely steve. >> the shocker. >> today, the absolute headline. it was. >> not remember how much we talked about the jobs report

yesterday. >> and then at 10 a.m. >> consumer sentiment. >> comes out and it drops. and expectations drop. and the. >> near term one year inflation. >> expectations jumped a full point to 4.3%. one of the biggest jumps. we've ever seen. and 27% of consumers spontaneously. cited tariffs as a reason. >> it's a remarkable. let's be clear, the tale of the tape guys. if you have that s&p 500 futures chart, the market was fine and cool with the jobs number. so we shouldn't be saying that the market's down or mixed. it was up from 830 to about 10:00 and 10:00. this shocker comes out. what you're looking at there which is interesting, is two legs downward. and i can tell you exactly what happened. the first leg is the 4.3% one year inflation rate. and i'm going to come back to diane in just a second. and the second leg down is the wire moment when trump said reciprocal tariffs. >> right. >> that also happened. the president is doing all he can to tank his own stock market and

his own economy. if you don't mind, i think you should get off that. all of that sums up as more and more people moving into the swonk fed camp. if you look at the probabilities now, what you'll see is that they're really in barely in one and they cannot get to two. so what are those numbers there. that's their. >> yellow is you know, call it dawn and blue. >> is now right. >> oh dark 30 as we like to say. and you can see there's still one cut baked in, but they can't get to that second cut. and they're not really all that wonderfully happy about the first cut. even so, it's there. but as long as these inflation numbers have been high, and i would point out we interviewed neel kashkari this morning. he said i'm wait and see. >> and did. >> even goolsbee am i wrong. was he on the wire saying potentially this is. not an. economy that looks like it needs. >> more cuts? he's been one. >> of the. >> biggest doves. >> he has been a dove. i didn't see those goolsbee those goolsbee a headline. so i'll take your word for it. but

kashkari is like, i do think we can go lower. however, i got to wait and see to what happens on the fiscal side. >> diane. >> there are some. >> nancy lazard over at piper sandler. >> i mean, to her, she sees signs. >> that core inflation is accelerating. >> you know, we were. >> all. >> excited when. >> shelter inflation finally started to moderate. >> when core pce and core cpi the past few months. that's what. >> got. bond yields the ten. >> year back below 4.5%. but she says. >> look at m2. >> look at just. >> kind of different signs of price pressures. >> in these idiots. she's sort of saying it's not idiosyncratic. >> there's a reason that we keep having sticky inflation. and maybe we're not. >> going back. >> down to 2% any time soon. >> well. >> that's the. clear issue. underlying inflation rate. once you strip. >> out the shelter. costs on the super core service sector. >> inflation, that's. >> running well. >> over a percent. >> what it was pre-pandemic. >> and unless we. >> get that to slow down a lot, we're not going to see the. >> improvements in inflation that we need. >> to see for the fed to feel fully. >> comfortable in. >> cutting again. and that the

target rate that we see on. inflation will return. >> to the fed's. target anytime soon. >> and that's one of the key. >> issues we saw during the. >> holiday season. we talked about this before. incredible number of. >> vacations, record number of vacations in the month of december before we got to. the actual holiday break, which also. >> broke records. >> and coming. >> into the year. >> we're seeing. a lot. >> of things like airline. >> fares continuing to go up that. >> which my daughter, i. >> think single handedly. helped do by. buying last minute. >> tickets to come home for the holidays. >> but i think these are important things to remember, because those are parts of the service. >> sector that remain buoyant. now, there was. >> an imprint on the job numbers. >> in terms of the fires in california. >> we had 591,000 people who could not go to work. because of. >> inclement weather. that is the highest january. >> on record going. >> back to 2011, which there was big blizzards. that disrupted it. >> so we did see. >> some weather. >> effects in there. and also. >> there were. >> layoffs in. the accommodation food services sector.

>> which i think. >> were very. >> much related to the fires. >> in california. >> and steve, this is courtesy of drew. matus over at. >> metlife. >> who. >> thinks that. >> we might be able to see consumer pressures even. >> showing up in the jobs report. >> he points to the shortening workweek. >> it was at its lowest since 2010. >> covid and basically. >> says, you know, that. >> at the same time, we're seeing. >> multiple job holders. >> rise to, you know, a new high near a new high. and maybe people are shortening the workweek, workweek of their kind of main job and trying to find extra paid work elsewhere. >> you know. >> the gig economy kind of idea to, to keep up with inflation. so i almost wonder if. >> you can read the jobs. >> report this. >> morning, as. >> people kind of working desperately to stay. >> ahead. >> of inflation, you know, trying to get those raises, trying to work, you know. >> those extra. >> hours and what. >> have. >> you, i think. so, i mean, you have had a good rise in real wages. so inflation adjusted wages have done okay. i'd be a little careful with the wage number. there was some speculation that i read that perhaps this was decent wall street bonuses. i don't know if you've heard that explanation or maybe diane would weigh in on that. so i'm a little less

