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Bessent Boosts Stocks, Names to Buy Now, and Google’s AI Future 4/22/25
00:42:49
Treasury Secretary Bessent saying the current standoff between China and the U.S. is unsustainable, giving investors hope President Trump might back down from his hardline stance on trade. Our strategists have two names they say can ride out the current volatility. Plus, Google’s Search remedies trial is taking a turn for the AI.
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Kelly Evans
Hey Fidelity. Can I get a second opinion on stocks in the Fidelity app? With Fidelity, it's easy to get an outside opinion from independent experts in a single score. And then when you're ready, trade US stocks and ETFs with no commissions. That's right. I am always right. Investing involves risk, including risk of loss, online US equity trades and ETFs and retail fidelity account sell order assessment fee not included some account types and securities excluded. Details@fidelity.com commissions Fidelity Brokerage Services, LLC member NYSE SIPC Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99 of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the Now It Pays to Discover. Learn more at discover.com credit card based on the February 2024 Nelson Report. You're listening to the Exchange. Here's today's show. Stocks are surging this hour on hopes for a de escalation on our many trade fights. A source familiar telling cnbc Treasury Secretary Benson sees de escalation with China ahead. Welcome to the Exchange. I'm Kelly Evans and here's what's ahead. The dollar index is down 9% so far this year. It's the worst start to a year ever and easily the worst start to a new presidential term. Trump has made it clear he wants Powell to cut rates and our guests actually agree. Two of them see more cuts than the market this they're for different reasons. They are here to make their case. Plus the weaker dollar and the tariff threats have only strengthened the bull case for this name. According to our analyst, his contrarian take on a few opportunities in retail right now and the names to avoid. That's our mystery chart today. Before we get to all that though, let's get right over to Dom Chu with more on this market rebound. That's right. That market rally bull is taking the place of that market bear, kind of bear that we saw yesterday. And there's a good reason why because at these levels, the markets have pretty much gotten back every single point point that they lost during yesterday's sell off. And we're hovering towards the session highs right now. The Dow Industrials at 39,180 are up north of 1,000 points. It's a 2.5% gain there. Same percentage move for the broader S&P 500 at 5293. It's up 135 points. At the highs of the session we were up 151 and even at the lows of the session trying to bounce today up roughly 49 points. That is your intraday trading range of again tilting towards the higher end of that the Nasdaq composite up a full 3% or 483 points to a level of 16,358 for the Nasdaq Composite index. A couple other places to watch right now we are seeing another another day, another record high for gold prices though with those bessant comments that Kelly just mentioned. A little bit of that risk or safety trade has now come off. So gold prices are off their record highs. I will still put a star up here because they did hit one earlier but 350990 is your new high watermark on an intraday basis. Goldman Comex Gold futures down now but they did set a record earlier. It's not just real gold. Check out that so called digital gold and bitcoin prices. Bitcoin prices right now above the 90,000 mark actually got above 91,000 at one point. Really propelled again by those best in comments up 4%. It's the first time since early March that we've seen this level above 90,000 for Bitcoin. So keep an eye on that. And then a slew of stocks and companies that have business in China or at least a notable amount of it saw some of their intraday moves to the upside. After those comments from Bessant, Apple, Nvidia, Tesla, Nike, Starbucks among those stocks that are up anywhere from 2 1/2 all the way up to 6% Tesla. This move in particular has got a lot of investors curious. They report earnings after the closing bell today and believe it or not Kelly, the options market is actually pricing in a less volatile report for Tesla. The than has been the case on average for the past eight quarters. So keep an eye on all those names, especially Tesla. I'll send things back over to you. All right Don, thanks very much. Stocks are rallying today even as more Dower data comes in. Like the Philly Fed. The non manufacturing index fell to nearly minus 43 in April. That's the lowest level since May 2020. And my next guests say an economic slowdown will force the Fed to slash rates this year. One's calling for at least four cuts starting in June. The other expects 2/2 point cuts after September. Joining me now are Adam Posen, president of the Peterson Institute for International Economics and Barry Knapp, director of research at Ironside cnbc senior economics reporter Steve Liesman is with. Steve, you're not here on set with me. Where, where, where, where's, where's Waldo? I'm sorry. I'm in what Dick Cheney used to call a udl undisclosed location. Okay, well, please feel free to jump in as needed throughout this discussion. And Adam, I'll turn to you because you have a forecast for two mega cuts later this year. Then you think we're going to have it back to hikes by next year. So how exactly do you see this whole economic situation playing out? I think we're on our way to inflation, whether we get recession or expansion. Kelly, I think there's a two thirds chance we're going to have negative growth on average over the next six quarters, in which case the Fed will panic and cut rates. But they will wait