for that. josh brown, what's your final trade. >> watching posts report this week with no position. >> nxt media salesforce i. >> intuitive surgical i. >> think that right now. >> it's best. >> health care. all right we'll see if we can close above that. get that closing high on the s&p 500. i'll see you in a few hours. the exchange is now. >> thank you very much, scott. >> and welcome to the exchange. >> i'm kelly evans and here's what's ahead. u.s. stocks are nearing record highs with manufacturing. showing some life after a two year recession, although one regional outlook slumped. president trump reiterating his reciprocal tariff plan over the weekend. our expert says it really could lead to 20 plus percent tariffs on many of our biggest trading partners. more on that in a moment. speaking of u.s. manufacturing, intel shares are surging again today amid reports it could be broken in two. but our analyst has a better idea to create value at intel. shareholders might want to think

twice. plus, american and russian officials are holding their first high level talks in more than two years. secretary of state marco rubio says they're building on discussions that trump had with putin last week about the ukraine war. >> the goal of today's. >> meeting was to follow up on the phone call the president had a week ago, and begin to establish those lines of communication. the work remains. today as the first step of a long and difficult journey, but an important one. and president trump is committed to bringing an end to this conflict. >> and while neither ukraine or the eu has a real seat at the bargaining table right now, european stocks are flying to all time highs. we'll dig into that and what the market is telling us. but first welcome back dom chu. >> it's been a it's been a real, real week for me i think on vacation. but i'm glad to be back kelly thank you very much for that. let's start with the rarefied air that you're talking about with regard to the markets. european stocks having their day, but the s&p 500 as well. the 6119 level that we're at right now represents a new closing high. if we were to be

there remember the old closing high was 6118 6128 is the high on that intraday basis. so that's where we stand right now we're up about five points. so relatively flat on the session. we were up roughly 11 points at the highs. down six at the lows. so it's been a modest move. but again near those record highs the nasdaq composite just about flat as well. down 12 points to 20,014. the dow industrials 44,488. it represents about a one tenth of 1% decline good for 58 points to the downside. so that's the market. look at this. our near all time highs for the s&p 500. another place to keep a close eye on is what's happening with meta platforms. because this massive run it's been a sight to behold. this run that we've seen up until today has been 20 straight days worth of gains for the facebook and instagram parent company. those shares are down 2.75% right now, but what a run it's been. it's already up about 51% over the course of the last year. and a lot of that chunk right there in

20 days may be now coming to a close as we snap that winning streak. so we'll see what happens with meta platforms as we as we head towards the closing bell and then check out what's happening with one of the worst performers, if not the worst performer in the s&p 500 at this point. and that's conagra brands. this is the big food processor behind birdseye frozen veggies. also, many of the names that we talk about, slim jim snacks, that sort of thing. well, it's down 5.5% after it lowered its full year forecast, due in part to foreign exchange headwinds as well as supply chain disruptions. general mills, j.m. smucker, campbell's, hormel foods, among some of the other s&p 500 food processors in the consumer staples sector, feeling some of that impact. so keep an eye on conagra on the food processing side. it's a big deal still. i'll send things back over to you. >> great point, don. thanks very much. president trump vowing over the weekend to treat the value added tax used by trading partners like europe the same as tariffs, but certain experts are pushing back on that approach.

steve liesman is here with the details, steve. >> yeah. kelly. >> interesting economic story. president trump warning over the weekend that his. >> plan for reciprocal tariffs, which could take effect as. >> soon as april 1st. >> will treat value added. >> taxes like tariffs. >> threatening a trade war, among others, with europe riding on its truth social website. trump said, quote, we will consider countries. that use the vat system, which is far more punitive than a tariff, to be similar to that of a tariff. but the tax foundation says treating a vow like a tariff, quote reflects a complete misunderstanding of what that is and how it works. so here's a tariff, a tax on imposed on imports of goods or services of that. however, a value added tax, a tax imposed on consumption of goods and services, kind of like a us sales tax but a little bit different. now the trump administration is right. europeans have a 10% import tariff on us autos, compared to 2.5% us import tariff on european cars. also, europeans charge a vat around 20%. it

differs 15 to 25 maybe on all sales. whether the car or the product is imported or domestically made. that compares to us sales taxes. they range from like two and a half to seven and a half. call it 5%. but the european vat not charged on exports. and that's the rub. the trump administration argues charging of that on imports and not on exports. that's a subsidy. economists, though they say charging about on imports and not on exports, appreciates the currency. and that currency appreciation wipes out the subsidy. erica york, vice president of federal tax policy at the tax foundation, tells me together, currency appreciation appreciation offsets any price changes faced by importers from the tax on imports and by exporters from the exemption of exports. so it's true. the us tariffs are lower than the european tariffs, at least when it comes to cars. the europeans have offered to negotiate that. but the economists say just reject this argument that the vat is a subsidy or a tariff

because they say currency appreciation wipes it out and it's charged, by the way, kelly, on both imports and domestically produced products. kelly. >> you know, the euro has been so volatile. i remember when it was at, you know, $1.40. a decade ago. it's barely above parity now. so it's hard to see any lasting sort of strong euro effect there. >> well, the idea being is that when you do this it basically is offset. so the european the euro is already appreciated because of that. this is, by the way, work that i've seen from republican economists. neutral economists and democrat economists. it seems to be across the board. i couldn't find anybody who said no, this currency effect is not there. but i will say robert lighthizer in his book points out this notion of the vat not being charged on the export being a subsidy, as does peter navarro. it seems president trump has embraced this. can't find an economist who doesn't. i'm sure there are some out there, but the majority of economists who