concerned about yeah, a little volatility in the wage numbers for december. it's not or january it's not. it's not uncommon. so and the other thing i'd like to point out was before you get too pessimistic about a 143 number, the retail number being solid two months in a row, nobody has more on the line than a retailer. if people aren't coming into the door, if people are are spending, retailers are hiring. if they're not spending, they're firing. it's almost automatic, about as automatic as you can get on that stuff. so i was impressed with that. i'm not really going to. it may well be that people are working hard to keep up with inflation, but right now what i see is the inflation rate for a lot of stuff has come down, and i'm about to change my idea about the about the eggs. >> i'm telling. >> you, i mean, i don't know if it was tariffs or eggs. >> eggs are really hot. >> and i want to make one more point, which. is that bird flu. just to be clear, i think there are some very good potential things coming for businesses, for potentially for consumers

from trump policies. but he's leading with the worst possible foot as far as consumers and businesses are concerned. if you look at the commentary in these ism services, these are businesses. these are his supporters out there saying tariffs are killing us. >> i just thought it was very surprising. >> for 27. no, it was higher. >> it was it was about. >> a third of consumers 27%. >> you're right 2,027%. right. >> who who mentioned tariffs. >> i mean this especially. >> the canada and mexico piece, which you know, did. >> get kicked down the. >> road was. not a. >> major news story. >> i was just on the phone with our pollsters looking at some of the data we've done on tariffs, the number of people who who answer, don't know was very small. when it comes to tariffs. people know about these tariffs. >> they evidently thank you both. we really appreciate it diane. thanks for joining us today diane swonk kpmg steve liesman. and we'll. >> see what happens now with the fed. amazon meantime is the biggest drag on the dow after those mixed results and weak guidance. >> last night. >> they reported slowing cloud growth similar to what we've heard from microsoft and alphabet. tech is still the only sector in the red year to date,

which my next guest says reminds him of the post 2000.com bubble when other sectors outperformed. joining me now is rich bernstein, the ceo and chief investment officer at richard bernstein advisors. rich, how can this be the.com crash? when. now. what is amazon spending $100 billion. it's like $300 billion. i know that the other side of that may look bad, but aren't we still on the upward climb. >> so kelly remember the. >> market's going to anticipate a lot of this. >> the market's not going to wait. and you know. >> in the tech bubble. >> you had extensive amounts of capex as well. you had. >> capex on storage. >> you had capex on on. >> fiber optics. >> there were there was a lot. >> of money being spent. not as much as being spent. now this is even more. but, you know, effectively, what people forget. >> is that there's. >> inventory cycles in every single industry. >> and what you're. >> seeing is a build up of an inventory cycle. in tech, everybody's spending like, like fiends right now. but there's.

>> really not. >> the demand. and everybody's everybody's scared to be. >> caught behind the. >> eight ball and be slow. so what. >> happens is they. >> build up. >> capacity and then it's not needed. >> and then you'll. >> get a down cycle. and that's the old inventory cycle. and tech isn't immune to it. >> and i might look i want to believe that narrative because i get it hard. i like to be a value person and think, you know, but i have never used all of these ai models, whatever we're calling them, more than i'm using them now. i use them all the time for everything, and i'm just one little consumer, so i can't imagine what the usage must be like in the enterprise. and you know, i have people sending us stuff all the time, like researchers in the world of retail who are doing incredible things with ai in these data sets. and i just think, you know, this multiply this times millions and millions of people. and i can understand the capex and i can see the demand. >> yeah. >> so, kelly. >> you've hit on a. >> very important. >> point. >> and that is that. >> people have a. >> very tough time differentiating between. >> an. >> economic story.

>> and an. >> investment story. the economic story for i, will i change the economy? of course it will. >> i mean, who would argue otherwise? >> that's silly. of course it's going to change the. >> economy. >> but it's. >> important to remember that technology always changes. >> the economy, right? >> the internet changed. the economy meaningfully. look what i'm doing right now with you. we couldn't do this 25 years ago, right? the automobile changed the economy. my personal favorite, the light bulb. massive productivity enhancing. >> technology because it turned the economy. >> into a 24. >> hour economy. >> air conditioning. >> right? i mean, this is nothing. >> new but the investment story, right? >> will i. >> be a good investment team for long term investment stories? it's always a function of the supply and demand of capital. >> if people are throwing. >> money at an investment, the long. >> term returns will always. >> be lower. you want to. >> look. >> for situations where you can be the one banker in a town with. a thousand borrowers. it's hard to argue that anything related. >> to. >> ai right now is starved for capital. >> all right, so you're starting to convince me. so then i sit

