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No Force for Greenland, The First Fed Fight, and the Housing Investor Ban 1/21/26
00:43:28
President Trump reiterates his pursuit for Greenland, but rules out using military force. Justice Kavanaugh advocates for Fed independence as the justices question the legality of Fed Governor Lisa Cook's firing. Plus, what the new housing investor ban means for real estate prices.
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- [00:00]
Kelly Evans
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. Restrictions apply. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update. Wherever you get your podcasts.
- [01:02]
We will see you then. Scott thank you very much and welcome to the Exchange. I'm Kelly Evans. We're off session highs in the markets today, but stocks are still positive after the President ruled out military action in Greenland. But the eu well, it's ruling to suspend its trade deal with the US we will get the President's first comments after his speech and a whole lot more right here in a first on CNBC interview. We'll we'll bring you Joe Kernan's interview with President Trump from Davos shortly. Let's get a quick check on the markets. As mentioned, stocks are rebounding from their biggest sell off in three months yesterday. The Dow's up half a percent, a smaller gain to the S and P and Nasdaq though. As for the yields, the 10 year yield back below 4.3%, you can see it there for 27 but gold still extending its rally now trading above 40$800 an ounce for the first time. Dollar stabilizing. Let's begin with the very latest out of Davos on a very busy news day. Eamon Javors has the key moments from the President's speech this morning and the latest on the tensions with the EU and how they're responding to these ongoing tariff threats.
- [02:02]
Eamon Kelly that's right. The President just wrapped up a session with CEOs in Davos and in his speech today he said he'll not use military force against Greenland. During his lengthy and wide ranging address to the World Economic Forum in Davos, he relieved the pressure of an immediate rupture of the NATO military alliance and decreased the possibility of a war between Western allies. Markets reacted in real time to that, with futures turning positive as the President spoke. But President Trump continued to insist that the United States should own Greenland, calling the island our territory and putting his demand in real estate terms.
- [02:38]
Fred Kemp
All we're asking for is to get Greenland, including right title and ownership, because you need the ownership to defend it. You can't defend it on a lease, number one, legally, it's not defensible that way totally.
- [02:56]
Kelly Evans
And number two, psychologically, who the hell.
- [02:59]
Fred Kemp
Wants to defend a license agreement or a lease?
- [03:05]
Kelly Evans
The President argued that the United States is entitled to Greenland because of all of the money and military power the country has invested in NATO since World War II. He said NATO has treated the United States very unfairly. And at one point he suggested a contrast between his approach, which is to grow the United States, and the decolonialization of the European powers, who had great lands across the world, as he put it, but then lost them when they went in reverse, as he said. Now, the President also discussed his affordability proposals, focusing on keeping institutional investors out of the housing market and capping credit card interest rates. Kelly, So a lot there to chew over. Back over to you.
- [03:41]
While he ruled out, as he said, the use of military force, the tariff threat or issue is still on the table. Right? Because after that speech was when we saw the news from the EU that they're now going to suspend the trade deal with us. Is that right?
- [03:55]
Yeah, that's right. So we saw that just a few minutes after the President stopped speaking, the European Parliament issued a statement saying they're going to suspend their work on the legislative proposals that would sort of support the existing trade deal that was agreed to back in July between the United States and EU. That's when the US side came down from 30% on tariffs to 15% on tariffs for Europe. Now the Europeans are saying, well, they're not going to go ahead and formalize that because of the President's threats against Greenland. That threat's still in place. And then the President's threat to impose tariffs on those countries that sent troops to Greenland to defend it against the United States, that threat is still on the table. The President hasn't implemented those tariffs yet, but he said he'll do that on February 1st. And all of that happening as the Supreme Court is weighing whether or not the President's authority on those tariffs exists under the Constitution at all. So a lot of moving parts here.
- [04:47]
No, absolutely. Appreciate the recap, though, Eamonn, thanks. For now, Eamon Jabbers. We appreciate it. My next guests say the Greenland crisis is at an inflection point, could determine the future of NATO. Let's Bring in Fred Kemp. He's the president and CEO of the Atlantic Council and a CNBC contributor. Nicholas Burns is professor at Harvard's Kennedy School, former U.S. ambassador to China and to NATO. And it's great to have you both here. And there's so much to do, kind of dive into, but I'm going to try to keep it in really kind of the lane for investors in our audience here. So, Fred, for, I guess, first question to you, is it the tariff issue that now is foremost? You expect even that to blow over? How would you think about the sequence of events that might take place here as the president remains focused on Greenland?
