rieder, tony pasquarello and everybody in the house. happy birthday josh brown. what's your final trade? >> starbucks. >> staying long. >> all right. thank you, farmer jim. astrazeneca shannon. >> yields lower by writes. >> jenny h. >> western union 9% yield. >> all right good stuff. i'll see you in a couple of hours on the bell. the exchange is now. >> thank you very. >> much, scott. >> and welcome to the exchange. >> i'm kelly evans. and stocks are under pressure today amid more signs of an economic slowdown. and trump's comments yesterday saying tariffs on canada and mexico will go forward. >> but nvidia. >> and. the ai trade. >> are ground. >> zero of. >> the. >> sell off today. >> you see that. >> pressure in the nasdaq. nvidia nearly 18% below its all time highs as we wait for its earnings tomorrow night. a bellwether for the whole space maybe for the whole market. speaking of bellwethers, bitcoin also slumping to a three month low and breaking below 90,000 overnight. it's now down. 17% since. >> trump took office.

>> but let's begin this hour with new headlines from the fed. richmond fed president tom barkin saying in a speech in richmond titled inflation then and now, that on the topic of inflation, it remains somewhat elevated. uncertainty argues for caution in the inflation fight. and if you back off inflation too soon, you can allow it to reemerge on fed policy. he says it makes sense to stay modestly restrictive until we are confident that more confident in inflation progress, that it's hard to make significant monetary policy in times of such uncertainty. and if headwinds persist, he says, we may well need to use policy to lean against that. now, speaking of the broader economy, which is the concern in markets today, he says that it is in a good place and unemployment is near. most estimates of the natural rate. and he notes. recession fears have dissipated. and finally, on tariffs, he says, we don't. >> know whether. >> our recent experience with inflation will exacerbate or. >> mitigate the impact. so we'll. >> watch for market reaction there. again, he's really emphasizing the hawkish aspect of their inflation fight in these remarks. now these comments follow a weaker than expected consumer confidence

report this morning, where inflation is probably taking a toll. for more here to explain and break down everything that's going on, barry knapp is director of research at ironsides macroeconomics, and he's here along with cnbc's rick santelli. welcome to you both.hs only two ways that you see interest rates move that much to the downside. one is when i agad nervousness in the equity markets domestically of course globally not the case this time or the economy. and under the economy there's a variety of issues. what pricing is doing in terms of inflation or deflation, what's going on with the labor market, what's going on with debt and deficits? but if i had to summarize, i would say that it's half the notion of a slowing economy, but the other half is flight to safety or safe haven trade based on a nervousness with equities. also you have to do is line up the

big down days with stocks and look at the response in the treasury complex. but there's a bit of irony to that because in the end, if this administration is treacherous for the equity markets, i'm not sure that they're not every bit as treacherous for the landscape of the fixed income and treasury market. but yet old rules die hard. so i think that if i had to put the bulk of it, or at least at least half of it, i would say safe haven going on in interest rates. >> and i take the point you've made repeatedly, rick, watch that spread we're showing right now between two year and ten year yields. we want to see it go higher. we want to see it reflect. maybe you know more optimism about the outlook not a flattening. barry you had a really good point about the consumer confidence data this morning. so don't focus so much on the headline read. look at what's going on with the labor market. and you're seeing some some. cautionary signs there. >> yeah i've got. >> a very. >> different perspective than tom barkin. >> and most. >> of the. >> fomc committee. >> i don't. >> really understand. >> why they're. all that.

>> concerned about the near. >> term. trajectory for inflation. >> i'm not in the camp that we're going back. >> to two. >> but if you think. >> about. >> the outlook for the next six months, we have that lag impaired rent of. >> shelter, housing. >> related measures that will put downward pressure. >> on the core. >> we had core goods. >> prices go from a -1.6% annualized rate at the midpoint of. >> last year to zero. >> but when you look at ppi measures of consumer goods, import prices, those will. probably start putting. >> downward pressure on goods prices. so i don't. understand the concern about inflation. and i don't. >> understand, say, austan. >> goolsbee. >> characterization of the labor market as in a stable. full employment environment. >> we've had. >> churn turnover in the labor market. absolutely collapse. >> when you look at the spread between jobs, switchers and job. >> stayers and the atlanta fed. wage series, that's negative. that's very rare. that only happened during the depths. of the global financial crisis.