here and i go, well, okay, but every time i've heard the case to walk away from these companies, it's been the wrong case to be made now. okay, you can say microsoft's gone nowhere for a year. fine. but where do you go? and i don't just mean health care is up for a month. and i don't just mean, i guess, financials. i don't know how excited i'm supposed to be about them, you know, kind of being great stewards of capital at these valuations. where do you really go and feel comfortable that you're going to compound that return over time. >> right. so. >> kelly, a couple of. >> things embedded. >> in your question there. number one is i wish that. >> people would admit that the primary driver of the magnificent. seven was liquidity. >> it was not fundamentals. there were plenty of companies that were growing. we published a thing i. >> think i discussed with you. >> many months ago that there were like 70. >> or 75. >> companies in. >> the s&p 500. growing earnings, 25%. >> or more. nobody cared. this is a very. >> liquidity, liquidity. >> driven, speculative market. that we've seen. well, if it is liquidity driven and liquidity dries up. that means that the

story starts changing. what's happening. >> your previous. >> segment on the. >> a block. >> here. >> you're talking about. >> the fed may. >> be reversing course. >> there you go. >> that's the. >> liquidity starting to be drawn. started to dry. >> up as the fed considers reversing course. so it's natural that you would see this liquidity coincident. >> with this discussion. >> or the liquidity coming out and. >> the mag seven suffering. >> at the same time, people are worried about. >> the fed. >> tightening. >> one more kind of devil's advocate question. and then if you could tell us kind of where where to go, where are those, you know companies growing earnings. because last year first quarter i remember you call it the mag seven basically grew earnings 25% year on year. the rest of the s&p grew earnings 4%. you know, there has been a strong fundamental trend underlying a lot of the price action. >> there has been. >> and i'm not disputing that and i'm not arguing that. >> but but. >> if profitability now is. disappointing among the. >> mag seven. >> it doesn't take a. >> lot of. their market cap. to spread out, to broaden the

market. pretty dramatically. i mean, i. >> think i sent. >> you in my notes. >> that, believe it or not, i. >> mean, the most esoteric thing you could think of, european small caps are now nothing. not that we are in european small caps. >> we're not. >> i don't want to mislead people, but european small caps are now outperforming. >> the mag seven. >> right. something that one would probably agree. like how could you get more esoteric. but it doesn't take a lot of market cap to shift to get these other areas of the market starting to outperform. it really doesn't take a lot. >> isn't europe just outperforming in nominal terms? not real terms? i mean, if you took the currency is crashing against the dollar while the stocks are at all time highs, while the economy, at least in germany, is in recession. >> yeah. but i think even. >> in terms of dollar in dollar based, i think they're still outperforming so far this year. i think european small. >> caps, even in dollars. >> are outperforming. >> quick quickly then rich. where do you recommend people go. is it is it company by company? are there sectors. it feels like there's more company by company. >> case right. >> so i have to be honest.

>> with. >> you, kelly. >> i don't think you have to get too sexy on this one. i think, you know, if you. >> think about the 493. >> being more attractive than the seven, if you think about just equities in general being more attractive, i just think diversification is the name of the game here. and i don't think you have to get too sexy and say, oh, it's got to be this company or that company, or it's got. >> to be this sector. >> or that sector. i just think a broad brush, you could do equal weight, you could do small caps, you could do global. >> i mean, there's. >> many different ways to do it. i mean, i would particularly argue that that there are sectors that are pretty attractive right now, like industrials. i think small and mid-cap industrials are still incredibly attractive based on deglobalization, based on the need to rebuild the american capital stock, all kinds of things like that. >> but. >> you know, i mean, you don't have to get all that sexy. >> no, if you're right, my retirement portfolio is horribly mispositioned. and so i'm going to have to go home and think hard about whether just being all in the s&p 500 is going to going to be a winner from now on. >> well. >> kelly, if you need a money

manager, i might know one. >> i do this for a living. i mean whatever i ask the questions i guess. rich thanks very much. appreciate it as always. rich bernstein with richard bernstein advisors coming up, frontier is up 17% today after posting an earnings beat, the low cost carrier making a second pass at buying spirit to create the fifth largest airline in the country. we'll see if they have better luck this time around. and we'll talk exclusively with the ceo about the quarter, that deal and the industry next. plus, the ipo of the day is cement producer titan america, and you can get it on the cheap. it's below its ipo price of $16, which itself was near the low end of the range company valued around 3 billion. and we'll talk to the ceo a little bit later on. we're back after this. >> this is the exchange on cnbc. >> individually, each of us is great. but from here you can see we're one big team. at

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amazing and is something that we get to use every day. >> welcome back. the airlines, as you can see, have easily topped expectations this earnings season, and frontier is no exception, surging nearly 20% to an 18 month high today after beating on the top and bottom line and giving strong guidance. the shares have more than tripled off their recent low just six months ago. the company is also reviving merger talks with spirit, which filed for bankruptcy in november and is hoping to emerge from chapter 11 this quarter. now, spirit rejected frontier's last offer, saying it wasn't sweet enough. is there another one in the works? let's ask ceo barry biffle, who joins us now alongside our very own phil lebeau. phil.

