← The Exchange
The Exchange
Volatile Session on Wall Street 4/7/25
00:57:41
It’s been a wild day of swings in the market. From the Dow being down 1,700 points at the low, to up nearly 900 points at the high, we make sense of one of Wall Street’s most volatile sessions ever
Loading summary
Transcript1 lines
- [00:01]
A
Fidelity Trading Dashboard brings live data, news and charts into one screen because better trading starts with finding what you need fast. Available for free@fidelity.com trading dashboard. Investing involves risk, including risk of loss. Fidelity Brokerage Services, llc Member NYSE SIPC for years, everyone thought Verizon had the best network because they did. But now the best mobile network in the US is T Mobile. T Mobile's network has the most advanced 5G with more towers and their signal reaches further than ever. So you can text an Insta talk and say, you won't believe where I am. T Mobile has the best mobile network in the US based on analysis by Ooklev speed test intelligence data 1H2025CT mobile.com network you're listening to THE Exchange. Here's today's show. Welcome to THE Exchange. I am Brian Sullivan. Kelly is off today and what a day it has been for the markets already and your money. I mean, we've kind of lived a week in just a couple of hours. All right, if you're just joining us, folks, here's what you missed. The stock market opened up the session sharply lower. We were down. We were down about 3 or 4%, depending on the index. Then around 10am There was some chatter of a possible pause on the tariffs that sent stocks skyrocketing. In fact, not only do we recap the losses, but we are recoup, but we actually went up a percent or two shortly after that. The White House responding to our own Amen jabbers, who called the press secretary, Caroline Levitt, and she called that bad headline about a pause fake news. Amen relayed that to the markets. And guess what? That sent stocks crashing back down again. So we were down big, then we were up and now we're down again. A lot going on. Here's where things stand right now. We are off our lows. The S&P 500 down 9. 10 of 1%. The NASDAQ want to go this way, down about one half of 1%. The low for the Dow was 1700 points. The S&P 500 was down more than 4% right after the Open, we're only down about 9. 10 of 1%. We're still down. We're still in the red. But considering The NASDAQ at one point was down over 5%, that doesn't look too bad. All right, there is a lot going on. So why don't we get to where things stand on the tariff front at this hour, we've got the aforementioned Eamon jabbers at the White House with the very latest. He's got messaging from the White House, Megan Casella with what is still to come on tariffs. Remember those country specific tariffs kick in on Wednesday and now you've got the President threatening an additional 50% tariff on China if they indeed retaliate from a market perspective. Oppenheimer's John Stolfuss is here. He just revised his year end price target down. He had had the highest target price prior to all this tariff turmoil. And for a technical take and maybe some signs of capitulation, maybe that was today. Got BTIG's. Jonathan Krinsky. Let us bring all these folks in. We'll start with Amon Jabbers. Because Eamonn, really, you calling the White House press secretary and debunking these headlines really sent the markets back down, but because it was not a real headline that turned the market up. Yeah, in this case, Brian, fake news was fake news. You know, the way this play played out is that we got this initial sense that there was a report in the market. I checked with folks inside the West Wing. Nobody inside the West Wing had any idea what Kevin Hassett was allegedly supposed to have said. Turns out he didn't say anything really like that at all. Then a few moments later, Caroline Levitt called me on my cell phone and said, hey, look, this is fake news. It's just not true. They had to run it up the flagpole internally, just double check and triple check and make sure that they were square in saying what they were saying. And then we came out here to the camera on the driveway and told the market that this was not true. So whatever happened, we went up and we went back down again. And now the question is, how serious is the President about his newest tariff threat, which has happened since then, which is his tweet a short time ago in which the President said, therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8, 2025, the United States will impose additional tariffs on China of 50% effective April 9. Talk to some folks in the West Wing about this as well. And they say that the President is serious about this. This is really going to happen. One of the questions that I have about this, Brian, and we don't have an answer to right now, is what is the President's intent here? Because with a very public tweet, social media post about this tariff threat to the Chinese, he is putting the Chinese government in a position where they have to either back down in a very public and humiliating way or accept the new tariff? Is the President actually trying to negotiate with the Chinese here or is his ultimate intent to just simply decouple US And China trade and grind us China trade not entirely to a halt, but but to a much smaller level than it is now? No real clear response here from the White House. They say he doesn't want to stop trade with China, but he is very serious about this newest tariff threat. Brian? Okay, a couple of things that are going on. Number one is that the NASDAQ just turned positive. So the market's down big, then up, then coming back down and now technology stocks are turning around. Is it, is it Thursday? I mean, it feels like Thursday already. Amen. But it's only a couple of hours into Monday. So I want to do a little tariff math and I know we got Megan Casella waiting as well. So if I, if I'm doing this correctly, okay, and maybe I'm not, we do a 50% additional tariff punitive tariff on China. So if I layer that on to some of the tariffs that are kicking in and I know we already have 100% tariffs on electric cars that was put in place by the former President Biden, but on all goods that I think takes us above a 100% tariff. I think that's correct. And in two days from now we'll be above 100% with China if China doesn't back down here. That's according to what the President said on social media. The White House says the President's serious about this. He's going to do this on April 9th. So if you're in any industry that has any trade with China, you've now got to factor in this massive cost increase in terms of your imports. And what the President wants here is ultimately all those supply chains to be completely reconfigured globally. That's not going to happen in a matter of certainly hours and days, let alone even weeks and months. So this is a long term project that this White House is engaged in and they're willing to accept some very sharp, severe short term pain in order to get there. Yeah. The possibility of a more than 100% tariff as the NASDAQ kind of flirts around with green and going back positive again. Eamon Jabbers moving markets. Eamon, thank you very much. Now let's stay on the addition of tariffs and go to Megan Casella with not only what is still to come, those country specific tariffs that are set to kick in, as Eamon said later on this week, Megan, but please, you're the tariff expert, did I, did I miss the math on those tariffs? You didn't miss a thing, Brian. And I'll get to that. But it's 104% against against China taking effect in two days unless they withdraw their retaliation. So a lot to come this week