until there's been some shakeout from the fiscal policies and the test tax and tariff policies. But I also think you're going to get inflation whether or not we get growth. And so the Fed is going to cut as a matter of forecasting, but it's going to be a mistake and they're just going to have to start hiking rates in 2026. So you see both the slowdown and inflation. So we're going to hear a lot about stagflation and the prior experience. In the 70s these rates were many times higher than what they are now. But do you still think the use of that term would be appropriate? I think in the literal sense, it's appropriate in the sense that normally you do not have, except for a month or so coincidence of declining employment and rising inflation. But I also think it's important because even though, God willing, it won't be anything like the 70s, it is the similar dilemma for the Fed as it was in 79 that you have to make a hard choice as Chair Powell, I think articulated reasonably well last week in Chicago. I'm curious that you and Barry both agree that the economy is going to slow. But Barry, you're much more dovish. I mean, you see a lot more disinflation coming. I think. Do, do tell. I guess I would start with a little bit of a caveat. I never really thought we were going back to below Fed target inflation through this entire business cycle. I do think though, there are a couple of major disinflationary forces in place. Last week the Fed released the new tenant index. It's been decidedly negative two quarters in a row. So that's going to put downward pressure on rents. I'm not sure that that's sustainable through the rest of the business cycle because of the collapse in multifamily construction. But for now we've got disinflation there. I think if Congress does follow through on spending cuts, that could put somewhat downward pressure on non housing services. Inflation and import prices were starting to cool before the surplus penalty tariffs I refuse to call reciprocal hit. And so China still has that excess capacity. They have 2 1/2% negative PPI manufacturing capacity. So I'm not as worried about inflation as Adam is, but at least in the near term. But I am clearly worried about growth. And I would note in addition to the Philly Fed non manufacturing survey you mentioned, we had Richmond Fed manufacturing and services today. The business capital spending plans six months forward have absolutely cratered. Jan Hatzi has cited that today as a reason why the Fed really can't wait until they see them start themselves starting to fail on the employment part of the mandate or wait for capital spending to get even weaker than it was in the second half of last year. So I think they'll probably move sooner than Adam said. But nonetheless, I think they are going to end up moving. So, Steve, this is the answer to the non bet from yesterday. Powell's going to end up cutting and then there's going to be no drama with him and the president. Yeah. You know, it's almost like you could be optimistic today because if you listen and stop talking, you'll hear the silence of President Trump not tweeting and then you see the beauty of the stock market rising, especially on this possibility that you might have indeed some kind of deal. And it's interesting to think of. I'm not quite sure how to characterize it, Kelly, but Besant's reasoning is fascinating that we have to have a deal because these tariffs are unsustainable. They're too crazy to last. So you could almost start to put together a little bit of optimism. I'm not sure. You know, Scott Woepner said to me, steve, there's got to be a deal because we can't not have a deal with these tariffs. So I don't want to be optimistic because the market's up. But at least for the last, I don't know what you want to say, 13 or 14 hours it's been possible to feel like, okay, well, Scott Bessant, well, he's kind of one of the adults in charge. It's possible that you get a deal with China and then maybe things look not as dire. It's well to remember, Kelly and I want to add to go ahead, Adam. I'm sorry. It's just I've been talking a lot with people who are senior in China or who are close to people senior in China and, and I've been talking with trade negotiators and there's no way in heck we're getting a deal with China anytime soon. Whatever the Secretary of the treasury says not going to happen. There's been no preparation and she isn't going to meet with Trump unless there's preparation. So I mean, it's nice the market's up, but if that's the reasoning as opposed to finally shutting up about Fed independence, it's probably not going to last. It's ironic you say that, Adam, because I was going to ask you if we got some whether it's a deal with China or with Japan or whomever it might be, is that how the market kind of shakes itself out of this and maybe does that even diminish the need for all the rate cuts and the stagflation and all the kind of dour situations we're talking about? Right. Well, I mean, I want to support what you and Steve were talking about, that that is clearly the repeated hope that there's a self correcting mechanism, that adults in the room or market punishment or clear unsustainability policies. But as a matter of social science and forecasting, that's not how things necessarily work. In fact, that's often not how things work. I was talking with a former senior diplomat just this morning and this has the feel of, you know, when countries are in an escalatory ladder and it's hard for each of them to back down and feels like the train's leaving the station. So I mean, I'm delighted if the secretary of the treasury can calm this down, but I would not be betting real money on that. Barry, what would you say about that? Well, I wanted to interject what I think is a really important point and I have to say I was quite entertained by Larry Lindsey's