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Nike's Nosedive, Tech's Turnaround, and Gold's Gains 4/1/26
00:44:02
Nike shares get crushed on weaker-than-expected sales outlook amid revenue struggles in China. The Mag 7 rallying for a second day after a rough first quarter, but Benchmark is bullish on name in particular. Plus, with gold on pace for its first positive week in five, Tim Seymour says the rally will continue if one particular condition is met.
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- [00:00]
Kelly Cavagnaro
Hi, I'm Kelly Cavagnaro, Managing Director, head of North America Institutional Distribution at Janice Henderson Investors we believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy, your valued assets and our valuable insights, your mission and our vision working in harmony to seek the right investment opportunities. JANICE henderson Investors Investing in a brighter future together.
- [00:31]
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- [01:00]
Exchange Announcer
You're listening to the Exchange.
- [01:02]
Exchange Host
Here's today's show.
- [01:06]
Dominick Shewing
All right, see you three for sure. SCOTT welcome to the Exchange. I'm Dominick Shewing for Kelly Evans today. Stocks are extending their gains at this hour as optimism around an end to the Iran war is growing. Tech and small cap stocks are leading the gain so far. The Nasdaq, the tech heavier one is getting closer to 2% higher and the Russell 2000 small cap is up about 1 1/2 percent within that technology trade. Another Update for the Mag 7 with Google as the standout in that group. Semiconductors also higher and so are pockets of the memory trade with Sandisk and Seagate seeing some bigger gains today. Yields are on the move with the 10 year benchmark note yield dropping below 4.3% and hitting a new two week low earlier today. Now just slightly back above that level as you can see there. And oil prices lower with US benchmark West Texas Intermediate dropping back to $100 per barrel. Brent is down to $101 per barrel. That brings us to on Iran and the president addressing the nation later on tonight. Eamon Javors is live in Washington, D.C. with what exactly we can expect from President Trump in this primetime address.
- [02:14]
Eamon Javors
EAMON hey there, Dom. President Trump is back at the White House now after spending part of his morning this morning listening to oral arguments at the Supreme Court. And we're watching for any indication of what he might say. Now in his address to the nation tonight, he repeated threats, or his repeated threats rather to remove the United States from NATO have certainly gotten worse widespread attention in Europe. The president of Finland, Alexander Stubb posted a short time ago on social media spoke with ealdonaldtrump. Constructive discussion and exchange of ideas on NATO, Ukraine and Iran. Problems are there to be solved pragmatically, he says. The president, for his part, also posted on social media today saying that the government of Iran asked the United States of America for a ceasefire. He said the US Will only consider that after the Strait of Hormuz has been reopened. But the Associated Press is reporting that a spokesman for Iran's Foreign Ministry called Trump's remarks on Tehran allegedly asking for a ceasefire, quote, false and baseless. And so that's where we stand ahead of the speech tonight. A very wide range of options for what the president might say. But it's clear that he's spent at least some of the day today talking about the future of NATO and contemplating end of war scenarios for Iran.
- [03:24]
Steve Liesman
Don't.
- [03:25]
Tim Seymour
All right.
- [03:25]
Dominick Shewing
Eamon Javros, thank you very much for that preview of what we can expect tonight. Stocks are moving higher as oil is back down to $100 a barrel. And while that's still high, our next guest points out that we are in a much better place right now on inflation, on earnings and the broader economy overall than this last time oil was at this level. So that was four years ago, by the way, following Russia's invasion of Ukraine. Joining me now for that story is BMO Carol Schleif over at BMO Capital Markets, chief market strategist over at BMO Private Wealth. Carol, this is an interesting situation with markets because with today's gains, we are just a handful, a few percentage points away from reclaiming record highs in the S&P 500 and the other major indices. Is this at all a surprise to you?
- [04:12]
Carol Schleif
It's not necessarily a surprise. And it's really important for investors to remember too that there's been a lot of repositioning, a lot of resets underneath the surface. You saw, even while the averages are flat, you've got the broader markets flat. You've seen significant trends, transition from the leadership that had brought us to the dance, if you will. And those that are continuing on is indicative of, as you alluded to, the strength in the underlying economy. We entered this yet another shock, you know, that we've had sort of repeated one time shocks in the last four, five, six years and the economy just keeps getting back up and coming back in even stronger. But you've definitely seen the broadening. You've got small caps, you've got mid caps, you've got the S and P equal weight outperforming those old technology names. So you've seen significantly significant repositioning under the surface that is belied by the averages being so close to all time highs.
- [05:13]
Dominick Shewing
Carol. I mean speaking of dancing with who you brought, you can maybe look at it as two different dances that we've seen over the course of the last few years. One dance where the people that we brought with us were the Mag 7 stocks and tech media and telecom names and this latest dance, if you will, for the last couple of years in that broadening out trade value, cyclical sector, small caps and whatnot. So if we're going to dance with who we brought for this next dance, who should we take?
