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We're up like close to 3,000 points. Nobody's ever seen a day like that. I think that's a record, isn't it, fellas? And it was a record and a huge exhale on Wall Street after President Trump reversed his course and pauses most of his tariffs. The odd man out, that's China, hit with an even higher rate. And China's own tariffs on U.S. goods, that takes effect. But the president says he's ready to make a deal.
I think he's going to want to get to a deal. I think that's going to happen. We'll get a phone call at some point and it'll be off to the races. And this morning, global markets, they are off to the races. Europe and Asia, they're surging. But here in the U.S., futures are pointing to the other direction. It's Thursday, April the 10th, 2025. And this is Worldwide Exchange right here on CNBC.
And good morning. Thanks so much for being here with us. I am Frank Collins. Get you ready for this trading day after a wild one yesterday. Take a look at U.S. markets to start things off. You can see right here futures. They're in the red across the board right now. You can see they're lower across the board. The Dow looks like it would open up about 600 points lower. The S&P down over one and a half percent. The Nasdaq also down over one and a half percent right now. So this action after a historic rally on Wall Street after the president paused what he described as reciprocal tariffs,
on most countries, but he also raised tariffs on China up to 125%. President Trump speaking about his trade strategy last night in the Oval Office. A lot of times it's not a negotiation until it is, and that happens. And, you know, I said outside that you have to have flexibility to do it right, and that's what we have. We brought everybody to the table, and it may not be a negotiation. It may not last. I mean, you know, things may be as that I think are not fair to us.
And a check of the 10-year yield. Many reports citing the upside move in yields in recent days, a major reason for the president's decision yesterday. We also saw a 10-year auction yesterday that saw some strong demand, easing a lot of concerns about foreign debt buying. Taking a look at the 10-year right now at 4.28. You can see it has moved up pretty significantly since the tariffs were announced, but pulling back quite a bit as well.
All right, moving on. We also want to talk about the markets broadly and also the currency market. So this week, the dollar, take a look right here, falling actually about three quarters of one percent, also hitting its low against the Chinese yuan since 2007. A lot of talk about currency manipulation. So we're hitting all parts of the market this morning. Want to go back to the broader market. Really historic rally yesterday. Remember, Nasdaq's best day since 2001, S&P's best day since 2008.
However, the major indexes are still well off their highs. Take a look right here at the Dow. Almost in correction territory, almost 10% off its 52-week high. The S&P in correction territory, 11% off its 52-week high. The Nasdaq still 15% below its 52-week high. And the Russell and the Dow Transports,
Both of them in bear market territory, 20% below their most recent high. Want to take a look at some of those country ETFs that track the countries that are in active tariff negotiations with the United States. Taking a look right here, the MCHI, we continue to watch this one. It's actually up 1.5% today. The FXI, the traps large cap Chinese stocks, also up a third of a percent. The European ETF up just about almost three quarters of 1%, about two thirds of 1% right now. The Canadian ETF up a quarter percent. The Mexican ETF up
up a half a percent right now. So we also want to look at tech. Big bounce for tech yesterday, not so much this morning. Taking a look right now, you're seeing Apple pull back quite a bit, down about 3.5% right now. Similar story for NVIDIA. Altimeter Capital's Brad Gerstner on our air yesterday saying he actually bought NVIDIA at the lows yesterday.
but seeing a pullback in the stock today after a surge yesterday. Microsoft pulling back as well. This one's interesting. Tesla shares pulling back more than 4.5%. Alphabet down 2.5% right now. We want to look at the metals complex as well. Taking a look at that area this morning, we're seeing gold move considerably higher. Gold up almost 1.5%. Remember, that's a safe haven trade in many cases. Silver up 1.25%. Copper rising significantly, up over 3%. Aluminum up over 2.5%.
OK, that is your setup for this morning. Now we want to go to the global markets, kind of a relief rally underway all around the world. Asia closing sharply higher and Europe with some historic gains of its own. Our Juliana Tattlebaum has the early action in London. Linlin has the trade in Singapore. Juliana, good morning.
