Records Within Reach, Shares Surging, Fed Chair Warning 6/27/25
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And now, a next-level moment from AT&T business. Say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day. You've got AT&T 5G, so you're fully confident. But the vendor isn't responding, and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. Coverage not available everywhere. Learn more at att.com slash 5G network.

I'm Frank Holland, and you're listening to CNBC's Worldwide Exchange. Our show is live weekdays at 5 a.m. Eastern. Listen in.

Records in reach, the S&P 500 about to do something for the first time since February as the NASDAQ 100 goes for four in a row. Nike providing a big lift this morning despite a double-digit sales slowdown. And what currency traders and Ron and Sana are telling the White House about its reported plans for a shadow Fed president. It is Friday, June the 27th, 2025, and this is Worldwide Exchange on CNBC and streaming on CNBC+.

Good morning. Thanks so much for being here with us. I am Frank Collins. Get you ready for the trend day ahead. We begin with the U.S. markets. The S&P 500 inching towards a new all-time high. You can see right here the NASDAQ 100 hitting another record. The Dow about three and three quarters of one percent away from its record. Down here, the Russell still in correction territory, about 12 percent away from its all-time high. Taking a look at futures this morning, you can see right now we are in the green across the board right now. You can see all three indices up just around around a third of one percent. Looks like the Dow would open

about 120 points higher. Take a look at small cap futures as well. Small caps were 1.5% higher yesterday. This morning, you can see they're up about a third of a percent right now in the pre-market. One of the big stocks that's moving specifically the Dow higher, Dow component Nike, the company out with its latest earnings report, beating on the top

in the bottom lines despite reporting fiscal Q4 sales fell 12% year over year. Nike says it expects the tariffs are going to cost it $1 billion in the current fiscal year, though price hikes and supply chain shakeups are planned. CEO Elliot Hill saying on that earnings call, Nike's not where they want to be. However, he also added the company's best when it focuses on sport and says that's really the direction that they're going in. Look at this chart right here. Nike shares really popping after that report right now up about nine and three quarters of 1%.

We also look at the rest of the S&P 500 pre-market leaders and the laggards right now. We're going to start with the leaders, of course, again, Nike right here at the top of the list. Apollo Global moving up about two and a half percent. Apollo Global, actually the owner of the Venetian in Vegas, signing a deal to acquire a digital gaming company. One of the factors moving that stock higher. Decker's Outdoor moving higher on the back of that Nike report down here. Franklin Resources and Biotechni.

writing out your best performers in the pre-market. Then we have the S&P 500 pre-market laggards as well. Newmont Corp right here at the bottom, pulling back about two and one third of a percent. The company more than likely moving lower on the declines in gold this week. We see Northern Trust, Hormel Foods, Brown & Brown, and HealthPeak Operations LLC writing out your worst performers.

Also checking Tesla this morning after Elon Musk fired his head of manufacturing. Also, Show Me hitting a new record high after the release of a new EV that has a price that undercuts Tesla. Taking a look at Tesla shares this morning, they're up about a third of 1%. Show Me right now trading pretty much at a high in Hong Kong right now. Those shares up about 3.5%. BYD pulling back actually about 1%. Down here, Rivian up about a third of a percent as well. We're going to talk more about EVs and EV batteries coming up later in the show with our Phil LeBeau. Also watching the dollar this week, checking the greenback.

You can see this week the dollar pulling back about 1.5%, just fractionally higher right now. We've got Ron and Sana coming up, talking about the impact of a potential shadow Fed president could have on the currency market and some other parts of the U.S. economy. A lot to talk about there. We also want to check gold, take a look at the moves in gold this week.

As I mentioned, gold moving lower this week, pulling back about 2.5%. Right now, gold down about 1.5%. And we'll take a look at the Treasury market as well. We've got PCE coming up later today. We're going to be talking about that as well. The benchmark at 4.27, pulling back a few basis points from the levels we've seen in recent days. The two-year at 3.75. The long bond at 4.82. Okay, that is your setup. Let's now see how Europe is shaping up as this trading day gets underway. Steve Sedgwick is in London with a look at the early action. Steve, good morning.

Yeah, good to see you, buddy. I think there's no one reason why Europe's all green behind me, but I think there's four or five good reasons that are adding to that positive momentum. Basically, a lessening of tension, lessening of geopolitical tension, trade tension. That's number two. And the kind of transatlantic tension. It was a really successful NATO. We've talked about that already between the US and the Europeans finding some form of rapprochement as well.

And another factor is the data out of the US. It's been suitably downbeat that people think, OK, maybe we are going to get a rate cut from the Fed sooner rather than later. Plus the gainers across the board. Well, I can show you those very briefly. Auto is looking pretty strong at 1.9 percent. Media up as well. Household goods up 1.4 percent. And within the household goods,

Europe's sportwear related stocks moving high in early trade. You've got the likes of Puma. You've got the likes of Adidas and also JD Sports. Now, some of our viewers might not know JD Sports. They've got a huge presence in the United States as well. They sell a lot of sporting goods and have got a big relationship with Nike. So that Nike move you talked about in extended trade after those fourth quarter results saying the sales decline is beginning to slow down. That was really positive as well. Now,

Now, there's another factor as well. European investors are welcoming the Treasury Secretary Besant's decision to scrap the proposed Section 899 rules. We've all been looking at tax codes. We know all about 899 now. The so-called revenge tax, which could have led to taxes on foreign investors in U.S. assets. The U.K. chance of the exchequer?

