there's a nice look at that stock weiss alphabet. >> it seems to have stabilized and is on the move back up i believe. >> okay service. now they're monetizing their ai tools. >> carrie see you next. natural gas producer small cap stock. >> okay. we are above a new closing high on the s&p yet again. we'll see how this day develops into the into the close the exchanges down. >> thank you very much scott. and welcome to the exchange i'm kelly evans and here's what's ahead. inflation is back. those words from the president himself. last night he blamed the biden administration for rising costs. but it didn't stop him from pressing ahead with plans for more tariffs on cars, pharmaceuticals and perhaps other things. those details which a key fed member is to some extent minimizing, are coming up in just a few minutes. speaking of inflation, shelter costs remain. one area that's stubbornly high. would privatizing fannie and freddie help or hurt in trying to bring home prices down? and would it

just put taxpayers on the hook? plus, the nasdaq is on pace to eke out a five day winning streak. and if you're wondering if you've been missing it from the sidelines, one tech investor says there are still bargains to be found, including this name, up 34% year to date. feel free to tweet me your guesses. and while you do, we'll get over to dom chu with the market action. >> all right. so the market action, as you point out, that five day winning streak for the nasdaq very much in play right now. we're less than a percent away from its own record high level, but one we do have in record high territory is the s&p 500. so that star goes up right away there. we're just about flat on the session at 6131. but the new high water mark on an intraday basis is 6135. that is the new ultra at least high level on an intraday basis up about two points at the highs of the session. we were up six and down roughly 11 points at the lows. so again tilting towards the higher end of that range the dow industrials slipping a bit down one third of 1% to the tune of 150 points to 44,406. and the

nasdaq composite, as kelly points out, riding what could be a five day winning streak is just up very marginally, up four points to 20,045. now the s&p 500 at these rarefied levels. let's go back and take a look at the at least year to date charts to see the sectors that have been leading the way higher. it has been financials, communications services and energy. your three best performing sectors so far in the year to date basis, and i will throw in there just for an honorable mention consumer staples as well. and materials, those value oriented sectors are the ones doing a lot of the heavy lifting. now they're not as heavily weighted as, say, tech and communication services and consumer discretionary. but check out some of those value sectors. they still are driving some of those gains to record high levels. and then one stock that we don't often talk about, but it's an interesting story right now is the 14% gain in garmin. it too gets its star because it hits a record high so far in trading today. the maker of wearables, aviation

navigation systems, seaborne navigation systems up after a bottom line and top line earnings beat also this idea that they want to raise the dividend pending some shareholder approval. and by the way, wearables and fitness driving the gains here. believe it or not kelly 30 to 31% gains in fitness and 31% in wearables. people are going back to garmin for those wearables and fitness trackers again. we'll see if that sticks. i'll send things back over. >> to you in the air of the apple watch. dom, did you say seaborne? yes. i feel like you have some. >> experience in navigation systems for boats. garmin does do some of that also aviation systems as well. so they're known for those kinds of things. but i think a lot of people just know them for the gps and those wearables that they have on their wrist. >> great for runners and so forth. there you go. thanks. you got it. president trump pressing ahead with plans for more tariffs this round on autos, pharmaceuticals and chips. and while many say that could leave the fed on pause with further rate cuts this year to try to assess the fallout, the fed governor waller said they shouldn't be paralyzed by that

policy uncertainty. eamon javers is standing by with more on trump's interview and tariff plans. steve liesman is at the federal reserve as we await the release of the minutes next hour. and adam posen joins us today. he's president of the peterson institute for international economics, and he's here with his big takeaways. welcome to all of you. and eamon. let's start things off. >> hey there kelly. well, it's extraordinarily rare and maybe unprecedented for an american president to do a sitdown television interview side by side with anybody else. but that's the status that president trump granted elon musk last night. in an interview taped last week with trump supporter sean hannity of fox news. now, musk referred to himself simply as tech support for the administration while wearing a t shirt that said exactly that. and trump explained why he sees musk as so valuable to this administration. >> he's got some very brilliant young people working for him that dress much worse than him, actually. they dress in just t shirts. you wouldn't you wouldn't know they have 180 iq. >> so he's he's your tech support.

