synbiotic is the 2 in 1 prebiotic and probiotic engineered to survive, bringing live bacteria all the way down to the colon for a healthy digestive skin, heart, and immune system. get started today with seeds. dscr1 daily synbiotic. visit mike pompeo to order now. >> welcome to power. lunch as stocks take a turn. >> based on. >> another potential. >> turn in tariffs. >> we're going to tell you who said. >> what. >> and why it matters. plus, as. oil and. >> bond yields fall will. >> it force the fed's hand. we'll have breaking. news from the fed. >> and why one biotech. >> analyst kelly, says. >> we may not. >> need. >> most biotech. >> i don't know if he would go that far, but we'll see. the major averages have turned around on that. news that auto tariffs on canada and mexico will be delayed by a month. that's got the dow, the s&p up nearly 1% a little bit more than that for the nasdaq. ford gm and

stellantis all nicely higher building on gains that we've seen throughout the session. as these rumors ahead of the actual announcement. brian, we're building. >> yeah. and by the way, we've got a pretty fired up canadian in house. >> in moments. >> to talk just about this. all right. let's begin. >> with. >> some maybe. >> good news. >> for. >> detroit and its investors. a reprieve, even temporarily. >> for the automakers. >> kelly just talked about it. let's talk about tariffs and trucks. we've got megan cassella in d.c. phil lebeau as well. megan, let's start with you on again. off again. what is the latest that we are hearing. and what do we know about potential tariffs slash non tariffs. >> a little bit of firmer. >> news now brian. >> just a few. >> minutes ago we heard from white house press secretary caroline leavitt. she's the one who confirmed that rumor. >> that we've been. >> talking about for about 24 hours, saying there would be this one. month reprieve for the automakers. she worded it as cars that are associated with the usmca would not see tariffs for another month. she also said. >> the president. >> is open to hearing more about exemptions. she said this

exemption came about because ford, gm and stellantis asked for it when the president spoke with them yesterday, and that he's open to hearing. >> from other industries. >> that's the good news. >> the bad news is. >> that she says it's only one month because these reciprocal tariffs, which they call the big. >> ones, those are the. >> ones set to take effect on april 2nd, and that the president is very firm on those and will have no exemptions there. >> so it's this temporary reprieve. >> the other bad news i would say, guys, is that steel and aluminum tariffs have already been signed into law. and those take effect next week. they'll hit canada and mexico and they'll hit the. >> automakers as of now. >> so it's good news. but it might be brief. and copper prices are jumping today because that was called out last night. if that could be a place we go to next. phil. so the automakers look at the results they're getting from these phone calls. >> that's good news. that's a one month reprieve. but in the end game kelly when you look at this they're still behind the eight ball because they have to make a decision in terms of production within the next month. what are they going to do. and they're likely because

i'm just guessing that they're probably going to say, look, they're going to go into effect on april 2nd. we have to plan for that. and as a result, what are they going to do in terms of production for vehicles made in canada and in mexico? and the expectation is you're not going to be able to bring much of that production back to the united states. when you look at the daily production of vehicles, the overwhelming production, the volume is overwhelmingly, overwhelmingly in the united states, followed by mexico and then followed by canada in terms in terms of daily production. they'll be able to bring some of that, not much of it, back to the united states quickly to bring it back in a large amount. you would need to build more plants and more assembly lines. that takes years. you're not going to do that within the next 30 days, 60 days, 90 days. well. >> you're also not going to make major and. >> long term. >> i mean, these these auto plants, it's not just about buying parts from canada or mexico to put into a car, is it? it's about long term investment.

you look at the ford super duty pickup truck there. ford is planning to expand an already large plant in ontario, canada. and those kinds of decisions are up for grabs. these are billions of dollars. and i would imagine to your point, they're not going to change or waiver based on something that may or may not happen for a month. correct. >> and that that's the decision that they're facing is okay. if we know that this is going to be the trade policy, let's say, for the next five years, four years at least, what can we do realistically within the next four years? you cannot build a plant, retool it, get it up to speed and start cranking out models in less than three and a half years. and that's lightning speed in the auto industry. so they have to make a choice in terms of okay, if this is what it's going to be, how much can we bring back here, which is nibbling at the edges. and then how much do we have to just we're going to have to make

these vehicles in these countries and bring them back here. what's the cost going to be. so you will see prices go up, incentives come down, and it's going to cut into the margins for the automakers. >> all right megan and phil, thank you very much. we appreciate it. our phil lebeau and megan cassella take a quick glance back at the markets. the major averages are sharply higher now as the trump administration gives automakers a one month exemption from tariffs. the dow is up 442 points. the nasdaq now about 1.1%. we're also awaiting the beige book. give us a little more color about the regional economies from the federal reserve. in fact, let's get to steve liesman with those headlines. hi, steve. >> yeah, lots of tariffs. kelly in the beige book here. what we're seeing is excuse me one second. economic activity rose slightly in the seven in the 12 federal reserve districts. six reported no change. four said moderate growth. two said even a slight contraction. consumer spending was said to be lower. on balance, increased price sensitivity for discretionary