- [05:40]
Carol Schleif
I think pieces of both because we still think you'll see that technology, you have two big things going on. You've got a shift in lots of geopolitical issues, lots of policy issues that have been in year and a half in particular and set us in a new direction and teed us up for some different infrastructure build and lots of things going on in the economy. We've also got this really strong technology, technology innovative cycle that we've unleashed. AI is the poster child for it. But we've also got robotics, we've got cyber, we've got all kinds of things that are continuing broadening out and that will have quantum at some point. We've got lots of different things going on that are support supportive of a whole bunch of our economy doing quite well.
- [06:27]
Dominick Shewing
Is it a problem for this market to have $100 per barrel oil both on international and US benchmarks? And will it be a problem going forward? Or is this something that markets can adjust to and companies can adjust to for their cost structures going forward?
- [06:45]
Carol Schleif
It's, it's definitely a change from where we were. We had some pretty record low, not record low necessarily, but inflation adjusted low energy prices going into, into the, at the end of last year. But it's important to remember we're a significant energy producer. Not just us, but North America in general. We're less, less tied to the way we were. And even the economy, the way it's structured is less energy intensive if you will, with multiple sources of that energy. So it's problematic for inflation. It could in the short run trip markets up. When headline inflation prints higher, it'll print up conversation around what will the Fed do. But I think underneath it all, this economy is one that will continue to power through. And I just heard our BMO economists talking earlier this morning that if you inflation adjust even $80 or $90, about even $100 a barrel oil, we we, on an inflation adjusted basis, had that for close to 10 years in the middle of, from, from the early 2010s on in terms of where energy prices were in, the economy remade itself just fine and continued to power through.
- [07:54]
Dominick Shewing
All right, so you've powered through oil. Now tell to me, talk to me about powering through the credit cycle right now. How worried should we be about private credit and what's happening in certain parts of that market?
- [08:03]
Carol Schleif
We think the headlines have definitely accelerated, if you will. But a lot of times those headline conflate headlines are conflating issues going on. Is it a problem with the underlying credit or is it a problem with the delivery vehicle and the understanding of more recent buyers of that delivery vehicle? We don't think it's, it's widespread problems with the underlying credit. And indeed, when you look more broadly at credit in particular, yes, you're going to have defaults here and there. That's a normal part of doing business, but it's not a substantial part of the industry. You've got key industry players out there raising funds and increasing credit lines so they can swoop in, if you will, and, and start buying up some of those distressed sales that other managers or weaker hands might need to let loose of, not of the underlying credit, but to meet redemption requests and some other things. So we're not that concerned about private credit and we think a supportive economy will support the lending market as well.
- [09:06]
Dominick Shewing
A number of folks out there on our air have talked about being opportunistic in certain parts of those private credit markets with the sell off there. Carol Schleif at BMO Private wealth, thank you very much. We'll see you soon.
- [09:15]
Carol Schleif
Thank you.
- [09:15]
Dominick Shewing
All right, so our next. Thank you. Our next guest went all in on energy at the end of last year, you may recall, but less than four months later, he now says it's time to sell. So let's bring in Carter Braxton Wirth, the founder and CEO of Worth Charting. A technician looks at the charts, looks objectively at the price action. Carter, we do. This is a victory lap for you because you were bullish on it and it came to fruition on energy. Why now are you making this call to lighten up and sell?
- [09:44]
Carter Braxton Worth
Yeah, I mean, I think, look, not all breakout moments, potential for real rerating to the upside happen, but when they do, I think it's right to harvest. And so that is the thinking here. It's an epic move. The S&P 500 energy sector, of course, is up 14 weeks in a row. It's never happened. Up some 40% in a matter of three, three months. And at this point, we think it's discounting all or all that's knowable about the perspective upside. Now the first, you know, comment. What about 250 a barrel? Okay, but let's look at the charts. We are now 32% above the 150 day moving average. And that is the highest reading ever recorded. And so it doesn't mean one has to be, you know, hysterical. It's just acknowledging that the breakout, the potential for a real rerating has come. And at this point we think it's right to harvest as simple as that.
- [10:43]
Dominick Shewing
All right, that's the energy sector. If you take a look at that vis a vis what's happening with the price action in crude oil. I understand that there are a lot of extraneous factors that are weighing on this geopolitical concerns and everything else, but the price action is the price action. What exactly do you think happens with, let's just say WTI crude prices? We've been kind of coalescing around 100 bucks a barrel for a while now. What exactly could we see in the coming weeks?
