Empower Representative (0:00)

Say you've always wanted to take a spontaneous trip to the Caribbean. Here's the thing, if you get smart with your money, you can do things like that. With Empower, you can start making the most out of your money so you can get out and live a little. Isn't that why we work so hard to have some fun with our money, like treating yourself to something special or spontaneously doing something extra for a loved one? So use Empower and get good at money so you can be a little bad. Join their 19 million customers today@empower.com not an empowered client, paid or sponsored. What does it mean to be rich? Maybe it's about measuring life in laugh lines and time, not by how much you have, but by how often it stands still. At Edward Jones, we believe the key to being rich is knowing what counts. Our dedicated financial advisors provide one on one support, meeting you where you are through all of life's changes. Because what matters most is living a life you love. Let's find your rich together. Edward Jones Member SIPC Live in the NASDAQ markets eight on a day when the global market sold off for the second straight day. This is fast money. Here's what's on tap tonight. Stocks posting their worst two day slide in five years. The S&P dropping over 10% in just the last 48 hours. The NASDAQ down nearly 11 and a half percent in that time. And the Dow dropping close to 4,000 points yesterday and today combined. Those moves are staggering. Over the next hour, we'll break down the country, country by country, response to President Trump's tariffs. We'll get insights on the challenges the Fed faces right now from former Cleveland Fed President Loretta Mester. And we'll go inside the massive slide this week we've seen beyond stocks and oil, the dollar yields and much more. I'm Melissa Lee, coming to you live from Studio B at the Nasdaq. On the desk tonight, Carter Wirth, Steve Grasso, Tim Seymour and Mike Koh. We start off with a sharply intensifying sell off on Wall Street. The S and p dropping another 6% today, now down more than 10% since President Trump announced his sweeping tariff plans Wednesday night. The benchmark index losing $5 trillion in market cap in that period, putting it its worst two day drop and its worst week since March 2020. It also closed at its lowest level since last May. The Dow dropping more than 2200 points, its third biggest point drop in history and nearly 4000 points in two days. The Nasdaq also sinking 6% with massive losses in Tesla, Nvidia and Apple. Tesla, in fact, has been cut in half from its record high. Apple dropping below the $3 trillion market cap mark for the first time since June. The Vix well, volatility index spiking above 40, closing at the highest level in five years. All this as countries start to retaliate against President Trump's tariffs. Megan Casella joins us now with a rundown of their responses. Megan? Hey, Melissa. We've been seeing some defiance from around the world today as countries are looking to push back on these tariffs. China, of course, being the strongest example, taking a multi pronged approach. Third, 34% retaliatory tariffs on all US exports to China with no exemptions. They also restricted exports of some critical Minerals which the US uses in MRIs and electronics. And they added 11 US companies to a list that essentially bars those companies from doing business in China. We're also just in the last few minutes learning from multiple reports that there was another casualty. Trump had a TikTok deal in place with China set on Wednesday that would move it to be US Owned and operated. But all of that fell apart after Trump announced his tariff plans. ByteDance, the parent company company said that China would no longer approve the deal. Another casualty so far of these tariffs. Then there's the eu. Its trade commissioner today said that he spent two hours talking with the US Commerce secretary and the trade rep. He says the EU is committed to meaningful negotiations, but it also is prepared to defend its interests. Now, other countries are taking somewhat of a softer approach. President Trump said today that he spoke directly with the head of Vietnam's ruling party and that the country offered to cut all of its tariffs down to zero if it can make a deal with the U.S. now, Trump did not commit to that, but it was the first confirmation that we've seen that the president is at least taking calls with world leaders on the tariffs. But I will caution that post from the president came just a couple of hours after he kicked off this morning by vowing that, quote, his policies will never change. Melissa. Megan, thank you. Meghan Casella with the latest on the retaliatory measure the countries might take. So all this really underscores the notion that there is no clearing event, that the tariff announcement was in fact not a clearing event, that we are well in the deep of the muck of uncertainty when it comes to how we trade this market. There's no question we learned three things today. And this discussion about the EU member, they have this their most important trade weapon is this thing called the ACI the anti coercion instrument. And if this is what we what our market does on a response to China you know EU I think on some level is a more important trading partner. What we also learned the other two really big aspects of today and then we can get into how oversold or how opportunistic investors want to be when looking at oversold conditions because they are but we learned that Microsoft is GDP dependent and we learned that the Fed is not going to blink. So there's. There's very little in terms of what you heard from one of the most important companies in the world who at least we hadn't heard backtrack off of massive capex plans a Fed that we still think that the market is so inured to the Fed having a put that is something that is bailed out the market time and time and again certainly since 2008 any of us that have been in the market have expected this and it does not seem like it's coming here. So it's. It's fascinating to see how quickly this move has happened and I would just say the move in oil is something that concerns me because it's another example of where this wasn't a demand dynamic. This is OPEC and policy response that also to me is going to get at risk dynamics and where I do think that there are parts of the market where there's a lot of leverage tied into the commodity space and I do think this is just another example of places where you could see places get significant significantly more oversold than they are even here. So Tim talks about oversold. The S and P has an RSI of 24. The semis the Sox has an RSI of 20. That's the lowest reading since 2018. It's pretty unbelievable the breadth of the Russell 23 down to everyone up 16 down to everyone up in the S and P. It made me think the volume has been so high the last couple of days. Is this the bottom? Maybe, maybe not. But it's a good spot to start picking around. So I've been buying individual stocks or the end I bought intel today. I bought Capri today. I bought my third day of Lucid Motors. I think there's some buying opportunities around the horn in every space and sector. I think the semis probably can see more downside but they're due for a pop to Carter. You see a lot more downside to the at least. Yeah. I think the first thing that I think needs to be noted or said or understood by all of us, right, is that it didn't just happen in the last five, six weeks. Right. So that we know at