- [05:29]
Fred Kemp
Well, first of all, going ahead of Nick Burns is a real treat for me, former ambassador, NATO, somebody from whom I've been stealing ideas for many years. But, but let me go first. In any case, look, when you have the US when you have markets cheer, when the US President announces to the world he's not going to take military action against NATO territory, it gives you a little of a sense of where we are. But the more serious point about this is the president has really put this in domestic terms. His whole speech in the very beginning was talking about the strength of the US Economy, about energy. And then when he talked about Greenland, he even put that in domestic terms, which is its, its geopolitical position, security position between Russia and China and the United States, so that it could be used for air defense for Golden Dome. In terms of your answer, I think that we're going through what a senior European official told me yesterday was shock therapy. The Europeans know that they have to provide more for their own defense. That could actually be a good thing, also a good thing for NATO, but, but they also know that their deal wasn't done. They thought the tariff deal was done, but the tariff deal wasn't done. And now Trump is adding these additional tariffs for the countries that are standing in the way of his purchase of Greenland. So I think this will play out right now, but he's also turning it into a purchase negotiation, an economic negotiation with the Danes and eventually, I believe, also the green Greenlanders who may want to be independent, but they don't necessarily want to be part of the US and so we'll see how this plays out. Now, you've got a European Council meeting on Thursday. That's all the leaders of the European Union countries. We'll see where they come down on this. They have up to 90, 93 billion of further sanctions, tariffs and other economic means they could use on us. There's also something called an anti coercion instrument that the French would like to implement, which would be a real, they call it sort of the nuclear option in trade deals which could hit US Foreign direct investments and many other things. I don't think it will go that far. We are now in deal making territory. The question is whether the president is willing to stand down at all from his sort of absolutist stance that he has to have Greenland as, as American property.
- [07:52]
Kelly Evans
Ambassador Burns, even as the US And Europe have been kind of trading comments back and forth and tariff threats back and forth over this, it's been pretty quiet from China and Russia. Is that strategic or how should we expect ultimately, if we're casting this as a threat from those nations, how should we expect them to respond?
- [08:09]
Nicholas Burns
Well, the Chinese and Russians probably don't want to interrupt, as the United States says, so markedly hurt our relationship with Europe. I think that's probably their strategy because if, if in effect we're looking at a rupture and that's what Prime Minister Carney of Canada said yesterday, not a transition away from the old liberal order, but a rupture that then the beneficiaries of a rupture between Europe and the United States will be China and Russia. Kelly, I thought that President Trump, obviously it was a good thing that he withdrew his threat of the use of force against a NATO ally, Denmark. But I don't think that's going to be very convincing to the Europeans for two reasons. First, they know he's unpredictable and they know that he could turn a dime and, you know, reinject the use of force, the threat of the use of force tomorrow. And second, you know, this is the first time in the history, as Fred knows of a NATO alliance that the United States has ever threatened another ally. We're the leader of that alliance. And so it's not going to be easily forgotten. A lot of damage has been done. And Fred's right to point to the fact that the president left the tariff threat on the table today. So there might be a rocky road ahead if the Europeans respond to that and match our tariffs blow by blow.
- [09:26]
Kelly Evans
You know, I had read some reporting recently, I don't know how seriously to take this idea, but that China was actually trying to make a lot of economic inroads. Ambassador, with Europe, is there any scenario in which this ends up resulting in far from America and Europe coming closer together over this issue and kind of beefing up security that Europe, that it would leave an opening for the Europeans to, I don't know, do more business or be on more favorable trade terms or something like that with, with China itself.
- [09:55]
Nicholas Burns
As a result, that's certainly what the Chinese want to do. The Chinese want to divide the United States from Europe. They've been trying to do that for years. I don't think it's going to work in the short term in 2026 because China is the major military supplier of microelectronics to the Russian defense industrial base for the Russian war in Ukraine. That's an existential issue for the Europeans. So I don't think you'll see Europeans flocking to China to build up their economic relationships and certainly not at a time when China is dumping a lot of very low priced exports on the European market to kill the European manufacturers. I wouldn't see the Europeans taken in by the Chinese that easily.
- [10:37]
Kelly Evans
Right. Although it's ironic that they are going to. You know, Chinese EVs sell very well in Europe. You know what I mean?
- [10:43]
Nicholas Burns
The EVs do, but the Europeans still have, the EU still has 100% duties on them. And the Chinese, you know, with their $1.4 trillion trade surplus for the rest of the world, they can only grow by a massive expansion of Chinese exports around the world. That's not good for the European market.
- [11:02]
Kelly Evans
Then a quick final take from you on the tariff question. Depends on what's implemented February one and as we saw last year, you know, there's big announcements and then a lot of things get watered down. I think the pasta tariff went from like 90% to 9% or something like that. Is that your expectation here that, you know, very little actually comes to pass?
- [11:21]
Nicholas Burns
I think it's an open question right now. President Trump withdrew the use of force today, but he didn't give up on trying to get Greenland. There's going to be a. Well, he thinks there'll be a negotiation. I think the Europeans will not want to negotiate on the issue of whether they should hand over Denmark, should hand over Greenland to the United States. So I worry that both sides are now going to think about the use of tariffs if the US Continues with this threat to try to acquire Greenland, even by negotiated means.
- [11:50]
Kelly Evans
All right, Fred, a last word here.
