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Squawk on the Street
SOTS 2nd Hour: Trump Tariff Talk, Tepper’s New China Bets, and NFL Superagent Drew Rosenhaus 2/10/25
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A
Hey Fidelity, Can I get a second opinion on stocks in the Fidelity app?
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That's right.
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Investing involves risk, including risk of loss.
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Online US equity trades and ETFs and.
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Retail fidelity accounts sell order, assessment fee not included, some account types and securities excluded. Details@fidelity.com commissions Fidelity Brokerage Services, LLC member NYSE SIPC Comcast Business helps retailers become seamlessly restocking, frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering, quick serving eateries and how hospitals become the patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business, powering possibilities, restriction, supply, market moving, insight and analysis. Join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of cnbc. Squawk on the street. Good Monday morning. Welcome to another hour of Squawk on the Street. I'm Carl Quintanillo along Scott Wapner and Leslie Picker here at post 9 of the New York Stock Exchange. David and Sarah have the morning off market weighing more tariff headlines, a continued solid earnings cycle and fairly subdued yields this morning with the 10 year still south of four and a half. Energy's carrying some water, oil's up a full dollar, but tech is also up 1%.
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D
We're 30 minutes into the trading session. Here's the movers we are watching at this hour. Steel and aluminum related stocks jumping on fresh tariff talk from President Trump. The details and the fallout in a moment. And shares of T Mobile are rallying the company saying it started wide scale testing of its satellite to cell Service powered by SpaceX's Starlink. Those shares up about 2.4% right now and we're keeping an eye on Medicares. The company expected to begin job cuts as soon as today and coming off 15 straight days of gains currently up about a quarter of a percent. We'll see if they can hold on. More on this story ahead.
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C
Meantime, as far as markets go, tariff headlines do dominate the weekend as investors work through an increasingly murky outlook for inflation and rates. Ahead, Morgan Stanley writing they now expect just one cut from the Fed this year. Our senior markets commentator Michael Santol is here to break things down. I think B of A also said the window for cuts is basically shut.
- [02:30]
E
Their words for, for the foreseeable. And that's one of the things the market is I think contending with in this stuck period where we basically been in this narrow range. The S&P 500 has traded plus or minus 3% since the November six close. That's it. That's all you've got in one way or the other. If you look at things like the equal weighted S and P, if you look at the industrials, you look at the small caps, it's completely unwound whatever expected kind of growth acceleration impulse you might have gotten policy wise, but the markets held in there because it's okay if the Fed's on hold, if, if the here and now economy is all right. No real alarm evident in credit markets in the volatility trade, any of that, not showing any stress. But I do think it's fascinating that it's become a much more selective market and the stuff that's working is having to do a little bit more to keep the indexes supported. Only about 60% of S&P 500 stocks are really in a technical uptrend right now. A lot of the cyclical groups outside of consumer are kind of flagging just a little bit. I don't know that it's just tariffs. I think it's just that almost everything we're seeing that's front loaded in terms of policy is growth neutral or slightly negative. Whereas, you know, that kind of bedrock idea that it's going to be a growth friendly policy mix and we're going to get some forms of tax relief down the road is kind of deferred at this point?
- [03:52]
D
Yeah. Which seems to be counterintuitive relative to what happened during President Trump's first term where we saw tax cuts kind of right off the bat and tariffs followed that later. What does that mean for some of the Trump trades that had been operating on that same playbook that then had to kind of reassess when they realized that the front loaded policies were the ones that were, as you say, group.
- [04:12]
E
Yeah, they, they mostly fizzled. So you know, if you thought it was small caps, I mean sell Treasuries, maybe it was a Trump trade. And the yields have gone higher, but they're well off their highs at this point. The market seems a little more sensitive to this idea that we might see more evidence of, you know, housing market being pretty paralyzed right now. A little bit more of the lagged effect of the higher rates that we saw in the fourth quarter for the broader economy. That's part of it. I mostly Just look at the way the market behaves day to day. The last three Fridays the S&P touched 6100 didn't hold. It ended up down on the day. In fact, each high was lower than the previous one. You don't want to slice it too thin, but the market's kind of saying it's going to take an extra bit of oomph to get us to the next phase higher if in fact that's what's waiting for us.
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C
Meantime, I keep thinking of the Dusk notes that are, you know which ones I mean. Yeah, saying they would write a tactically bearish note, but the flows right now are showing too encouraging.