the index level, whether you take the s and P500 or the Russell 3000, which represents 98% of the investable capital United States, the peak was, per the headlines, the 19th of February. But the day we were making those highs, fully 10%, I mean, excuse me, fully 30% of all stocks had lost 10% already from their highs. The average stock peaked in October. That's five months ago, not five weeks ago. And right now, as of today's close, the median performance of all 3,000 stocks is down 38%. The transports are down almost 30. The BKX down 30, the SOX down 40. We're well into a bear market now. The headlines are waiting. Someday someone's going to print it that it's down 20%. That's not the definition of a bear market. We're in it and the question is how much more to go. I would resist the temptation to buy just there is a phrase that I committed to memory from a teacher and mentor years ago. I heard him only use it three or four times in the course of 20 years. And he said simply this, there's nothing to be lost by postponing all new buying. Think how calm that is, right? What he's saying is don't, don't, don't sell it all or play for the bounce. He's just saying if you're a long only established professional in this business, hey, this is a time to just stand aside. Michael, are you standing aside? Yeah, you know, I am standing aside. I'll tell you the couple things that I was, I was looking at and I think, you know, we've all been in the business for about the same amount of time and you know, this situation is, you know, up there in the top three, you know, geo macro kind of events that have hit equities since I've been in the business. You know, the great financial crisis was one of these, in the pandemic was the other. But this is a, this is a bigger, I think macroeconomic impact than say the rate hiking cycle in 2022. And we saw equities drop about 25% at that point. And you know, the Fed highs that Carter was referencing, we were trading well over our historical multiple to forward earnings. If you just wanted to get back to the mean, that's probably going to be, you know, another 10 to 13% down from here. And I think that if you're going to get in, you know, if you're in a bear market and we've seen a lot of things that suggest that we are. You would expect that the, the biggest index would actually hit that level formally which means that you'd have to lose percent at least probably in the S and P. So I don't, I don't think you need to back up the truck here. It's not like you're, you're buying it at 16 times forward, you know it's still trading closer to 20. Yeah. And it's always important. Right. One has to know who one is in the market. There are people who will trade and catch a bounce. There's nothing wrong with that. That's excellent if you can do it. But the general thrust of the long only capital that is in every endowment, in every museum and every university and every pension plan. It is not a time to be exposing yourself more to the equity market in my view and we discussed this a little bit before, there's only two ways a market can go up. Either you have an expansion of the P E multiple or you have earnings growth. And which of those two is likely to happen in the coming three to six months? We expand the multiple? No, the multiple contracts in periods of risk or the earnings are about to start accelerating dramatically. Neither of those things are likely to happen. Yeah, Tim, you had said that we've learned that Microsoft is actually, I think you use the word exposed or dependent on GDP growth and of course we knew that all along. But do you think that Microsoft and stocks of that ilk, the mag seven, the fat, you know, the faithful, eight, whatever you want to call them, have reflected the idea that we are in a slowdown, possibly a recession, that capex could be cut. I mean some will say that this drawdown reflects that what CEOs are not gathering in boardrooms at the biggest companies in the world and deciding what we need to change in our strategy? What has changed? This is what investors are doing. I'm not suggest. First of all, of course Microsoft is GDP dependent and I think my point is they are GDP dependent. When posed the question what could this mean in terms of their commitment to capex and where they are. So I just think that we're all talking, it's. First of all, yes, it's a markets day, there's plenty to talk about. Steve brought up some really important levels, levels of how over sold we are. But note we're having theoretical conversations here because it's important time to talk theory. Theory is that global trade is being rewired, that there is 15 trillion in assets that are foreign assets that are going to figure out whether they want to be dollar hedged or not. But there's no question that assets look more interesting in certain parts of the world that never have before. So I think the theory around this is part of what we're talking about. So back to Microsoft. I don't know what they're going to do. I'm not sure they know what they're going to do and I don't think they're going to be whimsical about this. Wanted to point out that today was a day where people are looking to get some real insight into what earnings season is going to tell us in terms of what the most important C suite is going to going to do in this environment post tariff shock. I think that's it. The other thing is, you know, we had a jobs number today. We haven't talked about it yet. It's great. This was a stronger jobs number than people might have expected. We know there's some downward revisions but, but, but the reality is we know that this data is meaningless. And I'll say it again because well, I don't know where and to what extent we have a growth scare from here but we all know a growth scare is significantly different than the inflation scare. And Carter gave some of the levels, Mike gave some of the levels in terms of what, what the what the inflation scare, the Fed scare, the rate scare meant back in 22 the growth scares. It's a whole different ball of wax and something that people have to ask themselves what have equities priced in here? We know they're oversold. We know there's opportunities. Well, RBC cut its S and P year end target to a new street low today of 5550. That is down from 6200. With the firm saying its one time bear case is now its base case. Lori Calvin is behind that call. She's RBC's head of U.S. equity strategy. She joins us now. Laurie, great to see you. What changed in the storyline of the markets between you know, yesterday and today or Wednesday and today? I should say. Well it's a great question, Melissa and I would say what we did this morning was something we had been telling people we were going to do if a certain condition was met over the past few weeks. If you go back to March 17, we actually cut our target from 6,600 down to 6,200. And we refined our bear case a little bit to 5550. Now we came into the year. So if you go all the way back to November of last year, when we first put our outlook out, you know, we thought the market was still on a good path, but we also felt like there was a lot of policy fog and a lot of just fog generally in the outlook. So we put together a bear case and we were monitoring that very closely. And we found ourselves this year talking about the odds of having to pivot to that bear case. And, you know, I think at the beginning of the week last week, maybe when we March 17, when we put that report out, I think I said, you know, 40% chance we might have to pivot