>> no, no he is, but he's much more than that. >> actually i'm tech support though. >> but he gets it done now. >> that aired shortly after trump engaged in some tough tariff talk earlier on tuesday as he spoke to reporters at mar a lago, saying he would impose tariffs on autos and other key industries. here's what he said. >> there it will be in the neighborhood of 25%. >> doctors and pharmaceuticals. >> it'll be 25% and higher, and it'll go very substantially higher over the course of a year. but we want to give them time to come in because, as you know, when they come into the united states and they have their plant or factory here, there is no tariff. so we want to give them a little bit of a chance. >> so, kelly, it seems that what he's setting up here is a prolonged period of negotiation as the white house goes sector by sector and company by company, cutting individual deals. now that gives the president a lot of leverage and in theory, opportunities to announce wins on stages. but for investors, it means it's going to be very difficult to sort out

who's getting hit and by exactly how much. kelly. >> as we saw with the run up to the potential canada and mexico tariffs that are being delayed as well. eamon, thanks for now. appreciate it. let's turn to steve liesman now with the preview of the fed minutes to see how tariffs could impact their approach. steve. >> yeah kelly. everything eamon said put it into the box and put it for consideration by the fed. those minutes from the january meeting are going to be scrutinized for how much concern committee members have over the uncertainty of policies coming from the trump administration. most fed observers believe the central bank is on hold until there's more clarity about government spending and tariffs, and the effects of some of these layoffs. fed chair powell said as much in testimony last week, but some committee members could be tying their outlook more closely to just inflation, rather than waiting for fiscal policy clarity. fed governor chris waller said this week, quote, if this winter pause in progress in controlling inflation is temporary as it was last year, then further policy easing will be appropriate. the question is, how widely held is this view among other committee

members? it may be that an easing of inflation could create momentum on the committee for more cuts, even while the form and effects of fiscal policies remain to play out. well, markets are cautious on all this stuff. fed funds futures price is greater than 50%. probability of a single rate cut only in july. there's just a 49% chance of a second cut coming by january 2026. just one source of trouble for the fed comes from those tariffs aman was talking about. the committee will have to decide if potential price increases are just a one time rise in the price level, or the potential rekindling of an inflationary threat. minutes could shed some light on how much inflationary concern tariffs have created at the fed. kelly. >> go back to the waller comments for just a moment. kind of give us a little bit more context around them. >> well. >> you know, he didn't seem to say, well, we're going to wait for inflation to come down. and for clarity on the fiscal policy. i think that waller might be talking about a future that hasn't happened yet. and,

kelly, you and i have had this conversation, which is the fed can say right now we're waiting for clarity on fiscal policy because inflation is above the threshold. well, what is that conversation like if inflation is down at the target at 2%? there might be more support on the committee for that rate cut. i still think there's going to be caution. you know i look at the market kelly. it'd be great to put up a chart. i don't know from when that all time high was at the end of 2020. sorry the end of january. you look at the s&p. it's been up and down. and it seems like the market wakes up one day really and seriously bothered by the potential tariff threat. and then even in the same day or the next day it says, oh, this is not going to be a big deal. i read reports every day, kelly, that say, this is a big thing for the economy. and the next thing they say, well, it's not only going to be 30 basis points or, or less for the federal reserve. it's up and it's down. and i think that that

the fed probably has a similar reaction. certainly fed fund futures are saying, you know what, the fed is on hold until we get some clarity on all this. >> and our next guest maybe can shed some light. steve really appreciate it. we'll see you at two. steve liesman. my next guest says he's becoming more convinced that we could get across the board tariffs of 15% or so, maybe going up there on particular countries or goods. let's bring in adam posen, president of the peterson institute for international economics. it's great to have you here. and as steve was saying, i mean, there's so much uncertainty about how to price this in. what would you say? >> well. thank you. >> for having me, kelly. and i. >> think the way to price. >> it. >> in is twofold. >> first. >> as the. >> market's already moved so much over the last few months and should have moved earlier. the fed was. >> never going to do all the cutting that they were. pricing in six months or eight months ago. and i think they're still expecting too many cuts. so you can just say on the economic fundamentals there's no need for that level of cuts. but the second thing is, as you say on the tariffs, and governor waller has his right to and is a very

good record to argue for what he's looking for. but i think the fed is making a mistake because the balance of risks, you always have to go on a balance of risk, not wait for certainty. and so they're going to be behind the curve if they're waiting to see where inflation is now instead of where inflation is next. also as we just flashed on screen tariffs are real income cut. they reduce the availability of goods in the purchasing power of individuals. take the pharmaceuticals you mentioned. if you start producing them in the us you may produce them in the us. but they're going to be more expensive because you have to pay us wages and us plant standards and us intermediate goods to produce things that are usually produced in third world countries because they're cheap to produce. so that's also going to be a source of inflation. tariffs aren't just the percentage you put up. >> so it's interesting because you think well which one is the goal. do we want the pharmaceuticals to still be coming from overseas to raise revenue. let's not talk about by whom just to raise revenue