Our finance secretary, Rachel Reeves, she welcomed the decision, saying it would provide certainty for businesses and pledging further work with global partners to ensure a level playing field on tax. So no one individual reason, Frank, while we're rallying today, but a lot of minor factors all adding to that positive momentum. Have a great weekend, my friend. All right, Steve Sedgwick, live in London. You have a great weekend as well. Great to see you as always.

Turn our attention now to Washington, D.C., and some positive news on trade deals, also providing a boost to trader sentiment. NBC's Alice Barr joins us now from Washington with much more on this story. Alice, good morning.

Good morning, Frank. Yeah, we're tracking new developments here with the U.S. and China confirming details of a trade framework seeking to allow rare earth exports and ease some tech restrictions. That's according to a new statement from China's Ministry of Commerce that references relaxing some export control rules while the U.S. cancels some restrictive measures against Beijing. That statement coming after President Trump said this Thursday at a White House event.

We just signed with China yesterday, right? Things that never really could have happened. And the relationship with every country has been very good. A White House official later clarified that the administration and China had agreed to, quote, an additional understanding of a framework to implement the Geneva agreement. That's the deal that suspended a majority of those massive tariffs that the U.S. and China were trading back and forth. And President Trump also referenced a possible deal coming up with India. Let's let you hear about that.

We're having some great deals. We have one coming up, maybe with India, very big one. Well, we're going to open up India. And Bloomberg is reporting that Commerce Secretary Howard Lutnick says 10 trade deals are now imminent as the Trump administration is speeding toward its goal of this whole swath of promised trade deals. Frank, back to you.

All right. Alice Barr, live in D.C. Alice, always good to see you. Have a great weekend. All right. Turn it back to the markets. Once again, U.S. stock futures, they're pointing to a higher open at these levels. The Nasdaq Composite, the Nasdaq 100 and the S&P, all of them are going to open up at record highs. You can see a lot of green on that board. Let's bring in John Stoltzfus, Managing Director and Chief Investment Strategist at Oppenheimer Asset Management. John, good morning. Good to see you.

Morning, Frank. Good to be with you on CNBC this morning. All right. So we're on pace to open up at records. You say you're still bullish on stocks. So if you're still bullish on stocks, what's the play right now? Is it about value stocks right now? Is it about perhaps dividend stocks? Do you continue to pile into tech? Where's the move? Very good.

Frank, I think you want to be diversified here. In our view, what you want to do is you want to own growthier value and garbier growth as your core, wherever you can pick up a dividend and still look at primarily dividend growers rather than just diversified.

dividend payers. We think that's the place to be. We still like the U.S. above other markets, so we overweigh U.S., but still have exposure that we've had for years related to developed international and emerging markets as well.

It looks good for equities. If anything, we think it's overweight equities have some exposure to fixed income if you want to be traditionally diversified for current income. But it still looks like an equity player's world to us. All right. So we're talking about equities. One of the sectors you like is consumer discretionary. And then also we just got Nike earnings, Nike shares.

or actually the biggest gainer in the pre-market for the Dow and one of the biggest gainers in the S&P as well. When we're looking at consumer discretionary, Nike, by the way, it beat earnings expectations that were very low. The bar was very low. They also flagged some issues going forward, a billion dollar in tariff expense, some supply chain issues, and also they still expect sales to be lower. What are you seeing in the consumer discretionary sector that's getting you excited right now or making you see some opportunities?

Well, what makes me see some opportunities, I try to right-size my expectations here, is we still see how all this tariff business works out, okay? That's an important thing to consider. But what we do see is a consumer that has been remarkably resilient, because jobs have been resilient, and we see businesses resilient. And as a result of that,

But we expect that the consumer will, even though the consumer has slowed some, but sentiment remains one thing. But when it comes to shopping, the American consumer justifies much of their existence by what they can buy for themselves or their loved ones with their labor that they perform. And so we still like the consumer.

So, John, we're going to talk about this much more later in the show, but I do want to ask you just specifically about potential market risk behind the idea of a shadow Fed president. How do you think investors view that risk? We've seen some reaction in the currency market, but what about the equity markets?

You know, I think worrying about a shadow Fed is looking for something to really worry about. I mean, the opinions within the Federal Reserve itself since March of '22 at different points have been fairly diverse in terms of what policy should be.

But the Federal Reserve, the main thing is that it remains independent if there's another channel rolling there in terms of commentary. I mean, you can just consider what Bessent might say right now, looking for lower rates while Jerome Powell,

remains pretty well where he is with an opportunity probably to see rates trend somewhat in September is what we think. September and probably at the end of the year, another down payment by the Fed. By the end of the year, we expect another 100 bps will then remove from the monetary policy elevation that came from March of 22. John Stoltzfus, great to see you as always. You have a great weekend.