to the bear. And for me, it was the whole idea of a garden variety pullback is 5 to 10%. If you breach 10%, then you got to listen to what the market's telling you. It's telling you you're probably headed for something like we saw in 2010 through 2018, where we had four distinct growth scares where you bottomed out in kind of the 14 to 20% range. And those were all big fears of crises or recessions that didn' materialized. But you had a lot of panic in the market about those things. So we've been worried about that possibility for a while. And we found over the last few weeks, we just kept saying, look, if the mid March lows don't hold, we're going to have to pivot to the bear case. And guess what? On Thursday, the mid March lows didn't hold. I mean, we just blew right past them. And it's remarkable, Melissa, how quickly people went from talking about stagflation to recession. It felt like it happened in a heartbeat. So we felt like to be intellectually honest with our process, we had to make that change. So it sounds like, according to those key levels, Laurie, that you think that the markets have more to go lower. Yeah, look, a growth scare, you know, and to me, that's those 2010-2011-2018-2015, 16 drawdowns, they ranged 14 to 20, average of 17%. We're about at the average now, but I think 2018 is the most comparable one because we had frothy positioning and valuation. We had a trade war. And we also had concerns about Fed policy error. This time, I would argue investors are concerned not about the Fed, but about, you know, sort of Fed fiscal or the new administration, whatever bucket these tariffs fall into. And so, you know, the idea there. Right. There's a lot that's rhyming. And it was about a 20% drawdown that could get you down to 4900 on the S and P pretty quickly. Laura, you don't have an easy job. And with these, with the situation being so fluid, what makes you have to pivot again? We saw the conversations with Vietnam today. What makes you have to pivot again? And what are the, what's the criteria for you to raise those levels? How quickly can you, can you turn on a dime with this? Or is it something that you're going to wait six months to say? I'm not going to wait six months, Steve. You know, I've just taken a, frankly, a different approach to price targets this year. I am so tired of people looking at strategists and saying, you guys make a call in January and don't change it all year. Well, you know what, we're just like the stock analysts. If conditions change, we go to our computers, we go to our Excel spreadsheets, we input the numbers and we make changes. And so that's really how we've approached it. We've been a lot more aggressive this year with moving our numbers around. And I'll tell you, Steve, what changed between my 6200 and my 5550 is, you know, in certain models, at Least on the GDP side, I went from a 1.6% GDP assumption this year. In real terms, I took that down 2.5% just on the cusp of recession, but not quite having one. We also changed our inflation assumptions. So we had been in the upper twos, we went to the upper threes. We weren't having any Fed cuts before we put a few Fed cuts back in. We also moved around our 10 year numbers a little bit and we just kind of moved to 5% after consulting with our 4%, rather after consulting with our rates team about what a reasonable level would be. And when we take our inflation number up, that takes our P E multiple assumption down. When we take our GDP numbers down, that takes our earnings number down. So, you know, I would say, Steve, if I'm thinking mechanically about the modeling, I've got to get more confidence in a better GDP number. I've got to get more confidence in a more benign inflation number. Those are just a couple of things that you could start with is are there sectors that are defensive, Laurie, relatively more defensive? I think it's a great question, Melissa, and I was really sort of intrigued by your conversation in the earlier segment about kind of what you do in here. And I'll be honest with you, I don't really like defensive sectors. I'm overweight utilities. And I'm sticking with that one. That's my defensive bet. But it is already expensive. That's probably one of the sectors where we have a little bit more certainty on earnings. I'm sticking with it frankly, because if you look at health care, if you look at consumer staples multiples, we can get cheaper valuation multiples there and they're certainly working. You're seeing sort of a classic knee jerk defensive reaction in the market the same way you did back in the 2018 trade. Where were those classic defensive sectors are working? But when I'm thinking forward about what I would be buying now for anything more than just sort of a short term knee jerk trade, there's a lot of policy disruption risk in both of those sectors. There's a lot of consumer risk sitting in both of those sectors. So I'm not inclined to chase them right now. Right. And tariff risk in, in health care. Laurie, great to see you. Thank you. Thanks for having me. Thank you. Lori mentioned utilities is a relatively safe sector. Carter, I saw you shaking your head. What's your opinion on this? Well, look, there's a playbook that everyone relies on. It's day one, hour one, your business school class, whatever it is, you go defensive. And that is traditionally consumer staples. The original expression from the 40s, 50s was soap and cereal. We have biscuit companies like Nabisco that make crackers and soap companies like Colgate. It was not health care because, you know, 150 years ago health care was bite the stick and we're going to saw your leg off. Hope go so bad. Right? There was no health care guys with magic potions in bottles. So true, defensive is soap and cereal. But utilities, for instance, it's not a practical. It's 2.5% of the S and P. Put your whole thing in utilities. It can't absorb that kind of capital. Better than doing any of that is to postpone all new buying. Yeah, one little tag here. You know how they always say about timing the market and I agree, if you're a conscientious person, you look at this stuff. But, but when you look at timing the market, seven of the best days happened within 15 of 15 days of the 10 worst days. So when you think about timing the market, you could very easily be out of the market for the best days and lose your year performance in those top 10 days. So stay in the markets. You have to see it through. What's your time frame? But that's, that's what, that's what Carter said that you have to know who you are. Are you a trader or are you an investor? And some of the biggest days of all, all our bear market bounces. Right, so exactly. Meantime, a growing number of Republican lawmakers sounding off on President Trump's tariff plan and the steps they could take to blunt the impact they could have. Emily Wilkins is live in Washington with the very latest. Emily? Emily yeah, the impact of tariffs. They're really rattling Republicans on Capitol Hill. And lawmakers are actually starting to break with Trump on this. So far, we've got four Republicans. They signed on to brand new legislation that gives Congress the power to approve or roll back tariffs. Senator Chuck Grassley, he introduced the bill and he's now joined by Mitch McConnell, Lisa Murkowski, and Jerry Moran. And that bill could attract even more support. We've talked to senators like Mike Rounds and Thom Tillis. They say that they like the idea of Congress taking back some of its power over tariffs. And we now know