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E
They have been for weeks, especially kind of single stock retail flows have been remarkable. So there is this kind of source of adrenaline that's hitting the market in that way. I mentioned on Friday, Palantir traded twice as much dollar volume as Apple did. Okay. Apple is like whatever it is, eight times as big or something like that. Maybe even more than that. It may be like 13 times as large market cap weight. The problem, the point is, you know, we're just kind of turning it over that rapidly and Paltier really is the poster child for that action. And you know, Nvidia has kind of taken a turn in there as well. So there's just enough mega cap stuff working to keep things moving.
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C
But you've been really disciplined at looking at like dynamics like that. And also on the watch for the silly stuff, which, I mean, I know you've been no fan of the how Quantum's trade or certain elements of crypto.
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E
You see some eruptions in that direction. Was GameStop moving today because of a photo like that kind of stuff. Now that can just carry on for a while. And that is just a little bit of like the bull market sort of venting off a little bit of that energy. I don't think it's one of those things where you say, oh no, that we're drowning in the froth, because we're not.
- [06:23]
C
We have.
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E
You guys have been talking about, we have no IPOs. You have none of the supply issues. Therefore the demand for stocks, whatever form it's coming in, manages to be a.
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C
Net, by the way, IPOs, the big one that we had, VG is like way down from the initial pricing and then the initial open.
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D
If you remember, that came on a disappointing offering as well, which was downsized from the original expectations. Both of the IPO, the big IPOs that we've had this year.
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E
I do think that the initial companies that hit the window are like, these are sold, these are, these are owners or private equity that kind of needs to get that thing out there as opposed to do I have a great opportunity for you?
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D
Oh, yeah, I would agree with that. The stories are tough. I mean, they were both like declining top line and, you know, no kind of real big growth driver in the future. Those are hard, hard stories to sell in this market especially.
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C
Yeah, Mike, thanks. Talking a bit like Santoli. The president expected to announce new tariffs meantime on all steel and aluminum imports into the US Names like Cleveland Cliffs, US Steel, Al Koa and Nucor moving higher on that news. Let's get Damon Javiers this morning with the latest from Washington. Morning, Eamon.
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F
Yeah, good morning, Carl. We don't know exactly when we're going to see the president issue these new tariffs today. There is an event here at 1 o' clock this afternoon in the Oval Office where we might see the President on camera actually issuing these tariffs. We'll keep an eye on that. Here's what the President said yesterday about what he's exactly going to do today.
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We'll also be announcing steel tariffs on Monday.
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A
Tomorrow.
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H
Monday, yeah, tomorrow.
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D
What countries will those go on?
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Everybody. Steel, including Canada, Mexico.
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Any steel coming into the United States.
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Is going to have a 25% tariff.
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H
Aluminum, too.
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F
Meanwhile, Kevin Hassett, the National Economic Council director, was on CNBC a couple of hours ago. Guys, you know, there was this question that came up as Trump was talking on Air Force One yesterday. He said something about there being fraud in US Treasuries, and a lot of people were immediately questioning, well, is he Talking about the U.S. treasury market, the debt markets, it looks like, and the guidance I'm getting from officials here is that.
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A
No.
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F
What Trump was talking about in those comments yesterday that got a lot of people's attention was actually just this idea that the U.S. treasury Department has been issuing payments that this administration has found were improper. They were not issuing payments correctly. Here's what Kevin Hassett said about that a couple of hours ago here on cnbc.
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A
The Treasury Secretary has found that the.
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Controls for spending of the previous administration.
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A
Were unacceptable, that they were sending money out without knowing where the money was going. They were sending money out without flagging, you know, what it was for. They didn't check before they set the money out, whether it was appropriated.
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F
So, guys, we'll wait and see when we get these announcements. But what we're expecting as of right now is 25% tariffs on steel and aluminum coming from anywhere in the world into the United States, and then also these reciprocal tariffs that the president's been talking about in terms of tariffs on countries that have tariffs against US Goods themselves. So we'll wait for that announcement and see when we get the actual specifics back over to you.
- [09:37]
D
So, Eamon, you look at a list of who is importing the most steel by origin to the United States, and Canada for both metals is above and beyond the biggest. For steel, it's 11 billion. For aluminum, it's nine and a half billion. And Mexico for steel is the second biggest importer. And I have to wonder, given what we've already seen with those two nations in the trade war, if there's a potential for a, a rollback on this as well, given that they've already. They cut a pretty quick deal.
- [10:08]
F
Yeah, I think if you look at Donald Trump, you know, he's a hardliner on all these issues, but he's a flexible hardliner. I mean, this is a president who's willing to take yes for an answer if he can get some kind of leverage and some kind of win from that leverage. So I think you're right. As you look at that, you know, is there something that those countries could do to sort of, you know, wriggle out of this by offering something to this administration? We don't see any indication of that yet necessarily. But with all these things, you know, they're in place until they're not in place. And so you have to watch all the negotiations that are going on behind the scenes.