items among consumers, especially low income consumers. now, some we've been talking about there was unusual weather that was set to weaken demand for leisure and hospitality. we've all seen that maybe across different other sectors. vehicle sales were said to be modestly lower. now a lot of tariff stuff in here. manufacturers expressed concern over the impact of trade policy changes. real estate was hurt by some. diana olick talks about all the time inventory constraints. contacts expressed nervousness over tariff on lumber and other materials when it came to housing, but overall expectations were slightly optimistic. maybe a bit of a downgrade from prior reports. jobs job growth nudged slightly higher. you saw that weak ep report today that show 77,000 growth. job growth was seen as healthy in health care and in finance. labor availability improved in many sectors and districts. quote rising uncertainty over immigration influenced labor demand,

according to the beige book. wage growth was moderate, with wage pressures easing. now on prices is a part of the beige book. the fed follows closely. they were up modestly in most districts. several districts reported an uptick in the pace of price increases, with higher egg prices and other food ingredients impacting food processors and restaurants. we talked a lot about that. there were increases seen in insurance and freight costs, and they were set to be pretty widespread. finally, firms were noting a difficulty in passing along higher input costs to consumers. but they said when these tariffs come along, they're going to leave them to raise prices. and some firms even said they have raised prices preemptively. guys. >> all right steve thank you. trying to pour some cold water there. but the market is shaking it off with the dow up 500 points. we take your points though about the impact this is all having. steve liesman frances donald of rbc capital markets is here on set with us alongside adam phillips of epi wealth advisors. frances to you. busy day here. we just heard from the beige book. we heard about the tariff reprieve. we're

talking about economic uncertainty just a little while ago. what are the big points for you? another example that the uncertainty around tariffs is already in the data. we saw it with a surge of imports. we've seen it with consumer confidence. we've seen it with inflation expectations. and now the fed getting incremental information that companies are already increasing prices. so we may be getting news today that hey you know we may get a one month reprieve on autos. that's good. that's probably the sector economists are most worried about. but this uncertainty in and of itself is a tax on the us economy. and i bet you every economist across america right now is downgrading growth and upgrading inflation expectations. >> it feels like a tax on the american investor's psyche, because cnbc in the morning on squawk box will say tariffs are back on the markets tank. then you got lutnick or somebody comes out or we get this headline, the tariffs are off or the delayed. and the markets to kelly's point are soaring. what's our long term strategy. how do we get through. i'm not

going to say it's noise. it's bigger than that. but i think you get what i'm. >> going i do get it. and look they're playing with our emotions as investors right. and so i think it'll be interesting to see if we can hold on to these gains into the close this time. since we couldn't yesterday. i think we will this time. but this is the environment we're going to be in for the foreseeable future. we know that tariffs, the topic of tariffs aren't going away. we know that march 12th is coming up april 2nd with with the reciprocal tariffs. beyond that, call it the second half of the year. we believe that volatility could subside. and we can actually get this catalyst to move higher. that could come in the form of tax reform. now ultimately we got to get through this period first. and i equate it to what i tell my kids. you have to finish your vegetables before you can have dessert. right. and this is some of that near-term pain that we're going to have to deal with. >> how can you get your pudding. >> if you don't. >> give it up? i just say you can just have dessert. have dessert? >> it's a battle. >> yeah, it's a battle. >> i'm going to quote frances donald to frances donald. this

is what you wrote. as much as we expect us to remain the leader of the economic pack. thank you. we have raising concerns, rising concerns about the downside, risks for growth. so how much downside risk for growth is there in the united states if these tariffs actually happen? >> what matters is how long they're in place. if we get three days of tariffs hey, i'm not downgrading everything around the three. month mark is when you're going to start to see material downgrades to growth. but you know what? i'm more worried about the inflation side for the united states right now because we were already running too hot on inflation. >> there is. >> room on growth. we had 2% growth for 2025. hey, if we get down to 1.5, it's not going to break anything but 3% inflation or higher. that puts the fed in a real difficult situation, especially with the unemployment rate. wrong. watch the inflation side here, not the growth side. >> you know what we've been what we've been talking about and what the narrative that's going around. and you can dodge this question on it. don't worry okay. is there a part of any just, you know, quiet little part of you that thinks scott

besson's smart guy, howard lutnick is extremely smart guy? like, they know i think what they're doing, they're not amateurs at this game. is there any part of you that thinks that this is being done on purpose? try to force the fed's hands, slow things down. do it now. when you've just started your presidency? >> look, i mean, i think that that speaks to the idea of is there a there may not be a trump put maybe there is, but is there a fed put and is that strike strike price a little bit higher. >> so but just i want to jump in on my own self because a lot of our listeners and viewers may think selvin's finally lost it. he's finally gone insane. no, no, no. we talk about when you're a new ceo. yeah, you're a ceo of a company. you take over. you don't want new ceos often, do. they dump all the stuff out at the beginning of their term. right? they it's painful, it's ugly, it's stupid. but they get it all out of the way. so that down the road, that detritus. and i just there's a part of me that wonders is the white house doing the same thing? >> they very well could be.