Thanks, same to you. We have a lot more to come here on Worldwide Exchange, including a look at what's been a rough few months for shares of Apple and the massive ecosystems of parts makers that rely on the iPhone's success. But first, why the energy solution of the future may already be sitting at the bottom of your electric car. Our Phil LeBeau has that story. These are dozens of old EV battery packs that still have the capacity to harness and transmit energy.

What are they doing here? They're all part of a microgrid to power a data center. I'm Philip Owen, Sparks, Nevada. We'll show you a new way that some believe will provide the energy needed for hyperscalers when Worldwide Exchange returns. Let's say your small business has a problem. Like maybe...

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And now, a next-level moment from AT&T business. Say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day. You've got AT&T 5G, so you're fully confident. But the vendor isn't responding, and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. Coverage not available everywhere. Learn more at att.com slash 5G network.

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All right, welcome back to Worldwide Exchange. Just two trading days left in the first half of 2025. The S&P industrial sector is the top performing sector this year. At the top of the industrial, we've got Homet Aerospace is up more than 60% in the first half. GE Vernova ranks second. Uber is in third place, followed by GE Aerospace. All of them up more than 50% over the last six months. There you see Homet up almost 62% with a big run starting in early April after President Trump is back on tariffs.

All right, turning now to the EV race, the powerful demand for the AI and the data centers that support technologies expected to explode over the next several years. Our Philobo profiles one company in the Nevada desert attempting to meet that need by finding a second life for the battery in your Tesla or your Rivian. With the boom in hyperscalers and the demand for massive amounts of electricity to power data centers,

This may be one way to quickly and efficiently provide some of the energy needed. Redwood Materials, a battery recycling firm, is now building microgrids that are powered by EV battery packs set to be recycled. This is the company's first microgrid, which powers a modular data center for Crusoe, an AI infrastructure company. There is massive demand for the energy needed to power all

all of the data centers coming online this decade. Goldman Sachs estimates there will be a 165% increase in data center power demand by 2030. That's caught the attention of Redwood Materials. It believes it can quickly and efficiently meet a portion of that demand

by repurposing some of the EV battery packs it takes in. Redwood says many of those battery packs still have 50 to 80% of their capacity to harness and transmit energy that can power a microgrid.

With the number of EVs on the road continuing to grow even as demand slows down, Redwood expects steady growth in the number of battery packs that will ultimately be recycled after an EV is totaled or hits the end of its life.

While Redwood believes it has the capacity to provide the energy needed for many data centers, the challenge will be how quickly and efficiently it can take old EV battery packs and repurpose them into microgrids to help power some of the hyperscalers coming online over the next couple of years. Frank, back to you.

All right, still on deck here in Worldwide Exchange, standing alarm over a possible shadow Fed reserve chair and why the dollar's recent decline, that could be a warning sign for investors. We're right back after this. On WhatsApp, your personal messages stay private between you and whoever you send them to. So things like the passport numbers for your honeymoon stay between you and your fiancee.

And that video call for your grand's 80th stays in the family. Even your streaming password stays between you and your college roommates who still ask for it every week in your group chat. Because on WhatsApp, your personal messages are yours. No one else can see or hear them. Not even us. WhatsApp. Message privately.

And now, a next-level moment from AT&T business. Say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day. You've got AT&T 5G, so you're fully confident. But the vendor isn't responding, and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. Coverage not available everywhere. Learn more at att.com slash 5G network.

Welcome back to Worldwide Exchange. Retail traders outperforming the S&P 500 by 30% on Monday, the day after the airstrikes in Iran, making trades at the height of Middle East tensions, at least in 2025. Here's some of the other trades they made on that day. Buying the dip on HIMS and HERS, investing in the AI defense stock Palantir, and also some more conventional AI plays like AMD and Alphabet, plus investing in the hype of stable coins with Circles. The sell's also interesting. Retail traders dumping Apple and dumping big banks, Bank of America and Wells Fargo.

During the rise of these tensions, retail traders either outperformed the market or matched the S&P 500 in the two days leading up to those weekend airstrikes and even the three days after as we saw concerns about escalation. The top stock bought over that time, it was Tesla, over rising enthusiasm after the robo-taxi launch in Austin, just really attracting a lot of retail investor interest. Outside of equities, investors use ETFs to invest in bonds,

On the very short end of the curve, the SGOV and the BIL ETFs were in the top 10 of all ETFs traded during those same five trading days.

All right. Investors get their latest look at inflation later this morning with the Federal Reserve's preferred gauge on prices. That is PCE on a month over month basis. Expectations are for a slight uptick in May year over year. Prices are expected to rise two point three percent up just slightly from April. A similar story for the core figure with the year over year reading forecast arise by two point six percent. Also higher than the previous month for much more. Let's bring in Chris Hodge, the Texas chief economist for the U.S. Chris, great to see you again.

Great to see you, Frank. All right. What do you make of this? Light up ticks in PCE. What does that mean potentially for the Fed? The idea that while inflation has certainly moderated over the last couple of years, it seems to be kind of sticky above 2%.