>> and you have the spread. >> between the lowest income quartile and highest income. >> quartile also negative. >> something that. >> happened a little bit in. >> the early 20 tens when the labor market was struggling with. >> you know, household deleveraging. >> also negative. >> which implies. >> demand for labor. >> is really weak. >> so for me the labor market is in a very precarious spot. i'm not saying that we shouldn't be diminishing or trying to reduce government employment. i absolutely believe we should. we had government employment growing a percent faster than the private sector, and wages. >> growing. >> up percent faster than the private sector through. >> much of last. >> year, something that's only supposed to happen during recessions. but that could put downward pressure on the labor market. as well. so the fed's narrative that the labor market is fine and inflation is a. >> problem. >> i think is completely backwards. >> so you're. >> bringing me all the little nuggets today. a lot of this i feel like i want like the full notes and we're going we're going to follow up on it to understand. you also point out look when you ask people about

jobs plentiful versus jobs being scarce, that's starting to revert to pre-election trends. i mean, is that how you'd characterize it? >> yeah. >> that's i'm. >> sorry i skipped that key point. >> which was. >> your actual question. >> but no, that that jobs labor differential conference. >> board survey. >> it's very. >> similar. to the household. >> survey had a super tight correlation with the unemployment. >> rate, particularly. before the. >> pandemic and distortions. >> but that points to a. >> 4.3% unemployment rate. and we printed. >> for last month. now, the. >> last month's numbers in the bls. >> survey were completely. >> distorted by. >> their annual population change. >> there is a. >> good chance that. >> a week from friday, we'll get. >> a pop in the unemployment rate and the fed's whole narrative will change. but we are moving in to me, clearly to. >> a. period of weaker growth. >> i think. >> it was you. >> that. >> was talking to. us about this the other day. >> he and i have had. >> a similar perspective. >> on the balance sheet and the. >> influence there. >> right. >> i think we are headed.

>> towards. weaker growth and. >> the markets are waking up. >> to it. that's what is. >> driving the ten year rally. >> let's bring back in our colleague out in chicago, because, rick, i think you and i are you know, we look at the cpi data and go, you know, come on. if the trend is not good enough, we look at the way inflation is affecting the consumer and we go, this this fight is not done. and consumers are telling us that. and then i sit here and i listen to barry and i look at the markets and i go, maybe he's right, maybe he's right. maybe unemployment is now the new story. maybe the labor market is going to weaken more in the coming months than we currently think. >> nah. you know what? i like to look at? market reaction when you see things in real time. we have the last jobs report, if i recall, the workweek shrunk and now all of a sudden everybody's making a big deal about it. it made no market movement of significance. the day it was released, we looked at the low unemployment rate. and my point here is, is that we are now matching what's going on with the markets to our worst fears, but it isn't necessarily matching up correctly because we still have, in my opinion, a

rate of change that might be negative in the labor market. but we have a lot of runway before. i would say that it's dicey by any means. and with regard to inflation, when was there ever certainty the fed uncertainty is a buzzword for the trump administration, in my opinion. and prior to that, they didn't get inflation right when it was certain they didn't get it right when it peaked. they didn't get it right when it was going down. and they don't have it right now. i disagree with barry. to me, the most telling factor is, is how the bond market is completely ignoring sticky inflation. why is it ignoring it? because it's really, really only looking at the pricing of equities. that is the reality here. we could make all the fundamental, complicated silver dollar arguments we want. but the markets were incited by the downside of stocks. that's what incited interest rates. and they're completely ignoring inflation that is nowhere near

2%. and most likely with all the issues with electricity generation subsidies for evs, we're not going to get to 2%. >> in other words, you think, as we so often see i mean, look, it's been the case today. the ten year is just following stocks lower. barry, i'll give you a quick last word on all of this. and you know, look the employment report will tell us to some extent if it shows up, if we go to 4.3%, that's one thing. and if we don't, then i guess we're back to what rick's talking about. >> well, rick came out of the bond pits, and i was an equity derivative guy, so i'm going to end it with a little equity centric argument here. on why i think growth is slowing, and it really comes from revisions by sector within the s&p. so we have what looked like a good corporate earnings season, but the only two sectors showing any positive earnings momentum are financials and energy. and that's being driven by regulatory policy. the other cyclical sectors things like the industrial sector consumer discretionary and even consumer

staples are all showing decidedly weaker revenues. now some of that may be tariff uncertainty. and but a lot of it is just that economic momentum looks like it is deteriorating a bit here. and it makes sense that it would deteriorate. we're going from government spending at 24% of gdp to trying to spur capital investment. that will occur, in my opinion. we've had a big bounce in business confidence, but it's going to take three, six months to really get capex to replace that reduced government spending that i do think is coming. so that leads me to a soft patch outlook. now, you know, the employment market is one of the arbiters of this, but the corporate earnings momentum is another one. i do micro to macro being a reformed equity strategist. and to me that momentum looks weak. >> i appreciate you bringing it back to the markets because that will set up our next discussion. and also because we as we've seen from, you know, traders of software names, large cap, small cap, they say, look at the reaction to earnings. they've been very disappointed by it.