i've read basically say this currency effect wipes it out. >> right. we'll see then. that's the place to watch as u.s. autos, maybe elsewhere, if europe starts to say, okay, in that case, we'll lower the vat or give some kind of exemption, which would be hard to imagine given the importance of their domestic industry. so you can see why this is such a tough problem. >> it's interesting. it's interesting, kelly, to argue that a country should lower its vat would be the same thing, sort of saying that south carolina should lower its sales tax or new york should raise its sales tax because of the international trade effect. i don't think that's where the negotiations are going to happen. it's going to happen on the tariffs, and the vats are going to be the vats. that's how the europeans and by the way, 170 countries around the world fund themselves. there's one article i read that said if you go this route, you can end up raising the there's the reciprocal route raising the number of lines in the us tariff code from 11,000 to about 2 million. >> well, it wouldn't be the

first thing that resulted in kind of a you know, i know no one wants to add 2 million lines to the code, but if the issue is important enough, we could be headed down that road. steve, thanks very much for now. we appreciate it. steve liesman. my next guest expects the president will negotiate down from here in terms of tariffs, while he says the aspect of the new administration that has most surprised him and exceeded their expectations is actually doge, which looks very likely to drive real federal workforce cuts. but will it be enough to close the deficit? here to talk about that and why he thinks things could get more choppy in washington in the coming months, is tobin marcus, head of u.s. policy and politics at wolfe research. and i think, tobin, that's where the market is focused. you have a bit of a warning in here based on what you're seeing, that, you know, debt ceiling shutdown fight in march and obviously passing the extension of the tax cuts. why do you think those look a little more uncertain now? >> well, look, i. >> mean, all the fiscal. >> negotiations that are going to require bipartisanship, certainly keeping the government open, possibly. >> raising the debt ceiling. >> depending on whether or not.

republicans include. >> that in. >> reconciliation, have gotten more complicated in light of the doj's effort. i mean, in broad strokes, if you have the administration reserving the right to unilaterally cut spending that congress has appropriated, it becomes hard to figure out what a deal among congressional appropriators could look like. you know, what is the benefit for democrats of bargaining on those spending levels? if the administration is going to turn around and cut that spending? so, you know, that makes it really hard to figure out how congress can can handle some of those bipartisan items right now. >> so let's talk a little more specifically about this. there are some on the right who think that doge isn't really going far enough to make meaningful change. there are many who are now worried that, you know there all of the unforeseen consequences, bringing back the nuclear researchers and trying to track them down, like all of these different areas have gone too far. so from your point of view, from an investor point of view, what would how would you assess what's been done? >> so i mean, look, i think that from the federal workforce perspective, certainly we are seeing them go very far, very fast. i think they're taking kind of a slash and burn approach to agencies that they really don't like the mission of, like usaid. but when you

look, you know, sort of beyond those easy targets, i think it does get a lot harder to figure out whether or not there's going to be meaningful spending cuts driven in defense, i think, is sort of the clearest example. they've talked about going after hundreds of billions of dollars of waste, fraud and abuse in the defense department. i think no one doubts that there is waste in defense procurement. but at the same time, you have republicans in congress trying to increase defense spending by 100 or $150 billion over the next few years. so clearly the pie is not going to shrink. the question for investors is going to be, you know, are your particular projects on the chopping block? >> what do you see? so as you mentioned, we've talked about we'll talk more next hour. the increase in jobless claims in the d.c. area. there's obviously a few signs that the workforce cuts are having an impact. but is all of this enough to have a deficit impact as far as you're concerned? you know, when we look at the level of the ten year, we heard lael brainard saying so much a little bit skeptical of that this morning. >> yeah, i think not really. we you know, we're running a deficit close to $2 trillion, cutting the federal workforce by 10%, or about 250,000 people, which i think they are

realistically on track for. that's 30 billion with a b dollar savings per year. that's a lot of money in a vacuum. that's like worth doing for taxpayers if you think that those are dispensable functions. but that's not going to get us close to closing the deficit. you need to go much farther. and realistically, you need to touch entitlements. and that's why medicaid is on the table in these reconciliation negotiations in congress. >> yeah, i mean, you think of entitlement. you sort of think, okay, well, you know, medicaid is more of a program to kind of low income. it expanded massively under the biden administration was even going back to the obama administration. tobin, it's hard for me to keep up now that it's become so big. and when you look at the biggest drivers of increased spending now versus pre-pandemic, medicaid is the biggie. so what cuts can realistically, should we realistically expect to happen, and how big of an effect will that have? >> so it's a huge ongoing debate. conservatives want to go further. we're starting to see moderates get squeamish on the sort of center wing of the republican party. right now, they have an $880 billion number in the reconciliation instructions in the house budget resolution. we'll see if that sticks. if they do end up with

that kind of number, you know, you'd be looking at quite significant long term reform. i think the cuts are probably going to be backloaded like we're not going to see hospital reimbursements slashed right away. we're not going to see covered lives reduced right away. but as you look into the future, you know, getting to 20, 30, 32, 34, you know, you could be looking at 20% cuts to federal spending on medicaid, right? >> but again, that you see the narrative shaping up. brainard said it this morning, you know, extend tax cuts on the back of medicaid cuts. that is that why you think this is going to be such a difficult fight? >> yeah, that's democrats love running against that kind of republican fiscal bill, where you're looking at high end tax cuts as well as cuts to benefits for low income people. and there are many successful democratic campaigns run on the basis in the past, trump seems to be somewhat nervous about the politics of that. again, moderates in congress are nervous, but conservatives see this as their one kind of big chance to make progress. and to the extent that there's any seriousness about these spending reduction goals, whether it's from doge or or house conservatives or anyone else, medicaid really has to be part of the mix. if you're if you're