>> thank you, kelly berry. >> we'll get to the. >> fruit of. the spirit question in. >> just a bit. >> but with. >> regard to. >> q4 and your. >> outlook going into. >> 2025, do you think like. >> your. >> efforts. >> your efforts. right now? >> do you. >> feel like. they are taking hold in. terms of adding premium offerings? >> yeah, absolutely. you know. >> i think if you. >> look at the fourth quarter, you can see the network maturity for the things that we did last year in the summer are starting to improve, but also the new frontier and then the premiumization. and the focus on loyalty is starting to take effect as well. and that's enabled us to, to really exceed our expectations in the fourth quarter. >> all right. let's talk about spirit. you you. >> made. >> one run at them about two years ago. we know how that ended. and now you're coming back again. they're in bankruptcy right now. they've rejected your latest offer. how long. >> do you continue. >> with this and give us an update in terms of. where you see things right now? >> well. >> look, we've. >> we've made a proposal that we believe is superior to their standalone plan, including the fact that ours gives

consideration to their common shareholders, which under their standalone plan, they get nothing. we think it's great for consumers, it's great for their employees, and it's great for all the stakeholders. and we have noted that they yesterday, i guess, extended their deadline for another week on their rights offering. so we're ready to engage. >> will you sweeten the offer again? >> i. >> i think that. >> we have we have disclosed that we believe our proposal is superior, but we stand ready to engage. >> i know you heard. >> yesterday the. >> comments from president trump. >> and his administration about. >> updating the air. >> traffic control system. >> look, everybody in. >> the airline industry knows that it. >> needs to be updated. >> but this is kind. >> of like the person. >> who says i need to lose weight as. >> a. >> new year's resolution. >> and then two. >> weeks into the year. >> they say, well. >> i just. >> i'm not going to be able to do it. will we finally see the true changes that. >> are. >> needed in. >> order to. >> modernize air traffic control. >> in this country? >> well, i think there's i

think. >> there's a couple of points and one and i heard last night i heard the new secretary of transportation talking about some, some great steps to solve the staffing, which is today, we have a 56 year cap on on being an air traffic controller. you know, to be a pilot is 65. i would think that we should look at, you know, moving the 56 closer to the 65 and that would immediately create the opportunity to kind of solve a lot of our staffing issues, because it takes years to solve the staffing problem if you train brand new controllers. so i'm just really excited that the secretary is focused on safety and that he's looking for real solutions to the staffing. >> on the. >> modernization bill. i think there's a big opportunity there and one in both fuel burn, but also you could get more utilization. so it could actually be, you know, cheaper for airlines and cheaper for consumers. but also you're going to have a better experience because you're going to be more on time and less canceled flights. so i think there's multiple wins here. and i'm really excited that the department of transportation,

our new secretary, is really focused on the safety as well as the efficiency of it. but our heart goes out to all those that that lost their life in that incident last week in washington. and i really hope if there's anything good that can come of it, hopefully we can focus on the safety side of atc. >> you mentioned washington. >> how do you feel about the flight restrictions at reagan national? should they stay in place? should there be even more restrictions there? >> look. >> i'm. >> not an expert on that particular airspace. i was a former pilot back in the day. and i am very familiar with that airport, having lived in crystal city for i think eight years actually, back in the day. but i will tell you that that there's a lot of aircraft and a lot of, you know, kind of closed space. and i think it probably makes sense to review, you know, do we really need those helicopters that close to, to, to those commercial aircraft and possibly are there some better routings that we could use that kind of get them out of the flight path of reagan national. so i'm glad that they're pausing things right now and reviewing that

from a safety perspective. >> i think everybody agrees with that. barry, thank you very much. barry biffle, ceo of frontier group. joining us today from the company's headquarters. >> in denver. >> kelly, i will send it back. >> to you. and from the sound of that, we will stay tuned for maybe further news. thank you both. coming up, amazon plans to invest $100 billion in ai, more than what microsoft, alphabet and meta are each committing. but if deep sea showed that ai models are getting cheaper to build and train, why is softbank, according to sources, preparing to invest $40 billion in openai at a $260 billion valuation? we'll look at what's behind that bet and why big tech's ramp up in spending could be the key to this deal. stay be the key to this deal. stay with (♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is.