- [11:53]
Fred Kemp
Well, I actually think there's a path to an agreement. I talked to a senior West European official last week and he said if there's no threat of military action, his country could live with whatever outcome on Greenland that Denmark and the US could come to. If Trump is serious, that he wants to strengthen NATO and wants to strengthen, strengthen the US at the same time, I think there's a negotiated outcome that one could come to. Probably didn't need to do it with this much drama and this much stress. I think Ambassador Burns is about that. The one thing that one can't forget, and I talked to one of my close friend of President Trump's last week is he thinks of himself as a, almost a reincarnation of President James Polka, our 11th president, who brought Texas in in 1845. And don't forget that was followed by the Mexican American War where we ended up with most, most of the American Southwest after that. And then he brought the Oregon Territory in after that. A near war experience with Great Britain in 1846, where we ended up with the states of Idaho and Washington and parts of Montana and, and Oregon. And so he, he sees that he's going back to the 19th century. So we have a 19th century president in his instincts coming up against all the uncertainties of a 20 century, 21st century world. And that's very dangerous. We're at a historic moment where the tectonic plates are shifting and he's, he's thinking in terms of the 19th century when the world has moved on to another place. But I wouldn't rule out that they can reach a negotiation on this. I, it's, it didn't have to be quite this messy. It didn't have to be, have be this fraught. But I, I don't think he's going to back off of wanting some sort of win on this one. And I think that the door has been open today to some sort of path toward that.
- [13:52]
Kelly Evans
It was interesting to hear Ken Griffin make those similar comments in an interview with Sarah Eisen this morning from Davos where he said he thought the president had a point. So again, there's going to be more discussion about this and I think from more voices than, than maybe just his on front. But for now, gentlemen, thanks, really appreciate it today. Thanks for joining us.
- [14:10]
Fred Kemp
Thank you.
- [14:10]
Kelly Evans
Fred Kemp and Nicholas Burns. The sell America trade we saw yesterday, that certainly dominated the markets, but it's taking a breather today as we recover from that Sell off. Yields are falling, the dollar is stabilizing. The president did rule out the use of force to acquire Greenland. With us now for more market reaction is Charles Bobrinskoy. He's the vice chair and head of the investment group at Ariel Investments. And Charlie, you've watched as we talked last year, obviously in April when the tariff threat was sort of at its apex as well. Is this going to be similar to that episode?
- [14:40]
Charlie Bobrinskoy
There aren't many things that economists agree on, but almost all economists agree that tariffs are bad for everybody and the market clearly agrees. That is, I think nobody seriously thought we were going to war over Iceland, but we did think that then Greenland, that we did think that we could have a lot higher tariffs. Donald Trump seems to really like tariffs. He's been right about some things about tariffs. They haven't caused the inflation that a lot of us were predicting. They've raised more revenue than many of us thought would happen and he thinks they're a wonderful negotiating lever. The market doesn't agree. I don't agree. Hopefully we can get to a settlement here that does not involve an increase in tariffs, which are fundamentally inflationary.
- [15:25]
Kelly Evans
How are you thinking about equities? You know, do you take this as just a reset again? We had this really kind of rip roaring start to the year. Some kind of pause was certainly due.
- [15:36]
Charlie Bobrinskoy
Yeah, you know, I'm always going to push back on the broad brush about equities. Large cap growth stocks were clearly overvalued and they're off to a terrible start. Small cap and mid cap value are actually doing pretty well. My fund is up about 7% this year and it's. So we're finally getting. This is not my finger spinning. This is not a call for looking at the tape in an NBA play. This is rotation. We're getting rotation out of large cap growth into small cap value. Small cap value is reasonably priced right now. Large cap growth is overpriced and we've.
- [16:11]
Kelly Evans
Seen that with the triple Qs we were talking about yesterday. Kind of stalling out really since the late fall. And maybe there's more to say about that separately. But you've been warning for some time to go small and mid. And if last year's any indication, the trend of the first few days was the bandwagon to jump on. I mean, look at the performance of international stocks. Look at gold and so forth. So, so do you take these early sort of success stories with the outperformance there as a sign of what could be a pretty big year for them?
- [16:38]
Charlie Bobrinskoy
I really do. I think the story that's not getting talked about quite enough is inflation. Inflation is stubbornly high. Everybody hears the Fed wants to take it to 2% and thinks that means we will take it to 2%. There are a lot of inflationary forces that are pushing the other direction. Trillion dollar deficits. Tariffs are inflationary. So there are less globalization is inflationary, frankly, less immigration increases, the cost of labor and that's inflationary so for all those reasons I think the world is now correctly and the markets are correctly worried about inflation. That's driving gold prices higher. That's going to drive oil prices higher. That's going to drive quality real estate higher. Don't forget that with the sphere in.
- [17:20]
Kelly Evans
Madison Square Garden I and people should know that that's what underpins that argument as much as your affinity for, you know, shows there or anything like that. You have a bunch. James, we've talked a lot obviously about the frustrating period it's been for energy investors. So Barrick Mining, different story. But you have slb, you have apa, both for energy investors. For those who are maybe thinking about materials, metals, other stocks like that. I mean it's the message from your point of view then that the entire trade should work for the duration of the year. Do you have to be somewhat selective about it?