it'll be really interesting. we've already seen expectations for fed cuts to move, move up. so now we're looking at possibly midyear potentially three this year i would i would defer to francis on this. but i think that as we're talking more more, more and more about stagflation, that obviously if you force the fed's hand that that brings the stagflation risk even higher and creates an additional risk of a policy error. >> so on that point, just i don't know if we can pull up the ten year tips in the back. france. i think it's ironic that the market is less worried about inflation. i mean, it's fallen from 230 to 190. that's a pretty big drop year to date. so they're showing less of an inflation concern. but your point is what if the fed goes well we got to be careful. you know they are so reluctant to take market signals that they may end up just saying look it's going to increase you know the pce by 4/10. and so we better we better hold pat. and that could be a real problem. that's a big issue. and that's why i think the sequencing of policy here is so important. we talked about vegetables versus dessert. well

this market was really focused on corporate tax cuts reflationary deregulation and all the positives that came with that. we're getting the difficult elements of this. first, we're talking about a fed put here with respect to the stock market. but the big focus from our view is there an element of looking for tariff revenue so that we can compensate and offset the extension of tax cuts? they're looking for some sort of. >> revenue in. >> order to allow us to be able to eat our dessert too. so for me, i'm looking less at is the stock market going to provide that fed put? and what is the bond market looking at with respect to the path of fiscal. and at the end of the day, we're more concerned that the ten year yield, the 30 year yield is going to end up acting as the brakes on this government and its policy versus the stock. >> well, you know, we had another rbc person here yesterday. her name is halima, a very wonderful woman who i'm sure you know. well, we have this chart and it's a chart i asked to make. and it's oil versus the ten year bond yield. oil appears to lead borrowing costs. oil goes up. borrowing costs go up. oil kind of is the bond market in a weird way. oil

is falling. it's at 65 and change. and that's the blue line. and then the orange line is the ten year treasury yield. it's rolling over. how much are you francis, watching things like commodities and the price of oil as, like a as like an inflation. >> tell brian you're going to make a chart for me along with my colleague helima croft, which is look at inflation expectations amongst consumers. they're almost always driven by gasoline. gasoline prices are down 8% in a year. my goodness, i don't think a lot of americans are worried about the price of energy right now. except last month, inflation expectations spiked and they spiked without an increase in gasoline prices. why is that? it's because inflation is creeping into the psyche of the consumer. without oil prices in play. that's something to watch very closely, because it's a break in the way that we think about those relationships. an area to watch? absolutely. >> adam lives in la. i mean, so gas is now under six bucks a gallon, i think. i mean, what are you going to do with all your extra money?

>> well, i'll be buying maybe one more egg i can afford with it. yeah. thanks to this, this food inflation. right. yeah, but but it's so true. and as we think about where, where prices are heading, i was asked recently, where do we go from here? and much to francis's point, it depends how long this actually lasts. but i think back to 2018 when we were dealing with the tariffs the first time around and we saw a 10% correction. that was a very different environment in terms of valuations and a 22 times pe today versus 18 times then and inflation, which much different back then as well down at below 2% versus i think at core cpi has been above 3% for 46 straight months. so still very, very elevated. >> i know we have to go. but if you had to buy one thing, stocks or bonds right now. >> i'd still be putting money to work in equities. >> you would just more upside. >> look, we're long term investors at ep wealth advisors. and i think that when you get an opportunity like this, you're probably not going to hit the bottom. we expect this volatility to continue, but we'd be putting money to work. >> france. we have a new tariff boss. that's you. >> a new tariff boss. >> yeah. because not only are

you an economist, but you're a canadian economist. so you were the fired up canadian whom i referred to earlier. >> i am a proud canadian, but it doesn't matter what your passport color is, the information is in the data, and the data tells us this is going to be a. >> tricky time. but what are your family and friends saying privately to you about the potential for tariffs? >> the same thing that anyone understands trade, which is that canada and the united states are incredibly well linked together. a trade war benefits nobody, especially in the next 2 to 3 years. and something i feel passionately about us. exceptionalism is real. the upside for the united states is massive. canadians can help us achieve its bolder mandate. that is something that all canadians agree with and we'd like to help. >> next. premier of quebec right there. >> i mean, that was a stump speech. yeah. thank you both. really appreciate it. francis donald and adam phillips. >> all right. so coming up last night, the president said he wants to quote, take back the panama canal. what exactly does that mean? we're talking about

that tariffs and more with insider mick mulvaney coming up. >> assured guarantees bond insurance was protecting investors in municipal green bonds before they were even called green. called green. >> bonds - [narrator] this is my coffee shop. we just moved into a bigger space, brought on another employee, and ordered new branded gear for the team. it was so easy. i just chose my products, added our logo, and placed my order. bring your own team together with custom gear. get started today at customink.com. >> center of every decision. >> our business is built. >> around being responsive to our client's ever changing. >> needs as an advisor. >> as there are a custody services provider, i see my. >> client's success. >> as my own. >> because when they grow.