on the tariff front, but both as a lot of these things start to kick in and as we hear from more countries planning their retaliation. So first that baseline 10% tariff on imports from nearly all countries took effect over the weekend. So that is already being collected. But then tomorrow marks the deadline from Trump for China to withdraw its threatened retaliation or to face that even higher tariff. On Wednesday, all of the country specific tariffs take effect and that additional 50% tariff against China. So that would be 84% tariff against China taking effect just, just on Wednesday on top of the 20% fentanyl tariff that's already in effect and on top of everything that was in place even before this term. Again, that's if they move forward with this retaliation. Then On Thursday, China's 34% retaliatory tariffs kick in. And then next week, we learned this morning the European Union will begin collecting its first round of retaliatory duties as well. So there is still some time left here for the White House to find an off ramp and to make some side deals that would head off at least some, some of the tariffs. And the president did say in a true social post this morning that negotiations with other countries, everyone except China, would begin taking place immediately. But there's still another tariff threat on the horizon and that's those sector specific tariffs which the president has promised on goods like semiconductors, pharmaceuticals, copper and lumber on those last two imports are already under investigation, meaning that those tariffs could come very quickly. And Brian, as you know, the president has vowed the rest of those should be rolled out the very soon. So a lot of action here that we're waiting for this week. Yeah, moving around and the anchors getting ahead of himself. I said the NASDAQ had turned positive. It is not. I misheard something. But hey, if you don't like the weather, wait a minute. The market's still down about 1 1/2% but well off their lows. So Megan Casella, thank you very much folks. It's been that kind of day. The tariff turmoil leading more and more economists and markets and strategists to revise up their recession probabilities and and revised down their market targets for the end of the year. There's some of the target price declines. Bank of America Oppenheimer, JP Morgan, ubs, Goldman, Wells Fargo, Evercore and more, taking their prior estimates down to anywhere between 5,200 for JPMorgan Chase and 6,000 for Wells Fargo. Your next guest is on that list and he previously had the highest target out there at 7100. That number though revised down to 5950 this morning. Let's bring in Oppenheimer chief investment strategist John Stolfas. John, welcome. It's been a chaotic day and I do want to, I know it's stressful and it's scary for a lot of people, but I want to point something out and targets could come back down. We get it. And guys, let's bring up that wall graphic once again if we can. All the targets, including yours, John. Yes, they've been reduced. Some of them are where the markets began the year, but they're all 10 to 15% higher than the markets are right now. Where do you see that potential upside coming from, especially off of what's been just totally chaotic markets? Right. Great to be with you on CNBC today in a chaotic day, that's an understatement. But we'd have to say this. I think, you know, the idea is this is the, the big shot across the bow has already happened last week, tariffs much higher than expected. I think the expectations from those that you see have hired targets from where we are today, including myself, is we expect that cooler heads will prevail. Whether that comes from the other side being affected by tariffs, our side or both side sides, the, the likelihood of going is to disastrous results is just too awful to expect it. It's against the global economy. Many different countries around the world. We do think, you know, we're not, we're not part of the, of President Trump's cabinet or anything. And this is not a political statement. We do think that probably what he's looking at is he's thinking, you know, the US Is the biggest customer of the rest of the world, which is dedicated to exporting over the last 40, 30, 20, 10 years, more intensified, usually with an address on the box to the US for the best customers because we spend more than anybody else. So the thought is if your best customer is upset, make a deal with the best customer. The question is a lot of egos get affected. There's a lot of constituencies world that are upset about this and they want to see their leaders essentially push back on it. I guess, I guess, John. Yeah. And we don't, we don't know what's going to happen with tariffs. Everybody's kind of doing the same thing you're doing, which is, is this a tactic? If so, what's the end game? What's the goal? Vietnam apparently said we'll do zero. Navarro saying this morning on cnbc, that's not enough. I guess the fear that your clients probably have, and I'm sure your phone and email and texts are, are just blowing up right now is what if it just gets worse? Like, we keep waiting for this market bottom, this market turn. Everybody's brought down their estimates. There's nothing stopping you or anybody else from bringing down your estimates and your target prices again. You know, nothing stopping us from doing it. And if we thought it was the right thing to do, we would. But basically, as you know, I've been in this business for 42 years, and this is my first rodeo. I mean, the first thing I went through was Octo 19th of 1987. The Dow dropped 23% in one day. And everybody thought it was the end of the world, and it wasn't. The very next day, institutions came back shortly. Markets actually ended 87 higher. A lot of people don't remember that, that the worst day in the stock market history and the year was actually up for the Dow. We go. And so that's one of the reasons why you see the strategists as a group that you've shown generally with expectations that we will, something will get settled here. Egos will have to be packed in the box. We've gone from Trump, what is it, 1.0 to Trump 2.0. But essentially we've gone from tariffs 101 in the first administration process to the second administration process. For Trump, it's tariffs 401. It's like senior year. So this is, this is highly disruptive. The markets are seeking direction here. Volatility within the day, not uncommon. This is that falling knife kind of period where you, you really, for most investors, you're not looking to catch the bottom here, but you want to grab it before it takes off when we get out of this. But right now, you're building shopping lists and some of the best sectors in the world have been just beaten up extraordinarily. And some of the best stocks in the world have been beaten up unnecessarily on the drama. And I want to, we've got the market boards going up, and if you're on the radio, I'll say it, there is some green on the screen. The NASDAQ as a whole is down, but many of the mag 7 are higher. Guys. We bring that back up. You got Meta, that's higher right now. You have Nvidia, that is higher right now. You had a few of the other big names. Thank you. Amazon and Alphabet, Google. Microsoft is still down. But the stocks, John, the stocks that led us for two years, all we talked about was the magnificent seven and AI and the capital spending plans that drove the market to almost 30 times earnings on the S&P 500. In the last week, we've stopped talking about. Not CNBC, but the markets are focused on tariffs, not on this. Does it give you any comfort, solace, whatever, whatever word you want