- [11:09]
Carter Braxton Worth
Yeah, so we're thinking lower, but let's discuss it. The first thing to note, of course, is that the broader the market, the more wisdom there is in price. The 9 max contract for WT crude is very thin. Only a few players are in there. I won't say that's ridiculous, but it's true. If you look at the mass retail and a lot of big portfolio managers, they express their view in the energy market through energy shares. And as a testament that. Think about January. We know it was that Sunday night, March 2nd on Monday we gapped up when the attack began. Yes, okay, but in the month of January, oil was up 3%, hadn't moved, but XLE was up 10 and OIH was up 14. The shares market was anticipating this event, interestingly. And now we are as overbought as we were in Covid. You can see that price oscillator there. That plunge is Covid 2020 low. This is the equal and opposite. Those are huge news events. It gets abandoned. No cars, no planes, no trains, moving Covid and now it's adored big news each time. Covid's big news attack on Iran is big news. But it's. We think it's finished and we would reduce exposure.
- [12:20]
Dominick Shewing
I mean, negative prices happened during COVID for a barrel of crude oil for the future side of things. This is again, if you're characterizing it as corresponding with that particular move in Covid, there could be a meaningful correction to the downside for some of these energy stocks and the oil. So if you were to place a bet on one of those the commodity or the levered companies to it, where do you think the the biggest opportunity would be?
- [12:46]
Carter Braxton Worth
Well, you get much more leverage of course in the futures account if you're going to actual short WDI crude on the 9 Max. But if you're more pedestrian, and I say that in the best way, not a negative way, I think you can just do it through shorting. Actually there's, you know, other ETFs that capture the XOPI. But the thinking here is let's start with the broad base case that most people don't short. Most people are long. It's if you're long and you've had some nice gains, take some measures, sell calls, trim do something before as the expression goes, someone does it for you.
- [13:24]
Dominick Shewing
All right, Carter Worth with the outlook on oil and energy stocks. Thank you very much. We'll see you soon, sir. All right. Coming up on the show, retail sales coming in better than expected. But the latest ESM data is showing price increases as a result of the Iran war. So what does it all mean for the economy and the health of the U.S. consumer? We'll dig into that story coming up next. Plus, is it time to buy the backbone of the economy? One firm is initiating a half dozen tech stocks with buy ratings today, including Microsoft which is down 30% from its record high. We're going to look at which names have the most possible upside ahead. The exchange is back right after this.
- [14:05]
Exchange Host
This is the exchange on CNBC Foreign.
- [14:15]
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- [14:43]
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The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving. Visit Strayer Edu Jack Welchmba to learn more. Strayer University is certified to operate in Virginia by Chev and as many campuses, including at 2121 15th Street north in Arlington, Virginia.
- [15:12]
Kelly Cavagnaro
OnDeck is built to back small businesses like yours. Whether you're buying equipment, expanding your team or bridging cash flow gaps, Ondeck's loans up to $400,000 help make it happen fast. Rated A by the Better Business Bureau and earning thousands of five star Trustpilot reviews, OnDeck delivers funding you can count on. Apply in min. Depending on certain loan attributes, your business loan may be issued by Ondeck or Celtic. Bank on Deck does not lend in North Dakota. All loans, an amount subject to lender approval.
- [15:43]
Dominick Shewing
Welcome back to the Exchange. The latest economic data painting a bit of a mixed picture when it comes to inflation vis a vis the consumer. Our Steve Liesman is here to break it down all for us. And just how many cross currents do we have to deal with now with regard to the US Consumer, the war and everything else that's happening with the.
- [15:58]
Steve Liesman
Yeah, did you ever fish a stream where there are three different cores and you're trying to get to the fish?
- [16:01]
Dominick Shewing
You're the guy who would know this.
- [16:02]
Steve Liesman
That's where I'm up. But some reasonably upbeat economic economic data. Dom hitting the wire this morning on jobs to consumer manufacturing before it all changes with the surge in oil prices. So just keep that in mind as I show you what happened in retail sales. A positive 0.6. That's a good number after an upwardly revised negative 0.1 for January. ADP coming in, down a little bit from the prior month, but above expectations. And that ism also above expectations, ticking up 0.3%. That's a good number. It was the third month in a row that ISM has been above the 50 mark, signaling expansion in the manufacturing sector. But there were signs the Iran war is already having an impact. Commentary in the ISM report included quotes like this from a fabricated metal producer. We're seeing steady increases in activity. But geopolitical issues and the Iran war already waning sentiment. And then you get a respondent from the chemical industry saying geopolitical tensions related to the conflict in Iran are contributing to rising manufacturing supply costs. And ongoing tariff uncertainty is negatively impacting purchasing strategies. And cost forecast prices are already a problem. Take a look here. The price index in the ISM report hitting 78. It's the highest level since 2022 and it's up about 20 points since January. I don't know if that already incorporates what we're going to see or if there's more to come, but both jobs and consumer spending Bear close watching now with an eye on whether employers hold back from hiring amid the current uncertainty. And if consumers dial back or shift their spending in response to the bigger part of their paycheck or a larger part of their paycheck now going to pay to fill up the tank.
- [17:34]
Dominick Shewing
Okay, so we've had these types of scenarios play out to varying degrees over the course of even just the last five to six years with regard to inflation, fuel costs, egg costs at one point. But the consumer has remained resilient amidst all of that stuff. Is there any reason to think that this time around it's different?