Yeah, I do think we're going to see a fairly benign print today, somewhere in the mid-teens with regards to basis points on the month-on-month gain. As far as what it means for the Fed, Powell had his testimony in front of Congress just this past week, and he had to defend the lack of Fed cuts. And I think based on backward-looking data, there's a pretty strong case to be made that the Fed should already be cutting and cutting with alacrity. But the

has to be forward looking and we still have this huge rolling threat of tariffs and if the president. Is promising a fifty percent effective tariff increase policymakers need to proceed with caution and that's just what the fed is doing they don't have a great model. To deal with the shock of this size so until we get some sort of clarity.

on trade policy and assurances that longer run inflation expectations are well anchored, I think the Fed is going to be comfortable doing nothing just as long as the labor data remains okay. All right, so you think it's going to be benign, but I want to ask you, whether it's Fed Minutes or reports like the ISM, you continue to see this commentary that, you know, manufacturers and other companies, they're increasing prices in anticipation of tariffs, but we have seen, you know, considerable pauses and reductions when it comes to China and other countries.

Do you think that the anticipation of tariffs is going to be reflected in this PCE and other forward reports? And what about the idea of trade deals? Do you think that people hold back on increasing prices with the idea that, hey, there might be a deal and those tariffs might not be in place? It's a great question. And I don't think that we're going to see the tariffs bite in this print. But retailers have been preparing for these tariffs by now.

overstocking inventories. And these businesses have pretty slim margins. And those inventories are eventually going to be run down. And businesses are going to need to restock at higher prices. And these costs are eventually going to be passed along to the consumer. So I think today's print is encouraging. But I think it's probably the lowest inflation print that we're going to see over the next few months. As far as trade deals are concerned,

We're not going to see any durable, comprehensive trade deals. I think more likely what we're going to see is a trade truce with a bunch of countries. So I don't know that this necessarily improves things, but it helped us take the left tail risk off of the table. But I don't think it's going to be a tailwind to growth. All right, Chris Hodge, great to see you. Thank you very much.

Thanks so much, Frank. Have a great day. All right, as we had a break, we're watching Shares of Meta Platforms after it reports it poached three open AI researchers. Bloomberg reporting the company's in advanced talks to buy Play AI, a small startup that uses AI to replicate voices. Meta not commenting on the story that would be Mark Zuckerberg's latest push to bring in more AI talent. Shares of Meta right now, they're up about three quarters of one percent. We're back right after this.

If we had a person over at the Fed that would lower interest rates a little bit, that would be helpful too. It's hard to believe this is on top of, you know, we have to fight this guy, he's not doing the job.

So that was President Trump yesterday taking his latest shot at Fed Chairman Jay Powell over his frustration with the central bank's policy on rates. Wall Street's been watching for any new developments this week. Following a report, the president may name Powell's replacement early, creating a shadow Fed chair, and it's already having some real market ramifications. Welcome back to Worldwide Exchange. I'm Frank Collin.

Coming up this half an hour, we're going to have much more on this and why our next guest says the potential move would do more than just harm the Fed's independence. But first, we're going to get you ready for the train day ahead. We begin with the U.S. markets with the S&P 500 inching towards a new all-time high. The Nasdaq 100 hitting a new record. You see it right here. The Nasdaq right now, the composite just fractionally away from its all-time high. You see the Dow is about three and three quarters of one percent away. The Russell still in correction territory.

about 12% away from its all-time high. With that, we want to check small cap futures. Small caps were about 1.5% higher yesterday. Right now, you can see, actually, we're going to move past, there they go, small cap futures up about a quarter of 1%. We're going to go to broader futures right now as well, checking those, taking a look at the futures in the green across the board. We just showed them to you.

There we go. In the green across the board, all three indices up about a third of 1%. With that, we want to go to the NASDAQ 100 leaders in the laggard, starting off with the NASDAQ 100 leaders first. Right here, Trade Desk rebounding after declining yesterday, up over 3% right now. Lululemon getting a boost after that Nike report, also up about 1.5%. Keurig Dr. Pepper, Intel and AMD rounding out your best performers. Then the NASDAQ 100 laggards. We have the other side of the coin, of course, in the pre-market taking a look.

Atlassian pulling back about five and three quarters of one percent. Diamondback Energy, ADP, PDD and Old Dominion Trucking Company pulling back your worst performers on the Nasdaq 100. The tech sector near a record high. We're going to take a look at the stocks leading the Nasdaq 100 so far this year. You see some of these names Palantir, not surprising.

up about three quarters of 1% in the pre-market. Z scale are up about a third of 1% down here. Micron and CrowdStrike also fractionally higher as well. We also want to talk about the dollar. Looking at the currency market, we've seen a weaker dollar. Again, we have Ron and Sana coming up talking about the potential market implications of a shadow Fed president. Taking a look right now, one of them could be a weakness in the dollar. Right now, you see the dollar down about

1.5% week to date. Just fractionally higher right now. Also looking at gold, we've seen some weaknesses in gold as well. Traders moving away from the safe haven play gold this week, pulling back about 2.5%. Right now it's down about 1.5%. Also looking at treasuries, we have PCE coming up later today. We just heard...