- [17:52]
Charlie Bobrinskoy
I'm always Kelly, going to be pushing people to invest in things that are cheap relative to their intrinsic value. And Barrick gold. Barrick Mining, one of the world's largest gold miners is trading at less than 14 times earnings. I think people are underestimating the earnings power that Barrick is going to have with gold at $4,800 an ounce. Same thing with Apache, same thing with Schlumberger. I think that people are just that the low P ES reflect the fact that people don't buy that oil is going to have a good year. And I think the world needs natural gas, the world needs oil. And so Schlumberger and Apache are going to benefit from that trend. And the stocks are still very cheap.
- [18:31]
Kelly Evans
I'm told they're opening a second sphere in Maryland. Is that right? That's the that location.
- [18:36]
Charlie Bobrinskoy
Why not the third by the way?
- [18:38]
Kelly Evans
The third?
- [18:40]
Charlie Bobrinskoy
Dubai will probably be the second. It's going to be a smaller location, it's going to be a 6,000 seat location and people are very excited about that because it's capital light for the sphere. The Dolan's will not have to put in a lot of money for that. We're going to see that wizard of Oz has been a spectacular success breaking all expectations of attendance. And so if we can do that, I say we as an owner of the sphere, I think if we can show that this can work in a smaller venue then I think the number of spheres that could be built is frankly at least double digits.
- [19:13]
Kelly Evans
My parents would love that. So you're planting a seed here. Maybe a future gift idea. Charlie, thanks so much. Appreciate it today.
- [19:20]
Charlie Bobrinskoy
Thanks guys.
- [19:21]
Kelly Evans
Charlie Brabinskoy with Ariel. Coming up, investors are also watching the developments in the race for Fed chair. We'll have the latest and the highlights from the Supreme Court hearing and the president's bid to fire Fed Governor Lisa Cook. Stocks are paring their earlier gains, but even at the highs, we're not fully stemming yesterday's losses. The Nasdaq down more than 2% in the past two days. You heard Charlie's concern about the big caps there. The S and P down a percent and a half. The Dow almost as much in this shortened trading week. And we're moments away from the president's sit down interview with Joe Kernan out at Davos. You won't want to miss that and we'll bring it to you the moment it wraps here on the Exchange.
- [19:58]
This is the exchange on cnbc. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetized policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.
- [20:32]
At Capella University, we believe accessible education can make a difference. That's why we offer scholarship opportunities to all eligible students. Un futuro diferente estam mas cerca de lo que cres. Kuncappela University. Learn more at capella. Edu what made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. While there is plenty of drama overseas, there's also some big drama in D.C. today. The Supreme Court hearing on President Trump's bid to fire Fed Governor Lisa Cook kicked off with one justice even warning that Fed independence is at risk of shattering. Steve Liesman has all the details.
- [21:34]
Steve Liesman
Steve yeah, Kelly. In a case with broad implications for markets and the independence of the Fed, Supreme Court justices, including members of the conservative conservative majority, expressed skepticism about President Trump's decision to remove Fed governor Lisa Cook. In nearly two hours of questioning in the hearing attended by Fed Chair Jay Powell and former Fed Chair Ben Bernanke. Chief Justice Roberts questioned the government's claim that Cook's firing can't be reviewed by courts. Even if Cook made a, quote, inadvertent mistake. Justice Kavanaugh said the government's position, quote, would weaken, if not shatter, the independence of the the Federal Reserve. And Justice Barrett asked if risk of a recession from moving Cook shouldn't mean the Supreme Court Council caution on our part. Solicitor General John Sauer, arguing for the government, said Cook was guilty of deceit in filling out mortgage documents and that the President had a right to fire her because her mistake, quote, impugned the reputation of the Fed. But Paul Clement for Cook, responded later that that was less important than the Fed's reputation for independence.
- [22:41]
Kelly Evans
I think, you know, it's less important.
- [22:44]
Fred Kemp
That the president have full faith in.
- [22:47]
Kelly Evans
Every single governor, and it's more important that the markets and the public have faith in the independence of the Fed.
- [22:55]
David Zervos
From the president and from Congress.
- [23:00]
Steve Liesman
While skepticism of the government's case was clear from the justices, it was less certain how they would resolve it. For now, Cook appears safe in her position, denying President Trump a majority on the Federal Reserve Board of Governors, at least for now.
- [23:13]
Kelly Evans
Kelly, what was the biggest surprise to you so far? Steve?
- [23:18]
Steve Liesman
Again, it was mostly the skeptical questioning of the Solicitor General. The questions of Clement for Cook were more about how to resolve the situation. It's not clear how they're going to resolve this. They could remand it back to the lower courts where they can make a decision on their own. And it comes down to a question, Kelly, of whether or not they want to actually make case law on what for cause is and if they can limit that case law to for cause for a Federal Reserve Board official.