Frank, good morning. A relief rally, that's right. That's what we're seeing in Europe this morning. A bounce back across the board. Every region, every sector participating in the comeback. But again, I think it's important. We've been talking about this throughout the morning here in Europe. To put this into context, we were down more than 5% on the week coming into today's session. So yes, we're seeing a rally, but it's after a rally.
an extremely painful period for European investors. So this morning, Zetra DAX up about 5.5%, the CAC 40 up more than 5% as well, FTSE MIB in Italy and the FTSE 100 trading in the green. It's those cyclical sectors performing best this morning, in particular the banks. They're right at the top of the board from a sector perspective. Financial services also catching a strong bid as investors dial back expectations of European central bank companies.
cuts given the changed growth outlook for Europe, given that the Trump administration has walked back its tariffs on the European Union for now anyway. The technology sector also doing well, up about 6 percent, and then some travel and leisure also bouncing back strongly, more than 6 percent. The laggards in the market, those more defensive sectors, they're not performing as well as the cyclicals. Telco's food and bed utilities are at the bottom of the board. Frank?
All right, Juliana, thank you very much. Juliana Tettebaum live in London. We want to now turn our attention to the trade in Asia and a strong showing across all the major averages there. Our Lin Lin is standing by in Singapore.
Yeah. Hey, Frank, after a pretty painful few sessions, we have seen a pretty remarkable rebound. Let's kick it off with Japan, because it was up by more than 9 percent in the session here. And it was really a lot of those exporter names, Sony, as well as AI players like SoftBank, Tokyo Electron that were bid. We saw double digit gains there.
And even in the auto space, which, mind you, that 25 percent tariff still remains. We did see that some of those majors like Toyota also gain, keeping in mind that Japan is one of the countries that has sort of that priority status in terms of those trade talks with their Washington counterparts. Over
in South Korea, the KOSPI, we saw a very similar picture there. It actually had its best day since March 2020. It's also out of bear market territory as well, off the back of a 6.5% rise, a lot of that coming through from some of the tech gains there. And it is a similar story for Taiwan markets. The TAIX was actually the best performing index in Asia today,
9.2% higher and that heavyweight there, Taiwan Semi, was limiter up almost 10% higher on the session there. Over in terms of the greater China markets, we also saw green arrows there. That is despite the fact that this pause on these so-called reciprocal tariffs does not apply to China. In fact, that trade war between the two largest economies still persists.
However, we know that there is the promise here and the expectation that there could be more stimulus coming. We know Beijing have spoken about resolute measures and these so-called state funds also helping to stabilize share prices as well. Frank? All right, Lynn, thank you very much. Lynn Lynn, live in Singapore.
Sticking with that action in Asia, China, it is still the odd man out with Trump's 90-day tariff pause. It's now facing a 125 percent tariff on all exports to the U.S. as it implements its own retaliatory tariffs on U.S. goods. President Trump at the White House last night says he is still confident that President Xi will come to the table. I think that President Xi is a man who knows exactly what has to be done. He's a very smart man. He loves his country. I know that for a fact. I know him very well.
And I think he's going to want to get to a deal. I think that's going to happen. We'll get a phone call at some point and it'll be off to the races. Eunice, good morning. Hey, Frank. Well, the Commerce Ministry reiterated China's position today that the door is open for talks, but as long as the two can sit down on equal footing with mutual respect. Otherwise, the focus here has been mainly on managing the fallout. So the Commerce Ministry flagged China's support for Chinese exporters,
calls to the European Union as well as ASEAN countries. And then an official securities journal ran an editorial that hinted at greater monetary easing, saying that the time is ripe for rate cuts. Goldman Sachs sees greater monetary easing as well, though not enough, they say,
to fully offset the impact of the tariffs. So Goldman cut its outlook on China's GDP growth for the next two years. The WTO also came out with a gloomy forecast saying that they believe that U.S.-China trade could fall as much as 80 percent because of these trade tensions. Even so, China stayed quite mum as to whether or not it's going to match President Trump's 125 percent tariffs. The Commerce Ministry declined to comment on that very question.