car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com ♪♪ investment objectives, ris [inner monologue]ses this is going to sound crazy. but i know these attack vectors. oh, had a little upgrade have we? ♪♪ okay, so that's how you want to play. ♪♪ in the us stocks following the election. and it. >> could spell. >> disaster for some of america's favorite tech companies. >> my name. >> is mark chaikin. >> i built three new. >> indices for the nasdaq during my 50 years on wall street. so

when a big shift plays out in our country's tech sector, i take notice and. help my over 1 million followers around the world prepare. you see, as the overall market soared after the election, a record $5 billion poured out of american tech stocks. it was the biggest sell off for us technology funds since the 2022 bear market. now, why did this happen? and more importantly, what does it mean for your money? i recently returned to wall street to record an urgent market briefing explaining everything you need to know. you can watch it for free at the website below. >> and even. >> get the name and ticker of the number one tech stock. i urge you to sell today. again, urge you to sell today. again, 100% at ameriprise financial, we know our clients are so much more than clients. they're go-getters and legacy-leavers, 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. (vo) what does it mean to be rich? client satisfaction rating. maybe rich is less about reaching a magic number...

and more about discovering magic. >> welcome back to the exchange. >> i'm bertha. coombs with. >> your cnbc. >> news update. the justice department. will not publicly. release the names of the fbi agents who investigated. >> the january 6th cases. >> the department. >> made an agreement. >> with the lawyers representing the agents, but is still. >> needs a judge. to sign off. >> hamas released the names of the next three israeli hostages to be freed on saturday. the rebel group held up the names

for hours because of disagreements over the flow of humanitarian supplies into gaza. israeli officials say they have accepted the list. and netflix. >> is reportedly. >> considering a bid for the live broadcast rights of formula. >> one in. >> the. >> u.s. >> according to the athletic. the deal would begin in 2026. espn currently holds the rights through the 2025 season. >> netflix declined. >> to comment. >> to cnbc. >> see, i think the show about formula one is much more entertaining than a formula one race, where very little actually happens and the fast cars always win. >> sarah, i hear you say that. >> that's true. that's true. i take it all back, bertha. thanks. bertha. coombs. sources, meanwhile, telling our own david faber that softbank is close to finalizing a $40 billion investment in openai, which would value the startup at $300 billion post-money. it's just another sign the ai spent isn't slowing down even post deep c. deirdre bosa breaks it down in

today's tech check. deirdre i heard someone the other day say anytime softbank invests i run away. so there's a couple of layers to this story. i mean there's layers and layers and layers to that. massive bets big on individuals. sometimes that's worked out like jack ma. sometimes it hasn't adam neumann but this whole theme, right. rising capex, this investment, it raises a question that markets are really sorting through as well. how do we understand such a massive investment? and those rising capex numbers from the hyperscalers in this new ai paradigm, where the best performing models are cheaper and they're more efficient? well, think of it as an agi at all costs strategy. mausezahn and open ai's priority is to push the frontier relentlessly. the idea that reaching it first is worth any investment, rather than relying on incremental improvements that deep sea proved can be reached through a process called distillation. so two things are true here ai model building and deployment is more cost effective than ever, and those costs are going down. but companies like openai and google, by the way, they still

want to be the ones to drive revolutionary breakthroughs needed to reach agi. so this is really a long term vision, which masa certainly is no stranger to. he famously has that 300 year vision. meanwhile, though, the new paradigm is eroding the moat that openai has held for the last two years, really raising the stakes for them to make the next breakthrough. never mind. deep sea models are becoming commoditized at a rapid pace. openai's latest deep research feature that's being reproduced by hugging face as an open version. ai researchers at stanford and the university of washington, they were able to train a reasoning model for under $50 in cloud compute credits. i think it took them less than 30 minutes to do that, too. openai is even following the pack in some cases, like chain of thought, reasoning and making zero one free. underscoring this idea that it's no longer the pioneer it has been for the last two plus years, and the bar is getting higher. you've even got ex openai co-founders getting ready to launch their new startup. so you're going to see more

competition come online. all of this to say, kelly, the urgency for altman openai now to make new transformative breakthroughs that is rising. he may have the firepower, but altman has to prove that openai still has the edge and is profitable and can scale. deirdre, thanks. appreciate it. deirdre bosa it's a mega valuation. still to come, congress gearing up for a taxing battle after the president laid out his plan to the republican conference. we'll dig into the specifics, the potential end of the carried interest loophole and the impact all of this will have on the deficit. that's next. >> techcheck is sponsored by >> techcheck is sponsored by comcast 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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>> scan the code. >> now and ask. about the bosley guarantee. overtime is about understanding what just happened. >> in the markets. >> that day and preparing for tomorrow. i'm looking to talk to all investors. >> sophisticated investors. beginning investors. i'm always learning. >> closing bell over time for eastern cnbc. >> welcome back to the exchange. one of wall street's favorite tax breaks is under scrutiny. again robert frank brings us a closer look. >> hey, kelly. well president trump in a meeting with house republicans yesterday calling for an end to carried interest. carried interest, of course, is that loophole that allows private equity, venture capital and hedge funds to get. >> a lower. >> tax rate on part of their income? now, the carry is the 20% that they make on their fund profits. that profit is currently taxed at the capital gains rate of 23.8%. but many.