period. or is the point to encourage them here. you get the manufacturing benefit but consumers have to pay more. the vibe i get from the administration is that they want, in the fuller run, perhaps, that the economy is more balanced and has more manufacturing. and if that means consumers are paying more, so be it. the problem is they're already in an inflationary problem. so politically, i don't know how that gives them much breathing room. >> i agree with you. but i also just want to, for the record, say not so be it. it's a bad choice. even if they expand manufacturing, it's not going to make a very big difference to the well-being of the majority of americans. and it's going to make it harder for the majority of american consumers. so it's bad policy. but even if you as you say that the question is what happens now? and i think this hits for both the trump administration and the fed, like paul volcker in 1985, had to raise rates a lot. really put the hammer down because they didn't completely kill inflation in 1982. and now we're sitting here and it's again the fed didn't completely kill inflation in 2022. and it's coming back on

the fundamentals. and so then if you have big deficits big tariffs even if it's a one time price shift, which you and steve liesman accurately summarized. and it's a relative shift. the other prices don't go down. so people feel it as inflation. and when you've still got inflation in the system and you're still close to full employment, and you're reducing the number of migrants coming in there by tightening labor supply. everything is pushing towards higher prices again. in theory it could just be a one off. but it's a bad gamble for the fed, especially since, as was demonstrated, companies still have some pricing power. >> and i want to make sure people caught adam. what you said that, you know, you don't think the fed is cutting the market, maybe only has 1 or 2 or something like that, but you're thinking, no way. kind of. given all this, i was hoping maybe you could talk a little bit more, though, about why you're taking the tariff threat so seriously. you know, i could easily expect. and this is kind of what steve's point was. someone like yourself would come on and say, listen, it's a lot of talk. it's a lot

of rhetoric. but at the end of the day, there's not much that really takes place here. you're saying the opposite. >> yeah. >> and i, my colleagues at peterson institute have been taking the tariff threat seriously. i don't think exaggeratedly, you know, there are things that are more devastating than tariffs in this world. very strange changes to the fiscal policy of the us is one very large scale deportations would be another. but taking them seriously that they're going to happen, i think is the right call. on balance. yes. you just illustrated the president is saying he wants to have 25 plus percent tariffs on autos, 25% plus tariffs on pharmaceuticals. meanwhile, the budget process is going forward. and you indicated this. they only get real revenues for the budget process from tariffs if two things happen. first that they're part of the legislation that is not just presidential whim. otherwise it doesn't count for budgets because it could go away at any time. that's the reconciliation rules. second,

it's if you don't do across the board tariffs people substitute out. so even if you put extremely high tariffs on china and china's 25% of our imports, it's not going to have that big an effect on revenues because people will switch to things from vietnam or mexico. this is the leakage argument. so there are these two big forces on the budget process, which is of course, central to what the president and his economics team want, that if they want to have pay force from tariffs, they have to pass it across the board. and so the final point i'm making, this is just my judgment. if the president is talking about 25% on this, 25% on that, 60% on china, then he can say, well, we put a minimum 10% or 15% tariff. it's not that much. i'm only putting it up to 25 on certain key industries or certain bad countries. and he can say things which i don't think are right, but he can say things like europe has 22% tariffs on our cars and trucks, so why shouldn't we have 25% on them? so i think there are a lot

of factors in the market should at least be pricing in the risk that it's not either or that he may do the across the board. and then additionally threaten tariffs country by country, industry by industry. >> that's fascinating. i also appreciate you making the point about kind of the reconciliation process and that having to go through the legislature, which i've heard other people say, but you have to kind of stop and think about that for a second. what does that mean? adam, i would love to have you back. thanks for your time today. >> thank you. kelly. >> adam posen with the peterson institute for international economics. i bet my next guest has a slightly different point of view. let's zero in on the manufacturing industry, which in many ways is ground zero, both for the economy and for the president's efforts to shore up american industry through tariffs and other means. there are some promising signs lately the ism index back above 50. last month, empire state broke out of recessionary levels for the first time in two years. but tariff concerns did pressure that outlook to a one year low. joining me now is jay timmons. he is president and ceo of the national association of manufacturers. jay don't know if