that in the House, Don Bacon has confirmed to CNBC that he is planning to offer similar bill. Now, other Republicans, they're holding their breath right now. They're not signing on to anything or doing votes. They want to see what Trump and other countries do here. But Senator Ted Cruz actually warned on his podcast today that tariffs remain. If tariffs remain in place for the next few months, the result could destroy jobs here at home and do real damage to the US Economy. If we had tariffs everywhere. And then the other day, Senator John Kennedy, he had a slightly different way of putting that. Tariffs are a little like whiskey. A little whiskey under the right circumstances, will. Will refresh you too. Too much whiskey under the wrong circumstances will. Will make you drunk as a goat. The next test for tariffs could come as soon as tonight. Democrats are going to be forcing a vote on rolling back any tariffs that Trump has put in place that increase the cost of groceries, medicine, and other secondary goods. That's going to be part of a much larger debate on Trump's agenda. Not expected to get enough votes to go forward. But again, Melissa, very interesting at this point to see which Republicans will break enough with Trump to actually come forward and vote. Emily, thank you, Emily Wilkins. So a lot of investors are questioning the Trump put. They're certainly questioning the Fed put. At this point. Could there be a Congress, a congressional put? It might co. Well, I mean, first of all, they're going to have to all sort of come to an agreement between the two houses to sort of figure that one out. That's, that's the first part. And look I mean, however fast that happens, there's still quite a few trading days between now and then. So even if they did essentially reassume Congress's exclusive right to, for example, raise revenue, so they had by statute given these tariffs rights to the president in a couple of different cases in past decades, you know, it's still going to take a little while for us to fix this. And we're seeing that, I mean, just basically in the repercussions from places like China. Coming up, much more on the global market sell off as the world responds to Trump's tariff plan, including the rate route hitting the bond market, the technical take on the market drop and where you can find safety amid the sell off. But first, Fed Chair Jerome Powell weighing in on the central bank's rate path, how he sees tariffs impacting inflation, the job market and what they do next. Don't go anywhere. Fast money's back into with leading networking and connectivity, advanced cybersecurity and expert partnership. Comcast business helps turn today's enterprises into engines of modern business powering the engine of modern business powering possibilities. Restrictions apply. First on cnbc SEC acting chair Mark Ueda on market volatility and the agency's top priorities. And what's next for crypto regulation. Stay ahead of the market squawk. Box Monday, 6am Eastern. CNBC welcome back to Fast Money. President Trump saying in a post on Truth Social today that it is the perfect time for Fed Chair Jerome Powell to cut interest rates. This came right before Powell's speaking event at a business journalism conference. It was the first time the chair spoke publicly since the tariffs were announced Wednesday. CNBC's Steve Liesman with the blow by blow. And Steve, it didn't sound like the Fed chair was going to cut anytime soon. No, he did not really respond to the president and I don't think he will. Look, what he did is he acknowledged publicly what the markets have figured out through their pricing here. The effects of the tariffs on the economy and inflation are going to be larger than expected, larger than the Fed penciled in. But he seemed to disappoint. Markets are saying the Fed is in no hurry to change its policy and they're going to make sure that temporary tariff inflation doesn't turn into permanent tariff inflation. Our obligation is to keep longer run longer term inflation expectations well anchored and to make certain that a one time increase in the price level does not become an ongoing inflation problem. Okay. So he also said the economy is in good shape. Not a bad way to start the if you're going to have a downturn here and policy is still moderately restrictive, so no need to hike. I suppose that's modestly good news. But tariff inflation could be temporary or here's the problem more persistent and that's what he's watching out for. Well, the market thinks the Fed is cutting anyway. Not immediately in May, but pretty sure about a July cut and a third cut in September. And a fourth cut has become built in since those new tariffs were announced. The question is whether the economic effects of the market sell off. Do they create their own economic reality and become serious enough to be another factor that could motivate the Fed to act. They would have to assess it very seriously to overcome their concern about tariff inflation. MELISSA did he actually address the S word? Steve? Stagflation I don't think I was listening, but I didn't hear it actually be uttered. I don't think he addressed it, Melissa but, but it's look, it's inherent. I can go back to his actual comments, but he said there's higher risk for growth and higher risk for inflation. So the Fed is in this vice right now that you can, I think for a little bit. When he said to when he said that I'm worried about inflation over quarters, he used that term that's like six months. So what is that April and, and six is October. Right. So if you think about that, it may be I don't think it's going to be October for the Fed figures it out, but it's going to be several months for the Fed to figure out that this initial inflationary tariff impulse passes through here. All right, Steve, thank you, Steve Liesman, for what the Fed may do next. Let's bring in former Cleveland Fed President Loretta Mester. She joins us now. She's currently an adjunct professor at Wharton and a CNBC contributor. Loretta, great to have you with us. Thanks for having me. Melissa, are you on board? It looks like the markets are pricing in with a high probability. When I said at about 50% of 3, 3 cuts this year. Do you see that? So I think the Fed's in a difficult position. I mean, as Steve Liesman just pointed out in the chair said the day the tariffs affect inflation and they affect growth and employment, the other part of the mandate. So the Fed's got to play this very carefully. They don't know what's going to end up happening later in the year. And I think that's what the chair said. Right. So for now, we know that we're going to see prices rise from the tariffs, it's the Fed who can prevent those one off price increases from becoming embedded in inflation. And that's what I think the chair was trying to say, which is, look, we have to keep our eye on inflation expectations and not allow those to rise because that's the mechanism through which those one off price increases from tariffs could morph into more persistent inflation. So I think he's right to keep his eye on that now. And then when the, you know, further information comes out and we see how the economy is going to be reacting, we'll have a better sense of how much the downside is in terms of growth and employment. And the Fed can react then if, if they have to, if necessary. Remember, there's also other policies that are affecting the economy as we go forward as well. We have the tax cuts and we don't really know what that's what that's