to use, that the magnificent. Some of the Mag 7 right now are higher. Yeah, absolutely. And the reality is technology is deeply embedded in the lives, as you know, and we've spoken many times before of both business and the consumer, not only in the US but everywhere around the world. Developed emerging markets. I just got back from a short period in, in Mexico. It was supposed to be a vacation that got interrupted by all of this. But the emerging market, they got the bicycles with the smartphones, just like in New York City. And so where we are today is the tech. Looks like it's been brutally beaten up. Communication services, which is the streamers, which is the search engines, and which is the social media. Brutally beaten up. Consumer discretionary. You think people are never going to shop again. That's been beaten up. Industrials, which is the next window here for when we start building not a massive amount of factories, but massive factories in certain areas. That's important to national security and national security. And then the banks, which will likely do well. But you want to be diversified across all 11 sectors. But our favorites are those that got beaten up worse because we found over the years past performance, no guarantee of future results. But generally speaking, quality that's beaten up gets reappraised and recovers very nicely. Yeah, it is. And John, you know, we appreciate the views, we appreciate the honesty. It is a humbling time and I will end it on a positive note for our next guest. And this is not getting a lot of attention. The S&P 500 is still up 92% in five years. So unless you started investing about five months ago, you should still be higher, depending on what you may or may not have bought and if you had a diversified portfolio. John Stolfuss Oppenheimer, thank you very much. The future of Downton Abbey is now in Mary's hands. It's the grand finale we've been waiting for for see it on the biggest screen possible. It will be a sensation with scandalous twists and shocking revelations. Should wives have secrets from their husbands? Definitely. But not the other way around. The best is yet to come. So off we go for our next adventure. I like the sound of that. Downton Abbey, the grand finale. Gritty PG. Parental guidance suggested only in theater September 12th. Get tickets now. Great brands, great prices. Everyone's got a reason to rack. You know they have Marc Jacobs, Nike. Yes, just so many good brands. Join the NordicLub at Nordstrom Rack to unlock exclusive discounts on your favorite brands. Shop new arrivals first and more. Plus, get an extra 5% off every rack purchase with a Nordstrom credit card. More perks, more value. That's why you rack this summer. Turn your gifting game up during the summer plant and garden sale at 1-800-flowers.com Right now you can score up to 40% off succulents, bonsais, fresh cut blooms and more. Whether you're celebrating a birthday, sending a thank you or a just because surprise, 1-800-FLowers lets you save big on a stunning selection of gifts. Save up to 40% off during the summer plant and garden sale at 1-800-flowers.com sxm that's 1-800-flowers. Com sxm gift. Something unforgettable today. So your next guest says that we could be nearing capitulation. He is keeping an eye on the S&P 500, 200 week moving average as the volatility continues today. Let's bring in BTIG Jonathan Krinsky for more. Jonathan Markets Some of you just heard me mention some of the NASDAQ big names, the ones that kind of matter, they are higher. We saw Vix that hit 60 briefly. Massive volume at the open. Do you think we're at capitulation? Hey, Brian. So you know, when you look at the major bottoms over the last 40 years or so, we're seeing signs that are consistent with a lot of those bottoms. Now when you get into this type of volatility, you know, and as you've seen today, with a 9% intraday range on the S and P futures, as of now, you're calling the exact bottom is very difficult. But we think we are in the ballpark. And you mentioned that 200 week moving, you know, we don't talk about that a lot because quite frankly, you don't get near it very often. But in times of extreme market duress, it tends to be a good market barometer for a trading low outside of finance, outside of recessionary bear markets, deep recessionary bear markets. So if we look at the last 40 years, the only two times when the 200 week moving average has been violated for a meaningful amount of time was the 2000, 2002 bear market and the great financial crisis in 08 09. Even the crash of 87, the EU crisis in 2011, they all stopped at the 200 week moving average and that comes in around 4675. We got within about 3% of that overnight in the futures. So yeah, we think we're in the ballpark here. Yeah. And I don't want to be the grim reaper up here. Okay. I've been doing this 30 years as well. And ultimately all crashes, while painful, turned out to be longer term buying opportunities. But they could be very long because if you go down 20%, you got to go up 27% or whatever the number is to get back to where you were. It's just the law of, of math. Does the speed of the decline though, Jonathan, does that matter in your analysis? And here's why I ask. In 2022, three years ago, the markets fell 25% top to bottom, but they did it slowly. January to October was like a slow bleed. It was a terrible year overall. This is losing 20% in a matter of days. Does, does that speed and violence go into your thinking in your analysis? Yes, there often is symmetry in declines and rebounds. Again, think about the crash of 87. It was severe and swift, but you rebounded quite quickly. The COVID crash, similarly extreme downside move and then you V shaped back to the highs. And conversely, like you said, 2022, you think about some of the more long dragged out bear markets, they can take longer to recover. So in some ways the extreme downside velocity does lend itself to a potential reshaped recovery. We're not calling for that yet, but I think that's certainly in the cards. And you do tend to see that symmetry often in markets. Jonathan, could you stay there? I know we've got, we've got, we're going to come back to you, so don't go anywhere. We have some breaking news right now out of the White House with Eamon Javors. Amen. Brian, an interesting wrinkle in the schedule here at the White House. We were expecting a full dress press conference later this afternoon in the East Room between Benjamin Netanyahu and President Trump here after their meeting, which is about to happen any moment now. What we're now told by the White House is that they're canceling the full dress portion of that press conference. So they're not going to have folks in the East Room to ask the President and the Israeli leader questions. Instead we're going to see an Oval Office pool spray in which a select group of reporters is brought into the Oval Office. I'm told that the President will take questions during that pool spray. But they're saying that for scheduling and logistical reasons here at the White House, they've canceled the full dress sit down press conference piece of this meeting between Benjamin Netanyahu and President Trump that was scheduled for this afternoon. So not an enormous change, Brian, but you know, when we're looking for any wrinkle of anything that's happening at this White House that thought it was at least worth flagging for you that there's a change for the non news media pros out there. Eamonn, what would be then the difference between the full dress press conference and what we in the industry call a pool spray? Explain that sort of in layman's terms. Sure. So