discussion with Steve yesterday. I've known Larry for quite some time. But listen, I think the real issue in the treasury market is not so much trade policy, the flight from the dollar. The dollar is overvalued on a whole bunch of metrics. You know, real effective exchange rates, purchasing power, parity, all that stuff. The real issue in the bond market was made in America and we've had now four series of mini crises in the back end of the treasury market and it's related to our supply. So the weakness yesterday, the bear steepening we got in the back end came in front of a $69 billion two year auction. We just got tomorrow's $70 billion five year auction and Thursday's $44 billion seven year auction. True, in the weeks in the periods when we've been worried about that supply, the bulk of the bulk of the selling has taken place in the back end of the market. The real concern for me here is that the House signed off on the Senate budget resolution which requires no spending cuts. They went on recess. We got bad news on the budget deficit. That's the problem in the back end of the treasury market, not foreigners selling. So very well said. In fact, gentlemen, not to jump out of this, but we've got some more. Steve, just one second. Amen. Standing by at the White House and he brings us more about those bessant comments about the trade war with China. Eamon Kelly. That's right. I have a source who was in the room was given me a written rough transcript of exactly what Besson said at that conference yesterday. I want to bring it to you because obviously it's moving the market today. According to this source in the room, what the Treasury Secretary said was no one thinks the current status quo is sustainable at 145 and 125% in terms of the relationship with tariffs with China he says. So I would posit that over the very near future there will be de escalation and I think that that should give the world the markets a sigh of relief. He also goes on to say I do say China is going to be a slog in terms of the negotiations because that engagement engagement started I would not yet. But I think again I think neither side thinks the status quo is sustainable. But I've said quite a bit. So what Bessen is saying here is that neither the United States nor the Chinese side thinks that the trade relationship is sustainable between the two countries. And he also says here that he views this ultimately as an embargo between the two countries, that it's ultimately going to have to lead to some kind of negotiation. And he talks about the idea of rebalancing the two nations trade relationship together. He says they have stifled the consumer economy and favored manufacturing. We want to increase manufacturing. The identity of that would be less consumption. And if somehow I could see a Ray Dalio essay on this like a big beautiful rebalancing, if we walk out the door of negotiations and sign something in two or three years that looked like that I would think that it's a huge win. And then the trade practices, the goal of that is not that hard a break. We want to stay engaged, but it's going to be more fair. So that's a summary again from a person who was in the room of exactly what the Treasury Secretary told that audience at the JP Morgan event yesterday. Guys. I think that's interesting, Eamon, that his timeline, his timeframe was two or three years for a deal. Yep. He says if we walk out the door of negotiations and sign something like that in two or three years that looked like that, I would think that it's a huge win. And then the trade practices, the goal is not a hard break. We want to stay engaged. So I think that's an important timeline. But in terms of the sustainability of all this, he says we have an embargo now on both sides. Right. So what he's suggesting is that these tariff policies are so high that ultimately it amounts to an embargo on both sides and that both sides see that as non sustainable and that's why he thinks that there ultimately will be a negotiation. The question, Kelly, as you guys have been discussing, is how quickly can that happen? And you point out the timeline here he's given is two or three years. The President has talked about a couple of weeks. So there's, there's a big delta between those two time frames. And obviously they're working as hard as they can here at the White House to move negotiations along. But how realistic is any of that? How practical is it to get a major deal done with a major trading partner like that in record time? Eamon, stay right there if you have a second. And I know we have to bring Rick in as well. We've had a two year note auction. But I just want to give everyone a chance if they have any questions. Steve, first to you, Steve Liesman, some thoughts here. The Dow is still about 850 points, so call it about 2, 300 off the, off the highs. I'm going to defer to Adam on this because he has different information that is very important. I would just say if it's two to three years and not 90 days, I would then concur with the Dower outlook for the economy and deep rate cuts from the Fed from both our guests, Barry and Adam. Adam. Thanks, Steve. Thanks, Kelly. I'm very glad to hear the Secretary of Treasury addressing the fact that it is unsustainable and that negotiations for real rebalancing would take time. Problem is, as I've argued Recently and others agree China has the cards in this situation. They would rather not be in this situation, but once they're in the situation, they're less dependent than we are on them. And so the idea that it's in their interest to de escalate right now strikes me as odd. Barry? Oh, I wouldn't, I wouldn't go that far. I guess my base case was to assume that the 10% global tariffs were going to stick, that we would cut deals first in Asia, Europe would be more difficult and China would take two or three years. I don't agree