>> netflix. the first to turn way to oversold has nothing to do with tariffs. >> weiss matter. i'm not really in the mood to buy any stocks, but market will bounce this one. >> i like farmer jim. >> vertex pharmaceuticals. >> all right joey. >> interactive brokers. >> all right guys i'll see you at the closing bell. 3:00 the exchanges now. >> thank you, scott, and welcome. >> to. >> the exchange. >> i'm kelly evans and so much for hopes of a rebound. >> from yesterday's. >> steep sell off. >> new tariff drama is sending stocks lower. >> to pretty. >> much session lows right now. >> we'll have the. >> details in a moment. dow's down. >> 6.34 plus. >> terrible small business data. our fund manager says he's going shopping for big tech names. but and this could be a problem. he says there still aren't as many bargains out there as he'd like. now it's also been a whipsaw day for yields, with the ten year swinging 11 basis points falling after that. decent read on job openings, but then surging on trump's threat to double tariffs on canadian steel and aluminum.

ross michael darda says to seek safety in defensive value, plus warnings from corporate america about the consumer delta and american both cutting their first quarter forecast. delta ceo telling cnbc that both leisure and business customers have pulled back on bookings, while united ceo scott kirby warned of slowing demand and highlighted a slowdown in government travel. all of this has the airlines down sharply again today for delta 8.5%. but let's start with the terrible small business data i mentioned. it was the outlook in particular. i believe steve liesman is here with the results from the nfib survey, and we should set the scene here, steve, by saying this survey was incredibly bullish about trump's election and one of the almost outliers amid that initial bump, the first. >> time we're going to have a chart that shows you exactly right about that. let me show you that in the details. nfib small business survey falling for a second straight month while maintaining some of its post-election gains, as kelly suggests. but uncertainty remains near an all time high. let's show you the numbers. national federation of

independent business optimism index falling to 100 from a post-election high of 105. it's hovering right around its long term average is down like a lot of other sentiment indicators, but not a recessionary level. as you can see, that big bump up that came with the election. now two months off, you can see there to expectations in the survey. that's where the worrisome part was. net percent of those who expect the economy to improve minus ten. those expect sales to go higher minus six. good time to expand minus five and increasing employment. net minus three. and there's the nfib's uncertainty index at its second highest level ever, higher than at any time in the first trump administration. yesterday, kevin hassett, the president's top economic advisor, on squawk box, referring to a paper that he wrote in 2016 that found a higher probability of a recession in the first year of an administration paper, found that from 1946 to 2016, 46% of all recessions happened within 12 months of the presidential election. that compares with a normal expectation or

distribution of just 25%. part of the reason could be the uncertainty around elections and policy. that is, in his own words, more extreme than markets expect. but we have moved now from uncertainty over policy, kelly to i think the markets think certainty of bad policy. >> well, that's why i wanted to play up the nfib angle here. i mean this survey. >> was so people. >> are big supporters. >> of the. >> exactly, exactly. and so if you're watching like tay they have to pass on capitol hill, you know, this package that will get us through the shutdown. then they've got the big budget bill. so you have to watch for these areas where you could see some fragmenting. stay right there, steve. our next guest has been warning the markets are overvalued and says tariffs are a suicide mission that will destroy both labor and equity markets. delightful. michael darda is chief economist and macro strategist at roth capital partners. mike, not usually one for big, bold statements like that. so i take it you feel pretty strongly. >> thanks for. >> having. >> me on, kelly. well, listen, i think if we're using the mckinley tariff period or the smoot hawley period to model

economic policy, that is definitely a suicide mission. if you look back to the 1890 to 94 period that spans the mckinley tariff, the labor market failed, with the unemployment rate going from 4 to 18%. we had two stock market pullbacks. one was a correction, one was a 30% bear market. i don't have to go through the history of the 1930s for you, but the smoot-hawley tariff, which started to make its way through congress in 1929 and was signed in 1930, was obviously associated with an economic catastrophe that we refer to as the great depression. smoot-hawley were both run out of office in 1933. forced to recede an embarrassment into private life. >> so, mike, let me just pose the question. i remember, you know, sort of coming onto the beat 20 years ago. one of the things economists always talked about was that the us economy was out of whack. it was 70%, maybe 60, 70% consumer spending.