- [10:43]
C
Meanwhile, Eamon, we thought maybe we'd get a little clarity on budget over the weekend. It looks like we're going to have to wait a little bit longer. And this two step between who we watch more, the House or the Senate and then these ongoing headlines about to what degree they would be willing to dip into things like Medicare benefits.
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F
Yeah, look, the president has said that he doesn't want any kind of benefits that go to the American people to be changed in any way. But, you know, you've got a lot of people who are very excited about cutting spending. And if you want to cut spending, you know, those social benefits are one of the places that you might have to go. So far, though, what this administration, what Doge has been saying publicly and what Elon Musk has been saying publicly is what they're going after is just going to be waste, fraud and abuse. So any kind of improper, unauthorized payments that have been going out, you know, sort of heedlessly from the federal government is something they're going to target as for the strategy up on Capitol Hill. That's still all TBD as well.
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H
Carl.
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A
Eamon, thanks a lot. Appreciate it. Eamon jabbers as we do head to break. Here's our roadmap for the rest of the hour as President Trump considers more tariffs. China's own tariffs go into effect today. Is China better prepared this time around?
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D
Plus one super bowl ad causing big controversy in what weight loss drugs have.
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To do with it and Fly Eagles, fly. The Philadelphia Eagles blowing out the Kansas City Chiefs last night. Super agent Drew Rosenhaus will join us to talk about it and this ever changing sports investing landscape as Squawking the Street continues after this.
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A
Welcome back. Leslie Picker was talking earlier that it is 13F day when we do hear from some of the largest investment managers in the world, family offices and otherwise. The likes of David Tepper, for example, and Appaloosa, which has filed its 13F. And Carl had pointed out earlier this morning the K web was a big winner. Names like Alibaba and Baidu and PDD and JD.com I mentioned those names specifically because it looks as though Mr. Tepper has increased his positions in China as it relates to China and technology. And you remember that now famous interview from Squawkbox where he came on and essentially said buy everything China related. That's me paraphrasing.
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C
Did he say he said everything?
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A
He said everything okay.
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C
ETFs, I want to cover futures. Everything okay.
- [14:40]
A
So apparently he's putting his money where his mouth is and he continues to do just that. So what you, I think so smartly referenced a little while ago, Carl, the change in time from when China was viewed as uninvestable to a real moment in time where Tepper came on our air and said, no, in fact, it is very investable and buy everything. Now he is a continued believer in that story there despite weakness in the economy. And here we talk for 20 plus minutes about trade wars and the like. China's made it clear that they're going to do whatever they have to do. They'll stimulate as much as they have to stimulate. If they need to fight back on the trade war front, they'll do just that. If they need to have regulatory issues with our big technology companies, they're prepared to do just that. They're trying to get as much leverage into the system as they think they need to deal with Trump 2.0. But in the meantime, these investments are viewed by Tepper apparently to continue to be the place to be. Baidu Baba PDD and JD.com yeah, I.
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D
Mean, just looking at the dollar figures of, and this is of course at the end of the fourth quarter. That would have been the end of 2024, $1 billion stake in Alibaba. We're not just talking about like, you know, a rounding error here. $1 billion stake in Alibaba. Contrast that to a $570 million stake in Amazon. So these are pretty significant holdings here. Baidu about $129 million worth at the end of the quarter. JD.com about 360 million at the end of the quarter. So just kind of going through this PDD of 519 million. So half a billion dollars there. But it appears that Alibaba, over $1 billion stake for Appaloosa, is very sizable.
- [16:29]
C
And a multiple of the Amazon position.
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D
And a multiple of the Amazon position. I don't see any other billion plus positions in their portfolio other than Alibaba. So definitely putting his money where his mouth was in that squawk box.
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A
I mean, he's just had the most deft of touches in, you know, when markets are most dicey. He's Proven to be able to distill all of the noise down into the most easily understood and investable language, probably, if not of anybody, I mean, okay, maybe there's another two or three people who can do it equally as good as he has over the history of time. But that's what I've taken most from his way of investing. Cut the noise out, keep your eyes on the prize, and I'll distill the most easily understood value in all of this and increase my investments where I think they're going to perform best. And this continues to be a place to be.
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C
Annualized returns and 28%.
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A
Yeah, yeah, arguably the goat, I mean the goat like returns.