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powering five years of savings. powering possibilities. comcast business. sale and make your dream office a reality. >> all right. welcome back, president trump addressing congress in his address last night. it was long. it was powerful at points. it was mocked by some democrats with paddles for some reason. but it also did touch on a number of topics critical to you the cnbc viewer and listener. things like tariffs and inflation. even talk about taking back the panama canal. joining us now to talk about it all, active consulting co-chair and donald trump's former chief of staff mick mulvaney. mick great to great to see you on power lunch. from a cnbc perspective, inflation, tariffs, economy etc. what was the 1 or 2 main takeaways from mick mulvaney last night? >> it wasn't the panama canal. >> it wasn't even ukraine. it was. >> it was the tariffs.

>> and i. >> think what you're going. >> to see. >> now. >> brian. >> is what i call sort of a strategic ambiguity. on tariffs. there's going to be a group of. >> tariffs that are. relatively stable. >> those are going to be tariffs to protect american domestic industries. there's going to be a group of tariffs that are relatively stable. those are the ones that are going to sort of rein in china. and then there's going to be another group of tariffs. and it's what you're talking about earlier in the show that i think is where the strategic ambiguity comes in. and it's going to be chaotic anytime for the next four years, that donald trump gets an answer from a foreign nation that he doesn't like on whatever the topic is, you are going to hear about tariffs on that particular nation, and it's just the sort of the uncertainty that the markets are going to have to deal with. so i did notice, by the way, that if you watch the interaction between the president and his party last night, my party, the republican party, the enthusiasm for the tariffs was not nearly as as broad on the floor of the house last night, as it was for some of the other things. a lot of those men and women on that floor have to run for reelection in about 18 months, and they

don't like the impact that tariffs are going to have on prices in the short term. so tariffs will continue to be a focus i don't think that's going away anytime soon. >> that's interesting i didn't catch that in listening mick it's kelly here. so i appreciate you making that point. we were talking to gottheimer, congressman gottheimer last hour. he said a lot of what he's hearing from constituents is cost of living, cost of living, cost of living. and concern about cuts, cuts to the va, cuts to different programs that might be directly or indirectly funded by the government. what do you say, sort of from your point of view about those concerns? >> yeah, the cost of living stuff is real. keep in mind, i have full faith in what the trump team is doing writ large as as a package is going to have downward pressure on prices, just like it did in the first term. look, we were running huge deficits, we had no unemployment and we had tariffs in the first term, but inflation was under control. that's because the other things the trump team has is going to put into place over the course of this first term, will have a downward pressure on price. i'm thinking specifically about deregulation, which still doesn't get enough attention

even on this network. but that being said, tariffs are going first and they are immediate. it takes a while for the deregulatory agenda to flow through to prices. tariffs will have an immediate impact on prices. in fact, as you just pointed out in the previous segment, some prices are going up in anticipation of the tariffs. so cost of living is real. look, people say they care about spending. they don't. they might care about cuts to government government programs. they don't. they care about their own pocketbooks. and if prices are still. >> up, isn't that the weird thing? because this president ran on killing inflation? i mean, i did road trip to erie and to not fancy places. i actually talked to gasp real voters and they all talked about the twin eyes, as i call them, immigration and inflation. all right. so let's focus on inflation. we have a president who said i'm going to you know, if you elect me i will crush inflation. fine. but now we've got tariffs, which as we just heard from a leading economist are inflationary. where's the

what am i what are we missing here. >> yeah. you're missing the other half of the equation. you're looking at it as a as an all other things being equal, if you simply raise tariffs and don't do anything else, prices are going to go up at least in the short term. but you're not talking about the dereg agenda. you're not talking about energy prices. you're not talking about he did get, you know, huge response last night on drill, baby drill. all the republicans are lined up behind that. i expect to see some decent legislation maybe on that even. and that's a rare thing in washington, d.c. these days. but it's writ large. it's the it's the agenda that i think will have a downward impact on prices over the long term. the issue is a lot of those men and women on the floor last night don't get elected in the long term. over the long term. they get elected in about 18 months. >> yeah. there's also a bill to pass with a very slim majority and a lot of costs associated with it. a big wish list. >> sure. and the taxes look there's a lot to be done. the taxes are probably the legislative agenda. my guess is not much is going to get done legislatively. maybe there's an energy bill. but really what you're going to focus on is the