going to do something real there. >> all right, tobin, thanks for joining us. appreciate checking in today. tobin marcus with wolfe research. meantime, as doge now coming to the corporate world, at least in theory, as southwest becomes the latest corporate giant to announce cuts to its managerial workforce. phil lebeau joins us now with more details. hi, phil. >> hi, kelly. not a whole lot of reaction in shares of southwest today. >> to. >> the idea that it. >> is going to be a. >> leaner company at least once these cuts are put in place, which will happen here during the first quarter. so when you look at the announcement from southwest, which came out yesterday afternoon, 15% of its corporate jobs will be cut, approximately 1750 jobs. and they're going deep. they're cutting 11 senior leaders. they're going to be let go as part of this cutback here. important to point out here that these job cuts will not impact service. so pilots, mechanics, flight attendants, they are not part of the job cuts at southwest. this is strictly on the corporate side where by the way elliott group, which took a

stake within southwest, said for some time, look we think that this can be a leaner, more streamlined company. meanwhile, as you take a look at the cost savings and as you take a look at shares of southwest, the thing to keep in mind is that the savings this year will be $210 million. that's the estimate from the company with a charge of between 60 and $80 million that the company will be taking this year. those numbers, by the way, both increase in 2025. quickly, i want to pivot to what's happening in north of the border at the toronto pearson airport, where the crash investigation is underway. the canadian transportation board is leading that investigation, being assisted by the ntsb and the faa. there's really no impact on the airline stocks with this incident, largely because people are looking at and saying, is this a one off incident because of a lot of factors involving the weather, etcetera? we don't know. the investigation will determine that. the airline index close to a record high here. and as you take a look at the airline stocks, not a whole lot of

reaction to this. and you notice that there is strong demand in the first quarter. that's why you're seeing the reaction that we're seeing. by the way, as you take a look at jetblue, there's this chatter out there, kelly, that perhaps perhaps southwest will make a bid for jetblue. we should point out that chatter has been out there for 3 to 4 weeks. and while there are some people who are saying, yeah, it's going to happen. there is no indication at this point that southwest is planning to make a bid for jetblue. could happen. that's a possibility. anything is a possibility. but at this point, the movement that you're seeing in jetblue is the expectation of that, not anything that has been definitively announced. >> yeah, 10% pop. but, you know, it's a $7 stock. doesn't take too much to move it. but with the new administration of course have to watch that. phil, speaking of which, they've been turning up some pressure on boeing. what can you tell us about that? >> well, it's coming in two fronts here. the president over the weekend taking a tour of a charter 747 that used to be part of the qatar royal family's

fleet. so it's not your typical 747. he did that as part of the administration saying, we want our new air force one as quickly as possible. remember, there are two of them. this is part of the contract that they signed under the first trump administration. original cost 3.9 billion and the cost overruns more than $2 billion. kelly, it's important to point out this. those cost overruns are being borne by boeing. so you can say the boeing investors are the ones who are paying. they're not not taxpayers. so when you hear people say, well, they're over budget on air force one. well, yeah, they do have cost overruns. absolutely. but those are charges that boeing has been taking, going back over the last couple of years that now total more than 2 billion. they are not going to be passed along to taxpayers. >> yeah it's a great point. still, i know investors are hoping some day they can get this photo op phil where they get they got the new plane and the shares are up, you know, 13% off the lows and the skies are

clearing for them. and i know that that's what they're hoping for. we'll see if they get it. >> and kelly real quick those planes are not expected to be delivered until 2829. that's the estimate at this point. >> yeah a long, long time. phil, thank you very much. phil lebeau. coming up, intel leading the smh today. the semi etf. in fact its shares are up 30% now on reports that reports that taiwan semi and broadcom could split up the chipmaker 10% today but really 30% year to date. plus thousands of workers at the cdc, fda and nih are receiving termination letters over the weekend. what impact could doge have on the health care industry? we'll talk more about that coming up on the exchange. that coming up on the exchange. >> this is the exchange on it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh!

ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! ♪ are you having any fun? ♪ ♪ what you getting out of living? ♪ ♪ who cares for what you've got ♪ ♪ if you're not having any fun? ♪ ♪ have a little fun ♪ financial independence and become financially independent in my retirement. >> join the club. new members save with a special offer for a

limited time at cnbc.com. terms and restrictions apply. strategy at the market's final moments. >> we're now in the closing bell market zone here to break down the crucial moments of this trading day. >> market zone commercial free coverage sponsored by e-trade dave's been very excited about saving big with the comcast business 5-year price lock guarantee. five years? -five years. and he's not alone. -high five. it's five years of reliable gig speed internet. five years of advanced securit. five years of a great rate that won't change. it's back. but only for a limited time. high five. five years? -nope. comcast business 5-year price lock guarantee. powering five years of savings. powering possibilities. comcast business.

need now from your structured settlement call. now. >> welcome back. and check out shares of intel jumping another 10%. the wall street journal's report that broadcom and taiwan semi are eyeing potential deals that could split intel in two is the catalyst for today's move. and despite posting its best weekly gain in 25 years last week, intel shares are still down 40% over the past year. but my next guest, next guest says this deal making is the catalyst it needs. joining me is raymond james senior analyst. srini. srini, welcome. do you like this specific idea or just the idea in general of splitting up design from manufacturing? >> yeah. thanks, kelly. >> so i think one of the issues. >> with intel. >> is that, you know, they have two major segments, one, intel

products, which is in a, you know, pretty good shape. it's, you know, they do about 50 billion in revenue at 25% operating margin. and you know, that business is not growing as fast as it used to be. but it's a very stable business. the problem child for them is the foundry the manufacturing side of. things and where they're losing. you know, last year they lost 13 billion. this year they're probably going to lose about at least 5 billion or so. so that has been the issue. and that's the reason for the stock you know underperforming. so if there's a split we think that the product business alone could be worth, you know, around $32 a share. and you know they have other assets as well. they own altera which is probably worth about 15 billion. they also own about 85% or so of mobileye. so all in, you know, we think excluding the manufacturing, the stock could be worth in a high 30s or so. >> it's funny though, because as a sort of as a from broadcom's point of view, you think or i'm sorry, from taiwan semi's point of view, you think they