that China holds all the cards in this. Until and unless President Xi is willing to restructure their economy and stimulate domestic demand, they've got manufacturing pie, excess capacity, a real estate problem, massive unrealized low losses in the banking system. I don't really see how they have an upper hand. But you know, this is, this is bad for years, the Cultural Revolution, and they've been preparing for decoupling for a decade. So it's not to say what you say is untrue about China, it just doesn't weaken their hand. Kelly, I want to make a quick comment on what Barry just said, which is his default position is the 10% across the board tariffs. Let's just be clear, that's three times what the US tariffs were previously. It keeps the United States at the one of the highest levels of tariffs of developed countries. And it was the thing that the market was expecting before Liberation Day for which it had already sold off something like three or four trillion dollars worth of wealth from the S and P. So no offense to Barry, I think he's right. He may be right about that. But we somehow have normalized what was previously believed to be an outrageous position on tariffs that is now seen as the default position. And I'm not saying Barry saying this, but somehow that's okay because it's way the heck better than what we may end up with, right? The 6%. Can I add Kelly, respond. Because I'm not saying it's okay by any stretch. In fact, my real concern with this relates to my, my earlier point, which is for me, the only way to stabilize our debt and deficit is to get spending on track back to 20 and a half percent of GDP, which is the 50 year median. That what I'd like to hear Besson, Treasury Secretary Bessen say, which he used to say quite frequently was we don't have a tax problem, we have a spending problem. The administration seems to believe they can raise $600 billion a year or at least $300 billion a year in tax receipts, which will partially plug the deficit. So they're going to get there by a combination of revenues and spending cuts. I think that will fail. It's akin to what Churchill once said about, you know, trying to tax your way out of debt is like standing on the, in a bucket of water and pulling up on the sides of the pail. So my real issue then relates back to our debt and deficit problem, which we created, and trying to tax your way out of it with tariff taxes, you know, import taxes, whatever, is a mistake. So I don't think it's okay by any stretch. But my reason for thinking it's not okay has mostly to do with our own debt problem, which is become really acute. And let's get back to Eamon for a final comment here at the White House. Amen. Kelly. Just two more thoughts here from the Treasury Secretary. You guys are talking about the idea of decoupling. In these remarks yesterday, the treasury secretary said, I think that I saw a number of container bookings between the, between China and the US and this is from two weeks ago is down 64%. He says the goal isn't to decouple. The goal isn't to decouple. He repeated that twice. And then in terms of the negotiations, the treasury secretary, Secretary said, I'm optimistic that we could do this rebalancing, but in the meantime, there are so many things in terms of surpluses, in terms of the imbalances, and it'll be a question of whether they're ready to do it. So the treasury secretary there acknowledging in those private comments, you know, some doubt about whether the Chinese are ready to come to the table on the terms at least, that the Trump, the Trump administration wants them to come to the table with. And we'll go on that note. But, Adam, to your earlier point about how you don't see anything in the works on that front, maybe this timeline from the treasury secretary of two to three years is the realistic outcome. I mean, that would be fine. I just, I mean, not fine, but definitely an improvement and more realism. I think there are people in the Trump administration, and including Democrats and Republicans, Congress, who do want to decouple. And I think that the debt issues in the US Are going to be made complicated if you're making it unattractive for people, including Chinese investors and Chinese government to put their money in US Treasuries. So there is a tension here. I think Steve is right, that where we were set up, I said this I think last time I was on with you Kelly, a month ago we were set up to settle for the 10% across the board and the five big sectoral tariffs by propaganda that that's okay and it's really not. Well, we'll see where we land at this point with DAWA losing some momentum but again we're still up 764. Don't want to make too much of it but as we get more clarity on what was said in that meeting and what the White House's plans may be. Gentlemen, thanks. Adam Posen, Barry Knapp, Steve Liesman, Eamon Javers, really appreciate your time. Speaking of which, on this very question of treasury supply, let's get to Rick Santelli tracking how the results of the two year auction just went. Rick? Well do keep in mind the two year has been shadow boxing equities for the last several plus sessions. Equities were up and the auction wasn't that good. And it had a pop up yield as you look at the intraday chart made a new high for the session and those 69 billion two years were pushed out the door at a yield of 3.795 which is about a basis point and a half above the one issued market. Higher yield, lower price. The government was a seller. It was not a good auction. I gave it a C minus and I really do believe I was being overly generous here for a short maturity that's had so much volatility when long maturities are supposed to have that game to themselves. Really does explain or go a long way to explain why the auction didn't go that well. Let me hit some lowlights. If you look at the bid to cover 2.52 well below