Chris Hodge from Natixis saying he believes we're going to get kind of a benign report. Right now, taking a look at yields, the benchmark at 4.27, a few basis points lower than the level we've seen in recent days, the long bond at 4.82, the two-year at 3.75.

Also want to take a look at Europe over in the early going. Take a look at the stocks this morning. The stocks moving higher up just about 1%. The French CAC, the best performer, up about 1.1%, the Italian MIB. Pretty close to flat, just fractionally higher right now. Some of the big movers over there in Europe this morning. After that Nike report, we see Adidas up about 3%. Similar story for Puma. Both of them big sportswear makers. And we want to look at the Asian indexes and how they closed this morning as well. Taking a look, Japan's Nikkei 225 up.

just about 1.5%. The Shanghai Composite pulling back about three quarters of 1%. Similar story for the South Korean KOSPI. Okay, that's your setup. It's time now for this month's sectornomics and a closer look at the tech trade and one sector darling continuing to struggle. Steve Kovach is here with that.

Steve? Yeah, it's Sectronomics Day, Frank. And our attention turns to tech. The sector is up about 6% so far this year, hitting a new high yesterday. Now, if you take a look at the XLK Spider ETF, which tracks tech, Apple is the third biggest component after what else? Microsoft and Nvidia. Apple makes up 12% of the value of that XLK. Now, shares at Apple, they're down 10% so far in 2025 and 23% since the day after Christmas. That was around the time it was hitting all those all-time highs.

Apple is often seen as vulnerable to tariffs, of course, plus some of those AI misses. The uncertainty in all of those topics has not been helpful. Now, this week, Barclays issued a note to investors maintaining it's underweight on the stock with a $173 price target. The note said the iPhone still drives the stock and, quote, we expect volumes this year to be below the peak of 2015 when the first large screen iPhone was launched. Now, the 44 analysts tracked on fax

at 28 have a buy, 12 have a hold, and four have a sell rating. But all of their price targets together, and you have $228 as an average. That is 14% higher than the current stock price. Now, Apple also has a long list of suppliers, and all of them are doing better than Apple stock. A lot of that is some AI plays outside of Apple on the list. Micron, which is up

52% this year. Jabbel is up 47%. Flex is up 25% this year. 3M, 16% this year. Corning, they make the glass for their iPhone. That is up 8% year-to-date. They also make those fiber optic cables for all those data centers we talk about so much. And 2Qs, they also play a big role. Corvo, up

14% this year, while Qualcomm, they make modems for Apple. It's up just 1% in 2025. The stock is 26% from last year's high. Corvo, by the way, 35% from its high. Investors also watching Broadcom. They make Wi-Fi and Bluetooth chips for Apple. It's up almost 60% in three months. However, a lot of that is due to artificial intelligence, not necessarily Apple, Frank.

All right. Steve Kovach with this month's sectoronomics. Steve, thank you very much. Let's talk more about the sector now with Richard Clow, portfolio manager of the Global Tech Leader, Global Tech Leaders Fund and Janice Henderson. Good morning, Richard. Good to see you. Good morning. So we just kind of got a breakdown of the tech sector right there from Steve Kovach. I want to get your take on Apple first and foremost. Why don't we start there? What do you make of Apple and some of the moves we've seen in that stock this year?

Yeah, and I think it's a great example of the market trying to figure out who's going to be the winner in this next new technology of AI. And there was obviously some hopes that by launching Apple Intelligence, there would be some nice replacement cycles in years to come. That hasn't really worked out. There's obviously been some changes to the management in Siri and a little bit back to the drawing board. Now, Apple historically is not normally the first, but they just tend to do it better. So I don't think their story is over yet.

But I can certainly understand why the market's taking a more dim view of their near term outlook until they get that credibility in terms of being able to deliver on the AI side. All right. So you say also that when it comes to valuations, this is an interesting take that the E doesn't necessarily matter. You have to decide your own E. I'd like you to really explain that thesis. I'm looking at shares of Palantir right now. So the forward PE is 236. So how do you come up with your own E to either justify or not justify that?

Exactly. And we like to say that, you know, E's are often taken as fact, but they're actually opinions. And those opinions can often be very wrong. And, you know, the tech sector is the one sector where you really want to go and do that work. And obviously, as fundamental investors here at Janus Entities, that's what we're doing and all the teams are doing day in, day out. So to think about that, you know, the stock moves in advance of that E hopefully catching up. And you really do need that E to catch up. Otherwise, it's all hot air and hot air can go into the balloon.

it can come out of the balloon. Now, we would certainly say in some instances that's going to be pretty hard to fill that gap. And again, that's where we need to be discerning as to which stocks are just really just going far ahead of what their realistic earnings assumptions could be and where there are opportunities on the other side to be able to say, look, this stock is actually going to earn 10 times more than people thought like an Nvidia in the last two and a half years. That makes it actually quite an easy stock to own.