you know, a lot of this was because we over relied on cheap chinese imports, for instance. manufacturing was too small and so on and so forth. 20 years later, would we still describe these problems as existing and this policy as potentially fixing them or. no. >> you know, you have to ask yourself what the mission is here. and we've heard, you know, different goals. and it's been a very chaotic period in terms of what the end game is. but if we're talking about trade deficits or more broadly, the current account deficit, you know, that really has more to do with the balance between total savings and how much we're spending and investing. i am very skeptical that tariffs are going to be a quote unquote solution to that, unless it's part of a much broader program to reform entitlements and taxes. and we'll have to see about that. hope springs

eternal. but, you know, i don't think we're looking at anything breathtaking there. >> what you said and, steve, maybe you saw the headline or the piece in the journal as well by greg jensen of bridgewater. he said the trade war will pound stocks and high asset prices require a large u.s. capital surplus. we don't have that. and so you kind of everyone's trying to add this up to say the math doesn't make sense here, to have all of these things happening at the same time. >> i'm going to say this at risk of my job, kelly. but what president trump is doing is insane. it is absolutely insane. it is about the eighth reason we've had for the tariffs. and now he's saying he's putting 50% tariffs on canada unless they agree to become the 51st state. that is insane. there is. just no other way of describing it. and the trouble, kelly is that it shows there are no bounds around president trump. this is very different from the first administration, where there were people around him who seemed to, i don't know what the word is, but smooth over some of the edges now. and the other thing that's not talked about kelly, is what's going on within the

administration in terms of how they're treating the constitution and laws. i think all of that is bad for the attraction of capital. and the gentleman from bridgewater is 100% right. we need massive amounts of capital if we want to have fund our deficits, pay for the things we want to pay for, sell our bonds and have high stock prices. and it seems as if this administration is doing everything it can to chase foreign capital away. >> well, and we could go into the strategy of the insanity as a strategy in terms of our trading. >> insanity is not a strategy. i'm sorry. i'm with you, kelly, and trying to look for silver linings. i'm a sunny person. >> linings tactics. >> some some well, some explanation for this other than insanity. i'm ready to accept it if you can come up with one. >> and meaning in the meantime, mike, if we if we put aside whatever the strategy may or may not be and just simply take it as, what is the math going to add up to for stocks and for the economy the rest of the year? where do you think this leaves us? >> well, i think the math adds up in this way. kelly. we came

into this year with a very rare soft landing that the fed was able to pull off, in part because the supply side of the u.s. economy rebounded after 2022, with productivity growth picking up from essentially zero a little below zero for two rformance. it really helped the fed to engineer this period of disinflation without a recession. and the ai boom that's been going on has driven stock valuations into the stratosphere. there was probably some kind of reckoning coming one way or the other when equity value, equity market valuations get this high. but you know, what we're doing here is purposely throwing sand in the gears. and you know this is a risk to the soft landing story. supply side shocks that are now headwinds instead of tailwinds are going to make the fed's job more difficult not easier. so this is a reversal from that tailwind over the course of the last two years i don't see why you would run that risk. i guess the thinking is let's take the

pain now for a payoff later on. but i think the stock market is telling you it's pain now because there's going to be pain later on. >> do you see what are the fed futures saying at this point. because there's sort of two questions. there. is the trump put there. will he at some point react. is the fed put there. and will they at some point react? >> i was just on the phone with my producer betsy. we were trying to create something because i want to show you something special, something interesting here, which is if you look at may, it's at 46%. then it jumps to june being 90% for that first cut. why the gap? i think the gap exists because the market believes that the fed has to see the initial round of numbers from tariffs come into the system, and then hopefully by june, it can discern that there is not going to be a wider inflation threat. so you don't put the cut into may because you have to see those tariff numbers pass through. i don't know if we have further numbers, but i can show you the second cut looks like it's july at 63% probability. and then you get to

october 63rd, december 70th 3% for the for the third cut. so there's three cuts built in this year. but i think they're contingent upon the idea of those tariffs. they come in and pass through the system as just a one time rise in prices. >> that the slowdown is really i mean, three cuts is a big change. >> and three cuts of big change. and i think you also probably have to see at least some measurable weakness in either jobs or in the gdp numbers. not what we're seeing now in atlanta fed, because that's all driven by artificial trade stuff. >> and gold imports. >> which there's no i want to be clear about something right now, which is there is not recession is not in the hard numbers, okay. it's in the soft numbers. and the fear right now is that what's happening with tariffs and what's happening with sentiment will come into the hard numbers. but there is no inevitability of a recession at this moment. >> and that mike, i. >> think it gets to mike's point. >> you don't have a recession in your forecast, do you? >> it's not the base case, but i

think the risks are obviously rising with these policy shocks. and look, we're talking about the fed and the timing of cuts. you know, is the fed going to get super lucky again with the timing being just right and the cuts being sufficient to preserve the business cycle. and you know, certainly i think we all hope so. but we're taking a big risk here. and in terms of the hard data, you know steve's exactly right. there's no recession in the hard data at this point. but i will submit, you know, that tracking estimates for private sector final sales for the first quarter are below 1%. now. now, maybe that could change because, you know, we don't have a full set of data. but if nominally we're running the private sector final sales around three or just above three, and the fed funds rate is at 4.33, you know, you could make the argument here that, you know, that the fed might be falling a bit behind the curve again. so, you know, we'll see. i think you can't you can't discount the risk that a