the 10 auction average, basically the weakest since October of last year as was the dealer position, they took too many 13.7 versus 12%. All the metrics for indirect and direct bidders which we now combine were definitely well below 10 auction average. Tomorrow's 70 billion 5 years followed by 44 billion 7 years. What I can say is no single auction is going to give anyone the answer on debt and deficits. But debt and deficits certainly have been a big Hornet bite on the US economy since well before this administration. And pursuant to that last conversation, Kelly, I can't resist. How do you make a 10% tariff look good? You start at 125. Yeah, back to you. And there has been a lot of supply this week, Rick. I mean that's Barry's point about why we've seen the long end backing up. You know, I don't see any surprises. I know everybody's talking like there's surprises. We've had a lot of volatility. We've had a huge amount of curve movement because each side of the curve takes a day off on being volatile. Yesterday it was more on the long end. Today it's more on the short end. But in the grand scheme of things, yields were higher in January. And I see what's going on in Treasuries as something unique, but certainly nothing really negative or giving us any clues to something dire down the road. All right, Rick, thanks for now. We really appreciate it. Rick Santelli again, the two note two year note auction C minus from the Rickster and the Dow is up about 706 on that. Let's get out to Tesla which reports after the bell and it's been a dismal few months there. As we know, despite today's 4% bump, the company's erased more than half a trillion dollars in market value since January. The stock is 51% off its record high from December, by far the worst performing Mag7 name this year. Also the most lucrative trade for shorts, giving them more than $11 billion in profits. And the average analyst price target is still nearly 40% above where the shares are now. Philippeau has a has more Phil, on what we might hear this afternoon and the expectations are pretty low, Kelly. I mean look, we saw sales falling in the first quarter quarter and that's reflected in what the people are looking for, the analysts are looking for when it comes to the numbers within the numbers, the Q1 auto gross margins excluding zero emission vehicle credits, while they are expected to be lower, perhaps as low as 13 or 12%, there have been a few analysts as low as that. I think the estimate 16.8%. What do they say in specifics in terms of details about AI and AV investments? Or is it Elon saying this is the beginning of a big revolution that's coming and we'll be a part of it. The more specificity the better. And then finally, what do they do about 25 delivery guidance? Do they change it? We already know that they expect it to be slightly lower for the year. Remember in the first quarter deliveries fell 13% and the analysts are also going to be focused on production of a lower priced model. When will it start? Is it being pushed out as has been suggested by some reports within the last week that will also get a fair amount of attention. Finally, as you take a look at shares of Tesla and we're going back to November 5th. This is when President Trump was elected. Will Elon Musk signal an end to his work with the Department of Government Efficiency? More than a few Dan Ives is most notable have said on Wall street he needs to scale back and get back scale back his government work and get back to running Tesla. I'm not sure we're going to hear that from Elon Musk during the conference call, but if he does signal that, look, there is a period that's going to be coming to an end and I'm going to be more committed to focusing on Tesla, you can bet that shares are going to rally on that comment if he makes that comment during the conference call. Yeah, it seems like that's going to overshadow anything that might happen in the quarter, but we'll see. The company has a way of always surprising us. Phil, thanks for now. Phil LeBeau we appreciate it. Coming up, the name our market guest likes for protection against tariffs and the weaker $. We'll reveal our mystery chart ahead. Here's one more look at it. But first, if the rally peters out again, one manager says turn to dividend stocks, including this big tech name. We'll have details after the break. As the market tries to hang onto its gains. For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more@mycare.org Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com creditcard based on the February 20for Nelson report. Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the Same premium wireless for 15amonth Plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do. @mintmobile.com Switch upfront payment of 45 for 3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees, extra fee, full terms@mintmobile.tom welcome back. The Dow up about 650 points right now. So we've almost halved where we were at the session highs just an hour or two ago. Still, it's a rebound from yesterday's big declines. And our next guest has been busy scooping up industry leaders at discount prices. Matrix Asset Advisors CEO David Katz joins us now. David, welcome. And first of all, do you find it an opportunity or frustrating as an investor? The back and forth here, the way we're all trying to tease out these headlines and figure out what's really going to happen with these trade deals, both if you're trying to play the comments on a daily basis, we think you're going to go nuts. We think the best thing to do is take that longer term vision. Buy really good businesses and buy them on the days that the market is depressed or sad. Do it on the negative comments. Don't chase the rallies like today because the government and the administration is changing its mind on a daily basis. We think you have to look about nine