tax bill. that's where all the emphasis is from the trump administration. these are the trump tax cuts, and he wants them to be extended. i expect them to be extended in some fashion. i expect them to be to k ey're going to be abledon't to find the spending reductions you're already seeing on capitol hill. the pushback on a case by case basis against what doge is doing. why is that? everybody loves spending at every program that is in a spending bill has somebody who absolutely loves it. and if elon musk and doge and omb go after it, it's going to upset somebody. and sometimes those are republicans. so i expect the spending to continue. i do expect the tax bill to pass. and if i got a concern long term on the on the impact on inflation, it's from it's from spending much more so than it is from tariffs. >> i'm going back to the panama canal okay. and don't give me that. don't look don't this is real. >> can you see this i'm sorry i see i can't see you. you can see me. that's not fair. but go

ahead. >> i well, i look exactly the same. just younger and handsomer than i, than i looked a couple of months ago. make the president. we're going to play a sound bite. the president said this about the panama canal last night. >> to further enhance our national security, my administration will be reclaiming the panama canal, and we've already started doing it. just today, a large american company announced they are buying both ports around the panama canal and lots of other things having to do with the panama canal and a couple of other canals. the panama canal was built by americans for americans, not for others, but others could use it. >> what is that? he then he went on to say, we're going to take back the panama canal. listen, i'm not making a joke here. the panama canal is one of the most important commerce transit points in the world, along with the other canal's route and the delaware canal, apparently.

mick, what was your take on? what does that mean? take back the panama canal? >> yeah, i remember the reclaiming thing. the part you just played. i don't remember the take back. so i apologize. >> to take back the panama canal. >> i believe you. what i'm saying is that i'd have to hear it because. and here's why. i know when donald trump is speaking off of the off the teleprompter and when he is ad libbing, what you've just heard about reclaiming was off the teleprompter. and so that's the that's sort of the official policy. i can't tell if take back was also teleprompter if that was ad libbed. but look, step back for a second. i don't think anybody would deny the fact that the panama canal is of strategic importance to the united states. does that mean we're going to send troops down to panama to invade the country and physically take control of the canal again? no, i think you're going to continue to see what you saw when marco rubio went down there a couple of weeks ago, which is to try and figure out a way to reestablish the close connection between us and panama to circumvent china, who has been trying to get a toehold in that part of the

world. so we sort of extend or renew in a 21st century way, the monroe doctrine, which is the stuff that's here, the stuff that's close to us. we're going to be a lot more involved with than we have been in the last couple of years. i do not think we're sending troops down to panama any time soon. >> all right. >> what do. >> you think? i don't know, take back the. what does that mean? take back the panama canal. >> i like his point about. was it prompt or not? go ahead. >> let me be. well, let me be more serious. if an american company buys the canal, does that? is that taking it back? i think i think that's probably yes. i mean, that's that's that's not the same as having the military do it. but if it's controlled by american interests, or at least folks who are more aligned with us and they're aligned with china, doesn't that sort of reclaim it? doesn't that take it back? i think you're i think you're focusing too much on the on the actual verbiage as opposed to the concept, which is that we want to be more involved with the canal and we want china out. >> and it looks like it's heading that way one way or the other. very interesting nick, thanks. really appreciate it today. thanks. great to see you.

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>> all right. welcome back. i do not know how to say let's talk about germany in german, but if i did, this is where i would put it. because the german stock market and other parts of europe, they are soaring now. germany, if you're not paying attention close to agreeing to a massive new stimus program, about $500 billion in germany based on gdp ratios, that would be about, i don't know, $2 trillion of stimulus here in the united states. and that expected stimulus making an already hot stock market even hotter. the german dax index is up 16% this year. so to the stock markets of austria and poland, france and spain, their stock markets not far behind. in fact, on some measures, we're showing them to you right now. they're actually doing better than germany. now, i wrote about this two years ago in part of my prediction, saying a combination of sky high energy costs and a weak economy would

lead to likely stimulus in europe. but even in my wildest dreams, again, however, you say that in german, $500 billion not approved yet is a lot of money. >> yes. so transformative people think this has legs for the stocks that involve they can keep going. there's still a lot of reforms that need to happen for the european economy. overall. draghi has been very eloquent on this issue. so here we are, a place where very few, myself included, foresaw. a few months ago. we all saw the charts, though, about u.s. exceptionalism, about what percentage america was of the global stock market. and, you know, a line can't go straight up to 100. so this is a big reset that's happening. emerging markets doing pretty well lately. also coming up, a doctor's hippocratic oath saying do no harm. but what about the ceo that owns the hospital or the drugmaker? a hot take from mizuho's jared holt about that next.