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D
His 13 apps are really fun though because he does trade in and out of things pretty frequently. I believe he's been in and out of Chinese tech before and he does tend to kind of time it based on what he's seeing on the ground, what he's seeing in the headlines. We're seeing, you know, based on their own fundamental research there. So it's definitely worth worth noting today the Chinese tech dynamic here.
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A
All right, we'll see what else comes, comes out throughout the day as well. It is a good segue to our next conversation. In fact, regulatory Chinese tariffs are retaliatory. Excuse me, Chinese tariffs on a number of American products set to take effect today. Our next guest says that for China there is little appetite for a full out trade war. Joining us now, London School of Economics Associate Professor Qi Yujin. Welcome. It's nice to talk to you this morning.
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D
Great to be with you.
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A
You know, a lot of what we do is talk about China through an investable angle as we were just discussing on the desk here. By virtue of one of the greatest money managers ever increasing his positions, they're not running for the hills. And I'm wondering how you think we should view this pending Trade War 2.0 between these two nations and how China might be better prepared this time around to deal with it based on its first experience.
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I
Well, Chinese assets are looking very compelling these days, days in terms of prices and indeed many believe that the Chinese has economy has reached a bottom. But of course it would a lot depend on the response to the trade war. First of all, I think that China doesn't want to escalate and really engage in a full trade war. But it does want to have a reaction rather than just sit back because it wants to have a strong position when it's actually coming back to the negotiation table. So in fact it is a strategy and they're talking about using, using Tai Chi moves rather than boxing moves, which means a combination of hard and soft moves and then keeping tactics both flexible and pragmatic, in fact.
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A
But it is at least at this very moment in a weaker position, would you agree, than it was back in 2016 during, you know, the original Trump administration. Just because the economy is just weaker than it was.
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I
Absolutely. There's a pain level threshold that I think no economy, no, no, neither said wants to step over in the Chinese economy because, you know, Chinese GDP growth is low, Chinese profitability for the companies is low, the US inflationary pressures. But since then, China has been long been preparing for the return of Trump. In fact, the first trade war which didn't accomplish what President Trump wanted to do, but it has forced Chinese companies to go into complete, complete globalization frenzy, seeking alternative investment routes, supply chains, going to asean. And actually this time around, apart from just the retaliatory responses to the us China is taking this as an opportunity to build more trade ties, rekindle the global alliances and even with Europe and with many other countries. So this diversification strategy has been on the table. And also what they're saying is that because these tariffs are targeted on low, lower end products in China, it's actually not killing Chinese exports, but forcing it to evolve, meaning pushing into higher value added, you know, things that can't really be replaced even with tariffs, including rare earth infused steel and EV materials and so forth.
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A
What do you make of this? What seems to be an apparent tactic, I guess according to some of the reporting that we've been reading here about China trying to increase its lift leverage through big tech, through the regulatory mechanisms that they might have against some of our large tech companies as a way to increase its own leverage in this fight.
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I
Yeah, I mean this is for the long game and again it's about, it's a matter of position of strength when they start to negotiate. I think it is a risky tactic because I think it would benefit China to continue US Companies profitability in China. But what it's saying is, look, you know, there's Huawei sanctions and sanctions and export controls and all, all sorts. These companies do still depend on the Chinese market. So according to, you know, their negotiations with President Trump, they think that this is going to have them gain a little bit of leverage.
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C
Meantime, after spending much of last year sort of fretting about ongoing deflationary forces in their own economy, over the weekend they've got CPI at a five month high. I wonder how significant you think that is.
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I
Well, it's, it means that the economy is going to have a at least a modest rebound this year. Again the government is fully committed to a full on stimulus package and the response will likely depend on you know, the tariffs. They're really going to use domestic tools to offset some of the tariffs rather than say depreciation of the R and B voluntarily. So this means that, you know, study stuff is picking up, the stimulus is taking effect. However, I think that one thing is underappreciated outside of China is that it's not that the Chinese government doesn't want to put on more stimulus and and you know, more actions, but how does it do it without rekindling the debt problem? Right. How does it re stimulate the growth where the debt problem that's the thing that they have to figure out.
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A
Kiev, thanks for your time very much. We'll talk to you again soon. Appreciate that.
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I
Right, thanks.
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C
As we go to break, check out some of the biggest gainers on the S and P to kick off the week. We got some industrials in the there we mentioned Rockwell earlier. Chips are carrying a lot of water, smci, Nvidia, Micron, Western Digital on the list and you see Uber there as well. Following that news from Bill Ackman on Friday. Speaking of gainers financials hovering around some record highs as well as we're entering a week where we will get a couple of big financial services conferences. Dows up 126 more when we return.