to 12 months out and you have to assume and hope that ultimately saner minds prevail and they back off from some of these tariffs. And basically what Percent said today was exactly right. The situation is so bad that it's got to change and it's got to ease. So where do you know that you can kind of go to the sidelines while this all gets worked out? Because you can't really go to the sidelines. I mean, the kinds of things you're talking about affect so many different kinds of businesses. And not to mention if we have a recession. Well, you're exactly right. It affects all businesses. We think that you have to stay in stocks months and you have to look out 12 months and not get overly concerned about the daily moves. If you're looking for a more conservative area within the stock market, we'd focus on some dividend payers. They generally will have been more protective. On the downside, you're getting paid a good yield while you wait. But we also think at this point you can buy some of the more aggressive areas that have just gotten creamed. We went into the year cautious on Mag 7. We think at this point most of them are pretty attractive. You know, Amazon being one. You're also looking at AMAT at Lowe's, Wells Fargo, so kind of a mix of companies there. What about gold? I don't know if you have anything, any exposure to it in the portfolio. But do you look at that and wish you did? Well, we wish we did a year ago, but at this point we would not Be putting money into gold. We, we've read a number of things that talk about it being one of the most overcrowded trades out there today, more overcrowded than the Max seven last year. We think people are buying it because they're scared about everything else. And if the tensions ever cool and the market starts to do better, we think all of that gold money is going to come out. So we think your upside is very limited. Your downside probably is 20 to 25%. And we think again, 12 months out you can make 20 to 25% in the stock market. So we think that's a much better place to be if you don't want to be in the market. We would keep it in cash rather than putting it in gold as a secure place. And what about, and by the way, your comments are echoed by the likes of Dennis Gartman and others who have been longtime bulls but say, look, this is getting out of hand. It's looking almost like a bubble. So just curious on bonds, which often play some role in the portfolio, but people a little confused about that right now. Should they be hiding out in T bills like you said, if, you know, if there's a sense, well, I can't go in cash because of inflation, do I go to T bills, do I go to the longer end? And to your point, hope that this all kind of gets resolved and things calm down in the next couple of months. So for balanced account, we do like short term bonds, one to four year bonds. We absolutely would not buy longer term bonds. There are lots of concerns that there, if tariffs play out worse than we hope they do, that's very inflationary. If the Fed, if the president tries to force Powell out, that would be very bad for the bond market. So there are a number of things that are concerning on the longer term bond market. We'd stay away from there. We'd focus on one to four year bonds and again we would be buying into stocks here into this significant pullback. Is Amazon the only Mag7 name, so to speak, that you would look at? I mean, does Tesla get to a point? I don't, I don't know if it pays a dividend, must be small even if it does. But are there any others that look attractive? So we like basically all of the Magic 7 except for Tesla at this point. So we think Apple, which has a little bit more uncertainty than the others, is going to be pretty good. We like Microsoft a lot. Google's at a very good price matters at a very good price. So we're buyers of the group. We went into the year owning them, but we were a lot more cautious about their outlook at this point. We're very upbeat. The reason that we don't like Tesla and again, who knows what's going to happen today. But the reason that we don't like Tesla is it's a consumer product company that has really pissed off their customer base, which is going to mean there's going to be much less demand. They pissed off the customer base in China, Europe. And most US People that were interested in helping the environment are probably more liberal than conservative. So we really worry about the demand. And that's not that Musk is not focused on the business, but rather they're going to be unhappy with the company for a long time because Musk is the business. Well, we're going to talk more about that very issue next hour. David, thanks for joining us. It's good to see you today. Great to see you. Have a great day, you two. David Katz with Matrix Asset Advisors. Coming up, the Justice Department testing out a new playbook on tech regulation as its breakup trial versus Google continues in Washington. Those details ahead with Alphabet shares near their lowest level in over a year. Stay with us. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report. Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do. @mintmobile.com Switch upfront payment of $45 for 3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees, extra terms. @mintmobile.com welcome back to the Exchange. I'm Julia Boorstin with your CNBC News update. Secretary of State Marco Rubio has released plans to drastically reorganize the city State Department. Among the changes, Rubio said the office that focuses on human rights and war crimes would be cut, which he said has become, quote, a platform for less left wing activists. Senior officials would also need to submit plans to cut US based staffers by 15%. The three remaining federal prosecutors in the corruption case against New York City Mayor Eric Adams have resigned in protest. In a letter seen by Reuters, the assistant, usually attorneys, said the Justice Department had pressured them to admit wrongdoing and refusing to drop the case. The U.S. attorney's office for the Southern District of New York did not comment on the resignations. And the impact of President Trump's tariffs on Chinese goods is starting to show up in major ports. According to ship tracker Port Optimizer, for The week ending May 3, the number of cargo ships leaving China for the ports of Los Angeles and Long beach fell 29% week over week. Back over to you, Julia. Thank you very much. Coming up, your last chance to guess our mystery chart. The shares are up 7% to start the year. That's some nice outperformance. While the S and p, it's still down 11% despite today's rally. It's the name our guest loves and says it offers protection from tariffs and the weaker dollar. We'll reveal it next on the Exchange. Welcome back to the exchange. CNBC's newest subscription streaming product is CNBC Plus. You're looking at it now. It's now available so we wanted to show you what it looks like. What you see right now is the CNBC plus data feed gives you enhanced data, the latest headlines during our live programming. You can also stream this show and any of your favorite CNBC shows anytime, anywhere. And we were just looking at those market stats. In fact, we've lost some steam this hour. Stocks are rebounding, though from a four day losing streak for the Dow and for the nasdaq, though all three major averages are still down more than 7% since the new tariffs were announced by the president nearly three weeks ago ago. The dollar rebounding still below 100. Worst start to a presidential term ever according to bespoke. Down 10% nearly since Trump took office. My next guest says there's no doubt the US Is already in a recession and he's got a name insulated from both tariffs and a weaker dollar. Joining us is behind Janky and Greenwich Wealth Management's chief investment officer behind. It's great to see you. Welcome. Hi, Kelly. Thanks for having me back. Before before the big reveal, what are your thoughts about how this is all playing out? Do you worry about the, you know, emification of the US or do you think that whole concern is overblown Well, I think we've done substantial damage to the reputation of the United States and it's going to take a long time to recover that. You know, as of yesterday, the s and P500 was down about 15% since President Trump's inauguration. I'm very skeptical that we're going to get back to that level this year. This is a lot of damage that was unnecessary. You know, first of all, I don't believe that there's anything wrong with a trade deficit. I don't think that that's a problem. It does not mean that anybody is ripping us off. I'm all on board with trying to fix the budget deficit, but this trade deficit and the tariffs are all a self inflicted wound. And I think it's going to take a long time to recover. You know, all you have to do right now is look at what's going on with tourism. A lot of foreigners are canceling vacations to the United States. That's one of our biggest exports. Also look at, look at Tesla sales in Europe. I mean, they were down, I think, what, 49% in the first two months of this year because that's a brand that's most closely associated with the Trump administration. So there's a big backlash going on and I think it's going to take a long time before foreigners come around to buying American goods again. And you know, you would say you're not an economist, but you kind of look at the facts in the way certain stocks are behaving. You think we could already be in recession? Well, I am an economist, but yes. Well, then I said. Then let me speak your language here for a second. So Joe Lavornia the other day said we're not in a recession based on jobless claims and chain store sales, among other things. So he was saying kind of the real time data points still look healthy. Well, you know, I would have to agree with that. But I do think we are in a recession. It's just that we won't know it yet because it takes a while for the NBER to analyze all the data and actually declare the recession. Yes, jobless claims so far have been pretty strong. The unemployment rate is still near historic lows, but the economy is definitely slowing and it's a widespread slowdown. It's not quite really deep, but I think it could be deep. So I think we do have enough data now to, to say that we are probably in a recession. You've got your economist, you're running a portfolio. What else you do? Man of many talents here Well, I write a book every once in a while. You write a book, teach classes. All right, so the much more boring. I mean, I don't mean to put it this way, but the stock that has your interest is Verizon. And maybe that's exactly the kind of thing people want to hear about right now. But there's plenty of value oriented investors who are coming on and saying they're looking through the Mag 7 and finding a lot of opportunity. Yeah. So I think if the market does bounce back very strongly, the Max 7 will definitely participate and bounce back very strongly. It's just that I'm not very optimistic that these trade problems are going to be ironed out anytime soon. I mean, today, I mean, just a little while ago you announced that, you know, what Scott Besson said, and it turned out there wasn't a lot of meat in his words, in the market. Already gave back some of the gains. You know, as far as Verizon goes, it is not a stock that's going to go up tremendously in terms of capital appreciation, but it provides a great dividend. And even if you ignore the dividend, it's one of the few stocks that are actually up pretty strongly year to date. I think it's up about 8 or 9% right now, year to date. So it's a safe stock. It provides good income for people who want that income. But if you're looking for a double