going to look like yet. We have immigration which is going to be hurting the labor force growth. So that's also a negative. So there's a lot happening in this economy. There's still a lot of uncertainty. And I think what the Fed needs to do is keep its focus on both parts of the mandate, make sure that it doesn't allow the 1 of price increases that we know are going to come with inflation to become more permanent. And I think that's what, what the Fed's job is. And the chair said that today, that it's their responsibility. Hey Loretta, it's Tim. Thanks for joining us. As you look to rates in 2026, Steve said, you know, that the rates market, the market itself price something in for the Fed and we can, we can, there can be some conjecture whether that was a lot or a little. But as you look out to next year and I look at deck 26 fed fund futures, you know, we're, we're somewhere around to 90, which tells me that the market is certainly expecting a lot more to happen out in the next year. And I guess this feeds into kind of just your own medium term expectations based upon what we have now, not what we think the Fed's going to do. But I'm curious how you're viewing this now. I think that, you know, if, if the Fed can do what it needs to do now and sort of make sure those inflation expectations remain anchored. We're going to see temporary rises as inflation, but they'll come down as the economy digests the price increases. So prices will end up higher price levels, but the inflation rates will come down. And then I think the Fed can bring the start to bring down the fed funds rate. I don't think they're going to be able to do as much as the market is anticipating, but I think they'll look out and see, okay, we have seen some uptick in unemployment rates and we have seen growth slow down. And so it would be the reasonable thing to do to start bringing the rate down. That would not be the same reason that they were going to be bringing rates down in the middle of last year where everything is, is working well and we get the soft landing. It really would be because growth is weakened, the labor market is weakened, and so we'll have to see some change in the fed funds rate. But I think that is a way off. I don't think it's going to be as soon as the market is anticipating, and I don't think it'll be as much as the market's anticipating. But we don't know because we have to let things play out some more to see what the real effects are. And we don't even know whether some of the tariffs are going to last at the levels that they've been put on at this point. So there's a lot of uncertainty around all of this. And I think the Fed is right to sort of point out the uncertainty and great, that we got a good job report today allows them to have that more chance to be strategic and assess things and be patient. Professor Mester, thank you for joining us. Thanks, Loretta Mester. Micah, what do you think? She just said the markets are anticipating too much too soon in terms of cuts. Yeah, I think so. I mean, look, we have a, we have a little bit of a problem here, which is that even ahead of all of this, we really hadn't gotten right down to sort of the inflation levels that would have suggested that a lot of cutting would have been warranted. So that's, that's the first issue. And of course the tariffs themselves are inflationary, so that creates, it might be a step function rather than a continuous one. Still, that creates a problem if you want to cut rates. And they're going to be patient because generally what they have reflected, that is to say what the Fed has reflected is they are looking for consecutive data points. So they're not just going to look for a single number. And they say, ok, that's good enough, we're now going to cut. They want to see a pattern. They're going to look for a rate of change that they can actually act on. And it seems unlikely that we're going to get that as soon as the market might hope for it. Coming up is not just stocks, the Trump tariffs hitting the bond market in a big way. But our next guest isn't seeing any lack of demand for Treasuries. How he sees a rate route unfolding next and stocks wrapping up their worst week since the pandemic as investors around the world digest the impact of the president's actions. Where you can find safety amid this sell off straight ahead. You're watching Fast Money LIVE on the NASDAQ markets at in Times Square. Back right after this. First on cnbc, SEC acting chair Mark Ueda on market volatility and the agency's top priorities. And what's next for crypto regulation. Stay ahead of the market squawk box Monday, 6am Eastern, CNBC. Let's get back to Steve. Lisa with a news alert on updated recession odds from JP Morgan. I thought we just got them yesterday, Steve. Well, we did. Here's what happened yesterday. They upped their recession. I was at 60%. Now, the US economist Mike Feroli, who we all know well is basically making a recession his base case. He sees GDP contracting in the third and fourth quarters of this year. He sees the unemployment rate rising to 5.3%. Looks like what convinced Mike to do this were the retaliatory tariffs, among other things. That was not just the unexpected tariffs on Thursday, but now they expect retaliatory tariffs, which means going to hit exporters. They think there's a channel by which investment comes down because of these tariffs and of course, a channel in which consumption, the consumer takes it on the chin because of this. So they look around now, it's not a big contraction they're looking for. I see here the first one is minus 0.3%. They do see the unemployment rate rising to 5.3%. What is interesting here, apropos of our discussion just moments ago, is they believe the Federal Reserve will cut beginning in June and cut every month through January of 2026, bringing the funds rate down to 3%. If it is a defined or definite recession, you do have a contraction of the economy, a huge rise in the unemployment rate. I think that's aggressive, but I don't think it's out of it's a crazy forecast for the Fed to begin cutting even while they have again, they have inflation on the upside as well as part of this new forecast. MELISSA well, recession will cut that trade deficit. That's if you want to find a silver lining. It's the best way. It's most effective. If you want to cut the trade deficit, have a recession, it is the most effective way. President Trump's on his way to getting it done. Steve, thank you. Steve Leeson Liesman the market sell off hitting the bond market to yields on the ten year falling below 3.9% at one point today and closing just under 4% in mid January. The ten year stood at 4.8%. Here to break down where rates go from here, Andy Constant, he's CEO and chief investment officer at Damp Spring Advisors. Andy, great to see you. Thanks for joining us tonight. How much lower do you think the 10 year could go here under this, you know, uncertainty scenario? Thanks, Melissa. You know, I think that the 10 year has moved a lot obviously. And what it is going to take the last time I was on your show I said what it's going to take for it to really get much lower is the actual contraction, not just the fear of contraction, but it seems like we're heading that way. And so we could easily see a funds rate at 3% like JP Morgan is saying. And I would expect the 10 year to settle around 3 and 3 quarters in that case. Is that how you are positioning your portfolio, the assumption that there will be not just a growth scare but that there will