and that's a big part of maybe what's going on with the tech space right now. barry and rick thanks. appreciate it barry knapp rick santelli joining us. kick things off here. and against the backdrop of a possible economic soft patch we are seeing the momentum trade unwind. tesla palantir strategy former or current microstrategy all lower today. robinhood as well. tesla's market cap is back below a trillion. it's down seven almost 8% today as are the mag seven as a basket, down more than 10% from their recent highs and down for the fourth session in a row. negative on the year right now down 4%. my next guest says the question is which poses a bigger market risk from here. trump policies as we've been kind of assuming or the mag seven and this check unwind. are they connected? scott cronan is a u.s. equity strategist at citi research. scott, what do you say? welcome. >> welcome. thank you. kelly. so you know, what i would say on this is that you got two different components at work here going into this year. what do we know? we know that the s&p at 2425 times trailing was pricing in something approaching a soft landing, if not goldilocks sentiment. that's coming into question as a

function of the broader array of trump policy initiatives. but also what you know is that the expectations for us equities have begun to price in a perpetuity of earnings growth that we measure in the low to mid teens. call it 14%. so the bogey that you have for the q4 reporting period to beat and then follow through with upward revisions to maintain the momentum in this market has been fading. and in fact, what you've seen is, yes, very good q4 earnings. but at the same time, earnings expectations in aggregate for the s&p for 2025 have been falling down from roughly 278, let's say, 3 or 4 months ago to 271 currently. so this is a headwind that i think suddenly falls underneath the traditional macro playbook. >> so you're you're i don't know if you heard that kind of discussion debate just now, but it sounds like you're in barry's camp a little bit more concerned about a soft patch here. >> i'm not concerned about inflation, okay? i'm concerned about fundamental follow through

to justify the price action. and i think in aggregate, what we look at in terms of the broad array of trump policy initiatives is at some level, particularly as you go down the cost curtailment path, is that you begin to change the positive fiscal impulse that's been at work in this market, supporting consumption since the pandemic. so, yes, we're a little bit more concerned about growth here and what's being priced in in that regard than we are about the traditional macros. >> so when we look at the tech kind of epicenter of this, you could easily build a narrative that just says, look, it was overbought. some of these multiples were overextended. meta was on a 20 day win streak. and we're just unwinding that. are you kind of talking about the unwind of momentum or. it sounds to me like you're talking more about something more fundamental that could develop three, six, nine, 12 months from now. >> it's, you know, it comes back to what you think about growth stocks, right. and so these companies, the mag seven in particular, nvidia is the poster child for this, have been living off of a persistent beat and raised outward guidance for the better part of two years. what you've been seeing with nvidia is a deceleration in that, in

that pace of upward revision, and with the rest of the mag seven, you've actually begun to see it roll over flat line to roll over. so essentially what you're setting up for is a change in sentiment for how you're pricing in longer term forward growth. looking expectations for that mag seven cohort. what this means is that you potentially potentially go from good stock to good company, but more mediocre stock performance versus what you've gotten accustomed to over the past two years. >> so i hear what you're saying, and then i think about barry knapp's comments about earnings season. the only kind of like forward, upward progress we're seeing is coming out of the financials and energy space. and a lot of the more defensive sectors, even like staples, didn't look so good or screen so well to him. so where are you looking to. >> so you know we've been aligned for some time now. we're overweight financials. so we're on that playbook. we've been overweight on communication services as a way to tease out these creators, if you will, through the internet names. we're also overweight energy and a contrarian mode. and then, you know, i think lastly we've gone overweight healthcare going into this year, which got beaten up

pretty significantly last year, full for multiple turn, lower valuation to start this year versus six months ago. so all told, we're being a little bit more balanced between growth defensives and cyclicals. and where we're underweight consumer discretionary industrials materials and staples. >> this is the playbook today. so then leave our guests just with one more word of recommendation. you know nvidia moves 8% to the downside tomorrow. you know broadcom goes 30% from its recent highs i mean is there anything that would entice you back into that space. >> yeah. so there's always a there's always a fundamental message in price action. right. and so where we're trying to get my whole messaging here has been to expect q1 volatility if not pullback, setting up for a better risk reward in the balance of the year as trump policies become a little bit, little bit clearer, i'm not sure we'll get perfect clarity. so what you're looking at here is as you reset the prices lower, you're the hurdle that you need to beat to keep the implied growth element in your favor gets a little bit lower as well. so essentially the further down

you go into the reporting, a good number can be responded to appropriately. >> yeah. so you're waiting to pounce maybe until kind of middle to later of this year. scott, thanks for joining us today. really appreciate it. you bet. city scott kroner coming up. the dow is off session lows. and home depot is among the top performers. with those shares trying to snap a six day losing streak after results this morning. we'll get some analysis and implications for lowe's tomorrow. plus, the house is hours away from voting on a sweeping budget resolution that includes trillions of dollars in tax cuts. we'll look at what's in the package and what markets should expect. the exchange is back after this. >> this is the exchange on cnbc. your record label is taking off.