you caught those remarks. if so, i'd love to hear what you have to say. welcome. >> well, look good. good day to you too, kelly. look, i think the big issue here is that we have a president and an administration and a congress that wants to expand manufacturing and make us more competitive in america. and that's good news, obviously, for manufacturers here in america. but it really has to be a comprehensive strategy. and that. starts you. >> know. >> you're. talking about tariffs in this last segment. but it. >> really. >> needs to start with renewing those tax reforms from 2017. >> because a smart. >> strategy is going to involve. reducing the cost of doing business for manufacturers here in the united states. >> and kudos to. >> speaker mike. >> johnson in the house and leader scalise, because they. >> were able. >> to move their they are moving a budget bill forward. and that's going to set. the framework for those those tax rates to be set hopefully permanently in stone. but we also are looking at regulatory reform. we're looking at expanding our energy dominance. we're looking at workforce

policy as adam mentioned. and then of course we have to have a sensible trade policy as well. >> yeah. i mean, so how would you unpack this, jay? you know what is in the interest. so listen, i listened to adam posen's remarks there, and he kind of almost diminished the significance of the goal of shoring up u.s. manufacturing. there are some officials in the administration who view this as a matter of national security. like at some point you have to have a steel industry. at some point you have to have, you know, pharmaceuticals, i don't know. there's probably more chips. there's probably more on the list. is that worth the potential cost to consumers? >> well, look, you just have to look at what we went through with the pandemic to understand that that health concerns are a national security issue. i'm here at the energy institute high school in houston, texas, where which is part of our competing to. win tour that we do every single year to highlight the benefits of manufacturing. energy is also a critical national security component. all of those are

important. i don't think. >> you have. to necessarily assume. that costs are going. >> to go up if there. >> is. >> an integrated strategy. >> and i'm going. >> to i'm going to go. right back. >> to. >> those tax reforms. that has to. >> be done. >> it has to be done now. because are. there tax. >> reforms, jay? because, i mean, maybe i've been overly simplistic about this. i thought all we were trying to do is just keep in place the framework we already have. >> well, but some. >> of that's. going to some of it has expired kelly. >> several things. the r&d tax credit tax deduction, the immediate expensing, the interest deductibility. that's all history. now unfortunately the corporate rates are baked in. >> 90% of my 14,000. >> members are small and medium manufacturers. most of them benefit from the pass through deduction that expires this year. and i don't think what you want to see is a huge tax increase that will cost 6 million jobs in the economy happen if we don't renew those reforms. that's why the speaker's actions in theast

day or so have been so incredibly important to get this thing moving forward. president trump actually endorsed that bill, one big, beautiful bill, as he calls it, and that will help make america great again for manufacturing. >> yeah. you know, i suppose that i still have these questions about the cost of all of this. you know exactly how it you know exactly what the incentives will be. is the goal to increase the supply of u.s. manufacturers? >> you're talking about the tax reforms, the extension of the tax reforms? >> no, just the trump administration's plans more broadly. >> oh, everything. well, look, i think it's really important to understand that manufacturing powers any economy, right? if you're going to be a successful economy, you've got to have a strong and vital manufacturing sector. and what. >> we saw in 2017. >> and president trump actually introduced his tax reforms at our board meeting. and he called it rocket fuel for manufacturing. and indeed it was exactly that. we had record job

creation in 2018 that was higher than any year for 21 years. unfortunately, with. >> these. >> reforms expiring this year, the rocket's about ready to run out of fuel. and so we know and we saw it happen in 2018, 2019, 2020 before the pandemic hit. you saw that investment coming back to the united states. you saw job creation. that's good for americans. that's good for americans all over the place. i want to. point back to something that adam said or that he he pointed out. i think you were playing a clip of the president when he was speaking. >> he was talking. >> about ramping up tariffs. now, look, i'm not going to sit here and say that we think tariffs are a good idea because there are cost considerations. there's no doubt about that. but if you have a smart and common sense policy in place, if the president chooses to use that tool, which he's obviously. >> said he's going. >> to do, if it's smart, if it's common sense, if it's strategically targeted, and. >> it gives us.

>> manufacturers the ability to make investment. decisions that. oftentimes are made five, ten. >> 50. >> years in advance, then manufacturers can adjust to it, but it has to be done over time. it has to ramp up, start. >> slow. >> and ramp up over time to allow us to make those pivots and those adjustments. and you need to couple that again with tax regulatory reform and energy dominance. >> that's an interesting point as well to start slow and ramp up. jay, appreciate you joining us. we'll let you get back to the to the classroom. >> i'm looking forward to it. >> jay timmons with the national association of manufacturers. coming up, some more troubling signs for the spring housing market today. and that's got the homebuilders under pressure. toll tripoint among the biggest laggards on the ishares home construction etf. shares of nvr, by the way, are at a 52 week low. plus two new products from big tech today. apple unveiling its lower cost iphone 16 se. sorry if you wanted a car. folks it's never coming. it retails for $599 and is on sale later