actually be a contraction and that we will hit a recession? I mean how, what is, what is your sort of baseline? Yeah, I mean that's been my baseline and that's been my positioning. But prices have changed a lot in the last, you know, in the last six weeks, NASDAQ's down 22.5% from the highs. The S&P is down 17.5% from the highs. That's a big change in price. And the base case of a recession would take stocks further down most likely. But we're getting to a point where it would have to be a deeper recession to get stocks significantly lower. So I'm fairly neutral at this stage. Slightly short and it's Tim, if I look at French or Italian, dare I say, and certainly German bonds relative to treasuries on a 36 month basis and if I affect hedge them, there's not a great pickup to own in US and if I look at European investors, why wouldn't there be a home bias and is this something that's not a big deal? Is it a big deal? Do you see more of this happening? And ultimately again Treasury Secretary Bessant seems to be obsessed with getting the 10 year down and is it too much too fast and is it leading to some of these other Dynamics which I think are strong and are only picking up steam. Sure. I mean, I think the first thing is, is the, the slowdown in the United States is going to be a combination of tariffs and fiscal contraction, which is what has been expected and I think still expected. But the next. But in Germany you have this fiscal expansion which makes the growth situation much better for Germany, which would mean that the German Bund would actually tend to rise in yield relative to the US Yields. But I think there's this other dynamic which is the tariffs are going to reduce global imports. And when we import, we hand our dollars to a foreigner and those foreigners are forced because of the necessary place to put dollars is into US Dollar assets. And they have, they've bought Treasuries, but they've also bought made foreign direct investment. And like never before, they've also bought US Public equities. Now tariffs are designed to reduce the trade surplus, which doesn't eliminate demand by foreigners for US Assets but does reduce it for what has been fairly demand over the decades. And that means that our deficit and our assets will have to be absorbed by domestic savers. And if you notice, the US Bond market is not, is rallying significantly. So there must be significantly strong demand, which is likely driven by the slowdown, but not driven by foreign hate selling or foreign concern about things like they're making a taxing income for foreigners or certainly not selective defaults. So there is demand for US Bonds from foreigners, but Trump is asking for more foreign direct investment while at the same time our trade is giving foreigners less dollars. And if that foreign direct investment comes, it has to come from some money and that's likely going to be US Equities. You may not be worried about Haight selling Andy, but are you worried about just standing on the sidelines of the next treasury auction in terms of China and Japan, the two biggest holders of US Treasuries, just we're not going to sell, we're just not going to buy in full force anymore. We can do that to you. I think China, well, there is the retaliatory thing, without a doubt. They have to own US Assets. They can't just sell. They may not buy Treasuries, but they're going to have to keep their US Dollars in a bank or in money markets or something, typically bills. So they may pass on our longer term Treasuries, but more likely what they're going to pass on is holding our stocks. And that's I think partly what we've seen lately, particularly when stocks are more vulnerable to an economic slowdown. So I'm more concerned about hate selling of stocks if they choose to do that. The standing on the sidelines. China has been running off its treasury holdings ever since Ukraine. Our enemies have passed on US Assets and that is ongoing. But other countries have shown up at auctions and I expect they will be forced to unless they spend it on fdi. All right, Andy, thank you. Great to see you, Andy. Constant damp spring pleasure. Mike Koh, how do you digest all of that? Well, you know, it's interesting. In 2003, Warren Buffett talked about this foreign investment as a result of trade deficits issue and the number was 2.5 trillion at that time and it's now 18 trillion. Now, not all of that, of course, is in U.S. treasuries or all of it in U.S. stocks, but there's a lot of money there. And of course, if you sort of curb that inflow. And it's interesting to notice we had record trade deficits for the first couple of months, anticipation of tariffs. And so that net investment effect, you know, basically was very heavy in the first quarter and it's going to be very light in this one. So, you know, that does take away another potential buyer. And I think that is, you know, an additional risk and another reason why I don't think there's really a put under the market right here. I think that's the main point. I mean these are all things that would argue for continuing to de risk and be careful but, but what an expression and hate selling. I mean, think about what a strange world we're in now. Maybe against your own economic interest or self benefit. Let me sell it because I'm angry. It's weird stuff. Coming up, stocks wrapping up their worst week since the pandemic. So where can investors find some safety? Is cash looking like a great place to hide? We'll hit that next. And don't miss our live one hour special CNBC special report this Sunday digging deeper into the tariffs impact on the U.S. and global markets at 7pm Eastern Time time right here on CNBC. That's when he's back into stocks getting slammed again as President Trump's tariffs continue to shock global markets. The dow dropping over 2200 points today and for the first time ever falling more than 1500 points in back to back days. The S&P 500 down a staggering 6% today, wiping out more than $5 trillion in value in two days. With 84% of the S and P now in correction territory, more than 60% in bear market territory. The Nasdaq meanwhile, also dropping nearly 6%, putting its weekly loss at 10%. Commodities getting hit hard as well. Oil at its lowest level since April of 2021. Copper seeing its worst day since 2008. And not to be all gloom and doom here, crypto one space bucking the sell off. Bitcoin actually hovering near the 84,000 level. Etherium Solana Ripple also higher. And with this week's market sell off, we wanted to look at a couple places where investors could possibly find some shelter. Sharon Epperson joins us now to break down the safety trade. Sharon? Well, you know, Melissa, for many investors, building cash reserves is really top of mind. I've talked to several financial planners, including members of the CNBC Financial Advisor Council about safe havens where people should put money now, and here are some of the recommendations. Money market funds are an important mix in retirement and investment accounts if you plan to retire in the next five years. Top money market funds from JP Morgan, Invesco and Schwab are currently yielding 4% or more, adding cash to high yield savings account for emergencies as well as a buffer to help you cover high everyday expenses due to tariffs. That's another strategy. The national average savings account right now is less than 5%, sorry, is less than 1% for a yield there. But top yields at some online banks like Bask and synchrony are 4% or more. Now to increase your emergency