shouldn't get involved. >> well. >> you know. >> they are the leader. they are almost. >> a monopoly. >> the only reason they would get involved here is because they're forced to do so. i don't think voluntarily. i see no reason for them to enable a competitor. intel is trying to compete with them. but i guess, you know, if they're if they're forced to do it, they have multiple options. one, you know, the whole point of this is to bring more leading edge manufacturing to the us. and tsmc is already investing in arizona. you know they could they could potentially expand that investment. you know they they've they've announced that they would be investing about $65 billion or so over the next few years. they could they could definitely expand that. but you. know i guess you know taking over intel's manufacturing is one option. but you know, we think what makes more sense for tsmc is to simply expand their own us manufacturing. >> and so then going back to broadcom and we've seen this company it has a history of acquisitions. that's why its ticker is still different from the name and everything else. they want the product business the business that you think is

stronger. >> yeah i. >> mean you know broadcom does some manufacturing but they outsource most of their chips including their ai chips to tsmc. so they're really good at running you know the so-called fabulous model. and i think that's where their interest is in intel's products. if you look at broadcom's history their strategy has always been, you know, cut costs pretty aggressively, which they've done successfully over the years and also in many cases raise prices. you know, they tend to buy these so-called franchises where, you know, they have a monopoly or a duopoly. and intel is literally in a monopoly in pcs and the duopoly in servers. so i think that fits well with their strategy. but again, the issue here is regulatory front, right. i mean, us might, you know, say okay, because there is not a lot of overlap between broadcom and intel's products group. but at the same time you also need approval from china. that's going to be a challenge because lately china hasn't approved many semiconductor deals. >> that's interesting. quick final question, srini. why does

the us have to be involved here at all? is there an argument to be made that, absent its involvement, broadcom would be interested in the product business, the foundry business, at some point, at some price maybe. i don't know what happens to it. but do you think that absent the us involvement, that's why taiwan semi is kind of being forced to look at taking that that piece of the business? >> yeah, i think i think us is getting involved because they're worried about intel's fate. i mean intel's you know the flag bearer for us semiconductor manufacturing. they've been the leader over the last, you know 20 years or so. and they fell behind and they're struggling. and you know and from a supply chain resiliency standpoint, most of the manufacturing leading edge is still done in taiwan. so i think, you know, it's very, you know, strategic for us to make sure that intel is successful. and that's part of it. and then for broadcom to you know make an acquisition. it's not necessary for intel to succeed. but you know if that were to go through i think us involvement is necessary to get

the chinese approval. >> all right well we'll see again the shares have really been on a run this year. so speculation something's going to happen. appreciate it today srini. thanks, srini. you're joining us from raymond james. and as the white house looks to shore up domestic technology. china's president xi is finally sending a more welcoming message to his country's own tech firms, which shareholders have been waiting and hoping a long time for. eunice yoon has the latest from beijing. hi, eunice. hey, kelly. well, president xi seems to want. >> to dominate. industries that he considers to be. >> very important and critical. >> and it looks as. >> though that he. >> is gaining some understanding. >> that the private sector is important to achieve those goals. so at a very rare meeting on. >> monday. >> president xi told a room. >> full of entrepreneurs. that private. >> business could be reassured. he said of. >> his support, and he called on. >> them to fully. >> display their talents. >> now, those who attended represented industries that the xi jinping administration. >> has identified.

>> as critical to competition with the united states. so that's hardware manufacturing, like chips, evs, robotics, as well as ai. in fact, at the event, those who had speaking roles were apple rival huawei. the chiefs of byd, as well as a robotics company called unitree. both of those companies are seen as competitors here to tesla. and in addition to that, the founder of deep seek, which is a potential competitor to openai, was also present. now, investors were bidding up the shares of the companies that had some representation at that event in the hopes of more policy support, and they were also selling off shares of companies that did not attend and were not on president xi's guest list, such as baidu, as well as as jd. one notable person who was there was alibaba's jack ma, and he's notable because he's been largely absent from the public

eye ever since beijing had decided to force the scrapping of the ipo of ma's fintech company, ant. >> kelly thought it was significant that baidu, i guess, wasn't there, and those shares were selling off today, even as baba and others were rallying. so again, all the more important to watch these meetings. eunice, thank you very much. eunice yoon. meantime, elon musk's xi'e unveiling what it calls grok three today. claiming it can outperform all other ai models on the market. we've run the comps and we'll get you the key details, including how this factors into musk's face off factors into musk's face off with rival sam businesses and communities come together on tiktok. they don't show up like they do on tiktok. and i had all these people rooting for me on tiktok. empowering over 7 million us businesses. there's no way i'd be able to support this building or any of my employees. > that went from maybe a few hundred people seeing my product to millions. they rely on tiktok to succeed. i don't think i could have gotten this far if i didn't have that kind of community.

small businesses thrive on tiktok. (♪♪) on nordvpn and encrypt your online traffic. get 72% off nordvpn and up to one year for free. with the. fundrais flagship fund. >> you can. >> invest in the same kind. >> of real estate investments that empower the world's. >> largest. >> portfolios. >> for decades. start growing. >> your real estate portfolio. >> today with the fundrise flagship fund. >> here you go. >> is there any way to get a better price on this? >> have you checked. >> single care? >> whenever my customers. ask how to get a better price on their meds, i tell them about single care. it's a free app accepted at pharmacies nationwide. >> before i. >> pick up my prescription, i always. >> check the single care price. >> it's quick, easy, and totally free to use.