All right. So the Commerce Ministry declined to comment. However, we're hearing quite a bit from some very notable investors here in the U.S. We heard from our Bill Ackman or not our Bill Ackman, but Bill Ackman here in the U.S. He said time is not China's friend right now. Also hearing from Ray Dalio saying that President Trump's decision to step back from a worse way and negotiate how to deal with these people. I'm going to call it that. He says basically it's a better way.
How much is this all resonating in China as far as on the Chinese side, the idea of the trade war and the fact that the Chinese government said they want to be strong and resolute? Well, I think it's actually potentially counterproductive in terms of approach because the way the Chinese diplomatic ideology goes,
President Xi Jinping cannot be seen as subordinate. He cannot be seen as being bullied by the West, especially the United States. So the fact that there's all this pressure and quite public pressure to get him to go to the negotiating table actually makes it even more difficult for the Chinese to get to the negotiating table. All right. Yunus Yun live in Beijing. Yunus, thank you very much as always.
All right. Once again, taking a look at U.S. stock futures, they are giving back of some of yesterday's historic gains. Taking a look, the losses actually accelerating all morning. This is a multi-hour chart of the S&P 500 in the futures market right now. You can see pulling back quite a bit. The S&P down in the futures down more than 2 percent right now. Joining me now on set is Mark Hackett, chief market strategist at Nationwide's Investment Management Group. Mark, good morning. Thanks for joining us. Hi. What do you make of yesterday's rally? What do you make of the pullback this morning?
Well, yesterday obviously felt better than the previous week, but I wouldn't exactly say that there was rationality yesterday any more than there was rationality the week before. Still very emotional market, a lot of moving parts. So when we look forward, we still don't think we're going to be off to the races here. I think we're probably going to get some choppiness before you have a sustained recovery. Okay. Obviously, we're spending a lot of time talking about the president, his trade policy, tariff policy, and some of his decisions.
I want to get your take on a post on True Social that he made yesterday, shortly after the opening bell. Pretty short one. It says, this is a great time to buy. What was your take on that? How do you think institutional investors are taking that?
Well, I think they're taking it perhaps differently today than they did at about 8.30 yesterday morning. This is, the Trump put is absolutely in the market at this point, simply because the way that they had worked through the, you know, this entire process had been a little bit challenged. But at this point, the market is absolutely on board with the fact that Trump will, you
you know, talk the market up when he thinks it's necessary. All right. So, again, huge rally yesterday, a pullback today. A lot of parts of the market rallied that doesn't always make 100 percent sense. Like when you look at big box retailers, a lot of them still have a lot of exposure to China. Some of the tech companies also have some exposure to China. How are you viewing some of the markets that rallied? Are you expecting pullbacks or there's some areas that are more investable or less investable considering these 125 percent tariffs on China?
Yeah, again, I think yesterday was a very emotional market. It wasn't necessarily fundamental or tactical. The market hadn't been all that rational the week before that either. You know, we saw defensives, for example, not work. The bond market wasn't supportive. Gold even pulled back. So the market's been acting very strange the last week. With regards to China, I think that the market is betting that a deal will happen. At this point, Trump even alluded to that yesterday in his comments. So
At this point, we can no longer take anything at face value. Two questions about the bond market. Is it comforting for the institutional investor that the president seems to be responding to the actions in the bond market? And how are you looking at bonds as investments right now? Are they more attractive, less attractive, considering what we've seen?
I think they're certainly more attractive than the worst case scenario had been. The fact that President Trump is explicitly supportive of the bond market, he had mentioned that he'd listened to Jamie Dimon and the stress on the bond market was a factor in his decision making. That is absolutely going to be paid attention to, not only this cycle, but throughout the rest of his term. In terms of the way the bond market's going, though, we still have a ton of issuance coming. We do not know how the foreign countries are going to feel about their holdings of treasuries.