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watch golf from the best seat in the house with xfinity. from the tee to the green, catch every pivotal moment of the players championship in crystal clear enhanced 4k. find tee times, tour your favorite holes and see live leaderboards and scorecards. and with xfinity multiview, never miss a moment. watch up to 4 live events at once. brought to you by comcast business, proud partner of the players. just say “the players championship” into your xfinity voice remote. a smart? >> find an advisor@smartasset.com. >> welcome back to power lunch. i'm kate rooney with your cnbc news update. the united states and israel have rejected an egyptian led plan for rebuilding gaza that was approved yesterday at an arab emergency summit. it

called for the rebuilding of that territory without displacing palestinians. that plan, in stark contrast to president trump's proposal to transform gaza into the so-called riviera of the middle east, a national security spokesman says the egypt plan doesn't address the reality that gaza is currently uninhabitable. and in los angeles, los angeles county and the city of pasadena both filing lawsuits today against southern california edison alleging the utility's equipment sparked that deadly eaton fire back in january. company officials haven't commented on those lawsuits, but did say last month they were still investigating the possible causes. and the vatican updated the pope's condition today, saying he remains stable and hasn't had any new breathing problems, and spent the day seated in an arm chair and resumed some of his work activity. the 88 year old pontiff has been in the hospital for weeks battling double pneumonia. guys. brian, back

over to you. >> all right. best wishes. tim. kate. thank you. all right, so folks, we've got a big biotech deal. chimerix is being bought by jazz pharmaceuticals for about $1 billion. chimerix shares are up 77% right now. a good day today, but it's far from all wine and roses if you go back ten years. look at that chart. chimerix has crushed investors, losing about 80% of its total value. it's just one example of how hard it can be to make money in biotech stocks. they may seem cheap, but if a drug trial fails, the company can sometimes fail right along with it. so are there any safe or good places to put your money in biotech with us? jared holmes. he is a healthcare strategist with mizuho. some of the best research notes on wall street. jared, thanks for joining us. i mean, your notes, your fire bomb, i love it. you wrote this. you said, why don't we do this? count all the number of and i'm reading. count all

the number of biotech stocks with enterprise values below zero. combine them all, then dissolve them. give shareholders back a ton of cash. billions. maybe. keep all around. keep around a couple for fun. the ones with the clever tickers. what? what point were you trying to make to investors with that? well, great. >> to see you. >> first of all. >> thanks for having me. >> yeah. >> i mean, when you look. >> at the. >> denominator of biotech. >> stocks in the public. >> market, we're we're kind. >> of like. >> in. the 700 to. >> 800 range, given that we're depending on the day, there. >> are, you know. >> a quarter of those almost have enterprise. values in negative territory. that basically means. >> that, you know, investors have kind of not only. >> investors, but the companies in some respects have have. exhausted options. >> and in. >> order for, you know, any value to be created. >> they're going to have. >> to either shift their focus, you know, come up with another. >> plan of attack, buy an. >> asset that they don't.

currently own. >> resuscitate the company. and so. >> in some respects. >> we're always. >> looking for, you know. some clear. pathway for biotech as a sector to perform better. but if a quarter of the index is filled with companies that have more cash than, than market. >> cap. >> i think we're in a tough place. so that's why i kind of suggested and obviously some is hyperbolic, of course, but let's get rid of a lot of the tail here. there's just there are too many assets out here. >> but it's so attractive to some investors or traders or gamblers, whatever you want to call them. jared. is it not because let's say there's a stock, it's, you know, it's at five bucks and somebody tells somebody who tells somebody, i think that company is going to cure cancer, right? it's five bucks a share and you're like, all right, you know what? if they if they do have a great drug trial result, the stock may go to 100, right? maybe it's the next amgen or whatever. but if it doesn't it could go to zero. it's a very tempting scenario sometimes. >> it's incredibly, incredibly

tempting. you know, there are there are thousands of investors that are, you know, putting their careers on the line every day to try to figure this stuff out. it is i would. kind of characterize biotech as one of the only sectors in all of equities where single stock picking is pretty much the only way to make money. i mean, i've been covering the space for a while. over the past decade. the index is barely up. i mean, it's essentially flat. meanwhile, every other index that i can find has doubled or more. so there's an obvious issue with the broader complex. but like you alluded to, if you find the right asset, you can kill it. >> so jared, just back up here. we're at an ironic juncture. we have investors who are back in love with health care stocks for like the steadiness and some of the dividends and kind of unclear economic period of time. biotechs, no one wants to kind of go out on the risk curve there right now. okay. so these companies are still trying to hope, you know, that they find

the diamond in the rough. but the big takeaway from you is don't own the broad index. don't look for a big kind of turn and catalyst point here. are there any names you want to leave us with that you do feel more confident about? >> well i think you're right. i mean, so much of the of the moves this year are, in my opinion, or, you know, sense of the market, you know, rotational with tech selling off and the market looking for defensive assets. and so you've got many names in the pharma complex up 15 to 20%. biotech has not followed suit. i think there are some attractive opportunities. i think m&a is a big driver of single stock selection. and then you've got to kind of look at, you know, the catalyst pathway. so i think when you look at, you know, the ins and the blueprints, these are assets that these are assets that i think the street is looking for in exit by large cap pharma. and then we're we're dealing with a bunch of, you know, catalysts

that have data readouts over the next couple of months. i think you've got to kind of place a bet here and there. but m&a for single stock selection and then otherwise catalyst that's the way to make money here. >> yeah. no it reminds me of the shale boom right. it was it was great for consumers. it was terrible for investors. and you kind of would you say it's largely because vcs have have propped up these business models? >> i think that's the perfect analogy. i've used it before, kelly. so i think that's spot on. a lot of the companies that are publicly traded are still science projects. at the end of the day, they're not proven out. i would, you know, if i'm a company and i'm looking to create value, i think staying private longer works. and yes, i think the vc, you know, the vc industry has propped up a lot of this for sure. >> all right. maybe next for the science fair. i'm looking for ideas. let's just turn to this space. jared, really appreciate it. thanks for your time. jared holt thank you. and if you ever miss an episode of power lunch, no problem. you can catch the podcast version anytime. just