- [23:48]
Kelly Evans
Hmm, I see. All right, Steve, appreciate it for now. Thanks very much. Steve Liesman. Standing by is David Zervos. He's Jefferies chief market strategist at a CNBC contributor to react to what we've heard. And it sounds like the Supreme Court has some concerns here. Dave, what happens if they, I'm trying to think how to phrase this right. Don't allow it to proceed? Is that the way that it would happen if they don't allow the firing to proceed?
- [24:10]
David Zervos
Sounds like from the commentary and what Steve was saying, that that's, that's the market's assessment at this stage. I don't think that's a huge surprise, Kelly. I think most people thought it was a long shot that the court would get more aggressive here, but, you know, you asked Steve what his biggest surprise in all this was. I, Kelly, my biggest surprise was that Jay Powell went to the hearing. I just, I found that just like the Treasury Secretary, to be a very surprising thing to do. I think you want some oversight. You want to kind of make sure that the courts and what they're doing is independent, if you will, and sort of putting the thumb on the scale, as Scott said. I think. I just think it sends a bad message. It sends a message of trying to bully things around, and I'm not sure I like that one. That's what surprised me.
- [25:00]
Kelly Evans
Yeah. I mean, I think what you're saying is there's almost like the. By being there, he's sort of saying like, I'm watching you or something to that extent. I mean, but he, ever since his message to the public after the DOJ case, he seems to be less concerned. I mean, he's in the waning months here, and I think he seems to be acting like someone who's just kind of fed up with the direction that everything has been going and therefore thinks there's really not much to lose by trying to sort of act a little bit more muscular in what he sees as situations that are unjust. I mean, I'm speculating, I have no idea why, if there's maybe a completely different reason he showed up, but that's the vibe I'm getting from him, certainly.
- [25:39]
David Zervos
I think that's right. And I think he'll be celebrated in a lot of circles where, you know, where people will pay for him to come speak for very large amounts of money, celebrated as someone who saved the sanctity of the Fed. And that's kind of, as you said, there's not a lot to lose or just a couple meetings left. He's not fighting for anything real. So he can sort of build up that momentum as he leaves and he goes on to greener pastures.
- [26:02]
Kelly Evans
Do you know what I find most. I'll jump in. What I find most surprising, not about this case, which of course, has bigger implications for Fed policy and the border, but the real developments, to me, it seems they've, over the past four to six weeks have been on the economic front, perhaps on the inflation front as well. And I know, I understand where you're coming from with the pushback and that the labor market's still weak and rates should still come down, but the market seems to be moving against that a little bit. And I just love to hear your reaction to, like, if Powell really wanted, you know, to get to create some buzz around his departure. You know, hiking rates or talking about hiking rates would be the biggest narrative violation that we've had in years here with all the pressure that's on him.
- [26:41]
David Zervos
Yeah, I know we talked about that last time after your interview with my friend over at J.P. morgan. And I know there's other, other banks that have different views. I really don't understand the big hoopla about the inflation story. The CPI is sitting at 2.7. It's, it's way, way down. It's on a downward trajectory. There's a lot of disinflationary pressure coming from all this technology. And we're seeing that manifest itself in a very weak labor market in particular parts, especially for the younger generation that's coming out looking for jobs. I think the Fed has really kind of skipped a beat here on its dual mandate with regards to the labor side. As you know, the late, the unemployment rate has risen over a full percentage point over the last three years as inflation has come down and gotten really close to that target range. I just, I think there's a lot of folks looking at metals and other stories as inflation signs and the end of globalization. But the big bit and tariffs that you had that guest on earlier, the big, big inflation driver is still technology, productivity and the human mind. The human mind and innovation. That's really the biggest disinflationary driver over many, many decades, centuries. So I'm going to stick with my long term views that this is a real productivity boom, that that really brings with it some potential creative destruction in labor markets. That's something we have to watch for political reasons as well as economic reasons.
- [28:03]
Kelly Evans
Quickly then, if, if Cook is not allowed to be fired and stays on the board, remind me again what the board composition would be and what the stakes are, because I understand that if Powell were to step down, the President could appoint someone who he thought would be more favorable on his deregulatory policy and so forth. If Powell doesn't step down, then I believe Myron has to step down in order for that to be the case. Right. Or something like that. And then how would Lisa Cook, if she stays on, effect that calculus as well?