>> single care can. literally beat my insurance copay. >> you just search for your prescription and show your single care coupon at the pharmacy. >> so i just show the coupon and get this price. >> that's right. go to single care.com and start saving today. what if you could tackle your. >> dog's itching. >> mushy poops. >> and low energy? millions of. >> pet parents. raving about doctor marty. nature's blend. >> such a huge. >> difference in her health. >> more energy. more playful. no more pooping issues. >> i'm doctor marty. >> i've been a veterinarian for more than 50 years. the dangerous ingredients added to many pet foods could be impacting your dog's lifespan. that's why i formulated nature's blend. >> now you can feed your dog. wholesome cuts. >> of real meat, vegetables. >> and fruit with no artificial preservatives or fillers. try doctor marty risk free. go to doctor marty pets.com. >> hey small business owners, pickleball is kind of like bookkeeping. >> and. >> accounting, right? >> lots of strategy, lots of effort. and if you don't have the right. >> partner. >> you. >> just won't win. it's time to team up with a winning partner. call zendaya and let's get that win today. zendaya, the official bookkeeper and accountant for small businesses. >> the number of public companies is shrinking, while

the number of private companies is increasing. at franklin templeton, we're expanding access to the growing opportunity in private markets, offering the potential for greater diversification and enhanced returns. through our world class specialist investment managers, we are empowering advisors with solutions to build the portfolios of the future today. alternatives by franklin templeton, your trusted partner for what's ahead. >> welcome back. >> to the exchange. i'm bertha coombs with your cnbc news update. >> the cia. >> under new director john ratcliffe. >> has stepped up secret. >> drone flights over mexico to hunt for locations of fentanyl labs, according to a u.s. official who spoke with nbc. >> news. >> who. >> says officers. >> at the agency. will pass the information from the flights to mexican officials. the head of. >> the fda's food division. >> jim jones. has stepped down. a source familiar tells nbc. >> news it's. >> unclear what prompted his

resignation, but it comes after the white house last week cut thousands of federal workers, including fda staff. the division is. tasked with ensuring the. safety of the country's food supply, and more than 106,000 toyota. tacoma trucks have been. recalled over. >> safety issues. >> from build up of mud and dirt, according to a notice from federal regulators. the buildup in the wheel interior could lead to damage to the brake lines and potentially cause a crash. the recall affects four wheel drive models of the trucks. >> with 16. >> inch rear brakes and 17 inch wheels. >> kelley. >> all right, bertha, thank you very much. meantime, elon musk showing off the new grok ai model last night. steve kovach is here to break down. steve, even i know the market has been waiting to see how grok does one of these huge clusters of chips. right? >> yeah. >> this is coming out of that supercomputer that he built out there in memphis, tennessee. but

look, this is grok three, the third version of the grok ai chatbot from elon musk's company x ai. and they're claiming last night in the reveal that it's outperforming the competition. that means it's better than deep sea, better than chatgpt. but look, we hear about this stuff all the time. every time one of these companies has a new model, it's the latest and greatest until the next one comes out. also, some catch up features in here, including the voice mode that lets you talk to it with your voice, of course, and search. that's something that we've already seen from chatgpt, gemini and so many others. and then as far as how much this is going to cost, it's a little confusing right now, at least $30 a month if you subscribe to either from the social media platform or xai, though there are some indications here that if you do it through x, it's going to cost about $50 a month because you get all that other stuff too. and this is just the latest salvo here in that competition that we keep seeing between elon musk and sam altman, the ceo of openai. there's of course, that lawsuit between the two men and the two companies, and elon musk's offer just a few days ago to buy

openai or the nonprofit parent of openai, and both are in talks to raise more funding at just massive valuations. in the meantime, this seems to be paying off for both companies. all this attention the app store rankings today. chatgpt was sitting number one in the apple app store. xai was at number two and deep seek at number three in the rankings. and these models are really becoming commoditized. kelly musk launched xai to your point in record time last year, building that supercomputer out there in memphis, getting all those gpus from nvidia together. but what we're really learning here, after the deep c moment a couple of weeks ago, after all these new models coming out week after week after week, you need a killer product, not just a great model. right now it seems like the chatbot is enough, but what you build on top of these models is more important. >> as the everyday user, i'm not the power. i love chatgpt. steve i'm starting. >> to app in. >> the app store. i can't even believe how much i use it. yeah, they keep my i ask it every do you know how good it is for

recipes? it's great. you don't have to. >> i use it all the time. >> scroll all the way to jump to recipe and get past the ads. i mean, i use it for everything it does my meal planning. i ask it questions about the. it's like. it's like my best friend. it's i never thought i'd like it. >> this. don't go too far with the best friend thing. but it is really good. and what's what's really great now is chatgpt has been able to tap into the internet with that search feature that is eventually going to be added to xai. it used to be like, don't. >> even. >> need it, why. >> would i? it's crashed the entire internet's business model. and yet i love it. i can't live this paradox. >> it's great. it's replaced search for me in a lot of ways. i use perplexity a lot too. in fact, i kind of like that better because it kind of lets you choose your own model. it gives you different things. >> when i'm researching that, i agree that one, but just just everyday moments. >> yeah, exactly. it's turning to go. and i think it says a lot that google's gemini is not up there in the app store rankings. >> deep research on that i still think is very fun. >> oh, 100%. >> it's highly effective. but yeah, you're right, this is competition based product. you know, it's. >> 200 bucks a month for some of these features.