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to buy or sell before he does it. >> get invested. join the club today. go to cnbc.com. join jim. >> welcome back to power lunch. stocks are higher across the board. dow is up 1.1% about 500 points. now as autos from canada and mexico are getting a month long delay on tariffs. and meanwhile in the bond market we're seeing a wide range of yield moves. the german bond market making all of the headlines. yields soaring there on some major headlines. and a wild day. let's bring in rick santelli with the latest from chicago rick. >> you know let's start out with the us. we had a major reversal in rates in the us. consider we're at 3.99 now on a two year unchanged. you know what it's low yield was 389 and a ten year. right now we're at 426 up one on the day. excuse me up about. yeah about a half basis point one basis point. but the

point is the low yield was 418. so whether it was data or the german stimulus, remember on the data side, other than adp, the ism's were strong. the pmis they were all great. we saw very solid, durable goods, very solid factory orders. and back to the german scenario. remember this is debt funded stimulus. hundreds of billions of dollars potentially. constitution has to be amended to be able to do this. it's such a counterculture issue for the germans. they're usually fiscally very stubborn. and another point that is big that i talked about during the credit crisis globally, all stimulus is fungible. fungible, meaning whatever happens on the other side of the world, if it's a positive stimulus, it will have effects around the globe. of course, the major effect has been in germany. now let's go to the board, shall we? the german two year today was up 21 basis points to a yield of 224. that's

the highest closing yield since the end of january. now granted, it's just this year, but it's very important to pay attention to this because if you consider that the euro currency right now closed at a four month high. dollar index, by the way, the four month low, the dax was up 754 points. up 3.4% today alone. now let's continue to look at german rates. let's look at the german ten year shall we. they are now at the highest yield going back to the end of october of 23, 278 where they closed. that is up a whopping 30 basis points in, you know, at 30 basis points in our markets is big in the german market. it's absolutely huge. and from what i've been reading, that is the biggest jump in yields going back to the early 1990s. now finally, how did all that figure in to the spread? we love to look at spreads. so we look at german two year versus the ten

year. that spread today is at 55.5 basis points. that is the steepest. this yield curve has been going all the way back to the summer of 22. so we really need to pay attention to all these variables. now a couple of asterisks. none of this with the debt spending is done, but the framework is done. and the germans seem to be totally committed. of course. and we know they have a new government. and all of this, of course, is not only for security, but it's also for ukraine and their domestic economy. so we need to continue to look at rates, especially our neighbor's rates, and how much higher they could possibly go. brian, back to you. >> i believe it was the largest single day move in the german bond market since 1990. rick i was 19 years old. kelly was 14 years from being born. we're back right after this. >> i wish. >> the bond report is brought to >> the bond report is brought to you by pimco, at ameriprise financial we know our clients

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that's my secret to better odor control everywhere. >> welcome back. it's time for three stop lunch where we hit three different movers and what you should do with them. here with our trades is timothy chubb. he's cio at girard. timothy it's good to have you here. welcome aboard. we'll

start with citigroup today which is getting dragged down with the other big banks feeling the pressure from the president, the impact of the president's tariffs. of course, now it's rebounded to a 1% gain as the broader market has. do you buy it here on this dip this week. we're not not. >> quite yet. >> you know ultimately. >> we had a pretty nice run for citigroup. you know towards the end of last year really pricing in some of the expectations for the trump administration. >> as it. >> relates to deregulation. and although we think that will likely be. >> a pretty. >> strong. >> tailwind for. >> banks. >> not just in 2025, but moving. >> forward. >> citi really. >> is sort of. >> you know, maybe. >> the third, fourth, fifth. >> best bank. you know, we would look at and. >> they're going through a lot of issues. >> as relates to just, you know. streamlining efficiency within their business. >> i was a bit surprised about the. announcement with apollo. >> group in particular. >> ultimately on the private. >> credit side of things. and here, you know, we really think a. >> lot about. >> owning the. >> right asset class. >> and the right vehicle. and i