what we were going to see according to the schedule, was the President and Netanyahu in the Oval Office sitting down in those chairs in front of the fireplace, shaking hands, presumably taking some questions from the press. And then separately over in the East Room later on in the day, not much later on in the day, they would take questions from a room full of reporters and do what they call a two and two, which is in which case each leader takes two questions from the new news media. So a more elaborate full press conference with reporters standing in the East Room, that sort of thing, that has now been canceled. So we'll see the President once on camera in the Oval Office answering a few questions from a small group of reporters there. But we won't see the President and the Israeli leader taking a full suite of questions from reporters in the East Room. And they're saying that's because of logistics and scheduling of how the day was going today. So I don't know who those reporters are aiming and I hope that we're going to call you layman with amen from now on. By the way, I hope that Eamonn Javers is in that room because we need a market representative in that room. What are the odds we get a question on sort of this bad headline that we got. We want to hear from the President directly about whether or not he would have some. Would he put the ego in check and do some kind of a pause? Yeah, well, a couple of thoughts on that, Brian. One is there are a lot of good reporters here at the White House. I'm sure somebody will ask that question. Question we'll, we'll see. Two is I'm going to go try to put my foot in the Oval Office door and see if I can get in there and ask a question myself. Sometimes that can be very difficult to do with very little notice as we have here, I get. So we're going to let you go aim and jabber so you can go do that and try to shoehorn your way into that room because I hope if you're not there or somebody else that that question about a potential pause on tariffs is asked because it moved markets by about 7 or 8% in a matter of minutes until you debunked that headline yourself on cnbc. So I'm going to shut up and let you go. Eamon Javors, thank you very much. Thanks, Brian. All right, so we're going to get back to Jonathan Krinsky in just a second. But I want to also call your attention to the bond market because as stocks sell off, government bonds get bought when the price goes up, the yield comes down. And we're seeing the 10 year yield bouncing around as well. We're at 4.16 right now, but got down to 3, 8, 7 earlier today. Diana Olich joining us now. Diana, let's do, let's do this as opposed to like tell us what's happening right now but also give us kind of a lesson in how the, the mortgage market moves when you have these kinds of rapid and violent changes in rates, rates. Well, it's really actually hard to tell, Brian, because we only get one read on mortgage rates per day. We get that from Mortgage News Daily. Actually, CNBC gets that every morning because Mortgage News Daily runs those morning numbers. But usually others will get that weekly rate. We get that from the Mortgage Bankers association and from Freddie Mac. And that's kind of a general look at the whole week. But on this daily one, we've seen a lot of, you know, day to day volatility as of course, we have in the stock market. So after falling last week, the average rate on the 30 year fix actually took a big leap higher this morning because again, of those rising bond yields, it rose 15 basis points to 6.75%. But I would also note that Friday's early rate was revised higher later in the day again because of bond yields. So any upside to that huge stock market sell off for mortgage rates is now erased in the rates at least. We're right back to that very tight range that mortgage rates have been in really for the last month. And a half. But if you look and go back to the start of this year, rates were over 7%, and then they dropped sharply in February. During February, pending home sales, which are a measure of signed contracts on existing homes. So that's people out making deals. When rates were dropping, they only rose 2% from January despite a lot more inventory on the market, and they were still close to 4% lower than last February. Now, the most current data that I like to use for housing demand, though, is the weekly mortgage applications. And while they have been moving higher recently from home buyers, they're wobbling in another tight range that is still well below where we were pre pandemic. And when mortgage rates were falling in February, mortgage demand from home buyers was also falling. Usually those go in opposite directions. So it all comes down to what I keep hearing from housing experts, which is that mortgage rates are falling, but for all the wrong reasons for home buyers, reasons that don't make consumers want to go out and, and make a huge purchase like a home. Brian. And that really, I think, is the trillion dollar question. Because the one potential upside to all this is lower rates. Unless the fear about the economy causes people to seize up. All right, hold on, Diana. There is Israeli Prime Minister Benjamin Netanyahu arriving at the White House and shaking hands with President Trump. I don't think they're close enough to hear any comments, but let's listen in for a second. Mr. President, have you seen the markets today? All right, there we go. Into the White House we go. As you heard Amen say, no formal press conference between those two men later on today, but we will get some questions of the President, apparently what we in the industry call a pool spray. So, Diana Ola, going back to you. Lower rates matter a lot, unless you heard my point. People are so nervous about the economy to kind of seize up, freeze up, whatever term you want to use. Exactly. Because for most people, a home is going to be their single largest investment. And what we've seen in the housing market over the last several months is that really most of the activity is on the higher end of the market. Those are stockholders, those are people who invest and who are seeing their portfolios drop dramatically. And so if they're thinking, well, I probably I could form a home, I have the down payment, I wanted to move up into that home, but I'm worried about my retirement funds. I'm worried about where the economy is going, or maybe I'm worried that I'm going to lose my job. I don't think I'm going to buy that house right now. And so also when you see these rates moving in such volatile situations, again, it's not going to make somebody decide based on that rate. It's been moving in such a narrow range that it's really not going to be that difference for even a first time buyer who might not be able to make that down payment so easily because every little move is not going to be able to make them say, okay, now I can buy a home. Yeah. And, and if they were hoping to sell stocks to fund the down payment, that's likely way down. And so now they have less money for the down payment. I'm trying to find some silver lining in this. It might come from mortgages, maybe commercial. Diana Olik, we'll save that for another day. Diana Olik, thank you very much. All right, so let's go back down to the very patient Jonathan Krinsky. Jonathan, thank you. On Friday, not today, homebuilders are down today. But on Friday they were the only sector of the market that was higher. What's your technical take on the homebuilders or anything real estate related vis a vis interest rates? Yeah. So sometimes when you're going through a bottoming process and again, we don't know if this is the