All right. So I want to talk about another part of the tech sector, cybersecurity. A lot of eyebrows were raised about cybersecurity and a lot of attention to it after the conflict over the Middle East and people talking about the potential from hacking and things from Iran, bad actors. How do you decide the E there when we don't really know what's going on? We don't know the actual resolution of that conflict or even if there's hackers in Iran that are trying to target U.S. companies.

Well, I think it's just another episode of just more threats. And that's going to keep coming. So at least when you think about cybersecurity budgets for a firm, despite all of the volatility, everything, all the macro uncertainty, that's probably one area of budget they're not going to be cutting back. So that's going to be a pretty solid place to be.

And then you think about where is that technology going as we move into a quantum world and there's going to be more threats that are going to come down the pipe and people have got to think about those next generation solutions. So again, from our side, we're thinking about where could those budgets go realistically? Who are the best position players within that to be able to come against those threats in years to come? And where can they create platforms and not just single product? I think that's the history of cybersecurity.

It's a long history. They're not actually being that many great stocks. And that's because to actually find companies can build that platform is actually pretty hard. Richard Clough, good to see you. Thank you very much. All right, coming up, Nike investors finding plenty to cheer about this morning following the apparel giant's latest results. Nike shares up about nine and three quarters of one percent. Also, as we had to break.

Checking shares of SL Green Realty, BXP and Bernardo Realty. All three of the New York City link REITs were covering some ground yesterday following steep losses on the back of Zoran Mamdani's victory in the city's Democratic primary over fears around his rent freeze proposal. Also, be sure to catch the city's current mayor, Eric Adams, on Money Movers at 11 a.m. Eastern talking his reelection bid. We're back in just a moment.

And welcome back to Worldwide Exchange, checking a few stories that we're following this morning. Watch here as a Nike following its latest earnings report beating on the top and the bottom lines, despite reporting fiscal Q4 sales that fell 12 percent year over year. Nike says it expects tariffs will cost the company one billion dollars in the current fiscal year, though price hikes and supply chain shakeups are planned. CEO Elliot Hill lamenting on the earnings call that Nike is just not where it wants to be.

A number of European and U.S. apparel makers are following Nike's lead higher this morning. You can see right here on the board, Adidas shares up over 3 percent, Puma up nearly 5 percent, JD Sports, big sportswear retailer, shares up over 7 percent, Lululemon Deckers Outdoors also moving higher. We're also watching the INDA Indian ETF. President Trump late yesterday hinting of a possible deal with the country as soon as next week.

We're having some great deals. We have one coming up, maybe with India, very big one. Well, we're going to open up India.

The INDA is up just about 6% so far this year. All right, speaking of trade, White House officials and President Trump confirming the U.S. has finalized its trade understanding with China and, quote, signed a deal stemming from talks in Geneva and in London. Beijing, for its part, confirmed the details of the deal and will begin reviewing its export rules. Commerce Secretary Howard Lutnick adding in comments to Bloomberg, the U.S. has imminent plans to reach 10 more deals with its major trading partners.

Sticking with China, profits from the country's industrial sector fell more than 9% last month from a year earlier, marking their largest drop since October.

One part of China that's not cooling down, however, that's the EV market. Shares of Xiaomi hitting an all-time high. You can see right now up about 3.5% in Hong Kong trading. The company unveiling a new luxury SUV that says will cost less than the Tesla Model Y. And Apple making changes to its European App Store and its policy, saying the new rules will help it avoid a pending $585 million fine from EU regulators. The European Commission says it's examining those new terms. Shares of Apple, they're up just about 0.5%.

All right, coming up here on Worldwide Exchange, undermining Powell's power, where our next guest says he's a potential shadow Fed chair, and that pick by the president could cause more harm than good, just the central banks to the central bank's independence. We're going to be right back. Stay with us. He's an average mentally person. I'd say low in terms of what he does, low, low IQ for what he does, okay? But he's probably a very political guy, I guess. I don't know. I think he's a very stupid person, actually.

That was President Trump earlier this week further ramping up his attacks on Fed Chairman Jay Powell over the central bank's lack of moves around interest rates. Those attacks coming as The Wall Street Journal reports this week, the president may announce Powell's replacement by this fall, with the White House yesterday denying the president is close to announcing Powell's successor. Still, there's speculation the unusually early move could effectively create a shadow Fed chair with the power to influence market sentiment.

Those concerns hammering the dollar this week, touching a three-year low. Right now, the dollar up fractionally, but week to date pulling back about 1.5%. CNBC contributor Ron Insana is calling the potential shadow Fed chair a really bad idea in a new piece on CNBC.com. Ron joins us now with much more. I think I'm understating it. You say it's a whole lot more than a bad idea. So you say a shadow Fed chair would create potentially a dependent Fed.

What are the risks when we're talking about dependent Fed? It's early. And you're comparing it to some other countries like Venezuela. Or Turkey. Or Turkey. I mean, what are we talking about? Well, you know, you don't want investors to lose confidence in the Federal Reserve's ability to control inflation in particular. And we still don't know. You know, the jury's still out as to whether or not tariffs, if they remain in place, you know, some of the presumed trade deals notwithstanding, whether or not that's going to add to inflationary pressures on a more permanent basis.