- [28:30]
David Zervos
Well, Kelly, I believe, and I'm not an expert, you could bring on Scott Alvarez, who, you know, sat there for years when I was at the board and did all the legal stuff behind the scenes. But my understanding is as follows. The Adriana Coogler seat vacates at the end of this month, and then President Trump can appoint someone who would replace Steven Myron. I believe Stephen can stay on in the interim until someone is appointed to that particular seat. And then it would be from the seats that he would pick a chair in May. So let's say he picks one of the Kevins or someone else to go in and take the Adriana Coogler seat in the next week or so, which is what he's rumored to be doing. Then he would have the choice between Mickey Bowman, Scott, Chris Waller, and whoever the third seat is that he puts in to replace Adriana Coogler. Then from there, we get Jay's decision in May, whether he decides to leave or not leave. If he decides to leave, there would be a new seat opening. Presumably they'd already have decided on the chair. That could just be a governor's seat for, for the remainder of Jay's term, which I believe is only a couple years. Doesn't even go all the way through the Trump administration. So. And then you'd have another, another resetting of that when that term expired. It's complicated. I think the big story that, you know, that viewers need to think about is more about how does he, how do you get to four out of seven of the seats being Trump appointees? And that will require Jay to leave in May or Lisa Cook to be fired. Otherwise, it remains a board that is largely not made up of Trump appointees.
- [30:13]
Kelly Evans
So if, if she's not fired and if he stays, then Trump loses the, the board majority. I see.
- [30:20]
David Zervos
Exactly. Ok, then he's got three out of the seven instead of four out of the seven. And that really is important, Kelly. A lot of things and happen with a board, board majority. So the market's watching that very carefully.
- [30:31]
Kelly Evans
All right, Dave, thanks for bringing it to a point for us. We appreciate it. David Servos joining us from Jefferies today. Coming up, the homebuilders are coming off their worst day in more than two months as the president signs an executive order targeting institutional housing. We'll have those details, what it means for the market and a look at the latest pending home sales. That's ahead as we go to break. Check out shares of Apple, which are lower again today after posting its worst day since May yesterday. They're on pace for an eighth straight week of losses now dating back to December 1st. That would be its longest losing streak since May of 2022. Shares are down about almost 12% in that time. We're back with much more after this.
- [31:13]
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com market update podcast or find Schwab Market Update. Wherever you get your podcasts, Is it.
- [31:43]
Time to reimagine your future? The right business skills may make a difference in your career. At Capella University we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo what made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, Changing the game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. At its highs the Dow is up more than 500 points today. We're still at 300 but obviously we're off those levels. The Nasdaq is underperforming, only up 2.10of a percent and the Russell's are up, matching the Dow's performance. As you heard the case for small caps again earlier this hour. Now the chip and memory stocks those are still in the green. Intel up big, leading the NASDAQ 100. It's up 43% this month. Western digital arm those are having some really nice gains as well. Bitcoin, the other store, other direction and a different story. Touching its lowest level since New Year's day, it's back below 88,000 this morning. Netflix is also down about 4% despite posting a narrow earnings beat on the top and bottom lines. Its margin guidance for 2026 was below expectations and that is one of the things weighing on shares. Full year ad revenue was up two and a half times to more than $1.5 billion. Company says they've reached 325 million global paid subscribers. But again between the WBD deal and a few other things, those shares are down to 83. They're down 4% today. And a quick check on Nat Gas which is soaring. This two day run is wild. It climbed 25% yesterday. It's up 23% today. That is 54% in a week, but again, not uncommon for nat gas. This is only the highest level at about 480 since December. Equity Range and Baker Hughes are among the stocks doing nicely on this performance this week. Equities up 6%. Let's get over to Courtney Reagan now for the CNBC news update. Courtney hi KELLY Vice President J.D. vance will visit Minnesota tomorrow, according to multiple reports. The triple include remarks in Minneapolis and a roundtable discussion with local leaders. The trip comes amid the state's ongoing strife with the federal government after an ICE officer fatally shot Nicole Good on January 7th. Ghislaine Maxwell, Jeffrey Epstein's longtime co conspirator, is set to sit for a deposition before the House Oversight and Government reform committee on February 9th. That's according to an announcement from committee chair James Colmer. Maxwell is currently serving a 20 year sentence at a prison in Texas for her part in Epstein's scheme. The deposition is expected to be virtual. And a potential winter storm is expected to sweep across a large part of the southern US at the end of this week. As of this morning, winter storm watches are in effect in states including New Mexico, Oklahoma, Texas, Tennessee, Arkansas and Kansas. Exact timing and locations are still unclear since the storm is still a few days away. But as of now, over 30 million people are in a winter storm watch. Kelly, back over to you. I'm already ordering board games, Courtney. Can you imagine, you know how bad I am at all this stuff. If there there's a snow day Monday, they're going to your house. I can't deal with this. Bring them over, Kelly. We got plenty of food, toys were prepared. I know you can handle it. We can handle. I'm a planner.
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Fred Kemp
Kel.
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Kelly Evans
You want them over? Courtney thanks. Courtney Reagan. Coming up, we are heading into the meaty part of earnings season with nearly half of the Dow set to report next week. Will the drama in Davos threaten to overshadow those results? And where are the safe places to hide out? Our traders see some opportunities. We'll tell you where right after this. The major averages are higher today, but they are paring their gains. The president toned down his Trump on Greenland a smidge, ruling out military force. But Citi writes that no matter the outcome, recent events have incentivized Europe to make higher structural defense spending permanent. And while Citi says that's good for Euro stocks, geopolitical risks, we're keeping them neutral. But my next guest is a buyer. Let's bring in Tim Seymour he's the CIO at Seymour Asset Management and a CNBC contributor. Are you a buyer and I know we've talked about this a number of times, Tim, but are you a buyer across the board, you know, or do you have preferences or is it just like a Euro Stoxx 600 trade?