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A
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Yeah, I do. Now where did I put my keys?
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Investing involves risk, including risk of loss. Fidelity Brokerage Services LLC Member NYSE SIPC.
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- [24:16]
C
Welcome back to Squawking the Street. Keep an eye on some of the EV names. Today, Rivian announcing that it's opening up sales of its delivery vans to fleets of all sizes in the United States more than a year after ending that exclusive deal with Amazon. You remember they're a shareholder. Meanwhile, Stifel cuts its target on Tesla, citing some pricing concerns as China's BYD announced today that it's cutting its entry price for smart EVs to below $10,000. That remains the challenge for this industry to create.
- [24:46]
D
Thousand dollars. He was more than $10,000 back in like 1904. That is remarkable.
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C
Yes.
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D
Financials guys hovering around record highs, although lower today amid just a wave of headlines. Impact impacting this sector. Last week, the Fed released its hypothetical scenario for the summer stress test. Most analysts believe the test was actually better than last year. And that means that the biggest banks may see an easing of regulatory capital requirements which could improve buyback and dividend potential levels. And ahead of Fed Chair Jay Powell semiannual remarks in the Senate tomorrow and the House on Wednesday. The central bank released its monetary policy report on Friday which reiterated that the system remains resilient, although still somewhat restrictive on balance. And then over the weekend, the acting director of the Consumer Financial Protection Bureau gutted the regulator, suspending nearly all activities, halting funding and closing the offices. That, of course, has signaled a more lax landscape for the banking industry. And this week, worth noting, there are several financial services conferences. One hosted by UBS that begins today and extends to tomorrow tomorrow, another by bank of America. Top executives across Wall street will be speaking and we'll be covering both of those and any market moving guidance or themes that come out of them.
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C
Guys, what do you think the story is right now? Is it about markets and trading or is it more of a rate environment story for all these names?
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D
Yeah, markets and trading were so strong in the fourth quarter. There will definitely be a follow through on questions there. Although a lot can change over the course of the quarter, it can be a little challenging to give guidance on markets and trading specifically. I think investment banking remains a huge question mark in the minds of investors because they were coming into the year expecting this kind of gangbusters revival of the capital markets. We'd see this, you know, surge in IPO activity, surge in M and A activity, and as we're talking about that has really come to fruition so far. We're only a month into the year, a month and a half into the year, but we haven't really seen some of that revival that we've been talking about. And we've seen some head fakes on that revival over the last few years where we heard, you know, we heard about the green shoots and the green shoots weren't watered. And then, you know, the election was supposed to kind of unleash these animal spirits. And it sounds like the animal spirits are still percolating under the surface in conversations I talk to. But so far we haven't seen this kind of onslaught of activity which a lot of people have been waiting for. So maybe it's still under the surface and it'll still bubble up. But I think people want updates on what that activity it is doing.
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A
Morgan Stanley is noticeably weaker than the others this morning, down two and a half percent. Story I think over the weekend about what their positioning is in speaking of investment banking. It's been towards the top right with Goldman and sort of Morgan Stanley, but maybe some of their market share is slipping in that regard. The other story that continues to get speculation, I think we have a story on CNBC.com for pro on the recent weakness again in bank of America and what role Berkshire Hathaway might be playing in that. Now, we already knew that they were selling down their share. So I don't think that that's some great revelation. Are they at the point of just getting out completely? I think you've been among those who have asked Brian Moynihan straight to his face, you know, what do you make of Berkshire getting out of your stock? And I think his response, reasonably terse, was like, why don't you ask him?
- [28:01]
D
Yeah, basically Berkshire can do what they want, essentially. But it's a good question question because that is one of the few banks that we're seeing actually an upturn in net interest income predictions for the year. And so they are, they're seeing kind of this inflection change now when rates are higher, that does put pressure on their underwater securities. So if you look at market rates right now, where the treasury is, that continues to put pressure on some of those securities. They'll never sell those securities, but it's something that the market does seem to.
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A
Pay attention to, B of A green for the month, but relative to the gains of the others, it's by far the underperformer.
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D
Yeah. Very interesting. Coming up, the sector is most at risk of a pullback here, according to Barclays and what tariffs have to do with it. We're back in a moment.