- [17:54]
Jan Niffin
No.
- [17:54]
Steve Liesman
I mean, I think the consumer will remain resilient. You do have much lower confidence levels. They did tick up last week, but. But in general, they've been relatively depressed. The consumer will pull his and her way through this. But my point is that there will be shifts. You can't rely upon the data. One thing I didn't like in the, in the retail sales report this morning is this is a delayed February report and gasoline spending was already up 0.9%. So that was a concern because it's going to get worse. And you just wonder, Dom, if you get to a point where we had the inflation in the wake of the pandemic, it's remained relatively high. You had the tariff come through at some point, maybe you do kind of get more meaningful shifts in consumer spending.
- [18:39]
Dominick Shewing
In other words, the survey becomes reality.
- [18:42]
Steve Liesman
Exactly.
- [18:42]
Dominick Shewing
The pessimism that you might have actually translates into actual.
- [18:45]
Steve Liesman
And so far it hasn't. And I think you're right to point out the resilient consumer. I think that's the, the way that Wall street is betting on it. But you just can't be sure that that's the way it's going to end up because of the kind of pressure. One of the things you watch is not did prices rise, but also the speed with which they rose. You know, one day you're spending 50 bucks, the next day you're spending 80 bucks. So that could be a big, a big shock to the consumer.
- [19:09]
Dominick Shewing
All right, so we're going to take that speed and vector and put it in context with the business side of things now. So we'll start with that retail trade. Shares of Nike are getting crushed today. The retailer beat on the top and bottom lines, but issued a weaker than expected sales outlook for the current quarter. And amid revenue struggles in China, Nike is in the midst of a big turnaround under CEO Elliot Hill, who took the helm back in October of 2024. But Wall street is starting to question just how long the turnaround could take. Speed and vector. Joining me now to discuss this is Stacey Whitlitz, president of SW Retail Advisors, and Jan Niffin. Jay Rogers, Nippon Worldwide CEO, thank you very much for the for joining us here. You heard Steve's report just now about the resilience of the consumer and whether or not we could see higher fuel costs eventually really take their toll on the consumer. Jan, I'm going to go to you first from a macro level. Is the consumer in an okay place?
- [20:02]
Jan Niffin
Well, Steve gave you the Economist both hands, right. I'm going to give you my view. The consumer is in good shape. The consumer has falling inflation despite the fact that Steve's still worried about it. Big tax rebates, lower tax rates in general. They've got solid wage growth and they've got low unemployment. 380 gas won't stop them if that's what we're going to get. We've had it before. And the war in the Middle east won't stop them unless it results in trade imbalances severely or it does something to inflation that's severe. I don't see either one of those happening. So I'm feeling pretty good about the consumer overall. They've been solid. Even like Steve mentioned, consumer confidence, which I have no faith in anyway, did tick up a little bit though. So if you're going to look for a data point, at least went the right way. So I don't have a big concern about this year for the consumer. I think they'll be solid. Yes, the lower end still tough. Luxury is good. In the middle, it gets tough, but there are still great players in there that are winning. Wal Mart tells you the story. Walmart's good every time they report.
- [21:06]
Dominick Shewing
All right, so that's that side of things. We can make the transition now to what happened with Nike. Stacey, what exactly did happen? Is it an indication of the consumer? We know that there are some specific issues with regard to the greater China market for the outlook at Nike. But what happened?
- [21:25]
Stacey Whitlitz
I don't think Nike is an indication of the consumer. Nike is an indication of a turnaround that's not taking hold. And we upgraded the stock after two years with a sell on it and we were early and wrong. So, you know, put that out there. But what Nike talked about is North America was gaining traction. It was up 9% last quarter. It decelerated to 3. And by the way, they're talking about their sell through being below plan in North America and that is the region that represents Half of the business that's supposed to have turned, then you're looking at Europe, which is also down high single digits. Again, sell through below plan. So, you know, we've got a situation here where we're likely going to see more promotions specifically in the European market. And to me, there's incremental question marks on wholesale in the US because some of a lot of the, all of the increase in North America was wholesale driven and it was distributed. A lot of it was distribution, more distribution driven. So I think there raised more questions in this earnings release than give us encouragement going forward.
- [22:31]
Dominick Shewing
How much of this story, Stacy, if I can stay with you for a moment here, how much of this story around Nike is idiosyncratic? To your point about the turnaround efforts that Elliot Hill is trying to implement there, how much of it is microeconomically focused on Nike and how much of it is macro focused on footwear? And I'm not saying that any of these are linked directly, but we got the Allbirds news. They've basically sold their IP for 39, $40 million after topping 4 billion in valuation at one point. We saw on holdings, yes, they've been a standout so far, but even they've kind of given some back in recent weeks. What exactly does it say about footwear? And are there certain parts that are better positioned in your mind than others?