bottom, but in a bottoming process you get the first the parts of the market that were first into the bear market and the hardest hit are the ones that perform the best initially coming off the bottom. And I think homebuilders was clearly one of those sectors. Conversely, on the other side of the coin, at the tail end of the correction, you finally get the areas of the market that have held up the best and that is the low volatility, the defensive names. Think of your consumer staples, your utilities. So those hardest on Friday and we think there's still some risk to those groups in either direction. Right. If you get a rebound in the market, a risk rebound, those defensive sectors are going to lag. And those hardest hit groups like the home builders, maybe some, some tech names or some consumer names likely get the biggest rebound initially off the bottom. I want to ask you one question about volume and this data. I'm going to sound smart because I've got Gina and Chris and everybody on the data team behind us here at CNBC doing the heavy lifting. For me, we're seeing 18 and a half billion shares traded already. That's more than the 10 day moving average of 60 for the whole day. By the way, we've already surpassed by 2 billion the average daily volume and we still have 2 and a half hours left to go. And on Friday, we had the highest volume day going back to the financial crisis of 2007. What, if anything, Jonathan, does that type of volume tell you about the market? You know, it's volume is really just a function of the volatility. I mean, you almost, you can't really have a market sell off or crash or whatever you want to call this without an increase in volume. It almost always happens, at least on the index level. So I think that's telling. It's part of the capitulatory, some of the capitulatory signals you're seeing along with the inverted VIX curve, starting to see some elevated put call ratios, just different sentiment measures. So it's consistent with that capitulation. And yeah, today should be a record for a lot of different volume metrics. Yeah, looks like we're headed there at 18 and a half billion shares traded already. Jonathan Krinsky, BTIG, appreciate it. All right, so amid all of this, Congress trying to advance the president's budget plan at the same time, of course, the hard part now will be getting it past the House as more members of the GOP come out and softly, at least for now, criticize the tariff policy. Emily Wilkins in D.C. with more on this side of the story. Emily? Hey, Brian. Well, yeah, this is honestly the story that's going to take up all the oxygen on Capitol Hill this week. This framework for Trump's legislative agenda, remember, that's the tax package, that's border, that's energy. And it cleared the Senate over the weekend. But now it is facing a high hurdle in the House. About half a dozen Republicans are publicly saying that they will be voting against the bill over concerns that it will add trillions to the deficit. Now, this package, it requires House members to find $1.5 trillion in spending cuts. But the bill, it has completely different instructions for the Senate, requiring the Senate to only find 4 billion. So one bill here, two completely different instructions, that's causing some heartburn. Senate bill also uses what some are calling a budgeting gimmick, making several trillion dollars not count toward the overall cost of this bill, which also has House Republicans worried. You have the chair of the House Budget Committee, Congressman Jody Arrington, he called the Senate bill unserious and disappointing on social media. And then Congressman Andy Harris, he's the head of the Freedom Caucus, and he tweeted that he can't support House passage of the Senate changes to our budget resolution until I see the actual state spending and deficit reduction plans to enact President Trump's America first agenda. Now congressional leaders say they just want to pass the framework now before Congress leaves town for two weeks and then they will negotiate that final number of cuts later when they figure out the policy details. Speaker Mike Johnson plans to hold a vote on the bill as soon as Wednesday. Brian, of course, we'll keep an eye for all things tariff up on Capitol Hill. But this is also going to be a big pulp push to get through this week if Republicans want to deliver on the other parts of Trump's agenda. Is there any more growing signs, chatter, speculation, rumor, whatever word you want, Emily, that certain members of the GOP might use this time to use it as the lever against the president's tariff plan? Because a lot of GOP members and their constituents, they are also not happy. You know, at this point point it doesn't seem too likely that Republicans are going to have a lot of movement on tariffs this week. Of course, you have Jameson Greer coming to the Hill. That should make for a couple of interesting hearings and back and forth questions. What I'm going to be very closely watching for though is after this week, lawmakers go back home for two weeks, very interested to see when they return to Congress and in D.C. in late April, early May, what is the vibe going to be? What are they going to hear from their constituents then? How have these tariffs going to factor into prices then I would expect to maybe see a little more movement and a little more pushback. Right now the line that a lot of Republicans are holding is that they want to give Trump time to see what he actually does. The concern, of course, is if these tariffs go on for too long, I would expect to see a lot more Republicans begin to take action. Yeah, long way to go and we'll see what happens. And by the way, the courts still not entirely out of the question. Didn't even have time to get to that. But there's a lot of, there's a lot of network show left this week. Emily Wilkins, thank you very much. All right. So folks, it has been that kind of day and we can bring them back up on the screen. But the so called Magnificent Seven as a group have swung 10% today from collapse at the open to a violent retracement to going back down to many of them, including the macro CNBC MAG7 index higher now not by hardly anything 1/100 of 1%, but it is green, not red. And so we shall take that. Our trader watching this and many other things that are happening in the market right now. And that is Jeff Kilberg. Jeff Kilberg of KKM Financial. Jeff, what do you make of the market action today? I know it's kind of a lame question on my part, but I'm not going to lie. I don't know what else to ask Sully. It has been chaotic, it has been skittish and has been remarkable to see. And as you know, we always talk about the VIX which tries to measure option premiums in the S&P 500. Well, if we look at the realized move and remember the VIX measures the implied move, the expectation of a move. But the realized move today in The S&P 500 from the bottom to the top was over 9%. That's a Vix of 148. And we saw the actual VIX range, which is implied volatility from 60 down to 38. So this is, I know I'm saying these numbers casually, but this is seismic. This is historic to see volume with it. I am optimistic that I think we are seeing the skittish nature of both the NASDAQ 100 led by the Mag 7 as well as the S&P 500. The market is almost screaming at the White House to give us some shimmer of hope. It's remarkable to see this. But I think when you talk about the Mag 7, Nvidia, Nvidia almost got up to $102. So what led us in 23 and 24 which was revalued and you know, as a big critic and skeptic of the Mag 7 being over concentrated, overvalued, maybe there's the ability to lead us out of