reserve, another consideration may be to open a home equity line of credit at a bank or credit union. You generally don't pay anything if you don't use it, but the peace of mind of having extra access to extra cash is priceless. For more strategies, subscribe to My Money 101 Newsletter series. There are strategies there about navigating these uncertain times. You can scan the QR code there or go to cnbc.com money101. Do we need that right now? Sharon, in terms of the money market accounts at 4% versus some of these online savings accounts that are 4%, what are the pros and cons of is there a difference to holding either? Well, the money market funds for your investment accounts, you know, are mutual funds. And so there is not the same FDIC insurance that you would get from a bank savings account, even an online bank savings account now. So that's something to consider. But people want to make sure that they can sleep at night. So a lot of folks may be moving some of their money into money market Funds within a 401k or within their investment portfolio. And in fact, over the last several weeks we have seen people who normally are, you know, set it and forget it with their 401ks moving some of that money from equities to fixed income and to money markets. We were just talking about the precipitous drop in rates in just the past week. Sharon. So if you're on, if you're on the fence, you're looking at opening a cd, a high yield cd. Do it now? Yeah, do it now, Absolutely. Do it now because you want to lock in that rate for wave at six months or a year. And if you don't need that money during that period of time, it absolutely makes sense. I mean, as you're looking at what the major average is, how much they've fallen in a day and know that you could actually make that money for your money just sitting there. And it's kind of a great push to make sure that you're putting your money in savings in those CDs or building a CD ladder or something like that. And there are no penalty CDs too. Yes, exactly that. Absolutely. Okay, Sharon, thank you so much. Sharon Epperson, Carter has got some charts here because we want to take a look at where we are headed, where we can find some safety. Where do you go? So rather than the traditional soap and cereal staples or utilities or REITs, let's look at insurance stock stocks, big names that everyone knows, AIG, Chubb, Allstate, Prudential, MetLife and so forth. Here are some of the companies in this etf. Its symbol is kie. And if we look at, we have a few tables and charts, but if we look at this etf, it captures a broad swath of these very prominent names. And you can see on a year to date performance, this is what relative performance all about. Meaning alpha is the simple definition that you're outperforming other choices. And here is the chart of the kie. It's a beautiful uptrend but most importantly is the final. You'll see a two panel chart here. The KIE has not made a new high and yet it's making shocking big relative highs to the market. That is a safe haven in my estimation. And, and yes, you can do utilities or staples or maybe some health care, but this is a great place to, if one wants to not postpone all new buying. Mike, how do you feel about insurance? Where do you find quote unquote safety? You know, I mean, I know that Carter was kind of dismissing it as a suitably sized pool of liquidity, but I do think that utilities actually seem pretty interesting. Consider a name like Vistra. You know, this was a high flying AI play not that long ago. It's trading around 16 and a half times full year earnings for this year and you know, probably closer to 14 next year's numbers. So you know this, these are the kinds of things. And look, we're offering advice to the people who are watching the show, not the whole wide world. So you know, it's a $30 billion company. It doesn't need to be able to absorb everything. I don't know. Tim's got some big wallets side. Utilities are inherently domestic businesses. Tim, you'd mentioned that the other day and I thought that was a really interesting way of looking at. If you're looking at something that's truly, truly insulated, maybe that is the way to go. Certainly. And if you think about where some of the cost inputs on energy may be coming down. I like utilities, I like utilities a lot. I think you can be overweight. I thought you could be overweight going into this. I also think telco and as you know, make international great again. Dividend. There's some, there's some telephone companies across Europe like telefonica trades in New York, ttf. There's a real handsome dividend, a really solid balance sheet. I think looking at these trades and I go back to this global dynamic. I think if you're looking at utilities and telephone companies across Europe, I think you're going to have a currency play in addition to a corporate. They've been defensive. Look how they've traded over the last couple of days. I think they will be. Yeah. And I think people out there will think, oh, these are all interesting ideas. But Sharon Epperson comes along with a 4% savings account idea CD money market fund. And that seems a lot more readily available, really attractive to everybody else. I mean, depending on where. Zero. Right. And if you look at yesterday we had the second I read a quote today, second largest outperformance of staples over discretionary for the last 20 years. So to Carter's point, when you're buying cereals and you're buying staples and you're buying companies like that, you have to take a step back and say how long do they really outperform what you're trying to outperform? But in this day you're just looking for preservation of capital, right? I mean if you need that money in the next six months or so for whatever, for a college payment for whatever you're buying, then you need to preserve that capital and Also in terms of staples, a lot of people, soap and cereal. Way back then they only sold the soap and cereal in the United States. But now soap and cereal is an international business. That's right. So you're much more exposed to other factors. Yes. To the currency problem. Yep. All right. Up next, final trades, stocks getting slammed again as President Trump's tariffs continue to shock global markets. The Dow drops dropping over 2200 points today and for the first time ever, falling more than 1500 points in back to back days. The S&P 500 down a staggering 6% today, wiping out more than $5 trillion in value in two days with 84% of the S and P now in correction territory, more than 60% in bear market territory. The Nasdaq meanwhile, also dropping nearly 6%, putting its weekly loss at 10%. Commodities getting hit hard as well. Oil at its lowest level since April of 2021. Copper seeing its worst day since 2008. And not to be all gloom and doom here, crypto one space bucking the sell off. Bitcoin actually hovering near the 84,000 level. Ethereum Solana Ripple also higher. And with this week's market sell off, we wanted to look at a couple places where investors could possibly find some shelter. Sharon Epperson joins us now to break down the safety trade. Sharon? Well, you know, Melissa, for many investors, building cash reserves is really top of mind. I've talked to several financial planners, including members of the CNBC Financial Advisor Council about safe havens, where people should put money now. And here are some of the recommendations. Money market funds are an important mix in retirement and investment accounts if you plan to retire in the next five years. Top