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housing data points out this morning just ahead of the key spring season. diana olick has the latest numbers. what can you tell us, diana? >> well, kelly, it's aot none of it is good, i'm sorry to say. let's start with single family housing starts. they dropped 8.4% in january from december, and we're down nearly 2% year over year. that was a long expectations, but still not a good sign given that the market just needs more homes. the builders have been plagued by higher mortgage rates. the average on the 30 year fixed started january right around 7%, according to mortgage news daily, but then just started rising, hitting 7.26% two weeks later and staying above 7% for the month. builders like toll and pulte pointed to affordability issues in their latest earnings releases. toll with a big miss on its top and bottom lines. single family building permits, which are an indicator of future construction. they were flat month to month and down over 3% year over year. we know builders are increasingly concerned about potential tariffs hitting their costs for everything from lumber to wallboard to appliances.

sentiment among the builders in february dropped sharply to a five month low, with the nahb chairman saying high construction costs, elevated mortgage rates and challenging housing affordability conditions are causing builders to approach this market with caution. and on top of that, mortgage demand from homebuyers dropped again last week, down 6% for the week. still a little bit higher than it was a year ago, but the numbers overall are just historically low, which is not where they should be right now. kelly. >> that's a great point. you know, a lot of like we've talked about a lot of inventory on the market. the hot stuff is still selling. but the other stuff not so much diana. stay right there. because a proposal that started bubbling up in the first administration of first trump administration could have a big impact on mortgage demand and housing more broadly. and it's the privatization of fannie and freddie picking up some traction after a cbo letter said back in december, they see an easier path to privatization now than in the last report back in 2020. if that were to happen, moody's mark zandi thinks it could raise mortgage rates by 60 to 90 basis

points. my next guest says it could also trickle down into the muni market. let's bring in wells fargo. head of muni strategy vikram rai. vikram, you kind of broadly explain this. welcome. >> thank you, kelly, and it's my pleasure to be here. >> so see, whenever we talk. >> about this. >> issue and this has this issue has been on the back burner and the front burner for more than a decade. >> it's exhausting. >> it's exhausting. it's exhausting. yes. and it's a very complicated issue. so before we put the cart before the horse and start getting stressed out about the privatization of fannie and freddie, there are some prerequisites that need to be met, really, first and foremost. right. that when fannie and freddie were bailed out by the us government, the treasury took a senior preferred stake. right. so that. >> you're getting all that cash right now, right. >> they're getting it in the form of dividends. so the senior preferred stake has grown to 350 billion. right. and so that is something which is sitting on

the treasury's balance sheet. and that needs to be voided. meaning you know that's taxpayers money. >> right. so you think at a time when we have no money, we're going to say here, take 350 billion off. >> so politically it's very unpalatable. then of course, you know, there is this question about the guarantee, right. and that that guarantee it's not an explicit guarantee, as you know. it's the implicit guarantee. and it stems from the fact that in 2008, 2009, the treasury granted them a line of credit, which they have kept increasing. so now it's virtually unlimited. yeah. so that's the implied backstop, right? the implied guarantee now. >> which keeps mortgage rates, you know, maybe lower than they otherwise would i don't know. this is a big debate in the markets. right. there's people who say that this whole system is all screwed up and the incentives are all strange and what have you, and we should just privatize it and let the private sector rush in. and, i don't know, maybe somehow that brings down mortgage rates. >> kelly, i could not disagree

with that more. okay. see, housing affordability is at a multi-decade low, right? rates are still high. so any disruption to the market, the tba market, which is functioning very well, will have a not just a trickle down effect. it will have a knock on effect. >> is it having one. so when these discussions resurface, do you think that's having an effect on the mortgage rate. because you know that the president and his treasury secretary are trying to get come up with other ways to get mortgage rates down? and it sounds like any chatter around privatizing fannie and freddie then is not that helpful. >> it's not helpful at all. and my clients call me all the time when this chatter came up, came about, they were not freaking out, but they are worried about the market that what impact will it have because it will have a downstream impact on the muni housing market too. so you know what hfa is. that is the housing financing agencies and their charter, their mandate is copacetic with with the gses, meaning their, their their. >> state agencies. >> right? correct. the state agencies, their local agencies too. and it's a it's not a small market. it's at least 300

billion. now they increased. so the mandate is to increase affordability for gses. it's very similar for hfa. they just do it for lower income borrowers. >> i see kind of like the fha on a national. >> correct. i mean there are similarities, but they help with down payment assistance. they help with closing costs assistance, and they have access to a tax exempt market. and the hfa has done a phenomenal job in managing their credit portfolio and also increasing housing affordability. >> and they could be adversely affected. >> or they will be adversely affected because see, now there is a the whole doge initiative, right? you know, it's controversial, but it's a noble objective that, you know, we want to save the federal government money, right? we want to save taxpayers money. now, the muni market, the muni market is it helps because the muni market builds schools, bridges,