or triple on your money in a short period of time, this is not the one to buy. Given some of your concern, does that make you a bigger sort of fan of things like gold and crypto here and, and the whole kind of dollar debasement idea that is to some extent driving those trades or. No, I think it's true that the dollar debasement is driving those trades. Although I am not a big fan of gold and crypto because these are things that do not produce any cash flows and it's difficult to, to conclude that they have any intrinsic value at all. I would rather invest in things that actually produce cash flows and will grow over time. Right. And I know a lot has been made and maybe we can put up the gold chart that it's outperformed on a price basis, the S and P since the year 2000. But I think on a total return basis, stocks still have done better. That's. That's true. If you look over the long term. That's absolutely true. Yeah. Just to your point about the importance of those cash flows behind. Thanks for joining us today. Thank you, Kelly. Appreciate IT Bahan Janjigian with Greenwich Wealth Management. And still to come, China trade headlines are boosting First Solar today. The shares are up nearly 13 now, almost 10% after U.S. trade officials finalized steep tariff levels separate from Trump's tariffs on most solar cells from Asia. It's a key step wrapping up a case brought against the companies by American manufacturers like First Solar alleging anti competitive practices. The International Trade Commission will vote in June to finalize these tariffs. It all has First Solar on pace for its best day since last September. We're back with more. Welcome back. Google is back in court today where the DOJ is looking beyond search and arguing for remedies that could impact Google's future. And I, Deirdre Bosa, has more in Tech Check. Hi Deirdre. Hey Kelly. So that is a big shift here. I may no longer be just a side casualty of regulatory battles, but it could become the main story. This from DOJ attorney David Dahlquist is really key for investors. He said yesterday this court's remedy should be forward looking and not ignore what is on the horizon. He went on to say that the risk of excluding Gen AI as well as Gemini is too great. And this really hits at the Google playbook for search that the mega cap has quietly started to deploy for AI and for its Gemini app. New testimony yesterday revealed that Google is paying Samsung again, this time to preinstall its AI app Gemini on new devices. Now in other words, this is Google trying to secure early dominance in the next interface using a method that the courts already deemed illegal for search. Now the urgency meanwhile is only rising for Google to get this transition right. Two recent studies show that Google's AI overviews are hurting click through rates, especially for non branded informational queries. And that really calls into question Google's claim that overviews get more clicks than traditional listings. Now Google's valuation, of course, we talk about it all the time. It reflects the skepticism around the ability to make the shift from search to AI without cannibalizing its most important revenue. And it also reflects the increasing regulatory pressure. The latest cali from this remedies case is going to make it even harder for investors to see a real recent wins on the AI side. And it's a really, really important shift for regulators. We always talk about how they've sort of missed the boat. They're looking backwards. In this case. They are very distinctly looking forward. And that is a change. And that's something that we've been wondering that they would do for years. So where was the Report that, that their summaries are hurting the click through rates. Was that from Google itself? No, no, these were from third party reports. I mean obviously it fosters website. Right. Like it bolsters Google's case, but it also undermines, you know, I mean it's a major source of anxiety about owning the stock here if they can kind of pull off this transition from their lucrative ad model to something new and different. Yeah. And it actually goes against too. What we've heard from Google executives is that we see more click through. But I think all of this is also just being negotiated and transitioned in real time. Right. We don't know yet. Everyone's trying to figure out an ad model. And it's not just Google. It seems to be if you read the tea leaves, some of the other chatbots may be looking at that also. Right. And this is one of many, many trials it feels. How many are there going on right now simultaneously? 3. Two government cases in the US there's Europe, there's Japan, there's China. It's all over. Google is just drowning in this regulatory pressure. It's a full time job. And I think that's one of the arguments people make about once. By the time this regulation comes, it inherently almost distracts from the neck thing. Yeah. Deirdre, for now, thanks. Appreciate it. Deirdre Bosa, do a quick check on markets and I believe we can show you the data that Treasury Secretary referenced during the notes that Eamonn Javors got from his meeting yesterday where he talked about how the container volumes at the Port of Los Angeles have been down sharply. I think he might have said even more than what we're seeing on the screen. But the numbers are large. 43%. There is the decline through the most recent tracking data that we have. Dow is hanging on to about a 667 point gain, but it's well off the highs. You've been listening to the exchange. Make sure you're subscribed to get each episode every day, same time, same place. Hotels.com knows that planning your book club's annual field trip can get chaotic. Rhea, the romance reader wants to stay in Prince Charming's castle. Self improvement. Steve needs a hotel gym. 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