have argued for decades that, in fact, it's a fee for service, and therefore they should be paying ordinary income tax rates of 37%. now, trump made the same promise back in 2016, as did biden in 2020. neither were able to kill this provision. it has largely survived thanks to lobbying from private equity and hedge funds. but the 2017 tax cuts did make it slightly less lucrative. it extended the time that firms have to hold the assets from one year to three years. now, the cbo estimates that closing this loophole would raise about 1.4 billion a year. that's right, 1.4 billion a year. so not much money. mckinsey saying it's about 1.2 billion a year. that is about one tenth of the price of trump's plan to exempt tips from income tax. so it's not going to be much of an offset. it's still going to face a big fight. the american investment council, which represents private equity, saying, quote, we encourage the trump administration and

congress to keep this sound tax policy in place. it supports jobs, workers, small business and local communities. so, kelly, we've seen this before. president trump and president biden both saying early on in their terms that they would kill this. it has not happened. perhaps this time is the time because they do need some offsets for extending these $4 trillion in tax cuts back to you. >> yeah, but how would $1 billion? i mean, that's not going to do much. robert, thanks for more on the fiscal impact. let's bring in maya mcginnis. she's president of the committee for a responsible federal budget. and maya, i mean, we can start on carried interest if you want it. is it true it's only going to raise $1 billion if they go through this whole fight to close it. that's not going to do anything to solve our problems. yeah. >> you would think we hear about it all. >> the time, because it's a tax. >> loophole that all experts have wanted to get rid of forever. but it always reemerges and it always stays in place. the truth is, the money that that we would be able to raise by getting rid of it would be very, very little drop in the

bucket in terms of. being able to offset the costs of the big, big tax bill that we're talking about. is it a good idea to get rid of it in terms of tax policy and equalizing things? yes. >> almost every. >> expert would say yes. but if we are talking about a multi-trillion dollar tax bill over a decade, this is not even a credible start to how we're really going to ensure that it doesn't add trillions more to the national. >> debt, right? i mean, again, this is they're paying the capital gains tax rate instead of ordinary income. but these are businesses, aren't they? why don't they just pay the corporate rate of 21%. yeah. no. >> there are. >> many reforms that could that could be. >> put in place. >> that would help. >> raise the revenue and raise it in a more fair way. but right now, the lobbying that goes behind that tends to keep this loophole in place. but when it comes to tax loopholes, i will just say there are trillions and trillions of dollars of tax breaks throughout the tax code, about $20 trillion over the next decade. all you have to do is remove a small share of them.

you could offset the tax bill completely, so we need to look much beyond just one small slice. again, a slice that i think it makes sense to reform. but it has a huge advocacy effective advocacy group behind it. and we're going to need to look beyond just that. >> so let's talk about what came out of this republican planning meeting yesterday. what jumps out to you? and do you think it's all sensible, or how do you feel about it? >> so what what we certainly saw is that the price tag of tax reform just continues to grow and grow. so we have the extension of the tcja, which will already be about 4 to $5 trillion. and we've seen in the house that they've been really wrestling, trying to figure out how to offset that, that there are not enough spending cuts that politicians are willing to all agree on to put in place to offset the cost of that. even if you look at the score with dynamic gains. so then what happened yesterday was the price tag went up considerably because the president went back to the things that he ran on during the election, and he also said no tax on tips, no tax on seniors,

no tax on overtime, and just kept adding up the cost of this. we are now looking at a tax bill that would lose revenue from anywhere from about 5 trillion to over 11 trillion over the next decade. given our fiscal situation, we not only need to be offsetting this, we need to be doing it in a way that actually reduces the debt. so that is a heavy price tag for a group of politicians who aren't as excited to do actual spending cuts as they were when they talk about them. >> right? >> in principle, when it comes to the specifics, there's been some hesitancy. >> not just that, but the practical problem they face is that they're trying to get this extension passed through reconciliation. right. so it can't add to the debt, you know, the numbers, but it basically can't make things worse. so how are they going? where are they going to come up with the revenue to be able to pass it with the very slim margins they currently have gimmicks. one of the. >> big concerns here is that what's going to happen is instead of really matching all of the tax cuts with spending

reductions so that you would have a fiscally sound bill, that we're going to start looking at ways to pretend that it won't add as much to the debt as it really would. one idea is talking about astronomical growth levels compared to what we're likely to see. another is talking about a shorter window. so the tax cuts would only be there for 4 or 5 years, right? instead of making them permanent, we know that tax policy should be permanent, permanent, permanent. and so you can have the continuity. so instead of really saying we need to save money and where are the big parts that you look in the budget to save money, retirement, health care, a lot of areas that both the president and many politicians have promised not to touch. so they're looking at smaller areas, and it's just really hard to get the two sides of the tax cuts and the spending cuts to come anywhere close to each other. i'm very concerned that we will end up adding to the national debt. what we should be doing is the treasury secretary has put out a goal of deficits of 3% of gdp. that will be a really important target to get to, because we already see treasury markets. there's some real concerns about our debt levels.