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living. thuma. >> welcome back. a little bit of a sloppy session in the markets today for tech stocks in particular. the nasdaq still down about 1%, but home depot is jumping about 4% to make it the best performer on the dow. good for adding 120 points. trying to keep the whole index in the green. beat on the top and bottom lines this morning in earnings, and broke an eight quarter streak of declining comps. still, their full year sales outlook was a little weaker than expected. but you know investors shrugging that off i guess. laura champine is director of research and senior consumer analyst at loop. laura, the inflection point is coming, just as you called it. welcome. thanks for having me, kelly. yeah, we're pleased to see. >> the reaction because we started this day with home depot up half as much as the market

looks like we might end twice as much as the market. so nice to see an outperformer try to outperform today. >> and what do you attribute that to? you know, normally we'd say, hey, it was a solid quarter, but the outlook was light and the shares are down. you know such and such. it's interesting that that's not taking place. >> some of this is just buyside positioning where knowing that the first time you hear from a company to start the year, they're not meaning to set a pretty aggressive target, at least a sophisticated team like home depot. so not wanting to own it before the print, but then being willing to buy after conservative guidance is out there. some of it is just digging through what they said on their conference call. they're very happy with the srs acquisition. they're being very conservative on a potential housing related spending recovery in the back half that i think most of us analysts who follow the industry closely think we're likely to see. >> so it's interesting that comes also at a time when we were just having a discussion. we've been talking since friday about some signs of a weakening

consumer. you'd think home depot would would suffer from that, potentially. are they somewhat insulated? >> what we're really calling is that this is a gap in the momentum. so i attended the big furniture show in vegas in january. the mood was a was ebullient. people were really excited about demand. we're talking about a trump bump. then we hit february. you see some insecurities around tariffs. are they happening. are they not. you see some employment issues, especially if you're a federal worker. you hear that inflation is not done yet. i think we're in an air pocket for sales, which we would expect to recover over time in sectors like this, which have seen a big downdraft coming out of covid. as we tailed off the pull forward demand, these sectors big ticket home remodelings that have trended down double digits in the past couple of years, we should see a recovery, or at least not another backslide year this year in 25.

>> couple not to pivot away from from home depot laura. but you know now that that this is kind of baked in. i'm just looking across your coverage space. you know you've still got a buy on ross and burlington. we've heard some concern that immigration could be a hit there. we'll see obviously, as they start to report, you've been a hold on some of the cruise lines and companies like crocs, where we are now starting to see a little bit more weakness. so what is your kind of broad message here or is it a broad message or is it just really company specific right now? >> my bottoms up analyst i've got to think of it company specific. so for crocs, for example, we don't love casual shoes. we think that more formal shoes you often see when times become a little more conservative, people dressing up more and we're starting to see footwear makers push the sneakers and the crocs to the back of the store. we on the off pricers when there's inflation, off price takes share and the department stores just don't look good. right now, off price is about half the market share in apparel and accessories compared to the peak of

department stores, so there's still room for them to grow. the cruise lines were neutral on most of them because they had a great run, but they're places there to get excited. like viking, which recently went public, has an under levered balance sheet. a lot of growth opportunity in ocean cruising. so we're going to be stock pickers this year. and we think the market will reward that. >> pushing the comfy shoes to the back. that's it. the crocs era is over. and do we see this with uggs too. recently maybe we did. >> i'm not making the call that it's over, but i'm making the call that it won't grow from here, that it will be tougher to grow. they recently bought hey dude, and that's been a bit of a mess. so we're saying it's tough to turn around a casual brand in 2025, especially in a sector like footwear, that there's so many worries about tariffs. you know we cover steve madden. they moved a lot of production from china to mexico. and then they get announcements that their tariffs in mexico. so it's tough to make things overseas at least in february 2025.