So the treasury market right now isn't guaranteed to just decline in terms of yield. All right. A lot of times people say the bond market is smarter and deeper than the stock market. At this moment, at least, it seems to be more influential. Mark Hackett, great to see you. Thank you very much. Thank you. All right. We do have a lot more to come here on Worldwide Exchange, including a CNBC exclusive with the CEO of Flexport, a frontline look at what Trump's 90-day tariff pause means for global trade.
Plus, huge losses and huge gains, a wild ride for the bottom lines of the world's wealthiest people. And then later, futures taking a big bite out of big tech's bounce yesterday. We're going to hear what Wedbush's Dan Ives is telling his clients this morning. A very busy hour still ahead. Worldwide Exchange returns. Stay with us.
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All right, welcome back to Worldwide Exchange. Taking a look at U.S. stock futures. We are at session lows right now. The S&P down more than 2 percent. The Dow down 1.5 percent. The Nasdaq, the hardest hit, down 2 and about a third of a percent right now. But one part of the market that's not declining, it's Marist, the global shipping giant, big container shipper as well. Those shares up nearly 9 percent, getting a big boost after the terror pause by President Trump and the Trump administration.
All right, we're going to stick with freight right now following that 90-day tariff pause. Companies that were scrambling to get their products onto planes and ships to beat the first deadline are now at a virtual standstill as the Trump tariff strategy just continues to play out. Joining me now in a CNBC broadcast exclusive is Ryan Peterson, founder and CEO of logistics and shipping platform Flexport, former CNBC disruptor that is a freight broker for hundreds of companies all around the world. Ryan, thanks for joining the show.
Hey, great to be back on. All right. So, Ryan, can I ask you a pressing question in my mind as somebody that covers the freight market? We saw the tariffs on Chinese export our imports into the U.S. jump up to 125 percent. If you don't mind me asking, can you tell us some of your retail customers, what are they doing in response to this escalation of tariffs from a place where a lot of people run their supply chain through and a lot of people source through?
Yeah, it's about Flexport's one of the largest logistics companies in the United States, especially for ocean freight imports from Asia. In fact, 35% of our volumes globally come on the China to US trade line. So we're pretty heavily impacted by this. Our customers are definitely reeling from it. And the reality is it's ugly. What we've seen is customers are effectively pausing. About 28% of our customers decided to pause bookings last week.
for future weeks as they take consideration of what's actually going to be the new norm here. 125% duty. We'll see. A lot of what's happened is actually people pre-ordered. They knew this date was coming. They knew these higher duties were coming. And they said, hey, let's get as much inventory as we can ahead of time. And now they're kind of overstocked. So that's the main factor here. And then people are also just hoping for a deal to get cut. Now they're getting deals in the rest of the world as they pause here for 90 days. And there's some optimism. I wouldn't call it hope. But there's some
or i wouldn't call it optimism but hope there's some hope that we get you know hope is eternal ryan hope is eternal i don't know i don't know how people are feeling not that helpful or optimistic if i'm honest but let me ask you about rates very quickly it's bad for the business model right can i ask you about rates very quickly so uh trucking rates here in the u.s they're up three percent year over year uh we did see a spike in container rates for a bid as people as you mentioned tried to front load their tariffs
Where do you see rates going from here? I know something that a lot of people I talk to are concerned about is essentially we're going to go from a freight recession to freight stagflation, where rates are higher but volumes are lower. Yeah, I don't have a clear view on the trucking rate situation. I would predict the ocean freight rates are going to come down quite a bit. Air freight rates are likely to plummet. About 50% of the world's air freight has been parcels, Chinese e-commerce parcels flying around the world. And that's a crazy statistic. 10 years ago, it was negligible. So the
As that, the United States has banned or announced that on May 2nd, it will ban the de minimis exemption, which is what allows so many of these parcels to fly duty-free into the United States. You're going to have huge excess capacity in the air freight market coming up. So you'll see cheaper air freight. And then ocean freight, similar thing. I mean, if all these bookings flow through and all these cancellations flow through, you're going to have a lot less ocean freight. And these carriers, the ocean carriers, ballpark.
bought a ton of ships during COVID. So there's a massive new supply coming on board over the next year and a half. So yeah, it's going to be cheaper freight. Maybe that's some bullishness for customers as they're going through a lot with higher duties and all the other things happening in global logistics. At least there's some relief there. I want to go on to something else that you flagged to us. Coming up on April the 17th, the U.S. trade rep is expected to impose fees of up to $1.5 million per port call for ships that are made in China.