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B
Welcome back. Time now for your CNBC News Update. I'm Silvana Hanow. The Kremlin said today that U.S. and Russia relations are on the brink of collapse. Moscow refused to confirm whether Russian President Vladimir Putin spoke with President Trump on Sunday. President Trump told reporters the two had spoken. Meanwhile, the Kremlin reiterated the war with Ukraine would last until Kiev drops its ambitions to join NATO and withdraws from four regions occupied by Russian forces. Lawyers began opening statements this morning. Morning in the trial of the man charged in the attempted murder of Salman Rushdie. Hadi Mattar allegedly tried to kill the author in front of a lecture audience back in August 2022. The attack left him blind in one eye. Rushdie is expected to testify. And the CEO of Rideshare Uplift announced today the company plans to launch fully autonomous robo taxis as soon as 2026. The driverless cars will be powered by Mobileye technology. That's according to a social media post. The rollout is set to first take place in Dallas, with plans to eventually expand into other cities.
- [30:04]
D
Leslie. All right, Silvana, thank you so much, Savannah. Now turning back to the broader markets, our next guest says President Trump's latest tariff announcements could amount to a low single digit drag on S and P earnings if implemented with energy, materials and discretionary stocks most at risk. Venu Krishna Barclays, head of U.S. equity Linked Strategies, joins us now at Post 9. Thank you for being here. Can you explain the work that you've done on that and what it means for those sectors that we outlined?
- [30:33]
H
Sure. I think the challenge with tariffs is generally that companies don't report their exports and imports.
- [30:39]
D
Right.
- [30:39]
H
So I think so what we try to do is go get macro data from the Bureau of Economic Analysis in the Census Bureau and then try to percolate from there down to sectors and map it to S and P and figure out, you know, how do you estimate the direct impact of earnings? Right. And there are two legs to it. One is what if we go and put the tariffs so, for example, more recently 25% on Canada and Mexico. And then the second part is what if they retaliate? Most likely they will.
- [31:08]
A
Right.
- [31:08]
H
And so the combined effect of that is around 3.7%. And for example, if in the past we said let's ignore fuel and oil related commodities, Right. Because our assumption was that Trump doesn't want oil prices to go up. If you do that, it shaves off, let's say 50 basis points. So depending on what combination you're looking at, that number keeps changing constantly. Big picture, if we take a step back and say what if we were putting 60% on China and 10% of the rest of the world, that impact on S and P will be well over 5%. So quite substantial in the context of, you know, roughly 12% earnings growth of what we see this year.
- [31:50]
D
So then why do you think the markets have been so sanguine today? Is that just an implicit expectation that these tariffs won't take effect, that the retaliatory tariffs won't matter? I mean, why do you think that the markets kind of seemingly looking through it?
- [32:04]
H
Yeah. So two things. One is, you know, so far the whole debate has been is do you take him literally or do you take him seriously? And then last weekend we said we have to take him both literally and seriously a day later than the market realized that maybe it's just a negotiating stance. So I think that is the big debate. But overall though, to your point, my view is that the market has been overly optimistic in pricing Trump related group growth policies, which is, you know, on taxes and deregulation and less so on immigration and tariffs. So that's where we are. So ultimately what matters is which wins out. Do they even out or is growth better than the, the constraining elements of immigration and tariffs? The market seems to think so far that it's a growth side which has an edge and we would agree with, but I think it's a fine line.
- [32:56]
D
Do you think that there are some indirect elements that equity investors should also be paying attention to in that there are uncertainties surrounding the macro environment right now as it pertains to tariffs and geopolitics that could influence things like investment. It could influence things like the way that they are dealing with their own trading partners as corporations that that could stunt their growth or I mean, are these things as well that equity investors should be paying attention to?
- [33:26]
H
Yeah, yeah, absolutely. For example, on tariffs, just to touch on it briefly, the point is even we assume that 50% of the costs are passed over to consumers and they eat, 50% are distributed. Right. So companies have a series of options to deal with it. So we don't know where the dust finally settles. But your question on what are the other big issue? I certainly think that we have the 10 year rate. Some are that still remains critical. That in turn is a function of what the bond markets think about deficits, about the impact of tariffs and the impacts of immigration. And as you know, the term premium on 10 years has gone up quite significantly. Now why that is relevant is that if you look at long term data, then roughly around the 5% threshold, there's a very clear negative correlation between equities and, and where the treasury yields are. So in other words. We have been in a sweet spot thus far where treasury yields rising is not a problem because growth is good, earnings are nominal, the Fed is vigilant, everything is good. But there's always a tipping point. And I think we are in the danger territory right now. And the immediate impact of that, it's literally felt through multiples first. And it starts with high multiple stocks, including big tech tech, and then it eventually percolates into the rest of the market. So I think this environment right now is one in which we are more confident on earnings. As you saw so far like this morning, we saw in we are past the mid cycle and earnings are pretty good. But I think where the danger lies is in the multiples. It can keep bleeding slowly and steadily like it has big tech. Multiples have come down from 30 times at the beginning of the year to 28 times. Right. Right now. A week ago there were 29 times. So that is a slow risk which you need to keep an eye on.