here. But I think President Trump at this moment in time, you talk about the carrot, you talk about the stick. President Trump has been using the stick the whole time. Yeah, it's time for a carrot. Give a carrot to Japan. Give a carrot to the eu. Give us something, some transparency. Because ultimately Sully, and I'm mad at myself and I think a lot of market participants and portfolio managers, we just never saw this coming. No, this was being. Jeff, I appreciate the honesty, but I don't think anybody did. Wall street didn't. We showed their, we showed their price targets at the top of the show. They've most of them, not all, most have brought them down. They're still well above where we are now and they'll reconfigure any. If Goldman Sachs and JP Morgan and ubs, if they saw this, those would have been in their end of year price targets to start the year they weren't. I don't think anybody saw this. I don't know if you're prescient or I'm prescient. Jeff, you pinged me at the top of the show that the NASDAQ had just turned positive. We looked at the data. It was not positive, but we saw this huge spike in S and P futures. I think in a matter of seconds, something weird happened with the data at the top of the 1 o' clock Eastern, 12 o' clock where you are. But I will say this. The Nasdaq is positive right now. I want to bring it up for our viewers. The S and P and Dow are still negative. The NASDAQ and Jeff, maybe we are just prescient. The NASDAQ up 4. 10 of 1% right now. How. I don't know where we'll end. 4 o' clock's a long way off. How comforted, if at all, are you in what's been a garbage market with technology stocks in the green right now? Well, every time we see the Nasdaq 100 futures move lower, we are seeing higher lows. So there's a slight amount of comfort there. But this is so skittish. You're seeing the algorithms really try to better understand positioning, repositioning, deleveraging. Last Friday, we saw the most amount of puts ever bought. So when you see people reposition, trying to cover. It's so fascinating, you know, when you talk about the options market, because the option market does dictate where we're going to see equity markets going. But what's the biggest component of options Sully? Time decay, Right? Yeah. So this time decay that we're seeing, all these options we are now putting on the president in the White House. There is a time decay component here because now you're cracking confidence. CEOs and earnings season coming up. I'm scared. I'm scared of what they're going to say if we don't see something tangible in the next couple of days. Yeah, and very quick. I know. Listen, I'm going to. They call us producing for the desk. We have Dom Chu, who's going to do a market board, but he's ready here and I'm going to just kind of bring in Dom into this. Guys, sit tight for a second because. Jeff. Sure. I want. I want to ask you a question. And then Dom, I would like you to respond as well. Because Dom used to run money. He understands this a lot better than I do. You got to know what you don't know. Sometimes I was at a dinner on Saturday night as a fundraiser. A lot of hedge funds there, some prop desk people, they were all talking about hedge funds selling volatility. And. And you said buying puts, which is betting the market's going to go down selling volatility. Jeff, what are you seeing on the internals of the market? The Dom, I want you to comment on what you're seeing and what it means. Well, we're not seeing a ton of selling of volatility, so because typically and historically that has been a winning recipe. Whenever the VIX spikes, you sell volatility reversion to the mean, the VIX goes back under 20 and you make money. But now we've seen this extension of the Vix from 30 to 40, 40 to 60 today. But what's interesting to me, which kind of contradicts the move in the VIX or the surge in the VIX that credit spreads, the credit market is really okay right now. So I take solace in a cautious amount of optimism from the credit spread contrasting with the VIX and the fear of buying downside protection is right now I would say that I agree. The conversations that I've had over the course of the last several days with traders, folks on Wall street, is this notion for first of all to address your selling volatility thing. Yes. Because I have heard there is this taking advantage of type opportunity, right. Where you can say with elevated levels of stock market volatility. What you're in essence doing by selling volatility is selling away some of that downside protection with that downside protection being worth as much as it is right now in the expectation that according to. Yet, you know, to Jeff's point, if there is a mean reversion, we start to see any kind of a stability in the market, those insurance contracts then don't become worth as much and the seller of that premium, that insurance contracts actually end up making money for it. So yes, when we see volatility in the market like the way that we are, that's something or behavior that I would expect to see. With regard to the credit spreadsheet situation. I literally was having a conversation just yesterday afternoon with some folks who are very familiar with, with how Wall street works. I won't use their names, but we were talking about this idea that we have not seen any real distress in credit markets just yet. We know that corporate investment grade type securities bonds don't trade as much on say credit issues or like equities as some of the other ones do. Like in high yield, the high Yield markets have definitely taken a hit, but in not a way that is indicative of any real economic stress event just yet. So, yes, that is a positive sign. I also want to in the meantime show you a few of the flashpoints in the market right now that have been trying to find some sense of stability as well. If you take a look at the markets overall and then sector wise, what we're looking at here, the single worst performing sector in the entire S and P over the last week of market volatility has been energy. So if you take a look at crude oil prices, those crude oil prices were at $72 just a week ago about Wednesday. They got as low as 59 today and they're back up to 61. But the energy sector, SLB, Occidental, Chevron, some of the underperformers on the day. Meanwhile, the consumer trade also one that we're trying to figure out whether or not there's any kind of a stability factor coming in there. Tractor Supply, Nike, Home Depot, Ralph Lauren, Expedia ones trying to figure out whether or not they can find some kind of a balancing point right now. Moving on, tech and financials, two key parts of the market. We'll start first with what's happening with the big banks, which you can see here are in the green. So as much selling pressure as there has been on the banks, J.P. morgan, B of A, Citigroup, Wells Fargo and Morgan Stanley are now higher solidly on the day so far. And then we'll end on that Mag 7 check. You looked at the Mag 7 overall. Take a look at some of these names, though. Talk about the green side of things in video. Amazon, Alphabet and Metal platforms now up anywhere from 1 1/2 to almost 4 1/2% higher. Tesla's still volatile in the trading right now. So again, as Brian, we talk about with Jeff and you and everybody else where there is kind of like this churn, this price discovery happening, it is in the places that you would expect some of those consumer names and some of those tech and financial names that are the key focus right now. Guys, great stuff as always. Dominic Chu laying it out for us. Jeff Kilberg out there as well. Guys, thank you very much. I make myself a PB and J almost every day. I tell my kids it's for them and it is, but it's also for me. Smucker's Jams, Jif Peanut Butter, Fruity Jammy, Creamy Smooth. The OG Sandwich of all sandwiches. It's giving lunch, it's giving nostalgia, it's giving. I'm doing my best. The magic's in the middle and honestly, it still slaps snack like it matters. Don't overthink it because Smuckers hits every time. 