Now, what is this going to do to shipping? A lot of ships are made in China. It's something that the president has flagged as a risk that we do so much production of ships and other things in China. How big of an impact is that going to have on companies across sectors?
Yeah, so this would be it really depends. So about a month ago, the U.S. Trade Representative Office announced that there would be this ruling and they put out the kind of preliminary. Here's what we're planning to do. If they passed it or if they put it out as an executive order in that form, it would be pretty devastating for importers and really importantly for exporters, because these ports are used by U.S. exports for one of the largest exporters in the world. And they use the same ports. Right. And so what?
What the $1.5 million per port call means is that the carriers, instead of stopping at three ports on each coast, where they'll on the West Coast, for example, go Seattle, Oakland, LA, Long Beach, they'll just make one stop in LA.
And that means Seattle and Oakland won't get the service, right? Because that's $4.5 million if you stop at all three ports, or you only have to pay $1.5 if you go to the major port. But overall, that sounds like it's inflationary, right? I mean, if you have to pay $1.5 million, if you decide to stop at the three ports, that raises the cost of shipping. And if it's just at one port, you have to pay more once it gets on land to get it to the other place you need to get it to.
Exactly. Now you're going to be paying for trucking all the way down from Seattle to L.A. That's not cheap. There's going to be congestion at the port of L.A., similar to what we saw during COVID. So hopefully they kind of come to their senses. This is just not good. You can't punish our exporters like that if your goal is to reindustrialize. All right. Ryan Peterson, great to see you, man. Great stuff. You got to come back. We got to talk a little bit more about freight with you.
I'm happy to. All right. Ron Peterson from Flexport. Thank you very much. Also, CNBC Disruptor. All right. Still on deck here at Worldwide Exchange. Uncertainty for trade. Uncertainty on Capitol Hill when it comes to the president's tax agenda. And Mike Johnson once again trying to get the Republican defectors back on his side. We have the full details from Worldwide Exchange Returns. Stay with us. The best cars for the money are Hondas. Save big with 0% financing.
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Welcome back to Worldwide Exchange after a historic day on Wall Street, taking a look at U.S. stock futures. You can see we're lower across the board, but off of our lows of earlier, the Dow down about 2 percent. Excuse me, the Dow down about one and a third percent. The S&P down almost 2 percent. The Nasdaq down more than 2 percent. All right. Coming up on Worldwide Exchange, Wedbush's Dan Ives. He's here on Tech's Wednesday rally and this morning's free market drop where he's finding opportunity in all the volatility. We'll be right back.
-We ran the risk that if this continued for another four, six, eight weeks, that we were gonna find ourselves with one foot in recession. So I think today was essential. I think the president did what was needed to be done. And I think this will go a long way to helping us avoid, you know, the recession path. -The president was watching what was going on in the bond market.
I think we were about to have a credit event and that's a sure way to create a recession. So everything kind of fits together. If these tariffs are in place, we're going to see some upward pressure on inflation at least for a while and potentially, you know, a drag on economic growth. But the magnitudes, I think, will be less concerning than they would have been otherwise. It's an important pivot. The question is, how long is this pivot?
and how much of a reversal is it? I think of it as this was a necessary step to calm markets, but it will not prove sufficient unless we go further. Some high praise from some of the brightest on Wall Street on the back of President Trump's tariff pause and that historic stock market rally. This morning, however, futures are pulling back in a meaningful way. Investors hitting their own pause button. Welcome back to Worldwide Exchange. I'm Frank Holland. Coming up this half an hour, we're going to dig into big tech and the broader markets.
finding security in the volatility and what some of the wealthiest investors, what they are saying right now. But first, a look at the U.S. markets this morning. Take a look at the futures right now. You can see we're in the red across the board right now. The S&P down over 100 points, down just about 1.5%. The Dow down more than 600 points right now. The Nasdaq down more than 2% right now.