money market funds from JP Morgan, Invesco and Schwab are currently yielding 4% or more, adding cash to high yield savings account for emergencies as well as a buffer to help you cover high everyday expenses due to tariffs. That's another strategy. The national average savings account right now is less than 5%, sorry, is less than 1% for a yield there. But top yields at some online banks like Bask and synchrony are 4% or more. Now to increase your emergency reserve, another consideration may be to open a home equity line of credit at a bank or credit union. You generally don't pay anything if you don't use it. But the peace of mind of having extra access to extra cash is priceless. For more strategies, subscribe to My Money 101 Newsletter series. There are strategies there about navigating these uncertain times. You can scan the QR Code there or go to cbc.com money101. Do we need that right now? Sharon, in terms of the money market accounts at 4% versus some of these online savings accounts that are 4%, what are the pros and cons of, is there a difference to holding either? Well, the money market funds for your investment accounts, you know, are mutual funds funds. And so there, there is not the same FDIC insurance that you would get from a bank savings account, even an online bank savings account. So that's something to consider. But people want to make sure that they can sleep at night. So a lot of folks may be moving some of their money into money market Funds within a 401k or within their investment portfolio. And in fact, over the last several weeks, we have seen people who normally are, you know, set it and forget it with their 401 case moving some of that money from equity to fixed income and to money markets. We were just talking about the precipitous drop in rates in just the past week, Sharon. So if you're on, if you're on the fence, you're looking at opening a cd, a high yield cd. Do it now? Yeah, do it now, Absolutely. Do it now because you want to lock in that, that rate for wave at six months or a year. And if you don't need that money during that period of time, it absolutely makes sense. I mean, as you're looking at what the major average is, how much they've fallen in a day and know that you can actually make that money for your money just sitting there. It's kind of a great push to make sure that you're putting your money and savings in those CDs or building a CD ladder or something like that. And there are no penalty CDs too. Yes, exactly that. Absolutely. Okay, Sharon, thank you so much. Sharon Epperson Carter has got some charts here because we want to take a look at where we are headed, where we can find some safety. Where do you go? So rather than the traditional soap and cereal, staples or utilities or retail REITs, let's look at insurance stocks, big names that everyone knows, aig, Chubb, Allstate, Prudential, Metlife and so forth. Here are some of the companies in this etf. Its symbol is kie. And if we look at, we have a few tables and charts. But if we look at this etf, it captures a broad swath of these very prominent names. And you can see on a year to date performance, performance. This is what relative performance all about. Meaning alpha is the simple definition that you're outperforming other choices. And here is the chart of the kie. It's a beautiful uptrend but most importantly is the final. You'll see a two panel chart here. The KIE has not made a new high and yet it's making shocking big relative highs to the market. That is a safe haven in my estimation. And yes, you can do utilities or staples or maybe some health care but this is a great place to if one wants to not postpone all new buying. Mike, how do you feel about insurance? Where do you find quote unquote safety? You know, I mean I know that Carter was kind of dismissing it as a suitably sized pool of liquidity, but I do think that utilities actually seem pretty interesting. Consider a name like Vistra. You know, this was a high flying AI play not that long ago. It's trading around 16 and a half times full year earnings for this year and you know, probably closer to 14 next year's numbers. So you know this, these are the kinds of things and look, we're offering advice to the people who are watching the show, not the whole wide world. So you know, it's a $30 billion company, it doesn't need to be able to absorb everything. I don't know, Tim's got some big wallets side. Utilities are inherently domestic businesses. Tim, you'd mentioned that the other day and I thought that was really interesting way of looking at, if you're looking at something that's truly, truly insulated, maybe that is the way to go. Certainly. And if you think about where some of the cost inputs on energy may be coming down. I like utilities. I like utilities a lot. I think you can be overweight. I thought you could be overweight going into this. I also think telco and as you know, make international great again dividend. There's some, there's some telephone companies across Europe like Telefonica trades in New York, ttf. There's a real handsome dividend, a really solid balance sheet. I think looking at these trades and I go back to this global dynamic. I think if you're looking at utilities and telephone companies across Europe, I think you're going to have a currency play in addition to a corporate. They've been defensive. Look how they've traded over the last couple of days. I think they will be. Yeah. And I think people out there will think, oh, these are all interesting ideas. But Sharon Epperson comes along with a 4%, you know, savings account idea, CD money market fund and that seems a lot more readily available. Really attractive to everybody else. I mean, depending on where you zero. Right. And if you look at yesterday, we had the second I read a quote today, second largest outperformance of staples over discretionary for the last 20 years. So to Carter's point, when you're buying cereals and you're buying staples and you're buying companies like that, you have to take a step back and say, how long do they really outperform what you're trying to outperform? But in this day, you're just looking for preservation of capital. Right. I mean, if you need that money in the next six months or so for whatever, for college payment, for whatever you're buying, then you need to preserve that capital. And also in terms of staples, a lot of people, soap and cereal. Way back then, they only sold the soap and cereal in the United States. But now soap and cereal is an international business. That's right. So you're much more exposed to other factors. Yes. To the currency problem. Yep. All right, up next, final trades. Time for the final trade. Carter Braxton Wirth. There's nothing to be lost by postponing all new buying. So final trade is keep your cash. Tim Seymour look at European telcos again. Telefonica. Six and a half percent dividend yield. Defensive, but I also think thematic and I think there's others over there to follow. My CO. Yeah, XLU's got a 3% div yield. And if you want a secular growth story, Vistra. Steve Grasso. Semis are oversold. I'm giving the new CEO a shot. Intel bought it today. By the way, it's the last day for Emily Glass, a member of our team. So. So good luck to Emily. Thank you for watching Fast Money. Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer first on CNBC, SEC Acting Chair Mark Ueda on market volatility and the agency top priorities. And what's next for crypto regulation? Stay ahead of the market. Squawkbox Monday, 6am Eastern, CNBC.