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 to reiterate the Nasdaq and now the S and P are higher. Let's get a CNBC news update with Pippa Stevens. Hey Brian. A federal appeals court has ruled Elon Musk's Doge team can access government data for now. In a 2 to 1 vote, the court today lifted an order that blocked the team from gaining sensitive data from the treasury and Education Department as well as the Office of Personnel Management. A Russian court reduced the sentence of an American soldier who was jailed last year after being found guilty of stealing from his Russian girlfriend and making threats of murder against her. According to state media. A court today reduced Staff Sergeant Gordon Black's three year and nine month prison sentence by six months. Black was imprisoned after he traveled to Vladivostok instead of heading back to his home base in Texas. And in the United Kingdom's second largest city of Birmingham, the city council said today about 6,17,000 tons of garbage have piled up on streets as a trash collector strike continues into its fifth week. Talks Monday between the trash collectors union and the city failed to reach an agreement over job and pay cuts but are set to resume today. That's a lot of trash. Brian, back to you. And I feel like it's a visual representation of the global stock market as well. There's some sort of interpretive dance. Pippa Stevens, thank you. Well, the president's threat of an additional 50% tariff, that's additional 50% tariff on China, sending China stocks lower as well. But the messaging in Beijing has been the sky is not falling. Yuna Xun is live in Beijing with whether or not President Trump's latest threat has changed anything. We're also joined by AEI's Derek scissors on why these tariffs will not work and why they might be based on error and crane shares. Brendan Ahern is here as well with why tariffs in China will hurt American consumers and businesses more than China. Got three different angles on a huge global market. Eunice, let's begin with you and the thinking of what's going on in Beijing. Well, Brian, it is highly unlikely that the Chinese, in the face of President Trump's threat, would remove the additional threat 34% tariff on American goods by tomorrow. This government cannot be seen as backing down to Washington in the eyes of the Chinese public, otherwise they lose face. But the Chinese government has indicated that it's willing to negotiate. In the front page of the People's Daily, which is really seen here as the voice of the Communist Party. The paper said that China, quote, hasn't closed the door to negotiations. Now, at the same time, it says that China doesn't harbor wishful thinking either. And it's been signaling that China isn't in a panic to make a deal by saying that even though these tariffs could hurt, that the sky won't fall. They say so. They also went through a lot of different ways that China is prepared to bear these tariffs. For example, saying that they could see themselves increasing monetary and fiscal stimulus for their steps to stabilize the stock market. And they also mentioned more support, potentially for businesses. Separately, the government also reached out to US Businesses, including Tesla, Medtronic, ge, Health Care. The Commerce Ministry said that it held a roundtable and it wanted to show its support for American business. But at the same time, they also called on these companies to act as what they described as rational voices to push back against the White House. Brian? Yeah, help for businesses, kind of a, a hidden term for stimulus, perhaps. Unishun in Beijing. Thank you very. Yeah, well, we shall see. Thank you very much. Meantime, the trade war with China intensifying with the threat of more tariffs if the other side doesn't back down. Feels like it's going the opposite way. But your next guest says that for China, tariffs, they do not matter. Joining us now, Derek Scissors, Asia economist at aei. His team and his people just putting out a big piece that I'll post on Social later about the tariffs and the bad math. We'll get to that in a second, Derek, but I want to ask you. They don't matter that much because here's the bottom line. Outside of Tesla, Starbucks and Nike, maybe a couple of Buicks and some chicken feet, China doesn't buy much from us, right? The Chinese tariffs definitely don't matter in a macro sense to the American economy. None of us will notice except people who are specifically tied to China. My point is a little stronger than that. I don't know that the tariff rate on China itself matters. It certainly doesn't matter if we go from, you know, 50, 79, 129. The Chinese will transship goods through other countries. They will find the lowest tariff way into the US they're better at that than everyone else. And so the tariff on China is actually the tariff the US Charges other countries. Yeah. And it's interesting because I want to remind our audience there are already sizable tariffs on China. Many were put on by President Trump in his first term. Many others were put on by former President Biden in his term, a 100% tariff on electric cars made in China, for example, solar panels. And this is why I bring this up for a reason. Heavy tariffs on solar panels put in by the previous administration. And there's still worry that some of those solar panels are getting to our markets untarriffed because they're sold through other nations that then sell back to us. It's a real problem. Yeah, it's a huge problem. I mean, you know, 80% tariffs on China, 120% tariffs on China. The direction we're heading in, Chinese goods are not competitive with those, either of those tariffs. If the President really wanted to threaten China, he would say, look, we're going to pour resources into Customs and Border Patrol and we're going to find where you're trans shipping goods from. That isn't going to work anymore. It worked in my first term. It worked in the Biden term. It won't work now. That's the real action against China not raising the top line tariff rate, which they won't pay. Yeah. So the article that your team put out on the bad math, we've been hearing more and more about this last week. Everyone's kind of sharpening their pens and pencils trying to figure this out. What did you guys at AEI figure out about how these tariffs may be calculated incorrectly? Well, I love the idea that Voyger and Corinth are on my team, but congratulations to them. They're other AEI scholars doing independent work. What they did is they looked at the formula that was eventually published by the administration and they said, you're making an assumption to just make this work the way you want. You know, the formula doesn't even. Shouldn't even do what you said. It should lead to much lower tariffs. And you just change the number out of line with your source, which was a published article, to get what you wanted. And that's the real point. This whole thing was rigged. It's a manipulated way to get very high tariffs because President Trump wanted to announce very high tariffs. And my colleagues found one of the ways that it's rigged. But if they hadn't rigged it that way, they would have rigged it another way. Well, if you think that this is done to make high tariffs, then it