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D
If we're in danger territory, though, sorry, real quickly, is it okay if we or would you recommend investors sell out of equities right now or just, well.
- [35:16]
H
Big picture earnings are going to accelerate. Right. So I think more than pull off, I think our view is that pay close attention to what you're paying in terms of multiples for what you're getting. Right. To the extent that you can make a good balance of, of that, that's what's going to help.
- [35:30]
D
All right, thank you Venu. Really appreciate your time.
- [35:32]
H
Thank you.
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C
Still to come this morning, the Philadelphia Eagles notching their second super bowl win in just eight years. We're going to talk to super agent Drew Rosenhaus about it after the break. Meantime, shares of Edgewell Personal Care, that's the company behind brands like Banana Boat and Wet Ones, plummeting after those results. The CEO is going to join us next hour on Money Movers. Don't go away. No3 peat this year. The Eagles defeated the Kansas City Chiefs last night, as you know, earning their second super bowl win in just eight years. Our next guest reps several players on the field. NFL agent Drew Rosenhaus joins us this morning. Rosenhaus sports founder and CEO did you just get back home, Drew?
- [36:25]
G
I did. I caught a 6am flight out of New Orleans. I was there all week but had to get back to my four kids today.
- [36:34]
C
What a, what a week. What a weekend. I wonder what you make of the surprise element of the Eagles victory being a plus versus the lopsided victory. Maybe we were, I was talking to Wapner earlier in the morning kind of reminded us of super bowl eras of a different era.
- [36:50]
G
Yeah, I did not personally think it was a surprise, but I was surprised that it was a blowout for those people that were rooting against the Chiefs winning again, a three peat. They must have enjoyed it. For the rest of the country it was pretty dull. So that that element was unfortunate. In general, we've had some great gains recently. I was excited for our clients in particular. Not on that list is Josh Sweat, who made a lot of money last night. Carl, he's an unrestricted free agent. I personally felt Sweat number 19 should have been the MVP at two and a half sacks, six tackles, three quarterback hits. And the defense won the game for the Eagles by shutting down one of the all time greats in Mahomes and sending Travis Kelce maybe into retirement with a resounding defeat. This was a win for the defense. Really excited for the guys like Jalen Carter. We represent as a great defensive tackle. Darius Slay, who's been a great cornerback, finally got his first super bowl after more than a decade in the NFL.
- [38:08]
A
I'll tell you, Drew, it's Scott. The guy who comes out maybe with the most to gain beyond the players that you just mentioned is Sirianni, the coach of the Eagles. His contract was up. He wasn't one of the highest paid coaches at all 7 million a year compared to say Andy Reid making what's reported to be 20 million. Sean Payton next at 18. If you were repping Sirianni, what would you ask for? What should he be paid as a result of this win?
- [38:36]
G
It's funny, I did see his agent on the field afterwards with a big smile on his face because he. He's at a minimum going to have to be at the top. Luxury only has been in two Super Bowls in the last three years. A narrow defeat against the Chiefs in the first one, a tremendous victory last night. They had a great season. He's got the best winning percentage of any active coach. There's no reason why he and the general manager, Howie Roseman should be among the highest paid in the league given their respective positions. Sirianni deserves a lot of credit. Amazingly, he was on the hot seat some people felt going into the season. But they made all the right moves. They hired Vic Fangio, who did an incredible job as defensive coordinator. They brought in Kellen Moore as the offensive coordinator and he's going to be the next coach of the New Orleans Saints, presumably today. Jeff Lurie, the guy has become a great owner, obviously this is his second super bowl win. If you're in Philadelphia, which is one of the all time great sports towns, obviously they're going nuts for the Rocky fans. We all know about the Rocky theme and how that's connected to the Eagles. It was a really great season for this amazing sports town.
- [40:08]
E
Yeah.
- [40:09]
C
Finally, Drew, you can answer this one. When you think about the league going into next season or even the season after that and sort of this expansionary mindset they have international, maybe the number of games, maybe moving the timing of the super bowl, when do you think that that expansionary mindset is going to bump up against the. Just the bodies. Right. The athletes and the players union looking to protect those bodies.