- [23:15]
Stacey Whitlitz
Absolutely. I think, I think in business, the general has, the business has slowed down slightly. But still, if you look at ONS numbers, they were fantastic. If you look at hocus numbers, they were better. Adidas numbers are holding in there. Some promotions in the US you've seen a little incremental here. So I think it was, it was very much a Nike focused issue. And also if you hear, listen to Dick's Sporting Goods last week. They talked about margins getting better, they talked about inventory being cleaner and there were all positive signals there. Foot locker is 60% exposed to Nike here. So some mixed definite signals there. But I think this is a turnaround that is just going to be way slower than the street expected while most are sticking with it.
- [23:56]
Dominick Shewing
All right, Jan, if we take this kind of retail trade on athleisure and footwear and expand it out a little bit more. You had mentioned the likes of Wal Mart, other kind of bigger players. If we look at the retail landscape right now, are there places that you feel as though will be the outperformers if that consumer does in fact hold in and whether the oil price and fuel spikes in the coming six months?
- [24:22]
Jan Niffin
Well, you know I'm a perma bull on five best retailers in the country, Wal Mart, Costco, Home Depot, Dick's Sporting Goods to say you just mentioned and tjx in that order. So I'm always positive on them unless something's going terribly wrong. Beyond that, the middle, the part that nobody really likes, I still like Levi's and Contour and Tractor Supply and Casey General Store and Boot Barn and Aritzia Urban Outfitters and of Nike, of course. And why do I still like Nike? Well, you know, you've been a competitive golfer all your life. I've been a competitive runner all my life. I bought my first pair of Nike waffle trainers in 75. For 10 years, I haven't run in Nike. I just bought Vomero and Pegasus Zoom. They went away from sports. They got too much into style and casual. They're getting back there. They went away from the local retailer, they went away from the big boxes that sold them and they tried to sell it online. They're moving back there. So Stacy's 100% right, because Stacy on her analysis is always really, really good. But longer term, this Nike thing is going to work. The question is, when's it going to show up? The real question, though is will it ever show up in China? And unless it does, it's hard to get really positive it is going to show up in the United States.
- [25:38]
Dominick Shewing
All right, Big story and a complex one for sure. Thanks for breaking it down for us. Stacy Widlitz and Jan Niffin. We appreciate it. Coming up on the show, homebuilders are coming off their worst month in over a year, the sell off happening as mortgage rates have hit their highest level since August. So how long will it take to get some relief in rates? That's next. And as we head out to break, check out eli Lilly popping 4% after the FDA approved the company's new GLP1 pill found AO CEO David Ricks telling CNBC that while it's not as effective as its weekly shot Zepbound, it could be more attractive to people who value convenience. More of today's biggest movers when we come back after this.
- [26:17]
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- [26:22]
Dr. Guy Winch
Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts, the Jack Welch
- [26:54]
Exchange Announcer
Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to Made it happen and keep striving. Visit strayer.edu Jack Welchmba to learn more. Strayer University is certified to operate in Virginia by Chev and its many campuses, including at 2121 15th Street north in Arlington, Virginia.
- [27:22]
Exchange Host
OnDeck is built to back small businesses like yours. Whether you're buying equipment, expanding your team or bridging cash flow gaps. OnDeck's loans up to $400,000 make it happen fast. Rated A by the Better Business Bureau and earning thousands of five star Trustpilot reviews, OnDeck delivers funding you can count on. Apply in min@ondeck.com depending on certain loan attributes, your business loan may be issued by On Deck or Celtic Bank. On Deck does not lend in North Dakota. All loans and amounts subject to lender approval.
- [27:51]
Dominick Shewing
All right, it's a lot of green on the screen. Stocks right now are again near their session highs. The Dow industrials up about 450 points to 46,792. It's a 1% gain north of 1%. For the broader S&P566.08, up 80 points. And the tech heavier NASDAQ composite right around 21,970. It's up 380 points for a 1¼ percent gain there. Intel is moving higher after agreeing to acquire Apollo Global's 49% stake in its fab joint venture in Ireland for more than $14 billion. The deal will be funded with cash and debt and is expected to be accretive to earnings per share starting in the year 2027. Hasbro is lower after disclosing a cybersecurity incident saying a third party gained unauthorized access to its network, prompting the company to take systems offline. The investigation is ongoing and interim measures are in place and are taking they could lead to some certain operational delays. So hasbro shares off 4 and a half percent and then airline stocks are moving higher for a second straight day amid optimism about a possible de escalation to the Iran war. Alaska United leading the way higher. United, by the way, coming off an 8% gain in yesterday's session. So flying high. Pun intended. Well, mortgage rates are moving lower after touching an eight month high last week the recent spike in rates is putting a dent in homebuyer and refi demand as well. Diana Olek has the details on the current state of play for mortgages. Diana, well done.