>> well, we're paying 20. >> yeah. >> and it's good enough and maybe even that's too much. steve appreciate it. for now i'm going to go check out grok. still ahead. defense stocks are inching higher after u.s. and russian diplomats have spoken for the first time in more than two years to try to broker a ukraine peace deal. could we see even bigger market gains if a truce is reached? that's next. >> techcheck is sponsored by >> techcheck is sponsored by comcast (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. >> public.com is the one place. >> where you can invest in. >> almost everything stocks,

options, bonds, crypto. you can even lock in a 6% or higher yield. all your investing in one place. get up to $10,000 when you transfer an account to public.com. >> my clients deserve someone who understands their world, someone who listens, who has their best financial interests at the. >> center of every decision. >> our business is built around being responsive to our client's ever changing needs. >> as an advisor. >> as there are a custody services provider, i see my client's success as my own. >> because when they grow. >> we grow with them. for over 25 years, we've been committed to rias, and. to rias, and. >> that's why i chose only servicenow connects every corner of your business so people can do all their work on one platform. no more mindless swivel chairing between platforms. or swivel chairing between apps. no more swivel chairing! i don't feel so good. what does he do here again? mostly that kind of stuff. will you push me back? no.

nate jones... steps up to the mirror... lines things up... towels off... checks his fidelity app... looks to outside analysts to get a second opinion. nate likes what he sees... same page? -[ dog barks ] and he places the trade... before anyone hears him talking to himself. [ dog whines ] buy u.s. stocks and etfs for as little as $1, with no commissions. talk about easier investing. >> dry i don't shed. >> as much. i'm a jolie addict. >> get invested. >> join the club. >> the value. >> you're. >> going to get from making better investments more than

outweighs whatever the cost of the membership is. >> join the club. new members save with a special offer for a limited time at cnbc.com. terms and restrictions apply. >> check. >> well welcome back to the exchange. american and russian diplomats are holding their first high level talks in more than two years in saudi arabia. now markets are already sniffing out prospects for a peace deal, as european stocks have been rallying sharply and natural gas prices are falling. that's a big part of the story. in fact, let's bring in brian sullivan with more. brian, what do we know? >> and i want to be very critical on this point. we have u.s. and russia in talks in riyadh. >> saudi arabia. >> ukraine is not there. and that's a critical aspect. >> to the story. >> volodymyr zelenskyy and his. team are not there. they were not invited. they say they will not accept any outcome of this deal. he has postponed a. trip to riyadh scheduled for march 10th. that said, markets are a little bit optimistic. this is our cnbc.com headline today. marco rubio, steve witkoff and others from the us are meeting

with russia, very entry level negotiations. but let's all hope for some kind of a peace. and the reason i'm here talking to you is not only we can do more about this in power lunch. what do we know that might. move on this kelly. okay, let's say there is a peace deal at some point. oil that moved 30% when the when russia invaded ukraine back in 2022. u.s. natural gas up 140% in three months. you eu natural gas up 300% in three months. so those things have now come down off those highs. but oil natural gas here i would add coal wheat maybe iron ore and steel. those are things. >> that could drop in price substantially. >> but now they've all most have come down from those highs. but you are exactly right. the ultimate question is this down the road, does europe, which particularly germany, its business model was built on cheap russian natural gas via the nord stream pipeline. we

told our viewers the other day that denmark had agreed to let russia work on the pipeline. does europe go back. exactly to cheap piped russian natural gas? >> which is why we're trying to strike a lot of deals now to say, hey, maybe you can take some u.s. lng. you've also pointed out some of the stocks we're watching. yes, their defense names and european defense names are surging because they're going to have to look towards self defense. also, companies like ryan mattel steel maker, big user of energy. is that not why we're seeing some of these stocks in europe climbing the way they are? >> two things. you're exactly right. the hopes that companies like a rheinmetall of germany, like a saab of not the cars anymore, the airplanes and fighter jets, things like that. be a b a e systems in the uk. obviously big consumers of energy because they make big, expensive, hard things. but also because the idea that any peace deal may include some kind of provision where europe would have to front a higher cost of any defense of ukraine because

russia invaded ukraine, would sort of these companies benefit by not having or getting extra money, but also dealing with potentially lower energy costs. those are the we're very i want to be clear, we're very early in this story. right. but it is in the markets. and european markets have been. >> rallying not. >> because of this, but this adds a layer to it. >> it does. and if anything, there's more optimism among investors than maybe even amongst the political class right now. but the markets are giving them some breathing room to kind of try to come up with a solution. i will see you in a couple of minutes. brian. thanks. on power lunch, my next guest is staying overweight on stocks and expects international stocks to benefit from this broadening out trade. joining me now is steve orth. he's the chief investment officer of equities at federated hermes. steve welcome. and how would you kind of bring this all together for us. >> yeah it's like europe you. >> just talking about it's so bad. it's good. >> actually you know. >> in international. >> general we. >> have a pretty large

allocation. >> there as part of this broadening out trade kelly. those markets are trading mid to low double digits and teens m emerging markets at 12 times even. >> and a lot of people yeah go ahead steve. >> typical type names. sorry. >> no i was i was sorry i thought you were finishing the thought i was going to say go ahead. and also, you know, us stocks are also at close to all time highs. so it doesn't sound like it has to be an either or. >> no. well the us market kelly has plenty of stocks that have not really participated as you know. i mean talking about it all throughout your show the last several months. i mean, it's all been driven by the mag seven, and now we're starting to see everything else broaden out and what that has to do with the trump agenda. that is kind of throw what i would call old economy deregulation, lower taxes, better efficiencies, and then the ai trade starting to broaden out. you were talking about chatgpt, you know,

broadening out, really helping the broader us companies, you know, participate and get earnings growth. and we've got the earnings growth on the us market largely because of all these other elements. you know, going up to something like 350 by 2027. so our idea is if you if you focus on the long term, stocks look pretty attractive here even at these valuations. the difficulty is in the near term there's an awful lot of volatility probably likely this year. you know you've got a lot of short term pressures. the sausage making of tax policy. the deregulation is going to come and go fits and starts. we heard something today about maybe the m&a market's not going to take off. because you know biden policy is going to be continued i doubt that that's going to be the case. but and then of course you got tariffs up and down. one of the interesting things about europe is that they're almost benefiting from the pressure that trump is bringing on them.