>> that's a great point. i was reading another article recently saying, you know, that that the high heeled black pumps like the classic pump is back and all these young influencers are wearing it. and anyway, the fashion i guess meets wall street here. so what about lows in the morning. you're bullish on them as well. think they'll kind of echo a similar tone. how is all this possible with 7% mortgage rates. >> i hear you. and there are still so many people with mortgages under 4% of. eventually though, people's lives change. they have kids or kids move out. they they get divorced or they get married. people eventually do have to make changes. you've seen some positive signs around turnover in that really helps drive results. i'm looking today at the ticket number for home depot, which expanded look not much 30 basis points, 20 basis points of that was was maybe due to some one time items. but when tickets starts to grow again hasn't grown since the july 20th three quarter. that usually tells you the next 12 months

will be acceleration. so we think we're kind of bottoming out in some of these big categories like appliances, which they reported up today, which have been down for 2 or 3 years. we think that we're at an inflection point now. it won't be a v shape, but we would expect some recovery. maybe it's 1 to 3% growth, but compared to what we've been through, that's going to feel good. >> appliances are in comfort, shoes are out. i think we covered it all for now. laura, thank you again. really appreciate it today laura kelly with loop capital markets. before we go, don't miss a rare first on cnbc interview with amazon ceo andy jassy tomorrow. that will take place right here on the exchange around 1 p.m. eastern. very much looking forward to that and coming up. nvidia is down nearly 10% in five days now and tracking for back to back weekly losses for the first time this year. but is nvidia's pain china's gain after the break? why tariffs are supercharging china's ai growth. and as we head to break, check out shares of meta on pace for a six day losing streak. remember,

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news update. ukraine's parliament today reaffirming president vladimir zelensky's legitimacy as president and confirmed elections could not be held until the war ended. the resolution rejects suggestions brought forth by president trump and vladimir putin that zelenskyy's presidency was illegitimate, because elections have not been held during the war against russia. a bipartisan group of senators introduced legislation today to boost funding for air traffic control, staffing and training. if passed, the legislation would authorize $100 million over five years to provide simulators at traffic control facilities, which they estimate could reduce certification time by 27%. the faa says it's currently about 3500 controllers short of target staffing levels. and get this more than 230,000 canadians have signed a parliamentary petition calling on the prime minister to revoke elon musk's canadian citizenship, claiming musk is part of a foreign government that is trying to erase canada's

sovereignty. musk, who holds citizenship through his mother, responded on his x platform, quote, canada's not a real country. kelly. >> all right, thank you very much. the trump administration is reportedly considering tightening the restrictions on u.s. chip exports to china even further, which is interesting timing as we wait to hear from nvidia after the bell tomorrow, where this is a big concern for the outlook. deirdre bosa is here. for more in tech check. hi, deirdre. hey, kelly. so if those previous tariffs. >> laid the groundwork for deep seek, these additional ones could supercharge progress. >> at huawei. >> which is another. >> chinese company. >> even more central to the ai race because it is developing the foundation of it. that would be chips. this morning, the ft reports that the company has significantly improved the yield or the amount of advanced ai chips it can produce, a near doubling from about a year ago. to put this simply, it means that huawei's production process is more efficient and profitable, and that is key to being able to compete with nvidia in terms of pricing and availability. now, of course,

huawei still has a long way to go. nvidia is age 20. they are the industry standard in china, generating an estimated $12 billion in revenue for the company. and they have the benefit of the nvidia ecosystem. but if additional tariffs cut off access to those chips chinese ai companies, they could be forced to turn to huawei's alternative even faster. now, again, these are not the best and they're not the most preferred hardware, but they may be good enough and getting better. now, there's already reports that bytedance, baidu and deep seek are testing huawei chips in their ai building. now of course, those restrictions. oh kelly, you touched on this would certainly hurt nvidia as well. it's h 20. as i said they're the industry standard in china. they generate billions of dollars. it's going to be really key to guidance when it reports tomorrow. and that helps explain why nvidia has been so uncharacteristically outspoken against new tariffs, saying that they play into the hands of u.s. adversaries. they mean huawei specifically. >> oh, and a reminder again, of the competition in this fight.

deirdre, thanks for now. again. we'll hear from nvidia tomorrow afternoon. maybe some more color on that. and don't miss the cnbc special report at 7 p.m. eastern following those results. john ford sitting down with nvidia ceo jensen huang on the heels of their earnings report. after the bell again tomorrow at 7 p.m. eastern. meantime, the house is set to vote on a budget resolution that could add nearly $5 trillion to the debt through tax cuts. but will the controversial cuts to medicaid and food stamps be enough for fiscal hawks to support it? we'll have the latest from washington next. >> tech check is sponsored by >> tech check is sponsored by comcast (♪♪) 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.