recession could occur even if it's not the base case. >> all right gentlemen, thank you. appreciate it michael darda steve liesman joining us on tariffs. let's get the details of what trump's latest announcement was on truth social today where in response to ontario's electricity tariffs, he says the u.s. will double tariffs on steel and aluminum from canada to 50% starting tomorrow. now, the white house poured a little cold water on that, a senior administration official told cnbc shortly after that post that nothing has been signed. trump wanted to lay down the gantlet, quote unquote. let's get some reaction from the front lines. barry zekelman is ceo of zekelman industries, one of the largest independent steel pipe and tube manufacturers in north america, with one plant in canada, 22 here in the us. barry, what do you make of it? >> yeah. >> it's an unfortunate situation we're in. i mean, 50%. would be absolutely devastating. you know i think that cooler heads need to prevail here. i think that both countries need to sit down and talk about what's really important to each other. you know, one of the problems here

is that we're so integrated. i mean, it would kill the steel industry in canada, which buys all of its iron ore from the united states and us mines. so you're talking. >> about 10 million. >> plus tons of iron ore. so it goes back and forth across the border. i think that we don't have a voice in canada. we don't have one central negotiating team. i mean, you've got premiers from each province. making their moves. and in this case, doug ford of ontario is trying to protect his ontario constituents and businesses and making a move that is affecting all of canada and companies there. and then we just got a new prime minister in place, and there's probably going to be a snap election. and he has a different agenda. so we're kind of a rudderless ship right now. and that's unfortunate because i think if someone sits down with the trump administration and really gets after, what are the main issues that we need to deal with in our trade agreement and you massage them? i think we're going to be in good shape. i mean, donald trump himself, president trump has said he wants to restart the keystone

pipeline, which is 800,000 barrels of oil a day from canada. so obviously he wants to trade with canada with the right, you know, parameters in place. so let's all calm down. let's cool down and let's actually sit down and make things happen. and i think canada and the us can be, you know, great, great trading partners for decades and decades to come. there's probably just some areas that need some work. >> barry, let me ask you then, because what you said was this would destroy canada's steel industry. if i heard you correctly, would this be good or bad for your business in the very near term, or even in the long term? >> it would be absolutely brutal. i mean, it would be terrible for our business in canada, some of which we ship to the u.s. it would also devastate a lot of companies in canada that are using our product within canada. but, you know, the trump administration is trying to send a message back to, hey, let's not, you know, let's not throw arrows out here. let's sit down and talk about it. i mean, they gave a little reprieve when he said, look, we're going to exclude autos.

we're going to push back these duties until april. president trump is sending out an olive branch to canada in a way, saying, let's sit down and work this out, but don't go off. you know, half crazy and cut off our electricity and things like that. it's an unfortunate and delicate situation that we're in. but it would be very, very tough on our company. >> but so you have one plant in canada in 22 in the us. is that right? so i take your point that it would devastate the canadian aspect of this, but what would it do for the us business in the medium to long term? would there be a benefit? would that activity just talk us through the possible upsides? if you see any, or the downsides if you think those are more likely. >> yeah. so for one, for my 22 plants in the us, they don't all produce the same thing. so it's not like for like very different. and the imports of my product that we're talking about from canada into the us are relatively small. so i mean it would affect the us market a bit. we would absorb some of that in our us plants. but the bigger problem is if you drive up the price too much in the us

and we don't address other goods, we're actually in a worse position. so in other words, there are already countries that are paying 25% duties on on steel coming into the us, steel pipe in particular vietnam, taiwan, oman, the uae, those duties aren't going up and our steel prices are rising in the us, which they should. i think they were at too low of a level, but i'm competing against product that is being, you know, laundered through other countries, chinese product, indian product, russian product, iranian product brought into our countries. and those duties aren't going up. so i'm actually in a bit of a disadvantage until we actually address those those products, raise duties on that or block them out with quotas and or put, you know, higher duties on that and derivative products. so we've got it's an all encompassing, you know play here. but it's walking a tightrope. >> i remember you saying that when we spoke last time, that

there really needs to be almost a broader impact to benefit your industry instead of hampering it. barry, thanks again for joining us to react today. good to see you. >> my pleasure. i hope we can get an agreement here before before midnight, or else it's going to be a big problem. >> well, we've got some comments from the prime minister of canada, barry. thanks. barry zekelman, the prime minister designate. carney, i should say, who has just said my government will keep tariffs until americans show us respect and make credible, reliable commitments to free and fair trade. he also said president trump's latest tariffs are an attack on canadian workers, families and businesses, so no signs yet of any de-escalation there. and remember, this was ontario's premier, doug ford, who kind of kicked this whole thing off. now we're hearing from the prime minister designate who's not necessarily backing down or pushing forward out on a limb there. and you can see the market response. the dow's down 6.41. it's right around session lows down a percent and a half. the s&p is down 1%. the nasdaq a little less than that 1500 points lower between yesterday and today. my next guest reduces equity exposure by about 10% this week. doug ramsey is now here with me.