and we think china also will benefit because their only reaction is to stimulate domestic growth. that's probably the only card they've got in their respective arsenals. so that will actually help. in some ways. trump actually helps them. >> i find that ironic. and i'm sure they would too, especially as you've had certain investors out there saying they think trump is trying to break up europe and all of this kind of thing. it's clear he wants them to fund more of their own defense. do you have a view, steve, on tariffs, whether reciprocal with europe or or elsewhere? >> the traditional view is it's not a good thing. we all want fair trade. but i think what the trump people are trying to get is fair trade. and if that means having reciprocal tariffs, or at least until the point that we actually press people to bring their tariffs down, that us makes a lot of sense. i mean, if there were no tariffs around the world and all we were doing was raising them, that would probably not be a good thing. but i think in the context of

reality, trump is trying to get a better deal for trade in general. and my guess is the broader global trading environment improves post trump. it may take a little bit of sausage making though, between here and there and there going to be moments where, you know, the bond market maybe has a has a tantrum. we've seen that before, but that's one of the near-term risks that we're a little bit concerned about. bonds, you know, break out above five over a tariff issue, inflation etc. on the short term that could be a problem. >> do you view doge as having an impact there? >> yeah. again, long term doge is going to improve efficiency. but a short term risk could be and we'll maybe start to see it in the next couple of months. are these government workers start to hit the unemployment rolls. you know you could see the employment market start to soften, which is not not something that people are expecting. and people could get a little bit nervous about that. i think longer term, those

government workers presumably are going to shift into more productive private sector jobs and help alleviate the inflation pressures we have on the private side of the economy. so net net, that's another case of kind of long term positive short term, a little bit rockier. >> that's interesting. government workers rescuing us from the immigration shortage or the labor force shortage. not not exactly, but in that direction. steve, i just want to mention, for the audience sake, some of the stocks you guys like citizens and the financials, trx gold for a housing recovery, energy grid buildout. you like train a and e, quanta southern co, salesforce, crowdstrike, servicenow those kind of speak for themselves and you're neutral on the mag seven. so just wanted to get that in there i'll let you get back to it. it's always great to see you and thanks for joining us today. thank you steve. joining us from federated hermes. and still to come nike is the best performer on the dow today on the announcement. it's teaming up with kim kardashian and her shapewear for shapewear firm skims. they're going to create a new line of trading apparel called nike skims. piper sandler

comparing this outside the box partnership to nike's bold signing of michael jordan over four decades ago, saying it marks the first time nike has ever teamed up with an outside company to launch a new brand. company to launch a new brand. the shares are up almost (vo) explore the world the viking way from the quiet comfort of elegant small ships with no children and no casinos. we actually have reinvented ocean voyages, designing all-inclusive experiences for the thinking person. viking - voted world's best by both travel + leisure and condé nast traveler. learn more at viking.com. it's a smart move to get a second opinion. you do it when you're looking for a contractor. you definitely do it with medical advice. so why not with your stock market investments? we can help you see opportunities

you may be missing. at hennion & walsh it only takes a second to schedule your free second opinion. so what's there to lose? speak to hennion & walsh. the second opinion people. excruciating, and there is no fda approved treatment for this disease. >> now. >> octapharma is racing to become the first biotech ever with a drug to treat ncp. okeyo the first to initiate a phase two clinical trial for this disease. lead clinical site is tufts medical center. okiyo pharma's drug, if approved by the fda, would be the first ever for ncp. okio pharma symbol on the nasdaq. >> effective healthy blood pressure support takes more than innovation. it takes vision at human. our plant based supplements are scientifically formulated to support the center of your health and at the center

of super beats heart juice, healthy blood pressure support from clinically studied grape seed extract sustainably sourced from southern france with delicious pomegranate berry flavor, supporting your blood pressure and heart health, and all the moments your heart beats for. get a free month supply plus free shipping on all bundles at live human.com. >> for the most comfortable, luxurious, eco friendly and affordable handcrafted american made mattresses on the market today. delivered and set up in today. delivered and set up in any room of your ♪♪ [inner monologue] 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. ♪♪

wants to hold on to the nba. how much more will he have to pay? >> a lot of the revenue streams are guaranteed. >> cnbc sports official nba team valuations available now at cnbc.com. sport. >> you found. it then. >> you found. it then. >> of course i did. actors. we can make you believe we know what we're doing.

when, in fact, we do not. whoops. i have no idea what these buttons do. i've never driven a stick in my life. but my hardest role yet? small business owner. because i have no idea what i'm doing. but godaddy airo does, using ai to build a logo, website and social content... for walton goggins' goggle glasses. because if your goggles ain't goggins, they don't belong on your noggins. with godaddy airo, it's like you know what you're doing. stocks, you'll realize. >> that in today's. >> market, buying and holding stocks alone is not an option. >> the simple. >> beginner friendly option. strategies you'll learn in our new book could take your investing returns to a whole new level, and. today we'll give you a. >> copy for free. get your free copy while they last at. >> it's not an option.com. >> it's not an option. .com.

>> get invested. >> join the club. >> he makes a complex simple and not to make irrational decisions. the return on investment for the club pays. for itself. >> join the club new member save >> join the club new member save with a special o finding the right path takes experience. as a national leader in municipal investment banking and wealth advisory services hilltopsecurities can help you find the best path to reach your financial goals. with the backing of a diversified financial services enterprise, deep industry knowledge, and a 75-year history of innovation, we don't follow the herd. we lead it. for all those making it big out there... ...shouldn't your mobile service be able to keep up with you? get wifi speeds up to a gig at home and on the go. introducing powerboost, only from xfinity mobile. now that's big.

xfinity internet customers, cut your mobile bill in half vs. t-mobile, verizon, and at&t for your first year. plus, ask how to get the new samsung galaxy s25+ on us. resale shop now with code tr20 for 20% off terms apply. >> welcome back. elon musk's doge seemingly leaving no federal agency stone unturned, including now the centers for medicare and medicaid, two programs that consume a huge part of federal and state budgets. the trump administration also terminating thousands of employees across hhs, including at the cdc and the fda. so what do these cuts mean for both patients and the health care industry more broadly? let's ask mike desjardins. he's ceo of healthcare payments player anomali. it's great to see you here. thank you for having me. can i call you an ai player in in the space, just to kind of give people a sense of the technological aspect of this. so when you're sitting here and looking at what musk is doing, you're thinking, what about these efforts? >> maybe not. >> necessarily looking in the most. >> advantageous places. >> so i think we're.