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asked for a budget reminder. >> smart buy. got it. >> got it. boss otter, you got this. every day i'm reading extensively. >> i'm checking the markets throughout the trading session, working the phones, talking to sources, and doing my own reporting to share insights, information, and all of the details that you need to be able to make money. >> welcome back. the house is set to vote on the budget resolution bill today at 6 p.m, but some republicans are still holding out on concerns about entitlement cuts. bill is crucial to president trump's agenda, and the fight comes as we are three weeks away from a potential government shutdown. emily wilkins has the latest from washington. emily. >> hey, kelly. well, yes. i mean, the house is hurtling towards this major vote tonight on trump's agenda, but it is still not clear that they are going to have the votes to get it done. and that's really

casting a long shadow over being able to get the 2017 tax cuts extended. the way that republicans say that they want to. so a reminder, the vote tonight is just on spending levels and levels of cuts. but even without all of the policy details, it is still rankling republicans really across the spectrum, you have your more moderate republicans who are saying, hey, at these levels, these cuts are going to go into medicaid. they could go into pell grants for low income students. they could go into food benefits. that's concerning a number of republicans. and then on the other side, you have your fiscal hawks who say, look at 1.5 trillion in cuts. that is not enough. congressman thomas massie of kentucky has already come out as a no. and listen to him. when he left the republican conference today about his concerns with this package. >> if the republican plan passes under the rosiest assumptions, which aren't even true, we're going to add $328 billion to the deficit this year. we're going to add $295 billion to the

deficit the year after that, and $242 billion to the deficit after that. under the rosiest assumptions, why would i vote for that? >> the other concern with this package is that it doesn't quite allocate enough for the tax package. remember, that's going to be something that is going to wind up spending funds. and what the house is allocated is just not enough for all of what president trump wants to see. making the 2017 cuts permanent, including no taxes on tips and other things that he promised on the campaign trail. now, democrats, other republicans in the house have put a provision in the bill that would say that they would be able to spend more on taxes if they find more cuts. but kelly, as we can currently see with the debate over cuts here, that might be very difficult for house republicans to do. and it's just not clear, i think, whether the vote is even going to be tonight. and if it is, whether this can pass. >> all right, emily, thank you

for now. we appreciate it. emily wilkins. let's talk to my next guest about that. he says it may not happen tonight, but he does expect the house to pass the budget resolution. and the real question is what? what role do taxes play in making the numbers work? joining us is piper sandler, head of u.s. policy andy laperriere. andy, welcome. game this out for us. >> yeah. well, i think as she was just saying, you know, it's tough to know whether the vote's going to be tonight. but i think they're going to get there. this is the budget resolution. this is kind of the outline of the package. and there's a big difference between the house and the senate package. there's going to be a lot to work out. but i think that you're going to find that republicans, the conservatives and the moderates will end up going along. you know, if it's not tonight, sometime over the next couple of days or weeks, i think, you know, probably the biggest concern for republicans is more the gadflies, which i think massie is one of them. victoria spartz of indiana is another. where they just, you know, they just they just kind of just vote no. and so they can't afford to

have more than one person vote no right now. so it's going to be tough. but i think they get there. and then yeah, when you get to the house senate conference, how big are the spending cuts and how much room do you make for new tax cuts? i think those are going to be the key questions they're going to have to answer. >> yeah. and of course i always watch the market backdrop here. the fact that the ten year has fallen a little bit, i don't know if that takes some pressure off markets not really reacting yet. when would you expect it to become more of a market moving event. >> well, i think i think it's going to have to look like that. the package is really collapsing and i don't i don't think we're we're going to get to that point any time soon. certainly. look, the republicans have their back against the wall. and, you know, congressman massie was just talking about how you're going to be adding to the deficit under this package. but if congress doesn't pass anything, there's going to be a giant tax increase next year. and the 2017 tax cuts for individuals will expire. and that will be a giant tax increase. and so they can't afford to do that. their backs

against the wall. they have to pass this package. and so i think they're going to find a way to do it right. >> the problem is their margin is what three votes in the house. so what are they going to have to do to get everyone? i mean that you lose one vote, you know, voice on the right, you lose one voice. and that's why i'm watching these comments from trump about medicaid very closely, he said in that interview with musk the other night. medicaid cuts are off the table. >> yeah, well, that's going to be a real interesting one, right? because the president is saying that he's going to completely protect medicaid, only waste, fraud and abuse. on the other hand, the house budget kind of implicitly suggests that they're going to have to cut medicaid by maybe $800 billion in something in that range. so i think that number is going to have to come down. and they're going to say that work requirements and trying to get it the way the states game the system to pay less, to basically inflate their medicaid costs and get more money from the federal government, that that's not really cutting anybody's benefit. that's just waste. so i think they'll i think they'll be able to thread this needle, but