tunnels, roads, etc. and so it spends money so that the federal government does not have to spend money. right? so now their balance sheet, the hfa balance sheet, they have to manage their credit very carefully. so the hfa balance sheet consists of loans that they've given out. and they have to monitor the quality of the loans very carefully because in a in a in in a deteriorating macro situation that there are loan delinquencies. so what they do is that they most of these these loans are conforming loans. and so, you know, then they have to cleanse their balance sheet so that they can issue more loans. they they sell them in the tba market. right. and so or they wrap up by, by fannie and freddie. now, if there is any impact to the guarantee, right. is there any impact to the guarantee then they'll these there'll be collateral degradation of the balance sheet, meaning that the agencies the hfa will get downgraded. yeah. if the hfa is get

downgraded that means the cost of financing goes up. if the cost of financing goes up, that means the home buyers, they will be impacted directly. their costs will go up. and think about it that rates are high, housing affordability is low. so why would they want to let that happen? and here i'm optimistic because this administration is very savvy right. when have we had a treasury secretary who comes and says that they are looking at the ten year treasury rate, and that soothed the market, right. when the fed when the fed cut rates, rates went up by 100 basis points, when scott bessent came on and said that we're looking at the market, we're looking at the ten year rate that soothed the market. we rallied. >> and they understand what this would do. diana, give us a final word here. well, i. >> would just say that, you know, i talked to mark calabria about this just last month in an interview, and he was the one who, in the first trump administration, was tasked with trying to decide how they would take fannie and freddie out of conservatorship. he was the fhfa director, and he said he went

with then treasury secretary mnuchin to the hill looking for a government backstop. and congress said, absolutely not. now, you could say some are arguing you don't need a government backstop. and in fact, calabria said that, well, the government bailed out silicon valley bank and it would just be the same thing if fannie and freddie got into trouble again, just like they did during the pandemic. they were there to help. but that's not going to happen in the broader market of investors. if investors are the ones who are supposed to come in and buy these mortgages from a private fannie and freddie with no backstop, they're simply not going to buy them. mortgage rates are going to go way up. and as you just said, this is not a market that can handle any more hits to affordability. it is already one of the priciest housing markets in history. and as the numbers i just gave you, it's showing that it's the spring market. and we're not seeing any demand out there because of this affordability issue. >> hope springs eternal. i know for investors who are looking for that privatization. but after this conversation, i'm thinking it's probably going to be another administration off. vikram. thanks, vikram. ride with wells fargo. diana. thank you always as well. our own diana olick. if you want to know

more on this story on fannie and freddie, check out diana's deep dive on cnbc's youtube channel. and coming up, another major firm doing layoffs. this time, it's unitedhealth offering employees in its benefits unit buyouts if they quit by march 3rd. sources tell cnbc if the company does not meet its resignation quota, they will begin layoffs. shares are down nearly 13% over the past six months and are fractionally higher today. stay with us. >> muni money is sponsored by b&m help build america's future with b&m insured muni bonds. >> infrastructure makes our economy grow and keeps our communities strong. and now's the time to build. ban mutual protects municipal bond investments that finance essential projects, providing an added layer of security to improve your portfolio with guaranteed income that helps investors reach their goals. invest with confidence. build a

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patents, cntm is shaping the future of ai powered energy. >> why should you trade. >> options rather than stocks? because they offer higher returns, are cost effective and. >> can actually. reduce risk. >> learn how in our new book. get a free copy today at. it's not an option.com. it's not an option.com. >> welcome back to the. exchange i'm pippa stevens. >> with your. >> cnbc news update. treasury secretary scott. >> bessent will. >> skip a g20. finance ministers. >> meeting in south africa next week. >> the new. >> york times reporting that it's because of rising tensions. >> between the. >> u.s. and south africa over. >> its land policies. >> a spokesperson. >> for bessent declined to comment. the senate confirmed former senator kelly loeffler to lead the small business. >> administration this afternoon. >> they voted 52 to 46. on her

nomination. the next cabinet nominee who will. >> face. >> approval is kash patel. his final confirmation vote is expected to be held tomorrow morning. and the trump administration has moved to end the new york city congestion pricing plan. transportation secretary sean duffy wrote to governor kathy hochul today that the department was rescinding its approval of the program, but did not say when it would do so. the mta almost immediately filed papers in federal court to challenge that decision. kelly will send it back to you. >> it is all the buzz here right now, pippa. thanks. let's take one more look at our mystery chart. shares are up 35% year to date, but one strategist says it's the definition of growth at a reasonable price. any guesses? tweet me or drop me a line on x if you think you know the if you think you know the answer. we'll be right at ameriprise financial we know our clients are so much more than clients. they're go-getters and game-changers, legacy-leavers and visionaries, healers and confidants.