- [29:19]
Diana Olek
You're right. Mortgage rates did move lower to start this week as markets react to the most recent record rhetoric on the Iran war. But last week the average rate on the 30 year fixed rose to the highest level since August and that just tanked. Total applications 10% for the week for mortgage demand. Refis were of course hit the hardest, down 17% for the week. They were 33% higher than the same week one year ago. But earlier this year when rates were lower, refi demand was more than twice what it was a year ago. Applications for a mortgage to buy a home dropped 3% for the week and were just 1% higher than the same week one year ago. And maybe I buried the lead on that there, but that 1% is significant because this spring was forecast to be much better than last year. With mortgage rates expected to be lower and the economy stronger. It is clearly not shaping up that way. Just ask the CEO of Restoration Hardware, which missed analysts estimates in its big way for its quarterly earnings. On the analyst call, Gary Friedman said we're compounding clutter from tariffs, global discord as a result of the war and the most dire housing market in decades. Real estate agents I've been talking to for our next quarterly housing market survey which is out next week, say both buyers and sellers are suddenly pulling out of the market.
- [30:33]
Dominick Shewing
Dom for the all important spring shopping season as well for that. Diana, thank you very much for that story. Now to Julia Boorstin for a CNBC news update. Good afternoon, Julia.
- [30:43]
Julia Boorstin
Dom Protesters gathered outside of the Supreme Court as President Trump intended oral arguments in a case that could end the constitutional right of birthright citizenship. The president sat in the front row for more than an hour and left after the government presented its case. So far, several justices have expressed skepticism over parts of the administration's position. A federal judge has delayed the trial of Regime Mangione to October of this year. Mangione is accused of killing the United Health Care CEO in December 2024. His defense team asked for a trial 2027 trial start date to help them better prepare for both his federal and state trials. Mangione has pleaded not guilty to all charges and traffic Deaths in the US fell to record lows in 2025. According to New data from the Department of transportation. Just over 36,000 traffic fatalities were reported last year. That's a nearly 7% decrease from 2024 and the second lowest traffic fatality rate in recorded history. The report also found that traffic fatalities were down in 39 states. Back over to you.
- [31:48]
Dominick Shewing
Good news for commuters like me. Thank you very much, Julia Boorstin for that. Coming up on the show, software stocks have been hammered to start the year. The IGV ETF is coming off its worst quarter since the great financial crisis. But one Wall street firm says the pullback is creating long term buying opportunities. The analyst behind that call will tell us where those opportunities are coming up next.
- [32:13]
T-Mobile Advertiser
As America celebrates its 250th anniversary, CNBC spotlights the companies that rose with the nation and continue to shape its future.
- [32:26]
Bill Ford
I'm Bill Ford, executive chair of Ford Motor Co. A company that my great grandfather Henry ford founded in 1903. Through his innovations on the vehicle and most importantly the assembly line, he really helped create the middle class in America and he gave the average American the freedom of mobility that they didn't have prior to the Model T. Most people never traveled more than 25 miles from home in their entire lifetime. I think what it did for America was allowed people to choose where they lived and where they played. Prior to the assembly line, cars were hand built and you could make just a few a day. And all of a sudden now you were making 20, 30, 40, 50 an hour. And that changed everything. It brought the price down. It made it so that the average American could actually own one. And it really changed the way all manufacturing in America was done. He also doubled the average wage of the day to $5 a day. And he began profit sharing so his own workers could then afford the vehicles that they were making. We were the arsenal of democracy in two world wars. Fast forward to when Covid hit. We transformed our plants to making PPE equipment once again. We've proved to the country that our industrial know how is something that the country benefits from. What's made us a great company is we have so many multi generational employees, dealers, suppliers that have been with us for our entire journey. And we want to continue that, you know, well into the future. If you look back at our last 250 years, it's been an amazing run for our country. And when I look ahead, that same opportunity is ahead of us. But we have to come together as people. And I believe if we do that, our future will be every bit as bright as our past.
- [34:28]
Dominick Shewing
The Mag 7 names are rallying for a second day. But the group had a tough march, of course, and a rough first quarter overall. Especially For Microsoft, the stock is closing out its worst quarter since the financial crisis in 2008 and was by far the worst performer of those MAG names, down more than 20%. But our next guest says he just initiated coverage with a buy rating and a $450 target price. That's what's got him so bullish on things. And we're going to ask him about that turnaround effort and why he's bullish. Joining me now to discuss that story is Yifu Lee, senior analyst over at Benchmark, which is a stone X company. Yi, thank you for being with us right now. Let's start with that Microsoft. Let's start with that Microsoft Trade first. Yes, because it has been maybe the arguable epicenter of this kind of mag 7 meltdown that we've seen since the highs. Why the buy rating and why now?
- [35:21]
Yifu Lee
Because we think Microsoft is a core investment holding for the long term. Just because. Yes, we understand they spent over $70 billion in capex. But the flip side is they're not building and waiting for the customers to come. They already had very great visibility on the pipeline of customers. So they are building these data center, purchasing these cutting edge GPUs from Nvidia AMD and have a great customer base. So we think the sell down, the drawdown is very overblown and this presents an opportunity to buy and hold Microsoft for the long term. What I recommend to my client is if there's any weak days then start loading up on Microsoft. And we're not looking at this from a short term perspective, more of a long term horizon.