- [40:35]
G
Well, I'm not in favor of an 18 game schedule, Carl. I think 17 is a lot and look is someone that's represented NFL players for 37 years now. I've seen the difference from when I broke in the business in the late 80s to now. It is a grueling schedule. The the obviously they cut back the preseason, but they made up for it with a tough training camp with inner squad scrimmages. I don't think they should go to 18 weeks. I certainly think that there's enough games right now. As far as international expansion, I don't know, maybe going to Australia is a little much. That is a long trip for guys to take who are professional athletes that have to play an NFL game. But certainly I do love the idea of the NFL playing in Europe and playing in South America, Mexico. It's exciting. And the NFL is at an all time high. The salary cap this year is going to be north of 275 million. So I'm excited for the players. It'll be over 300 million in 2026. The league is very healthy. You see the partnership with gambling with that is done. The ratings are fantastic. In general, credit to Roger Goodell, Troy Vincent, other leaders of the NFL, the 32 owners and obviously the players for creating a great product along with their coaches.
- [42:09]
C
Yeah, it's always bittersweet the morning after. We're going to miss. We're going to miss it for a few months, but we'll be talking in the interim. Drew, get some rest. Thanks for joining us.
- [42:19]
G
The season isn't over. Free agency, the draft, training camp, it's just getting started for me. But thanks for having me on and have a great day, guys.
- [42:27]
C
Our pleasure as always. Drew Rosenhaus by the way, Drew mentioned betting and we do have some updated betting numbers from FanDuel per our Contessa Brewer, more than 16.6 million bets, up almost 19% year on year. Almost 70,000 bets per minute. That's up from 50,000 last year. Nearly 3 million active customers during the game.
- [42:47]
D
Not bad for not a close game. After the break. Telehealth provider Hims and Hers in hot water after their first super bowl ad. Why there's controversy. Controversy in what big pharmas say next. Don't go away.
- [43:06]
A
Telehealth provider Hims and Hers Health airing its first super bowl ad last night, but not without some controversy. Brandon Gomez is here to explain all of that. Brandon?
- [43:15]
C
Hey Scott, good morning. No shortage of flashy ads last night. And if you didn't catch what we're talking about, take a look.
- [43:25]
D
Welcome to Weight loss in America.
- [43:26]
A
Like and subscribe.
- [43:27]
D
A $160 billion industry that feeds on our failure. They're medications that work, but they're priced.
- [43:34]
H
For profits, not patients.
- [43:36]
F
This is America.
- [43:37]
D
This system wasn't built to help us.
- [43:39]
I
It was built to keep us sick and stuck.
- [43:42]
C
HIMS goes on to promote its weight loss offerings with images of compounded GLP1 vials. Basically copycat generic versions allowed to be manufactured during a shortage. Well, the ad faced pushback from big pharma and lawmakers heading into the weekend. The FDA was urged to look into it for false advertising, neglecting to include warnings or side effects of taking compounded versus FDA approved branded Ozempic and WeGovy.
- [44:04]
A
Now the FDA told CNBC it takes.
- [44:06]
C
Its responsibility to monitor promotional materials very seriously. I did speak to legal and advertising experts over the weekend as well.
- [44:13]
A
And the general consensus is that since.
- [44:15]
C
HIMSS doesn't explicitly promote a specific drug in the ad, it it was fair game. Now Novo still this morning responding with their ad that you just saw taking aim at HIMS in USA Today in the New York Times called check before you inject Carl.
- [44:29]
A
Him shares up fourfold in the last 12 months.
- [44:32]
C
But a reminder to investors the clock is ticking on this tailwind since the shortage will eventually be over. Carl, interesting. We know hims has been volatile on all kinds of pieces of news. Brandon, thank you. Brandon Gomez. Meantime, later on today on the half. Scott, what think do you you got?
- [44:48]
A
We'll have more on this 13F from David Tepper's Appaloosa, increasing his positions in China technology and decreasing in some big mega cap stocks here as well. Go through all of it a little bit.
- [45:01]
D
Can't wait to hear what the traders have to say about that one.
- [45:03]
A
Me too. Me too.
- [45:04]
D
Great.
- [45:04]
A
Thanks for having me guys.
- [45:06]
C
We'll see you. Thanks for the help, Scott. Meantime, Money Movers begins after this. You've been listening to the opening bell on cnbc. Squawk on the street all opinions expressed.
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B
By the Squawk on the street participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, or 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 Squawk on the street participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and its should not be relied upon as such. To view the full Squawk on the street disclaimer, please visit cnbc.com squawkonthestreetdisclaimer introducing.
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F
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C
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F
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C
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