>> talking about, you know, cuts. >> to personnel, which they've got. >> a remit to do. and hhs. >> is an enormous agency, almost. >> 80,000 employees. and i. think so far the cuts have looked to affect maybe 50. >> to 100 employees. >> but the money is really in the payments. and you mentioned in the lead in, you know, looking at cms broadly, medicare, medicaid, it's almost $2 trillion in spend annually, i think 1.7 earmarked for the 2025 fiscal year. and the bulk of what you can do there is actually really look at where the money is going, do anything you want to do. on the regulation side, that's largely set by congress. and your previous guest talked a lot about medicaid, which we can talk about, but really it comes down to where's the money going? should it have gone out and should it continue to go out? >> because you guys do a lot to try to cut down on the waste and the fraud, is that right? so, you know, and obviously you're do you work with any government agencies or is it all private sector. >> we do not all private sector. >> so even though you're based in washington so you kind of have that proximity. should they take a firm like yours then and say, okay, go wild on sort of the government payments aspect of this? >> i think technology can solve a big chunk of what's out there

to be solved, you know, with this particular problem. so i think in 2023, the government accountability office looked at about $100 billion in kind of misspent federal money. so that's fraud, waste, abuse, improper payments across medicare and medicaid, $100 billion, a lot of money. and most folks say that's probably a drop in the bucket. i think the real kind of opportunity is people don't even know how big the problem is, because it's so complicated to unwind the billing. so there's the chunk of payments that represent fraud, waste and abuse that technology can absolutely help with. then there's the bigger chunk of funds that are spent within, for example, medicare. so i think the trump administration, you know, in their previous iteration in 2016 on expanded medicare advantage, they're likely to do the same. now, you know, we're already at 52% of seniors kind of getting a medicare plan through medicare advantage. and there's no real good way to track moving forward is the money that's being earmarked and spent on medicare advantage actually being spent on care, or is it being denied or is something else happening with it? and, you know, one

auditing would have. >> thought that that was such an area to focus on. i would have thought medicare advantage was sort of quiet and ho hum. and, you know, not not the area to focus on. >> no, i mean, medicare advantage was designed to inject some value based incentives in payment to lower cost. but if you look at the history of medicare advantage, it's expanded. folks have focused on growth. the cost of actually gone up as government were actually spending more on medicare through medicare advantage. and there's lots of reasons why. but, you know, at least in the ethos of solving problems that can be solved, getting around where the money is actually going and figuring out whether it's being well spent, that's a job for technology and that's where where people can help. >> so in the final moments, give me an action plan. chatgpt if i had, you know, my, you know, how would you then if elon musk literally called you up or one of his employees and said, okay, so what should we do? what does that look like? >> well, first i would be shell shocked. so once i once i got past that, i'd say really two things. i'd say, hey, let's look backwards on what medicare payment has really looked like. and is there an appreciable

fraud, waste and abuse signal that we can pull out? so one, what shouldn't have gone out the door, and how do we prevent that moving forward? and then number two is to put a better, more real time audit function on medicare payments that are going out. so, you know, just like a normal company would outside the government, hey, should i have paid this or should i not have paid this? you know, is everybody following the rules with regards to payment? because medicare advantage should follow medicare established payment rules and it doesn't always. and that is, you know, maybe in previous iterations of technology a difficult problem to solve. but that's a solvable problem today. >> well, and these represent the biggest dollar pots, you know, to really work with, you know. >> $1.7 trillion to look. >> at, which is basically equivalent to the deficit. so not that we're going to get rid of the whole thing. but mike, it's a good perspective. it's good to see you today and appreciate you joining us. >> thank you for. >> having me. mike desjardin with anomaly. and that's it for us. thanks for watching the us. thanks for watching the exchange. and i will [birds chirping] [dog growls] ♪♪

♪ who knows what tomorrow ♪ ♪ will bring ♪ [dog barking] ♪ maybe sunshine, ♪ [dog whining] ♪ and maybe rain ♪ ♪ but as for me ♪ ♪ i'll wait and see ♪ [knock at door] ♪ and maybe it'll bring my love to me ♪ ♪ who knows ♪ ♪ who knows ♪ ♪♪ 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 collaborating from anywhere on everything. atlas (♪♪) 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 >> sudden she's on. >> five different medications. >> me and the pharmacist got so tight she said go to x can save you a. >> lot of money saving that. >> extra 2 or $300 a month. >> you know, you do the math. the money we're able to save. with using good rx, we're able. >> to do. >> all these extra activities. she can hit hard too for a little skinny thing, so it puts less stress on our household and it puts less stress on our pockets. >> i. hire either. told me to

stay. in an office. janet yellen music. oh yeah. la la la la la la la la la la la la. >> and welcome to power lunch. could the world see a. >> peace deal in ukraine sooner than later? the u.s. and russia talking today. markets are moving. we'll talk more about what. could happen with any deal. >> plus. >> you've seen the stories on social media, but it's concern about layoffs in washington, d.c, really hitting their housing market. >> we're going to show. >> you data. >> and talk to a real insider. >> and what. >> microsoft has to say about ai and. >> whether elon musk.

>>