sounds like you believe, Derek, this is not a negotiating tack. That the tariffs are here to stay as Peter Navarro has basically implied. Everyone's waiting for them to be taken off because the markets are down. Sounds like you don't think that's what's going to happen. Well, you know, President Trump goes back and forth. He wants to negotiate with countries. If you don't negotiate with him, he's going to punish you. So obviously, obviously there has to be some given the tariffs. My main point is the tariffs won't work. And they won't work because they're not based on other countries policies. They're based on an outcome. So other countries can't do anything about the outcome. They can only change their policies. So from the start the tariffs aren't going to work. Whether we negotiate or not is basically President Trump saying, I'm going to stick with something that can't possibly work or I won't. Now I feel like he's going to respond to people who make him good offers and that's going to be the start of changing the tariffs. But that we can't be sure about. What we can be sure about is the tariffs aren't going to do what the Trump administration says they're going to do because they're not set up to do that. Yeah, it's been crazy. We'll see where they end up. Derek, scissors of the AEI. Meantime, the crane shares, China Internet ETF, Kweb Kweb selling off on tariff threats down about 5.5% although it was down more earlier in the session. Joining US onset, Brendan Ahern. He is chief investment officer at Crane Shares. You have any hot take on what the hell is going on here? Well, I think we need an offer. I'm trying to come up with some genius questions that make me look smart, but all I know to ask is about the market action and let the market tell the story. And the story right now is not good? No, no, not at all. Particularly. I mean we have to remember that 2/3 of global equity market cap is in US stocks. China is less than 3%. So. So the pain here is really felt by US and global investors who after a 16 year bull market are very, very exposed to US stocks. Obviously US economy economically is really going to suffer under tariffs. The Wal Marts, the Home Depot's, Costco's, you know, these import Cheap stuff from China. It's, it's, it has no value to make it here to, to build it here would have. Why are you guys environmental? Yes. So why are you guys being sold off that. I think it's a knee jerk reaction because of the geopolitical. It doesn't make any sense. KWeb has basically zero revenue exposure to the United States. So just because as China in the name it's getting puked up. But, but the end reality is the companies in K web have no exposure and there are going to be beneficiaries where China is actually doing something that the Trump administration wants which is they're focusing more on domestic consumption and they've been stimulating but you're going to see an acceleration of that stimulus. It could happen at any moment's notice that they pulled a bazooka again as we saw in September of last year. It's definitely coming. They need to offset weakness in the exports with domestic consumption. And I guess the fear, if I had to speculate and I'm going to speculate is that a lot of countries, companies in China make their living by making stuff there. They sell it to us. Tariffs get put on China, they sell less to us. Thus you bring down earnings, thus you bring down the market. How much of those types of export heavy companies are in the K web I mean versus domestic 0000 and so the K web is all domestic China. It's domestic China. The tariffs won't hurt domestic China because they don't really, I hate to say it folks, they don't really buy much of our stuff. No, it's about the GDP of the state of Nebraska total for China. I mean Washington state because of Boeing, Texas because of LNG and oil and certainly the Midwest and energy is untarrified by the way. Correct. So I think there's an opportunity, I actually think there's an opportunity for an off ramp. I think the push on the tick tock, the notice 75 day stay as well as you have China's actually doing what President Trump said which is raise domestic consumption. And they're actually spoke about that today. We just haven't seen the actual measures. And so I think that allows for this potential off ramp more dialogue. You know, maybe it's someone like Elon Musk, a trusted advisor who knows both sides. Maybe it's Larry Fink, Ray Dalio, you know, maybe it's you know, Tim Cook, someone who knows both sides. Tim was just, Tim was just there and Ray Dalio by the way is a guest on Squawkbox tomorrow morning, 8:00am Eastern Time. You see how I just threw that tease right? That's very nicely done. Brendan just threw that tease right in there. Brendan Ahern Kweb making some sense. Thank you very much. Let's get now to Tech check and Deirdre Bosik has been a wild session for tech. And now Deirdre, we've got some of the names you follow every day and the Nasdaq as a whole, not only positive, but up 8%. What a turn. A turn, but barely makes up for really the carnage we saw in the last two days of last week. And really that has erased a lot of the fueled gains of the last year. And in fact Google and Microsoft, those valuations are now barely higher than their 2022 lows before chat CBT even kicked off the trade, meaning that even the Mega Cap AI premium is close to being eroded here. Nvidia is already there. 20 times forward earnings is a lower multiple for Nvidia than both its 2022 and Covid lows, as if the trade never even happened. Now last week we talked about the impact of tariffs on data centers, which hinges on a steady supply of chips, networking hardware and raw materials. Key to AI. Beyond that though, there's already mixed momentum in the space. Over the weekend Metta released a new Lama model, but Sam Altman, he also warned that Chachi Beat five will be delayed. So if investors were already growing skeptical of the trade, tariffs could give them even more reason to get out or pause. Now a catalyst for the Mega Cap and AI trade this week that may come from Google's next cloud event. Just a few days from now we will hear from cloud chief Thomas Currie and CEO Sundar Pichai on how they plan to catch up with the other hyperscalers from Amazon and Microsoft Azure. There is this idea that because Google is positioned all across the different layers of AI, they have a real opportunity here to catch up. But key question will they reiterate capex with I spend now caught in the crosshairs of those newly announced tariffs that could have major implications for the Mega Cap trade as a whole? Google, Microsoft Matter, Amazon, they all issued Capex guidance in a pre Liberation Day tariff world. How much will $75 billion in Google's case or $80 billion for Microsoft? How much will that get them in terms of infrastructures? If we see those tariffs stay in place, it's not going to get them as much as it did certainly about a month ago. That's it. Will we get capital spending cuts because capital spending drove the market for two years before we talked about tariffs. That'll be the question. No time for an answer because we've got to go. Deirdre Bosa, thank you very much. Thank you. I'll see you on Power Lunch. By the way, we got a great guest, Francois Poirier. He is the CEO of TC Energy. Talk to him about Energy Canada tariffs and a lot more. I'll see you on the other side. Nasdaq and S and P higher. We're back in two and a half minutes. You've been listening to the exchange. Make sure you're subscribed to get each episode every day, same time, same place. 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.