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Fred Kemp
Well, by the way, I'm not a buyer of board games. I heard that last segment and I think I'm long enough. You know, the euro stocks, whether Euro Stoxx 50 where you're looking at the 600, I think defense spend, whether you look in Siemens. Some of the industrial plays in Germany are interesting. They're interesting on, on valuation and obviously the trends in terms of the top line and margin profile. The international story is a combination of I think it's always been a valuation discount but I think there a distribution yield in terms of dividends that you see superiority for European money center banks, for some of their industrials, even in their health care, whether it's AstraZeneca, whether it's Sanofi, these are all names I'm long in. I devo my European ETF or Global etf. And I think some of those trends across Europe are ones that remain. I think lower energy costs, by the way for the last 12 months have been great for Europe. I think lower inflation has been great for Europe and I think the ecb, if anything is in a neutral stance that's euro positive. So these are, these are the setups for the trade that I still think is bottom up sector by sector. But health care, banks and industrials look pretty good.
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Kelly Evans
That's a great point about lower energy costs. I mean that was the boot on their neck for a couple of years. I keep thinking, you know, how are they up so much? And that would obviously have a lot to do with it. The flip side of that is kind of the trade now right now you probably heard Charlie Bobrinsko, you guys have very similar take. I mean long materials, long metals. He's in the energy names. You know, I'm not saying we go back up to where we were three years ago, but can all of this work at the same time? That if the materials, if the input cost is going back up, that the companies in Europe can still perform well, fair.
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Fred Kemp
I think if inflation gets out of hand, Europe, Europe struggles. But I think on a relative basis I actually like European integrated oils. So Royal Dutch, Total Energy, a couple of names also long in this etf. Couple long. Personally their break evens on divs and essentially the payout levels are better than the US names. I do think that the charts and the energy names given the heaviness in the outlook on supply, the dynamics around just the general oil price for Brent or crude, whatever you're tracking, it's these charts look really interesting given the headwinds they've had to deal with. Yes, I believe the industrial metals and the precious metals continue to rally. At some point copper prices will absolutely feed through. They don't call it Dr. Copper for nothing but I believe you know look at that Copper miners ETF Capex, it's almost doubled since last August. I think it probably continues to go higher. I think you've heard me say that the input copper price in analysts models has to go higher. I'd be really surprised if current pricing for a lot of these pure copper plays and even some of the integrators like rio Tinto and BHP whether they have copper at 550 a pound, let alone 5, I bet it's lower. You're going to see upgrades. I think that's part of this trade.
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Kelly Evans
Yeah, great point in your long Alibaba, you know in echoes of 2018 there but Chinese tech stocks you're more positive on and there's they've all performed what China equities have performed well over the past year. Obviously Korea is off to the races with some of the memory names and do you think that continues?
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Fred Kemp
Look memories hard to deal with here because and Korea is the place to own it and so you know depending how you get your exposure you can own that Korea etf. But I do think it's ultimately very cyclical in the memory department. It's a really interesting what we're doing to the markets here. But semiconductors continue to make relative new highs. Memory names are kind of leading the charge and at some point this really is the ultimate cyclical trade. But I do think that Alibaba is very interesting for different reasons, not because it's cheap. I think Jack Ma is been put in a position of significant authority in the Chinese tech sector. I think the free cash flow dynamics I think Ali cloud make this a global tech play that a lot of investors are underway too.
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Kelly Evans
And there it is up 3% today, still trading around 23 times. Tim, thanks so much. Appreciate it.
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Fred Kemp
Great to be here Kelly.
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Kelly Evans
Tim Seymour Coming up, President Trump signing an executive order to bar corporate landlords from owning single family homes homes. But we also got a big downside surprise in some key housing numbers this morning. All of that has the ITB still up about 2%. We'll get the latest on the health of housing right after this. The president signing that executive order to ban housing investors before heading to Davos, where Trump had promised to announce more housing affordability initiatives. His speech this morning hinted at the opposite, though. Let's bring in Diana Oleg. Diana, what did he say? I missed it.
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Diana Oleg
Well, Kelly, President Trump's executive order is designed to ban large scale investors like Invitation Homes, American Homes for Rent, Blackstone and Pretium from purchasing more single family homes. But he exempted investors in the build to rent market. And that's a big relief for builders like Lennar and Taylor Morrison, who sell to investors. American Homes for Rent is also a major build to rent player, actually a top 40 home builder. Analysts say the ban could definitely help in markets like in Nashville and Atlanta where investors make up a very large share, but nationally, big institutionals only own 1% of the rental stock. The president also, though, said in his speech this morning that he did not want to bring down home prices.