it's they have basically yeah. no room to spare. they have they can lose at this point one vote and still be able to get it done. and so it this is going to be extremely challenging. and i think, you know, a little bit more time consuming whether that whether it's tonight or, you know, just getting it through the house or the house in a conference, i think, you know, it's going to just take some time to, to work it out because they're going to have to basically be unanimous in their agreement on this. >> yeah. and at the same time, then you might have to deal with the shutdown and however that is going to pan out or not. andy, what would you say to those in our audience who look at this and go, okay, well, i want to be a fiscal hawk, right? i want there not to be a further increase or upward pressure on the deficit and want to kind of, you know, stop the debt from from rising any further. but if you want to keep the tax cuts in place, how do you do that if you don't want to cut medicaid? i mean, what do you what do you tell those those folks? >> well, i mean, i you know, this gets a little bit tricky, but, you know, this is where

this whole baseline issue comes into play. i mean, i really think as an investor, i think the way i'm looking at it and most investors are looking at it is, you know, maintaining current law is not really a tax cut at this point. it doesn't really add to the deficit. it just leaves things the way they are. and so then the question is on a going forward basis, what are you doing. so if there's new tax cuts, to what degree are you offsetting that with spending cuts. and i think the way this package is going to turn out is it's going to essentially be an extension of the trump tax cuts with a bunch of important changes beneath the surface that on net, though, keep the deficit basically where it is. so there's some new tax cuts, but there's some new tax increases. there's some spending cuts. there's higher interest. >> so again this is i appreciate you being on because as i look through my understanding is it could cost 4 or 4.5 trillion. so even just to keep these policies in place, my understanding is that that actually would be very costly. and that there's only spending increase increases up to about 2 trillion of that over the time frame, and maybe more like one and a half. >> right, i get it. yeah. i guess it just depends on your perspective. i mean, if you sort of use a current law baseline which says, well, under current law these tax cuts go away,

that's a big tax increase. so if you want to count that as, you know, preventing a big tax increase and just leaving things where they are, let's just say congress did nothing but extend extend the trump tax cuts, you know, for the next five years or ten years or whatever from a from an economic policy point of view, you know, i'm going to pay in taxes what i pay today. you're going to pay what you pay today. everybody's going to pay what they pay today. that's really no policy change. that's is that really adding to the deficit? no. well, you know, it's the deficits we've had. no i take. >> your point. but the revenue portion is at what, 17%. so in other words, if revenues are at 17% and spending's at 23, i don't know the gap exactly. but if you just keep things in place and we stay at 17%, then you're implying in order to get the deficit down, you'd have to cut spending by a significant amount that doesn't look like it's anywhere close to being realistic right now, right? >> well, i mean, we have a deficit in the 6 to 7% of gdp range in the last couple of years, and that's projected to where it's going to be. and i'm arguing they're not going to improve our deficit situation. that's a problem, don't get me wrong. but i don't think that i don't think this package is going to improve the deficit situation. it's going to leave

things. i think basically, yeah, like i said, basically where they are. so that's a problem without a doubt. but i, you know, as you evaluate this as an investor, i don't think i think we want to just be careful to think leaving things the way they are is not what is the impact of that. well. maybe the economic impact of that is pretty small. i take. >> your point. yeah. well, and i guess that's the paradox, right. if the market's basically saying it's 6% deficit, no big deal, then where's the pressure going to come from to really change course. we'll see. andy. super interesting. please come back as this drag drags on continues. >> yeah. thank you. that's how you look at it. >> yeah andy laperriere with piper sandler today. speaking of washington, a nippon steel official saying they will speak with the u.s. officials about how to gain the president's approval for their intended takeover of u.s. steel. shares are fractionally higher today. now, this comes as shares of rival cleveland-cliffs are down 6% and down nearly 50% over the past year after posting a wider than expected loss. but they are

forecasting a, quote, dramatic rebound this year, thanks in part to president trump's trade policies. chairman and ceo lorenzo goncalves says it will benefit his company more than others, and he will join overtime today at 4 p.m. eastern to make his case. coming up, shares of hymns and hers getting clobbered again today down 22% despite a top and bottom line beat. the online health and wellness company saying they likely won't offer the compounded weight loss products after this quarter. since the fda declared that shortage of certain glp one drugs over. over last week, shares of hims losing nearly half their value since that announcement, down 40%, in fact. we'll continue to follow it. and the exchange. be right it. and the exchange. be right back. 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?!