>> we got to go. but so i'm not sure where that leaves us, maya. >> it leaves us in a fiscally vulnerable situation. so this is going to drag on. this is not going to get done as quickly as politicians might have hoped. it's going to drag on. the real concern is that the tax bill will grow, the offsets will shrink, and that we will add to the debt. and there's a whole host of other risks that come along with that. that used to be in the long term. now they're looking pretty pretty short term. and the real risks we're facing there. >> even as the treasury secretary has said, the ten year is his new focus. and that's where we see more of this reflected versus what the fed is doing. maya, thanks. appreciate it today maya macguineas joining us. and coming up we'll reveal our mystery stack. it's a name that's down nearly 30% this week. and there's a few different candidates this could different candidates this could describe. we're back after at&t has a new guarantee. because most things in business are not guaranteed. like a distraction-free work environment. -yeah,i'll circle back around. -get those steps in, kevin. your coworkers keeping things confidential. [phone ringing] oh, she's spilling all the tea. ♪♪ or office etiquette. yeah, that's not guaranteed.

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ten year as well. and keep an eye on shares of elf beauty. that was our mystery chart having its worst week since august 2018. after cutting its full year guidance on a 36% drop in profits and soft sales in january, the ceo telling cnbc he blames the potential ban of tiktok for impacting online beauty trends, changed the chatter on tiktok recently, as well as the recent wildfires in los angeles. now, at least three analysts have downgraded the stock to neutral today, including ubs, morgan stanley and d.a. davidson and short seller carson block of muddy waters shorted elf back in november, telling us here on the exchange that the company overstated its revenues for at least three quarters. >> we feel that. >> elf is likely, as. >> of. >> the. >> most recent. fiscal quarter, overstating its inventory. >> by about. >> 100% and more. more to. >> the point. >> though, when that happens, that's usually because there's an overstatement of revenue. >> or. >> well, revenue and profit. >> so we. >> estimate that elf has

overstated over the past three quarters its revenue. >> and by. >> probably by by well over $100 million. >> company, of course, had no further comment on that and its earnings last night. but the shares are down 41% since his short. coming up, the ipo pipeline is opening up again to some extent. today's big name at the new york stock exchange is not a tech company. it's a cement producer by the name of titan america. the shares have now turned positive. they're up about 3%. and the ceo joins us next. >> individually, each of us is great. but from here, you can see we're one big team at atlassian. we believe real progress takes all of us working together on new sources of energy, cars that drive to the future, even pizza deliveries. together we can go beyond where we've ever been collaborating from anywhere on everything. atlassian makes software for teams to do what is impossible

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that's what you chose to ask it? i had other things planned. ask how to get up to one thousand dollars off the new samsung galaxy s25 ultra with xfinity mobile. luxury resale shop, now with code tr20 for 20% off. terms apply. >> welcome back to the exchange. shares of the lng exporter venture global are down 31% since its ipo on january 24th, just a couple of weeks ago. that stock one of the latest names to struggle going public. and our next guest company is looking to buck that trend today. shares of titan america are up about 3% listed and open for trade this afternoon. the cement producer, priced near the low end of its range at $16 a share, puts its initial market value around the $3 billion mark. for more, let's bring in ceo bill sakalas. bill, i hope i said that correctly. joining us live from the new york stock exchange. and congratulations. it's a big deal anytime a company goes public. welcome. >> absolutely. >> thank you so much, kelly. >> why now?

>> it's a great opportunity. >> for us because the market. >> is ahead of explosive growth. and also. >> after ten years of explosive growth for titan america, we've become 60% of the group that we belong to. >> so we. >> are a pure play in the us. and this is the right time to have it as a standalone. independent company. >> with its own strong. >> balance sheet and its own independent board of directors to deploy capital behind the opportunities. >> yeah, i mean, it should be the biggest of the big times for cement. we're talking about stargate building these massive data centers down in texas and all the cement required for that. and obviously, we've seen demand with the infrastructure bill, and they're still going to be build out in the next few years to come off the back of that. are you surprised that there wasn't more investor demand for these shares? >> we think. we're satisfied with the demand we saw. we are priced. right in. >> the middle of. >> the range. >> and we focused on a strategy to continue delivering top. >> line growth, margin. >> expansion and return on. >> capital employed behind. >> the. >> tremendous opportunities. >> we have in. >> the attractive mega regions. we operate.