- [36:12]
Dominick Shewing
All right, so there's also some other software names that have been hit recently that you are initiating as well. I'm looking specifically, let's start with say some of the SaaS type companies like ServiceNow. You've got a buy rating with $125 price target. Even some of the infrastructure plays right in cloud like Snowflake buy rating, $190 price target. What exactly is this ecosystem telling you about? Just where you think we can go. Even with the AI spending picture and the gargantuan nature of the money that's going to be deployed.
- [36:42]
Yifu Lee
What I could say dom, is there is no AI strategy without a data foundation. Like you said, names like Snowflake, ServiceNow, these are quintessential firms. It's good that OpenAI is very good at analyzing things but at the end of the day you still need the underlying data. And Snowflake is the cloud data warehouse. The core business is the Trusted custodian of the world's largest firms. The data source that that that is generated the intelligence in the air. So we think Snowflake is a stare. We really like Bill McDermott leading the charge as service now as well we think is really too cheap to be true. Trading at miss single digits right now. And again it's unjustified as this is a rule of 50 plus grower. You know we talk about top line maybe 20 to 25%, 30% in the free cash flow margin and we think it's going to be here to stay because they have the right strategy. Where do you build it which they have a strategy with their control tower or you buy straight from them. ServiceNow should be a long term platform here to stay.
- [37:58]
Dominick Shewing
All right. I was recently yi at a tech executive forum down in Florida. A lot of senior tech leaders from Fortune 100 type companies and CISOs, CIOs, CTOs. And one of the things that came up in those discussions at that forum was just how important cybersecurity is going to be with the evolution of from generative AI into having AI agents in many parts of our lives. We're already seeing that play out now. So let's talk about the cybersecurity story and why you are so bullish on them and what stands out to you.
- [38:33]
Yifu Lee
Thank you. Cybersecurity is the sector I like the most actually. And I would like to highlight CrowdStrike as my top cybersecurity pick. We like this platform. We've been following the story even since they were a private company went through the IPO in 2019. We think that they have a great management team led by George Kurtz Bert cfo, great cutting edge product line, top not management team. And we have a good path to double the air by 20 fiscal 2031 to over $10 billion. And we see it, we talk about AI. Whether the open claw, things like anthropic claw is going to kill the entire SaaS sector. But at the end we forgot the other part of the equation. When you introduce new technology there's going to be greater risk. What we believe is Crowdshake is at the cutting edge to protect you in this AI supercycle. And I want to mention one more thing Don is I want to give a call out to Datadog as well. We like them from an infrastructure software side just because we like the organic story. Both of the two founders just like CrowdStrike, they've been with the firm, you know, Olivia as well as Alexia driving the product line. We really like their new products in sre, Site Reliability Manager apply AI to the story as well. So both Data Dog and Cross Site we believe is a long term stayer, long term winner. Even though there's there could be some headline disruption headwind, but we think it's more noise than bike.
- [40:19]
Dominick Shewing
All right, cybersecurity, a big play there for Yifu Lee. Thank you very much with Benchmark. We appreciate it. All right, coming up on the show, sticking with the AI trade, Apple changed the tech landscape with the Apple One computer 50 years ago, half century. These days though, it's widely seen as falling behind the AI race. But is the company actually just playing the long game? What Apple insiders are saying coming up next. Welcome back. Apple was incorporated 50 years ago today. Big anniversary half a century later. The company is famous for its innovative hardware and it's notorious for its closed ecosystem. Apple is taking a different approach when it comes to artificial intelligence though, but one some insiders say fits just right into its playbook. Mackenzie Sagalos has the story in Today's Tech Check. Fifty years later, the long game in AI, what does it look like? Mac.
- [41:15]
Mackenzie Sagalos
So Dom, as Apple marks its 50th anniversary, the big question is whether the company squandered its lead in AI. And to answer that, I went straight to the people who helped build Apple, Steve Wozniak, former CEO John Scully, and the engineers behind the ipod, iPhone, and Siri theory, people who are there for some of the most important chapters in the company's rise. And what they told me is that yes, Apple did lose the first round of AI in a multi year head start, in part because the same privacy culture that helped define Apple also left it poorly suited to the first phase of generative AI, which rewarded companies willing to train on enormous amounts of user data and pour money into cloud infrastructure. That's never been Apple's model. So now once again, Apple is leaning on its frenemy Alphabet, this time for its Gemini models to help rebuild cpu. But almost everyone I spoke with described that as a stopgap, not a surrender. Because Apple has broken dependencies like this before, whether it was in Maps, chips or other core technologies. And the pattern is really partner learn, then build its own. It's also a playbook that's worked for the company before. Come in late, let others prove out the market and battle over the best models, then fold the winners into Apple's hardware ecosystem where it still controls the interface, the distribution and gets to take its cut.