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Kelly Evans
Every time you make it more and.
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Fred Kemp
More and more affordable for somebody to.
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Buy a house cheaply, you're actually hurting the value of those houses, obviously, because.
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The one thing works in tandem with.
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The other and I don't want to do anything that's going to hurt the value of people that own a house.
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Diana Oleg
So it seems kind of counterintuitive. But what I think he's saying is he wants to mortgage, he wants to lower mortgage rates and he wants to have less competition in the market to make it easier for buyers. But we of course got some rough numbers this morning. That is a huge drop in December pending home sales down 9% month to month, even as interest rates kind of just sat around on the low side. The realtors said that put a damper on this whole year's housing outlook.
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Kelly Evans
Yeah, the number was, was really bad, you know, and like, like you, like many, I thought, okay, well, in the margin, you know, rates were in a downward trajectory. Maybe it wasn't the sub 6% moment yet, but still.
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Diana Oleg
Yeah, I mean, they were sitting right around 6.25% in December. Remember, these pendings are based on signed contracts. So it's people out shopping during the month. They're seeing that mortgage rate which really did not move at all. And they are seeing seasonally adjusted. So I know it's the slow time of the year still. I think it had more to do with just general affordability, the fact that while rates sat around 6.25, they're still higher than they were last summer. And also it's this general uncertainty in the economy. We've talked to, you know, our housing market survey, our quarterly survey of realtors was saying people are just nervous about the economy and sitting on the sidelines.
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Kelly Evans
All right. Interesting. Diana, thank you very much. Diane Olek, appreciate it. We're counting down to Joe Kernan's interview with President Trump that is coming up any moment now in the next hour or so. We'll have a whole lot more on the exchange right after this. Welcome back. We're just a few minutes away from our own Joe Kernan's interview with President Trump. Back for more. Ahead of that is Fred Kemp, the president and CEO of the Atlantic Council and a CNBC contributor. And, Fred, this will be the first time the president will respond to the Europeans suspending their US Trade agreement because that happened after the conclusion of a speech earlier. So I'm curious how he'll react to that.
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Fred Kemp
That's a hugely important question. I'm really looking forward to seeing Joe's interview with the president. So an advisor to Trump said to me once, the most important square foot of geopolitical space on earth right now is that between the president's ears. And European leaders know that it's not the interagency process, it's not their embassies. And so you have people like Italian Prime Minister Giorgio Maloney, the British Prime Minister Keir Starmer, the NATO secretary general who Trump greeted on the stage from the stage in Davos, Mark Ruta. You know, these people are talking to him personally and they're trying to influence the way he looks at things. I think they hope to still defuse this Greenland situation, which they consider much more serious than anything they've confronted with with Trump thus far because it really does pertain to the sovereign territory of a European state. And they really feel it's a very sensitive moment for the, for Europe and its relationship with the United States. And so they really want to cool down the temperature. And I think the president's speech helped do that today by taking the military option off the table. But now they're going to try to find their way to a quiet process perhaps built around this high level group that Secretary of State Marco Rubio is setting up with the Danes and put it in a process that perhaps is not so much in the hot glare of the klieg lights right now.
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Kelly Evans
Yeah, I mean, there are a lot of people talking about and kind of working on these deals that I don't know. I mean, some would say it's recasting the world order and so forth you know, certainly there's been a sort of back and forth over that. But in the meantime, we've had the EU signing this historic trade agreement with Latin America. We've had Canada signing one with China. So, you know, kind of what is all of that telling you about America's position?
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Fred Kemp
Well, a lot of countries are seeing opportunities in our tariffs for their own trade deals. And you see the EU also negotiating with India right now, which could be a huge trade deal, because India is quite upset with the United States right now about the tariffs that they've suffered because of their buying of Russian petroleum. So I think that's going to be a really important, important area area to watch as to how these other trade deals pan out and also look at disagreements and agreements among among Europeans. The French President Macron would like to go to the anti coercion measure, which would be a real, as I said earlier, the nuclear option to really punish the US Economy. I mean, the European economy is incredibly important to a lot of American, American companies. The Germans don't want to go in that direction. The British don't want to go in that direction. They don't want to go that far. But I think by halting talks for now on the trade deal, they're at least saying, well, maybe we've got to be a little bit tougher, right, to get President Trump's attention.
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Kelly Evans
That certainly seems to work for the most part. Fred, thanks so much. We appreciate your time today. Look forward to hearing what the president has to say again. President Trump being interviewed by Joe Kernan in that interview will be coming to you shortly. Quick check on the markets ahead of that event. The Dow is still hanging on to a 300 point gain, but not erasing its big drop yesterday. And the small caps continue to take the lead, up 7/10 of 1%. And the US 10 year treasury yield is back to below 427. You can catch Joe's interview with the president from Davos coming up on Power Lunch in just a little while. I'll join Brian Sullivan for that after this break. Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella. Eduardo.