>> a lot of companies lately have told us they're more reluctant to go public these days and that, you know, why not just go to private equity or why not do something that has fewer headaches and so forth? how did you find the process itself of going public? was it friendly or was it overwhelming? >> well, the process was. >> very good. i think we enjoyed. >> it and it was great to. >> to get in touch with the investors in. >> our country. >> and as you know, there is a lot of opportunity, all the capital from around the globe is converging to take advantage of the. >> tremendous growth. >> in the. >> us. >> construction market. >> yeah. so tell us about your expansion plans, bill, for people who are looking at the shares now, what what investment and profit opportunities should they be thinking about? >> we have. >> tremendous opportunities both. in a very strong pipeline, both in organic and inorganic opportunities. first, we're looking. into expanding and doubling down on the tremendous growth opportunities already in the strong market positions that we have, and also with. >> a very strong. product lines. >> on top of that, we're looking into accelerating an innovation pipeline. there are tremendous

growth opportunities in resilient urbanization, climate adaptation and new themes. but also our industry is still very fragmented with very attractive opportunities for consolidation. so opportunities up and down the value chain, organic and inorganic. >> yeah. what's it been like trying to operate these businesses at a time when we've had whiplash between the administrations the last few years, you know, kind of plans one way and then plans the other way, tariffs that potentially could, could have an impact. i don't know if you guys are exposed to mexico or anything like that. does it make things more complicated or does it create more opportunity? >> i think we're going to see more opportunities first, that america is not affected by the tariffs. >> we have many. >> different options. we are a local producer and we supplement our sales with imports. but we have many options to do that. and also we see opportunities in relation to the deregulation. many infrastructure projects are relatively delayed because there is a huge span between planning and breaking ground. so we

expect deregulation will shorten this time. >> yeah, but penn state, is that right? and then and then athens. tell me about your background. >> i'm an american born in greece. i cannot shed my accent, but yeah, i did my master's degree at penn state, and then i spent 20 years with dow chemical and now 16 years with titan and 11 years as ceo of titan america. >> well, your shares are at session highs while the dow is at session lows. so welcome. to a taste of being public. bill. thanks so much for joining us today. >> thank you so much kelly. >> appreciate it. bills are callous with titan america. and as mentioned we'll keep an eye on these markets heading into the close as the dow hits new session lows. that's it for us. thanks for watching the exchange. and i'll join brian sullivan who says he's taken off the weird glasses. whatever that means. that's for power lunch right after this quick break. >> individually, each of us is great, but from here you can see we're one big team at atlassian. we believe real progress takes

all of us working together on new sources of energy, cars that drive to the future, even pizza deliveries. together we can go beyond where we've ever been collaborating from anywhere on everything. atlassian makes software for teams to do what is impossible alone. >> sometimes investing can feel so all over the place. that's why public.com. >> created one place for it all. one place where you can. >> invest in almost. >> everything like stocks, options, bonds and crypto. you can even lock in a 6% or higher yield because it's the one place where you can build your portfolio the way you want. all your investing in one place. get up to $10,000 when you transfer an account to public.com. >> nothing stands still. not technology, not the market, and not franklin templeton. we've been a firm in motion.

>> for over 75. >> years. >> always innovating. today, we're a leader in public and private markets. digital assets and custom tax management. >> empowering advisors. >> with solutions to build the >> with solutions to build the portfolios of the future. today. (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. >> opportunities can be hard to. >> find. >> like catching lightning in a bottle. in uncertain. >> times. >> it's tempting. >> to retreat. >> or simply wait and see. >> at cme group, we empower. >> those who act. we deliver tools to help manage, risk and capture opportunities in every market climate, across every major asset class. to seize each

possibility at precisely. >> the. >> right moment. cme group opportunity. >> is everywhere. >> hi, frank. >> hey, goldie. i'm looking for those. >> reports from yesterday. >> they're already. >> on your desk, frank. >> of course they are. >> easily isolate phone calls to the. >> driver's seat in the. >> all new three. >> row infiniti qx80. >> welcome to power lunch. i'm kelly evans here at cnbc headquarters in new jersey. >> and i'm. >> brian sullivan here in. >> washington, dc. >> we're here. >> for a big. exclusive interview with the new secretary of energy. you saw. >> some of it earlier. >> live right here on cnbc. but we're. >> going to show you. what you didn't. >> hear or. >> see earlier. coming up. >> plus the. >> implications of some new tax. >> proposals from president trump and why it might impact your favorite football team. >> oh, yes. let's start with a check of the markets, though, because we're kicking things off here at session lows. the dow is down more than 400 points for

th