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as i mentioned, up 34. same with uber. let's also get a check as we go through these names here on their multiples. and that's where things get really interesting. meta and doordash. i'm sorry. doordash and draftkings are trading above 93 times. uber is around 32. meta is down at practically an inexpensive 27. all of that said, my next guest says they all still qualify as garb at as growth at a reasonable price. joining me now to explain and defend is drew pettit. he's director of u.s. equity strategy at citi research. drew, it does crack a few of us up to be trading at 95. this is not nvidia from 2023 okay. >> yeah this. >> is the problem. >> when we look at some. >> of these. growth stocks that are at. >> relatively early stages right. >> we get these headaches. >> on and. >> even ev. >> to ebitda when we're kind of looking at the near term. numbers that are kind of close to zero. so look mathematically. >> yeah that p is right.

>> but when you look. at this over the medium term. >> and you look at the. >> growth trajectory, these stocks still look reasonably priced based on the dc apps. >> on the d f the discounted cash flow. so let's say i said all right convince me. like i'll take doordash. i think that was one of the ones trading. like i use it all the time. i'd love to know based on discounted cash flows and all that. i mean, give me the legitimate case for this company being cheap or inexpensive right now. >> yeah. >> before we go. >> into the actual. >> dcf, let's. >> talk about the reverse dcf. >> what's the market pricing in? so let's assume price is right here. >> what kind of. >> growth rate do we need in the next three years for. doordash to. really make sense. and the market's pricing in 20% annualized growth. that's great. that's a pretty high number. but if you look at our analysts and consensus, they're way above that. so the sell side, the analysts themselves see 3,540% earnings.

>> in free. >> cash flow growth from here. for a stock where only 20% is priced in, the key to hitting those numbers is really operating leverage. and as doordash has really grown, not just its traditional restaurant business, but other delivery and verticals have come online and they're all beginning to get profitable. you'll see that in grocery. you'll see that in international as well. that's all key to this stock really beating that 20% growth number that's priced in. >> yeah i think it's not crazy i mean i remember netflix 15 years ago, we used to hotly debate whether the 100 times pe was completely insane or justified. and look at the answer. it was incredibly justified. >> yeah, it's. >> all about leverage for these platforms, right? when you're in earlier stages, that's where you really start to see the growth ramp. so every dollar from here gets incrementally more and more profitable. and that ease starts to move really, really quickly. you know pe has to come down for

these stocks to really work. but again it's all about the growth and it's all about the dcf stocks. >> let me ask you one that i just not as not not as much a fan of. so i question the valuation a little bit more. and that's draftkings. in the case of a doordash some of these companies, you can see how those early kind of benefits of getting those users in. you get this flywheel approach. it works out in the long run. a name like draftkings, i just wonder if they're kind of benefiting from, you know, subsidized customer acquisition costs and you know, how much they can kind of keep engagement and all that over time. >> well, it's kind of the beauty of being a pretty big player in a space that probably only has 2 or 3 skilled players on the digital side, right? so, yeah, customer acquisition costs coming down really helps ebitda and free cash flow for this company. but we look at where we are today. and this is a company that's already announced a buyback. so it already has some free cash flow optionality. so this is an interesting one because we still have negative free cash flow in some like

backward looking data. earnings is still negative. you know markets probably pricing in like a buck and a quarter of free cash flow in three years from now. analysts see that operating leverage here turning on. we're at that pivot point. and what is modeled by the street and city. it's in excess of 250. so you're you're kind of buying a stock that's got a buck 25 priced in where analysts think you're going to get 250 again. that's that's garp to us. >> that's interesting. i want to just quickly mention so you like amazon. you like meta alphabet i mean there's a lot of big seven names here. look meta at 27 times looks. what is that pricing in then in terms of growth. something reasonable. >> yeah. actually something more in line with analyst expectations at this point. the difference between this and let's say like a tesla or an apple in our work is meta's expectations. what the market's pricing for growth is in line with where analysts are. the thing about meta is it has a

product supercycle coming right now. so meta, google and even amazon to us probably have more upside leverage to positive revisions, not just for 25 but into 26 and 27 compared to the other big seven names, which are not on our thematic 30 recommended list. >> that's interesting. apple shareholders. listen, he lumped you in with tesla. no. i'm kidding. drew, thanks very much. good to have you on today. we appreciate it. drew pay citi research. still to come. health care is shaping up to be a key area for ai. we've heard from the ceo of anomali right here on the exchange yesterday about using it to streamline insurance claims. up next, we'll hear from the founder of one company trying to make doctors more efficient. details when we come back. >> our new book shows you how. >> our simple option strategies offer you a lower cost way to trade stocks with limited downside risk and remarkable upside rewards. get your free. >> copy today at.