he's the chief investment officer of the fold group. and it's good to see you. good to see you. so walk us through the playbook the strategy. what do you do with all of this swirling about? >> well. >> i listen to michael's. comments about the tariff threat. >> i think it's the timing of the tariffs. with the economy already sort of fragile in terms of real personal income growth only growing about half the rate it was a year ago, 1.8% was the january number versus 3.8 a year ago. nonfarm payroll employment is at what we call a stall speed. it was strong employment report on the surface last week, but 1.3% year over year growth. we've never before slowed to that rate and not escaped a subsequent recession. and now, on top of the tariffs and the uncertainty they brought is this wealth effect. and we've been talking about this for quite a while. how we think very likely, the upswing in the market we saw in 2023 and 2024 prolonged the economic expansion. and now our

fear is that, you know, a shallower correction than normal might actually trigger the downturn. there's a great line. this was from george soros years ago. he said financial markets have a very safe way of predicting the future. they cause it. and i just thought that was a wonderful summary of this interrelationship between markets and the economy. so now, just in terms of the size of the economy relative to the stock market, we peaked just three weeks ago. hard to believe the stock market was a little over two times gdp 205%. wow. this roughly 10% correction now that we've had is therefore more than 20% of gdp in terms of wealth. and we've had full blown bear markets that didn't take down wealth. again, in relation to the economy that large. so i'm very concerned about this becoming a self-fulfilling prophecy. >> and that's why you guys trimmed exposure, because we've talked to other guests this week who have said, you know what we see? look at alphabet trading at 16 or 18 times earnings, or nvidia down to 20 times. you know, they're seeing areas of

opportunity to kind of pounce. but it sounds like you're moving into more of a cautious position. >> yeah. and those you know the big tech would not be where we would go. i mean i think the air is going to come out of those multiples in a big way over the next couple of years. whereas we've really and this is probably our strongest conviction as a rotation away from large cap growth and into traditional value sectors. i it's sort of underway, you know, on a day to day basis, you'll see it flip flop. >> but but you wouldn't say that google's a value stock right here. i mean at 1816 times they've got waymo i mean i know that's not a value story, but what would be a value stock that you would feel like is a slam dunk or an industry or a representative representative. >> slice, oddly enough. i mean, despite our concern about the economy, we have moved heavy in the financials really under, you know, potential deregulation under the new administration. it's certainly one of the few areas that might be tariff proof, right? i mean, am i going to argue they're going to hold up all that well during an economic downturn? no, but i

think it's the cheapest sector. it's we use a fair amount of relative strength with our disciplines, but we're almost 30% financials in our portfolios versus like 8 or 9%. yeah, that's a year ago. so part of this you know growth to value rotation. >> where else. just to give a couple of examples. >> we've been in the homebuilders and we've been in systems software. so you know a couple of areas that are battered. we're not completely out of out of the big tech names. but and then you know we've we've as you mentioned put on an increased hedge. and it's pretty rare that we do this. we've had we have our own short selling strategy in-house. the grizzly short selling strategy. that's quantitative. that's usually how we handle our portfolio hedging. but in view of the circumstances surrounding the big tech stocks, we have a small short position in q-q-q. >> that's really interesting. >> that's working now. and it's not often that we, you know, move beyond our home cooking. but we did that. yeah. just that's i think where the biggest downside risk.

>> here when people associate value with kind of steadiness, they don't think, well short. the q-q-q was right. but then i take your point about this market. quick last question. so when is it that you might look at either the technicals, like for instance, there are some signs that the nasdaq is way, you know, overextended to the downside or valuation. i mean, when would you start to say, you know, now it's the time to go ahead and increase that equity exposure again? >> well, with with that sort of work, we take it day by day. but i think investors have just become so conditioned to buying the dips. whereas there's an old saying that the first buy signal in a new bear market is actually a sell signal. so we would be looking i mean, depending on, you know, how any ensuing bounce takes place to probably take down exposure further. interesting. we'll have to see. but we'll see how again, people are focused on tariffs. but it's this wealth hit that i think is going to be pretty significant after having been so supportive. >> no, there. >> are a lot of 23 and 2024. >> a lot of long faces among my

acquaintances who had done quite well in the markets the last couple of years. doug, for now, thanks. really appreciate it. good to see you today, doug. thanks a lot. with the leuthold group coming up, every sector is in the red right now, but energy is still in the green. over the past week. up next, cheniere ceo jack fusco weighs in on tariffs, trade and demand. he is back after this with stocks right around session lows. stay with us. us. >> this is the exchange on it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! (vo) what does it mean to be rich? maybe rich is less about reaching a magic number...