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for their worst day since december and the fourth worst stock in the s&p year to date. musk's wealth, if you were wondering, is down $100 billion from its december highs to a mere $380 billion. he will also be at tomorrow's first cabinet meeting. there were reports of weak sales in europe. by the way if you're looking for catalysts could just be the dow or market move today as well, especially for momentum names and meanwhile and a total pivot. krispy kreme is plunging to an all time low and all time low. the shares are below $7 right now on a 23% decline. that's its worst day on record. only went public what, five years ago? earnings missed expectations. revenue fell 10% from a year ago. the sales forecast coming in well below the street's estimates. the shares are down 66%. here we go. since going public nearly four years ago, you wonder if there's a glp one effect here. regardless, that's a remarkable turn of events for them. coming up, one of the most contentious parts of the government spending bill is set for a house vote tonight. are the potential cuts to medicaid, which could be up

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at shares of adtalem, which have more than doubled in the past year, up 109%. but the health care education provider, under pressure since president trump took office and elon musk's doge, has started some sweeping spending cuts and the budget resolution bill targets 2 trillion in spending reductions, including some possibly big cuts to entitlements like 800 billion from medicaid. joining me now with more on the impact is adtalem global education ceo, i should say steve beard. steve, it's great to have you here. welcome. great to be here. so what do you make of the new policies so far under the trump administration? >> well, we're still examining. >> it, but. >> we don't think it has a real immediate implication on our business. we think the secular demand trends for healthcare professionals are durable and lasting. these are still exciting opportunities for students who want to be physicians, nurses, veterinarians and social workers. and we expect that to continue irrespective of what happens around entitlement cuts. >> yeah. so, for instance, if we start talking about, okay, maybe pressures on the medicaid space and less access to care there. would that mean that there's less demand for your graduates over the years?

>> absolutely not. because the shortages across these professions are large and growing. literally hundreds of thousands of nurses, physicians and social workers that will be missing from the system by 2032. so there's just a long way to go to fill that gap. and we don't think immediate cuts to medicaid or reimbursements will have any meaningful impact on the. >> department of education. i mean, that's talking more about like the high school level. but i mean, so literally, when you look at the policies that you've heard about so far, which are tailwinds for your company, which are possible headwinds. >> well, look, i think anything that that has an impact on the department of education is something we're monitoring closely. but everything we understand about those initiatives is that the primary responsibilities of the department will go elsewhere, but they won't go away. student financial aid will be there. support for research will be there. it's just a matter of where we go and what agency we face off to deal with those issues. >> well, the taxpayers that are going to. so. so you're just moving the deck chairs around. exactly. that's what you think this is more show than than substance. >> well, look, i think there's a philosophical desire to have the government play a smaller role in education, both at the k

through 12 level and in higher ed. i don't have a dog in that race, but i do think the fundamental operations of the department of education will persist in some form. >> corporate taxes. i mean, is that an important initiative? are you watching to see what happens on that front, or is it kind of a shrug? >> well, obviously we're taxpayers, so we pay close attention to what happens there, but it's not a meaningful part of our overall economic model. >> yeah. so when you look ahead to this year, do you think what it's going to be a pretty a good year demand steady with all the uncertainty in the economy so on and so forth. >> we think the demand for health care professionals is large and growing. we think the attractiveness of these professions for students is large and growing. and because traditional higher ed isn't expanding capacity for these professions, it creates a lane for us to step in. and we believe that's durable. and we'll enjoy those trends for some time to come. >> yeah. is there a di angle here at all? i mean, is that a set of policies that have helped your graduates or affected your company, and is the kind of pressure now to unwind those programs something you think about? >> i think it's primarily an issue for elite, highly selective institutions. we're in the opportunity business. we're

here to create more opportunities for more students to be healthcare clinicians. and we can do that without discriminating against anyone or excluding anyone. so it's not such an issue for us. but i think for highly selective institutions it becomes a challenge. >> anything else that you would, you know, if you were in the cabinet meeting tomorrow, anything you want to have those folks think about. >> well, look, i think anything that that can help expand the population of, of clinicians that support all of us in healthcare is something we should take a look at. i think the shortages of healthcare professionals impacts everyone. with your waits to see a specialist or your wait to get in to see your physician. so we're supportive of anything that helps us grow the pool and address these long term, long term workforce challenges. >> i mean, there are some people out there hoping there's more pressure on unitedhealth, you know, this time from chuck schumer today. do you think like a major overhaul is needed here to kind of clean up the health care system? >> look, i think there's great sentiment and appetite for a healthcare system that's more responsive to the needs of patients, where people feel like the rationing of health care isn't quite as severe as it feels to many people. and i think part of that solution is

actually growing the healthcare workforce, which is right in our lane. >> all right. as long as i i've been asking i a lot. i said, what are those red circles on my daughter's legs, you know, is that something to worry about? but. >> well, we think it's an enabler for our business. we're using it to tutor students for test prep. we've got a number of great use cases, and we expect it to be a real accelerant for our business. >> yeah, i think so too. steve, thanks for joining us. good to see you today. good to be here. steve beard with adtalem. and before we go, don't miss a rare first on cnbc interview with amazon ceo andy jassy tomorrow. see what he thinks about some of this. i will be right here on the exchange at 1 p.m. eastern. and that's it for us. power lunch is up next. after a quick break. >> get.

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