just wonder, you know, the ability for an etf to really be that right vehicle for a lot of investors for such an asset class. and if maybe citigroup or apollo or potentially appreciating or underappreciating some of the risks associated with that. so you know, overall they're. >> buying. >> back some stock. it's trading close to tangible book value. and i would expect, you know, those buybacks to prevent it from trading below tangible book value. but overall we're much more attracted. >> some. other areas. >> within the financials, especially those we're going to be a bit more exposed to. m&a activity evaluations continue to fall. >> right now. that's interesting. and i hadn't thought through. i didn't realize they were a part of that private credit launch. so that's a sell for you. what about crowdstrike? that one of course had weaker than expected earnings guidance, continued pressure from that outage last july. and the shares are now down about 7%. >> yeah. it was one of those good quarters. i mean ultimately eps and revenue beat. you know subscription revenue are you know being ahead of expectations. i thought the guide was was pretty strong. but with a name that's gone up as much as it's has, you know,

coming out of the news last july and ultimately recovering quite a bit from the cyber outage, really. you know, it's a wonderful business with a lot of stability with that subscription model, but really one that doesn't have that attractive of a valuation. and so i think when you look at some of the other names within the space, such as a fortinet, ultimately there are more well rounded platform. and not just, you know, endpoint detection and ultimately will benefit, i think, from, you know, potentially seeing enterprises, you know, shift spending here as potentially streamline things a little bit further. so just a tough valuation. >> looking at maybe a fortinet over a crowdstrike for this play. so then let's move along to uber which is our last name. it's offering customers an austin driverless rides through that waymo partnership. the shares are up 2%. it's been a choppy year for them. what do you do. >> yeah it's one night i really like uber's one of our highest conviction names right now. and you know here we're investors not traders. and so we're constantly thinking about, you know, how does the core business ultimately enhance the moat or

the reinvestment runway for the business? and i think uber is a perfect example where the fundamentals of the core business are doing extremely well. they have this two sided network which is really creating these flywheel effects where more drivers, more riders, more drivers, better pricing, more better pricing, more riders. and, you know, flywheel effect takes, takes hold. but i think the market is still really underappreciating just how much more activity they're having with their users on the platform as compared to a lyft, for example, and with how much free cash flow they're generating. it's trading like 15 times our estimates for 2026. we think it's going to be a company that, you know, certainly gets over 100 in the near term. uber at some point in the next year or so. >> uber i was going to say is a buy maybe a table pounding buy if you think it's going to 100. timothy, thanks for your time. we appreciate it. timothy chubb. remember if you want more three stock lunch you can recap it anytime you want by scanning that qr code or heading over to cnbc.com. >> all right. in the meantime we

do have some breaking news that involves elon musk doge and federal spending cuts. emily wilkins what's going on. >> hey brian. so elon musk just got. >> done with about. >> two hour. >> meeting with republican senators. and one of their main messages. >> to. >> him is. >> that while they appreciate everything he. >> is doing with cutting a. >> waste and spending in the us. government that the senators will need, congress will. >> need to go ahead and. >> sign off on. >> those spending cuts. >> and they discussed a process actually known as rescission, where the white house basically sends the congress a request and says, hey, we want you to claw back this funding. and then the senate and the house would have 45 days to go ahead and either approve or deny the white house request. so that was something that was discussed. it seems like a lot of senators are on board with this. senator lindsey graham told me as he was coming out of the room, that there's momentum right. >> now and that congress needs to capitalize. >> on it. and he said that elon musk was on board as well. it's been very interesting seeing, of

course, the cuts that doge has been bringing about and wondering. >> exactly what. >> congress's role here. obviously, they are the ones, constitutionally who have the power of the purse. and it looks like now senators are stepping up and saying, hey, all these cuts are fine, but they're not finalized until we vote on them. and then, of course, it is a question. once senators actually have to vote on eliminating some of these programs, what are actually going to be the lines to do? so are there going to be some republicans who are hesitant to eliminate certain programs that musk has? >> once again, the executive branch learns the hard way that congress controls the power of the purse, and they will remind anybody who gets their way that they, not the president, is the one in charge of spending. emily wilkins at the white house. emily, thank you very much. >> interestingly enough, this also comes as the trump administration has been ordered to reinstate thousands of fired usda workers. and on a day when the supreme court, with that scathing dissent by alito, has told them that they have to move forward with the funding for us aid. >> it's amazing when you've got all this sort of sturm und drang, more german about all

these cuts. it comes back to congress and the court. it's amazing what people might have thought about with the division of powers. thank you founders. they were pretty smart guys. >> and look at the markets, by the way, saying thank you for the delay in auto tariffs. dow's up 507. thank you for watching power lunch. >> closing bell starts right now. >> all right guys thanks so much. welcome to closing bell i'm scott wapner live from post nine here at the new york stock exchange. this make or break hour begins with a nice bounce for stocks clearly being driven still by tariff headlines. it's made for more volatility yet again today. let's show you the scorecard here with 60 to go in regulation. the major averages started moving a little bit higher midday on a headline that president trump spoke to canada's prime minister trudeau today that raise hopes of some sort of compromise, perhaps in this trade dispute. another report suggesting tariffs on autos might be pushed, which sent shares of general motors and ford higher. and there's your look there. and that is where they remain. w