We don't know if that will further devalue the dollar, if we'll see capital flight from the United States. I mean, most countries that don't have independent central banks have suffered economically, and those that do have done quite well. And you look at New Zealand, you look at the performance of the European Central Bank,

And the way in which the president is going about this, and I leave the piece by saying no, no, a thousand times no. One, you don't trash the Federal Reserve chair. He's not a stupid man by any stretch of the imagination. And two, I think if you set up a shadow Fed chair who will openly criticize the man in charge, you're going to create a lot of confusion among investors and maybe make it that much harder to raise money.

by selling U.S. Treasury bonds. All right, that's the point I want to get to. So, by the way, there's a couple things we have to hit on. Well before we got this report about the shadow Fed president or the potential for it, the dollar's been under pressure all year long on trade deals, on some of the economic policies, the thoughts of a U.S. slowdown, also investors perhaps politicizing their investments, moving their money outside the U.S. And we've seen that, yeah. Yeah, all those things were already happening.

More, I think maybe more importantly to investors, what could this potentially do to people's confidence when it comes to U.S. Treasury bonds? And would it impact every part of the curve or just the short end of the curve that the Fed influences? No, I think it's the whole curve. I mean, you know, if you go back and look at the history of this and, you know, President Nixon really was the last sitting president to try to actively campaign.

convince his Fed chair at the time not to raise interest rates during election year in 1972 and certainly to lower them to increase his chances of being reelected, which he didn't need in 1972 for a wide variety of reasons, Watergate being one of them.

But since then, presidents have understood the importance of an independent Fed, what that means to the cost of capital, the cost of money, and the cost of borrowing at the federal level. The last thing you want to do is reduce that confidence so much so that given that, at least from what we hear from the Congressional Budget Office, this new tax bill will add $3.4 trillion to the federal debt over the next 10 years.

and maintain trillion-dollar deficits for as far as the eye can see. You don't want to pay more for that. Okay. But in all fairness, Ron, you're giving us shadow concerns. We're talking about the shadow Fed. What are the concrete concerns here? Is the idea that if there's a dependent Fed that the yields would move up to the upside because investors would feel less confident? Absolutely. Would it be harder? And when we're talking about auctions, like earlier this week we had an auction. Rick Centelli gave it a C-. He said demand was unbearable.

average but the pricing was kinda like what are their concrete concerns so that he a failed auction is one right if investors both domestic and foreign and many of whom own action large you know chunks of u_s_ treasuries were to boycott a a treasury auction and not show up

and the price falls and the yield spike, that just adds additional birds. We're already paying a trillion dollars a year in interest payments on the federal debt. You don't want to have an inability to service the debt at a time when it continues to grow. And I think also just broadly speaking, keeping the economy on an even keel, and the Fed has its dual statutory mandate about employment and inflation. Let's bring it full circle. We started talking about the dollar. What would this potentially do to the dollar being the reserve currency for pretty much every central bank and every investor in the world?

Well, if the worst scenario were to come to pass and the Fed were to become completely politicized and just respond to every win that not only this president but any president has about lowering interest rates at inappropriate times, you could get a run on the dollar. And we've already seen central banks around the world, Frank, stock up on gold so much so that it's now the second largest reserve currency, if you will, in the world behind the dollar. So what you don't want to see in the U.S. is have...

Foreign investors in particular exit the dollar in such a way that the dollar comes down, interest rates go up, and you get into an intractable situation where inflation remains very high, cost of borrowing remains high, and that ultimately affects the consumer profoundly. So, Ron, we've got to go, but then why are we seeing gold lower and the dollar lower? Well, I mean, you know, we've seen gold hit new all-time highs, and as you just said, the dollar just yesterday hit a three-year low. So we're seeing a little countertrend move on the prospects for trade deals with China and 10 other countries. That's what Commerce Secretary Lutnick said.

said was coming in the next couple of days.

So there's a brief reprieve. But if the president were to play this out the way he's discussing it right now, I think it would have adverse consequences on the Fed, the dollar and interest rates. We're going to keep our eye on this, Ron. You got to come back. We see any new developments. I want to see if your opinion changes or you become more concerned. Ron and Sana, always a pleasure. Thank you very much. All right. Coming up here, Worldwide Exchange, the S&P 500 looking to open up in record territory this morning where our next market panel says you need to be putting your money to work in this upcoming trading day. We're going to be right back. Stay with us.

On exchange, stocks looking to end the week on a positive note as worries about tensions in the Middle East, tariffs and trade deals shift to the back burner, at least for now. The dollar's on course for a weekly loss, struggling on concerns about the Fed's independence as traders price in more rate cuts this year. Joining me now, Tiffany McGee, CEO and CIO at Pivotal Advisors, and Megan Hsu, head of investment strategy at Wilmington Trust. They are both CNBC contributors. Ladies, good morning. Thank you so much for joining us.