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increased investor attention. i wish them all the best. it's going to be tough. kate rooney has more in tech check. hi, kate. >> hi, kelly. yeah, this isn't easy, but this intersection of ai and health care, it's getting a lot of buzz in silicon valley. it's also seen as sort of the antidote to some of the doom and gloom around the more nefarious use cases. and the downside for this tech optimists think i could help cure diseases, help with the messy back office, and then make burnt out doctors more productive. open evidence is trying to tackle that burnout problem with a chatbot. they call it an ai copilot for doctors that the company claims is being used right now by a quarter of u.s. physicians out there. here's investor and sequoia partner pat grady and what he said about it. >> there's this big question that's on everybody's mind right now. is i actually going to be good for humanity or not? i think it is inarguably going to be good. and here's a great example of a company. open evidence should save a million lives over the next decade. you don't have to make any crazy

assumptions to believe that. >> grady sees huge potential for ai in healthcare. as you mentioned, kelly, both in the clinical and back office. but investors really need to be picky here. there is a lot and there are a lot of great ideas, but it is such a complex system, it can be really hard to cut through all of the layers, as he put it. open evidence founder daniel nadler, we also spoke to, pointed out how high the bar is for ai accuracy, especially in a clinical setting. their model was trained on peer reviewed medical journals. it was not connected to the internet when it was trained, which he says helps the trust factor help tech as a sector brought in $3.3 billion, roughly around 250 deals last year, according to pitchbook. while med tech brought in closer to 2.2 billion. kelly, back over to you. >> all right. a space we will be watching very closely. kate. thanks so much, kate rooney. and still to come, fitness, fashion and kim kardashian, the reality star teaming up with nike for a first of its kind crossover deal. that was enough for one analyst ask is kim k the new

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>> welcome back. the street is very bullish on nike's partnership with kim kardashian. the shares jumped on the news. they're up more than 5% this week. and it's plan and hope to attract more female customers with a new nike skims line. has telsey advisory group putting out a note today, calling the team up a big win. piper sandler said the outside the box partnership could be as big as nike's collaboration with michael jordan back in the day. joining us now is anna andreeva. anna, it's great to have you here. i mean, remind us how big a deal michael jordan was for nike at the time. >> yeah, no. great to. >> be here. >> thank you guys for having me. >> so michael. >> jordan partnership began 40 years ago. the first jordan one shoe was launched in 1985. so it's been a while, and it's amazing to see the staying power of this franchise. the retro jordan franchises are still selling out. so we'll see. you know whether this will be similar. but we think this is a huge win. i think it's really great to see a legacy brand like

nike that's going through some of its own growing pains right now, team up with an interesting, disruptive type of a brand like skims in efforts to attract this next gen consumer. and we think it's going to be super interesting to watch. >> $90 price target. the shares are at 76. i've been very interested to watch if we can revive the fortunes of the, you know, the nike's, the starbucks of the world. apologies. we're short on time, and far be it for me to suggest that kim k will not have 40 years of staying power, but i appreciate that the market is discounting at least a little bit of that. anna, we'll have you back soon. thanks so much. today, anna andreeva with piper sandler. and we got to go for the fed minutes. i'll join for the fed minutes. i'll join brian sullivan on the other side (vo) what does it mean to be rich? maybe it's not just about the places you can go... but also the people who welcome you home. it's not about living like a star... but about feeling like one. rich measures life in laugh lines...

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>> all right, welcome to power lunch alongside kelly i'm brian. right now we. >> are. >> seeing stocks down just a little bit. in fact well mixed. the s&p is up with the dow and the nasdaq are lower kelly it's because we have something happening right now. >> the fed minutes steve liesman is there. steve what can you tell us. >> minutes from the december for the january meeting are replete with mentions of concern both to the upside and the downside for the economy, from potential policies from the trump administration. the committee says that it's well positioned to take time to assess the evolving outlook. the fed wants to see further inflation progress before making additional adjustments to the funds target. as long as the