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>> welcome back. sentiment has not been great in energy lately as oil prices slide under president trump. although we're seeing little tiny bit of a bounce today. natural gas meanwhile down a percent. speaking of which, let's head back out to ceraweek in houston and to my power lunch co-anchor brian sullivan, who has an exclusive interview with the ceo of the largest producer of lng in the u.s. and some big geopolitical topics, among other things to talk about. hi, brian. >> yeah, kelly, i think. there might be a. >> few. >> things going on with energy and metals, i'm told today. let's talk about it. >> all with, as you introduce them, jack fusco. he's the ceo of cheniere energy. >> ticker literally is lng. and they. >> are about. >> 11% of the world's global. >> lng supply. so call it 1 in 10 pieces of lng that is shipped around the world is one of yours. so jack, great to talk to you. tariffs are all the rage you guys use. i've been to your facilities in corpus christi. use a lot of metal. yes. how much, if at all, are tariffs on

energy and or metals going to impact cheniere. >> right now? brian, we. don't see a big impact for us personally. >> because on. >> our expansion projects both at corpus christi and now the new expansion that was announced last night by ferc, we've already pre ordered all the materials and materials are on site, and we'll start assembling the equipment here with american workers. so not a big impact on tariffs yet. it is a hot topic though for. our our customers. we have 36 long term customers. some of them are canadian. some of them are chinese. and you can imagine that's been the topic du jour for this conference. >> that's why it's so confusing. i mean, for me and i do this for a living. you, you not only not you, but the american industry uses a lot of natural gas from canada. yes, but also sells back into canada. so if we get these tariffs on energy, not metals, energy, gas, oil, what will happen? >> well you're seeing.

>> it right. there's a lot. of speculation right now. and in the forward curve for henry hub. you saw it yesterday. >> what does that mean in english. >> it means in april if you buy the prompt month for gas, it hit close to $5 in mmbtu here in america. because there's a lot of speculation around what the tariffs mean on energy in canada. >> so is it material? it's already seeing a price hike because of tariff speculation. >> we're seeing an illiquid price hike which is why it came back down today. so i think there's just a lot of confusion right now in the in the markets of which tariffs are going to stick. you know what tariffs are being used for negotiating. but at the end of the day it's not going to impact my business. yeah. >> so let's talk about that because you you deal. you have 36 customers all over the world as you said, japan china korea, canada, germany. we've talked about it. how many, if at all,

of your customers are coming up and saying, jack, are these tariffs going to potentially impact my supply? is my supply of gas at risk. because in my country, we need to keep the lights and the heat on? >> no. you know, for us, the product is it's contracted for 20 years. it's a take or pay contract. the price of nat gas in america is borne by the customer. that's an index price to us. so we're we're. for us, it's business as usual. so right now we currently process eight bcf of gas. >> billion cubic feet. >> billion cubic feet. almost all of it comes from america. from the. the five basins gets loaded up on to tankers and shipped out. and i'm very excited not only for our expansion that got processed by ferc, but also that we're about ready to launch our 4,000th tanker from america. >> having seen your facility, it

truly is remarkable what we can do. a lot of people didn't, and i say a lot. i mean, me too. didn't realize that natural gas, mostly the byproduct of oil drilling. so usually the sort of the oil and gas folks are kind of aligned here this year, a little different if we see the president push for maybe demand more oil drilling, is that a net benefit to the gas people, the engineers of the world,ecause there's just going to be more gas to use? >> oh, it's absolutely. so a lot. >> of our. >> gas right now is coming from the permian basin, which is traded sometimes in an in negative prices, because there's not enough infrastructure to take that gas away. so right. >> now literally burn it off. >> they burn it off, they flare it. that's the gas i want i don't want to flare anymore. bring it to me. let me process it. let me send it offshore. get it to our allies. get it to europe who's desperately in need of it. and you know, we'll make

america great again. >> yes. and we will talk about energy. the next tour of europe and their energy the next time. that's all the time we have today. jack, a real pleasure to chat with you again, kelly. i think that's really one of the main themes. and we'll talk about it. at the top of power lunch that we have here is sort of this, i don't want to say disconnect between oil and gas, but companies like cheniere and others will benefit if we drill for more oil, even if the price of oil goes down, because there'll be more gas and we won't have to burn it, which of course is just dumb. but it's also bad for the environment. we'll talk about all of this with the secretary of the interior. we had the secretary of energy yesterday, another cabinet member today, former north dakota governor and businessman doug burgum, will join us. 2:15 p.m. eastern time. first on cnbc. we'll see you at the top of the power lunch. kelly. >> really looking forward to it. brian. thank you so much. brian sullivan at ceraweek. and coming up, intel is on track for a seven day losing streak. that's every trading day this month. and for those keeping track, it's also its worst stretch in two and a half years. we'll have