Tiffany, I'm going to start off with you. Markets pretty much at record highs. What now? I think that's what a lot of investors are trying to figure out. Yeah, so listen, you know, as we are kind of passing through this halfway mark in 2025, it's a really good time for investors to be reviewing allocations, trimming what's hot, kind of reinforcing investments.

areas to stay aligned with long-term goals. And listen, diversification remains your best defense against uncertainty and your best offense for what's next. Megan, same question for you. I think a lot of people are trying to figure out where to put money to work. We see the S&P set to open up at an all-time high. Industrials are the leading sector there and also the tech sector hitting another record high as well.

Yeah, well, we do think that we could see some chappiness into the summer. I think there's a decent likelihood that tariffs go up on July 9th or thereabouts, even if there are some countries that are spared. And then we have the uncertainty around the tax bill, as well as a number of other issues. So I think we've had a really good run.

the April ninth bottom. And at this point we're probably going to turn with a little bit more volatility but I think investors should stay invested. There is a lot of opportunity we think in the tech sector but also some of the other more beaten up sectors maybe even parts of health care which has been a part of the market that nobody has really wanted to touch at this point. And our expectation is for the Fed to cut rates which should lead to a steeper yield curve which is a good environment for banks as well.

You know, speaking of health care, Tiffany, you're also looking for opportunities in health care. How would you play the health care trade? Yes, absolutely. So listen, in that rebalancing, we're definitely recommending overweight U.S. equities. And so really specifically in health

they're going to offer you quality mid caps they're going to offer catch up opportunities and specifically health care is going to offer you catch up opportunities to health care financials communication services- and so one idea that we have is the health care select. A sector a spider XLV- you know. A

really kind of tilted towards these industries. And so it's a broad-based U.S. healthcare ETF. Why it works, it really offers this kind of defense stability. It's trading cheaper, about 17 times forward P.E., below the S&P average of 22 times with room to catch up. And also with recent hiring and earning stabilization in healthcare, firms are going to add these tailwinds.

All right. So I do want to ask you about some of the changes at HHS, you know, the new vaccine panel that's been kind of convened by RFK Jr. And some other issues going on in the health care sector. I mean, why there? There are other laggards like consumer discretionary. That's going to tailwind today, at least for Nike, with so many unknowns when it comes to the health care sector. Why do you think that's the right place to put money?

So that's just one of them. And listen, at the end of the day, we do think that it is stable. People are always going to need care. And so, yes, you know, you you kind of bring up some some interesting points. And so we've kind of seen a lot of uncertainty out of Washington all this year. But we do think this is an area that really has that offers an opportunity for people.

stability and really to kind of catch up as well. Megan, I want to come over to you and just talk about the Fed for a second. You're forecasting 75 basis points of cuts this year. At the same time, we're kind of weighing those reports about the potential for a shadow Fed chair. How do you view that when it comes to market risk?

Yeah, I mean, I think there's a lot of noise coming out of Washington as it relates to the Fed chair. We're not as much focused on that. We're really focused on the balance between the Fed's dual mandates. And right now, it looks like inflation is basically at their target, even for all of the angst about what could happen with tariffs. The backwards-looking data is very favorable for rate cuts. And going forward, we think that tariffs

play through as a disinflationary impact which is to say that the

go up on certain goods but we will see consumers who are much more strapped than they were the last time we did this in twenty eighteen- instead of just taking those price increases and continuing to spend we think that they will offset their spending elsewhere in services so. All told at the end of the day you're looking at. Lower inflation and importantly housing prices are coming down there's some weakness in the housing market market so we think housing inflation. Will be

continue to trend and that puts the fed in a position as we expect the unemployment rate to increase. Slightly into the end of the year where the fed will be able to cut rates now they didn't really leave the door. Very wide open- for July so we took our expectation for a July cut off the table pushed it to September. But we do think that once we get to that September meeting they will start. Their- sort of re engage in their rate cut cycle. All right-

So, again, stocks very close to all time highs. We're talking about the S&P and the Nasdaq. Tiffany, I want to come back over to you. We were talking about some of those concerns when it comes to the shadow Fed president having an impact on the dollar, moving the dollar lower and potentially, Ron and Sana said, money could move to gold. We're talking about opportunities outside of equities. What do you think about gold, cryptocurrency, bonds? So, listen, I think that gold is always an option for us, specific commodities in general.

bonds and again you know we approach everything from a total. Portfolio perspective- so we're thinking about bonds. You know are we favor U. S. investment grade bonds kind of over- on that fixed income portion of your portfolio over international bonds and so listen U. S. race really remain more attractive and stable. In a national bonds- those are kind of carrying more currency and credit rate risk now and so how we would play this is kind of favor the seven to ten year U. S. investment grade.

kind of bonds for income, for stability, especially as the Fed is expected to ease a little bit later this year. All right, Tiffany McGee and Megan Hsu, great to see both of you. Have a great weekend.

Thank you. Thanks, Frank. Here's what to watch today. A busy morning of economic data, including the latest look at PCE and consumer spending. We're going to hear from three Fed officials before the opening bell today. And after the close, we get the latest stress test results for the banking sector. One more quick check of futures right now. We mentioned in the green across the board right now, again, the S&P on track to open up at a new record high. The Nasdaq on track to open up at a new record high as well. The Nasdaq 100 at a record. That does it for Worldwide Exchange.

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