- [42:32]
Dominick Shewing
And Mac, it's installed user base. So how much of that story for the long game in Apple is about whether or not the installed user base can stay with the Apple ecosystem. And then how do they grow it?
- [42:46]
Mackenzie Sagalos
Well, that's what Tim Cook, their CEO, put in a memo to employees today that they have two and a half billion devices in hand. And part of what this is recent hardware lineup that they put out just last month is about is putting more devices out at the lower end of the spectrum. MacBook Neo, a $599 MacBook the 17e, which is their budget version of the iPhone, now equipped with all these AI capabilities. And that's what's so key, really maximizing that installed user base. And they're going to have different phases of this AI rollout that really maximize how customized their machines are and being able to use that on screen context, all that personal data that they have access to. So this rebooted Siri, it's going to use Apple's, it's going to use Alphabet's Gemini models. And then we're also seeing Siri open up to a chatbot of your choice if you're a Claude user, if you are a ChatGPT user, you're reportedly going to be able to plug in whichever bot works best for you.
- [43:43]
Dominick Shewing
All right, so Apple capitalizing on that installed base Mac. Thank you very much for that. Mackenzie Segalos with the Apple at 50 story. Coming up, gold and the GDX, the gold miners ETF is up 6% today on pace for its best week since March of 2023. But it's down 16% since the start of the Iran war with President Trump saying Iran has asked for a cease fire. We'll discuss whether now is the time to buy gold miners and maybe the gold itself. That story is next. Welcome back to the Exchange. A mixed bag for commodities. In trading today, oil prices are lower, but gold is hitting its highest level since March 19 and on pace for its first positive week out of the last five. The miners are also climbing. Our next guest says the gold rally will pick back up if, if oil prices continue to cool off. So here with me now for the case is Tim Seymour, Seymour Asset Management cio. He's also a CNBC contributor. So, Tim, we talked a little bit yesterday about just what happens with regard to the US versus international trade. But now let's break down the commodities. Why does gold stand out to you?
- [44:53]
Tim Seymour
Well, we definitely have the potential to have less Fed concerns. So we were talking a week ago about an emergency rate hike, possibly less Fed equals less dollar less safe haven. We clearly have a lot less froth in gold. But the fundamental backdrop for gold has been central bank diversification. As we know in a world where post Iran the world is looking for energy independence and that will be major investment across energy. I think we know the theme for the last few years has been dollar diversification. So the idea of gold both as an asset allocation for portfolio holders, whether that's 3, 5%, whether that's 1% that you never had before, gold exists differently as it did years ago. And if you remove the safe haven dynamic, if you remove a stronger dollar and obviously if we get less inflation, it means we have an easier Fed and that's great for gold. It's been proven to be a great backdrop.
- [45:50]
Dominick Shewing
All right, if that backdrop is in place there, the gold miners, they are again more levered to that gold trade, the underlying commodity. Just how exactly should you view the gold miners trade? Do you just take the basket approach, do the ETF or there places specifically that are better positioned than others?
- [46:07]
Tim Seymour
I think an ETF approach to owning gold miners is great because I think what we've seen over the last 15 to 20 years, if you invest in miners, you know some are more efficient than others. We know there are operational challenges, we know there can be politics and volatility around the world. But the reality is that gold miners as a group in a upmarket for gold, especially one where we have less inflation and we're more concerned about some of the dynamics. But the higher gold price has meant the upgrades for the gold miners.
- [46:36]
Jan Niffin
I think after.
- [46:37]
Dominick Shewing
First of all, let's be clear, we've
- [46:38]
Tim Seymour
rallied almost 17, 18% off the lows in the GDX which is a gold miners ETF. I am long that I think the dynamic for gold almost 8% off those lows, I think miners are going to be slower to get back to the leadership that they showed ahead of the metal pre inflation concerns. I will say in a higher inflation environment, what we've seen in the past is that miners anywhere, gold miners especially were not performing when gold was rallying. I do think you, you want to think about splitting that allocation probably in half or two thirds gold, one thirds miners to get some of that beta. But, but either way the argument around gold, whether it's an environment that is de escalation in the Middle east or whether it's the environment that we may have had, there's no question to me that gold is a part of the portfolio that investors, a lot of investors for the first time in years have been spending time with and I think that's part of what made this volatility since Iran war so extraordinary.
- [47:39]
Dominick Shewing
All right, Tim Seymour, Seymour Asset Management on Gold thank you very much. We appreciate it. That does it for us here. Thanks for watching the Exchange. Power Lunch with Brian Solomon is coming up right after this quick break. Keep it right here.
- [47:52]
Exchange Announcer
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- [47:54]
Dominick Shewing
Make sure you're subscribed to get each
- [47:56]
Exchange Announcer
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- [48:00]
Zepbound Advertiser
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