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>> i'm bertha. >> coombs with your cnbc news update. british police say a man has been. >> arrested on. >> suspicion of. gross negligence. manslaughter as they investigate the cause of yesterday's collision between a us. flagged oil tanker carrying jet fuel and a container ship, local police added. the 59 year old unnamed man has not been charged. another federal appeals court has blocked the trump administration's bid to pause a lower court's nationwide block on its birthright citizen executive order, while the appeals process proceeds. today's ruling from the court in massachusetts is now the third appeals court to rule against the president on that issue. and former democratic representative katie porter is running for governor of california. porter launched an unsuccessful bid for the senate last year. she joins a field that includes a number of prominent state lawmakers. but an even bigger name looms over the race. sources tell nbc

news former vice president kamala harris will decide whether to run by the end of the summer. and a quick research note i looked, and only one vice president did manage to have a second act as a governor, and that's harrison's vice president, levi morton. >> interesting. i had no idea harris might run for governor. that really is a news update. thank you. our bertha coombs this hour as we head to break, check out kohl's plunging 26% to its lowest level since 1996. after some disappointing guidance. it's been a tough run for kohl's lately, but also that's dragging the xrt etf to its lowest level in over a year. so the pain is beyond just that struggling name. we're back after this. >> is this your dream of retirement. how about this sweet deal. i like fishing or is this a little more your style? retiring wealth isn't a guarantee, it's a goal. it's easy when markets are going up. but what about when they're not?

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before anyone hears him talking to himself. [ dog whines ] buy u.s. stocks and etfs for as little as $1, with no commissions. talk about easier investing. >> that's my secret to better odor control everywhere. >> a cnbc exclusive. the ceo of ibm. the next wave of innovation. bold moves in ai and quantum computing. crucial insights for investors john fort is one on one closing bell overtime for eastern. >> cnbc welcome back. the nasdaq coming off its worst day in two and a half years, and now down more than 6% since election day. also almost in correction from the highs down about 10%. the mac seven is down 4% since election day. nvidia is down 23% since november, losing $1 trillion in market cap from its highs back on jan sixth. my next guest says while this pullback does present some buying opportunities, there aren't as many as he'd like. his etf is quality focused ticker ql. t they've got microsoft, apple,

alphabet, meta, and unitedhealth as their top five holdings have been outperforming so far this year, down only half a percent. let's bring in tom hancock. he's gmos us quality etf portfolio manager. and tom welcome. we had a guest a few moments ago tell us he's been using any rebounds to further reduce his exposure to equities. and is a little worried about what he sees here. how do you feel. >> well you have to be. >> worried about equities. >> given. >> everything that's going. >> on. >> in the macro environment. >> and given. >> how well. >> most equities have. done over the last. >> year, the. >> last couple of years, i. >> would say. >> most is not all. i think there are a lot of pockets in the stock market that have been kind of left behind. >> and. >> that's maybe where we're putting a little more incremental capital right now. i would also say for a lot of our more growth oriented stocks, the bad news is really stuff that doesn't affect the long term story. so if you're investing in ai, what matters is how big ai is going to be three years from now, not what tariffs are or recession is this year. so there

might be some opportunities there. >> where do you think the biggest opportunities are right now. you know, and maybe maybe valuation is a good way to come at this. maybe not. but some of these multiples are down. as i said, google is around 1618 times nvidia. what is it, around 20. i mean where where do you see those opportunities? how do you evaluate them? >> yeah. >> well, in the ai space actually i think broadcom is a very exciting place to be. it's not probably not as much upside as nvidia if i really plays out. but we see their exposure as being a lot safer because they're making custom chips for alphabet and other companies that have a clear application, clear use case, clear profitability. they're also gaining share on the networking side. and ai is not the only thing they do. they have software, they have smartphone components. they're very diversified company. if you get outside of artificial intelligence, you know, health care is one of those areas i mentioned that have been kind of left behind and actually do have pretty good fundamental growth characteristics. unitedhealth, one of our biggest positions, there's been a lot of negativity

about the stock that we think, frankly is overdone. there's been some reporting we think is pretty unfair and misleading. so that's one that as the news cycle moves on, we think is going to be a pretty strong performer. >> thermo fisher j&j those are a couple of others. is that right? >> yeah. that's right. so thermo fisher for example, think of it as a picks and shovels company for healthcare research for biotech. there's a cyclical hangover post-covid. you had a lot of policy news where their funding cuts from nih or rfcs, potential policies. but we think that's short term stuff. long term. we're seeing great innovation in the healthcare sector. we obviously have glp one covid vaccines going over a few years. there's a lot of good stuff to like there. i think ultimately the companies will profit from that. >> i'm not hearing you say nvidia. >> you know the trick with nvidia, i think it's very easy for people to say, oh, nvidia is a 25 times earnings. that's a flaw. how can you not buy here. and the problem is i think those

earnings are potentially very ephemeral. this is a stock whose revenue has doubled each of the last few years. post deep post chatgpt coming out. and for that revenue can continue to continue. their customers have to keep investing. and a pause from the hyperscalers. you could really see the fundamentals fall away underneath that stock. so while there's a lot of upside over the long term, any sort of short term recessionary pullback or for that matter, fundamental pullback, if people are disappointed about i would really, really hit that stock hard. >> and quickly on apple. are you sticking with it despite these delays now and its rollout of siri? speaking of ai. >> we are. yeah, i see that as just a matter of eventually it will happen. like obviously not great to get something pushed back, but we don't think that's for a company as steady and great long term competitor like apple. we don't think you should get too alarmed about these short term wiggles. >> all right. so looking at some of those big cap tech big cap tech names health care as well.

tom, thanks for joining us. especially on a day like this. >> thank you kelly. >> tom hancock with gmo. coming up verizon is lower after the company warned its first quarter has been challenging, in part because of increased competition. it's the worst performer on the dow today and partly why the dow is underperforming. verizon down 8% after hitting a 52 week high yesterday. ma chris grisanti, remember, told us just yesterday he thought the run could be coming to an end. the shares are now on pace for their worst day in almost two years. we're back with more right after this. >> in the. >> world of. >> investing, a beast. >> lurks between the numbers. some watch from the safety of the sidelines, but others saddle up and ride that one ton rowdy ribeye for all he's got. if that's you, join us on. tastytrade named best online broker for options trading.

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enhanced returns through our world class specialist investment managers, we are empowering advisors with solutions to build the portfolios of the future today. alternatives by franklin templeton, your trusted partner for what's ahead. >> week nights. >> what's really happening is your price to earnings. multiples are shrinking because we sense a mandate for lower prices. so why not just sell? and the mandate does not come from wall street to come from the white house. >> mad money weeknights 6:00 eastern on cnbc. >> welcome back. amid the sell off and everything else going on, openai is unveiling a new suite of tools to help developers build ai agents things that could independently handle tasks like booking flights, ordering groceries, working in spreadsheets. is the agi upon us? change of pace from our last discussion. hi, deirdre. hey, kelly. >> that's right. i mean, there's always an ai story going on in the background. this time, openai now detailing new tools for building agents. the hottest, but maybe also the most

overhyped investment area of artificial intelligence at the moment. openai's announcement it's technical, aimed at developers and enterprises, billed as the first set of building blocks that will help them build useful and reliable agents. really underscoring how far we still are from fully autonomous agents that were promised to us by google and apple, which have teased the idea that our devices could seamlessly handle multi-step multi app tasks without user intervention, or the slow adoption of salesforce's agent force. even minutes out of china, which was originally hailed as the ai agent we were promised, it received a lot of hype, but seeing that initial hype now fade amid user issues and a tepid rollout. one thing openai does do well, kelly, is self promotion, creating products on top of its llms versing versus letting other companies do so. so-called ai wrappers, something that anthropic has been criticized for, especially when it comes to that new product product. so

even if the news today is incremental. agents still remain more of a vision than reality. this keeps openai at the forefront of the conversation as we look for that agent chatgpt moment. and kelly, i mean, worth noting as we look at the ai trade, which has really been struggling in markets. part of that has to do with some of that overhype around agents and investors really wanting to see roi on seemingly never ending increasing capex. >> yeah, i'm using it more than ever. i welcome the agi. i can't wait until it can go complete a task for me. deirdre. thanks. we appreciate it today. deirdre bosa in techcheck. president trump's new tariff threat has most steel stocks higher. but cleveland-cliffs is selling off. although paring its losses. united states steel up 4%. a look at the impact the tiff could have on muni bonds and whether they offer safe haven at a time like this. that's coming up next. stocks moving off their session lows. the nasdaq hey it's only down half a percent right now. the dow down less than 600 points. stay with us.

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session on wall street today. while investors flight to safety typically includes treasuries, my next guest says they should look at another option during times of uncertainty high grade munis. craig brandon is back. he's co-head of munis at morgan stanley investment management. and you've been this with japanese and the koreans are doing. i mean, global investors really are looking to this us asset class. is that right? >> they are. >> so a. >> couple of weeks ago i was in japan and i was in korea. >> and really the. >> way that that. >> institutional investors. >> there view. >> munis as. >> you know, you're taking credit risk off the table. >> you're not giving up yield. you're not giving up duration. >> but you're. >> going to an asset class that has, you know, mostly. double triple-a ratings. and it's just a much safer risk off asset class. >> do we have to worry about a slowdown affecting, you know, maybe not default risk? i don't think we're talking about that kind of event yet. but you know, a slowdown is you know, that's something you have to grapple with. i mean, these are what toll revenues. you know, there's lots of different sources that could see a little bit of a hit. >> yeah. >> so the. >> slowdown have.

>> to weigh. >> sort. >> of the pluses and minuses. >> of a slowdown. the minuses. yeah. there could be some credit risk maybe a downgrade risk. like i said 71% of the index is triple in double-a. so maybe you're going from a double a plus to a double a, which in reality is not that big a deal. but remember, in a slowdown, you might see rates falling both the fed and treasury rates. and we are correlated to treasuries. so what we tend to see are assets coming into munis in a lowering rate environment and going out in a higher rate environment. so yeah maybe you might see some slowdown in the economy, maybe affects tax revenues, toll revenues, things like that. but the way i look at it is if i see a, you know, a gradual slowdown in the economy, you might see lower rates, which could bring assets into the muni market, which could help us outperform. >> right. because how would you say it's performance? and just kind of the general environment compares with the last few years when rates were soaring, because that was a really tough period for all bonds. >> it was. >> so we definitely. >> underperformed a little bit. you know, with the flows you saw in 2022 when rates were rising, it was very poor performance. and then in 2023 when rates were

were falling. >> a little, you saw the money. >> coming back in. right. so we really are correlated to flows. we're correlated to rates. and you know, in a falling rate environment we generally see positive flows and positive positive performance. >> people are really kind of making light of the fact that warren buffett has this big position in treasuries, which a couple months ago you said, well, they're big. there's not a lot that they can buy. and now, as we're sitting amidst one of the deepest sell offs we've had in a few years in terms of the kind of seriousness and quickness of it, you know, he seems to be sitting pretty now. he's not in munis, but i think that captures the sense that people have all of a sudden they go, geez, maybe i should have or should now look at doing something like that. >> right. and what we're starting to see, i was talking to, you know, my head of trading this morning, and we're starting to see some nontraditional buyers come back into munis. we've underperformed treasuries a little bit in through here year to date, and we're starting to be attractive versus corporates. if you look at munis on an after tax basis, again companies get the tax benefit against the 21% tax. we're

starting to look cheap to treasuries. we're starting to look cheap to corporates. you're starting to see some of those crossover buyers come into munis. we look at at ratios right. so corporates trade at a spread to treasuries because we're tax exempt. we trade at a rate lower than treasuries. so we start to become attractive when our outright rate gets close to treasury rates. so in the long end we're at about 90%. at a 90% rate, you start to see some of the other nontraditional buyers come in, the insurance companies, the hedge funds. we look attractive. >> and we've been seeing corporate spreads widen a little bit, you know, and those are the kinds of things that make people, again, maybe look at something of a rotation. what would you say the biggest risk is for those looking at the asset class right now? >> i mean a spike in rates and outflows, right. our biggest risk, our black swan, our outlier is something happens a 2008 type event or, you know, an event that makes rates spike because we are a duration high quality asset class. you want to ride us in a falling rate environment, but a quick spike in rates can cause some distress

and make people want to take money out. >> so you're not talking about a ten basis point spike. >> you're. >> talking 100. >> basis points. >> exactly. i'm talking 100 basis. >> people who said, well, we had that today. >> yeah, yeah, yeah. >> no, that's not the magnitude craig. for now we appreciate it. craig brandon joining us there on munis. stocks are off session lows. and that's it for us here on the exchange. dow is down 736 at the lows so far. power lunch will pick up our coverage next right after this quick break. >> muni money is sponsored by bam. help build america's future with bam insured muni bonds. >> bam mutual protects municipal bond investments, providing an added layer of security to improve your portfolio with guaranteed income. invest with guaranteed income. invest with that moment you walk in the office and people are wearing the same gear, you feel a sense of connectedness and belonging right away. and our shirts from custom ink help bring us together. we make it easy to wow all your groups with high quality custom apparel and promo products, all backed by our guarantee at customink.com.

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cuts of. >> real meat, vegetables and fruit with no artificial. preservatives or fillers. try doctor marty risk free. go to doctor marty pets.com slash tv. >> and welcome to power lunch, everybody. i am brian sullivan at the ceraweek global conference in houston, texas. and kelly, i think we have an hour of power lunch coming up. >> we do. and brian, we have another sell off on our hands. so here we go again. i'm kelly evans at cnbc headquarters. dow's down 633 right now. but look at your screens. it is the worst performer. so a bit of a distorted sense there of what's going on. down 1.5%. the selling pressure picked up a couple of hours ago when the president threatened for tariffs on canada. the dow down more than 700 at the lows. the s&p is down a percent right now. the nasdaq is outperforming. it's down about half a percent. but it's still down 5% this week. and it's only tuesday. and all the major averages are now lower since the election from the recent highs. the nasdaq is off more than 10% now. the