This morning, we're seeing all this action after a historic rally on Wall Street after the president paused what he describes as reciprocal tariffs on most countries and also raised tariffs on China to 125 percent. The president speaking about his trade strategy last night in the Oval Office. This was something certainly we've been talking about for a period of time. And we decided to pull the trigger. And we did it today and we're happy about it.
And right now, a check of the 10-year yield. Many reports citing the upside move in yields, a major reason for the president's decision yesterday. Also, we saw a 10-year auction yesterday that saw strong demand, easing a lot of concerns about foreign debt buying. Taking a look at the benchmark right now, sitting at 4.27. You can see big run-up in yields after that tariff announcement and now easing back at least a bit right now.
Also, we're looking at the dollar this week. Dollar actually lower on the week. You can see right here, down about three quarters of 1% this week, pulling back more than a half a percent right now. Also hitting its low against the Chinese yuan since 2007. A lot of talk about currency manipulation from the White House.
Want to take a look at some key sectors this morning as well. Retail, we're going to start there. Rallying retail yesterday. This morning, you're seeing a broad pullback. Walmart shares down just about 1.5%. Right now, Target pulling back 2%. Amazon had a huge rally. Now pulling back more than 2%. TJX.
down more than 3% as well. We're going to look at autos also facing additional sector tariffs. Taking a look at the auto sector, everything in the market rallied yesterday, but this morning you're seeing a pullback. Stellantis shares pulling back more than 8%. Tesla down nearly 4%. Ford and GM both pulling back just over 3.5% right now. We also want to look at pharma, also expected to face some tariffs, according to the president. Some comments he made earlier this week. We're seeing Novo Nordisk, those shares surge significantly.
They're up 5.5%. But other stocks you can see pulling back quite a bit. Sanofi pulling back more than 3%. Moderna down almost 3%. GlaxoSmithKline down almost 2% as well. And we want to take a look at chips as well, possibly another area that could face tariffs. Take a look at the chip complex.
You're seeing NVIDIA shares. Those are pulling back more than 3.5%. Obviously, NVIDIA, a big part of any chip ETF, the SOXX, pulling back about 3.5%. AMD, Broadcom, and Micron also pulling back more than 3.5%. Broadcom pulling back more than 4%. One chip we want to break out. We want to break out one company right now. The world's largest chip producer, that's Taiwan Semi. First quarter sales easily beating estimates. Taking a look at the move in that stock right now. You're seeing right here Taiwan Semi. It's four enlisted shares up.
Almost 10% here in the U.S., not quite catching up just yet, pulling back about 1.5% right now. All right, with that, we want to turn to tech and the sector under some pressure this morning. Taking a look at the broader tech sector this morning, we're seeing some action, a pullback.
After its surge 14% yesterday, its biggest and best move to the upside since January of 2001 and second best of all time. But still more than 16% below the record high. Big thanks to the MAG-7, adding more than $1.5 trillion in market cap yesterday alone. The gains failing to erase the $3.4 trillion they've collectively lost since their peak late last year.
Let's talk much more about this now with Dan Ives, global head of tech research over at Wedbush. Dan, good morning. Thanks for joining us. Great to be here. All right. So we had Brad Gerstner from Altimeter Capital on our air yesterday. He said the pause, they gave tech CEOs, they gave tech companies a framework that will let them move forward and kind of ease some of the questions about what's going to happen next and ease a lot of the uncertainty. Do you agree with that take? I mean, look, I think there's a framework, but the reality is, is that there's mass uncertainty.
And I think you could still have 10 to 15 percent CapEx large purchases that ultimately significantly get downsized or at least get paused. And I think that's the issue here. I think tech is going to be very volatile going into earnings season. I think a lot of these companies either don't give guidance or give very general guidance. I think that's just the reality of what's happened. You've set a storm in motion. We came off the cliff, no doubt, very positive for big tech.
But we're still, I think, only a quarter way through this. Well, I mean, absolutely. A lot of these stocks are still well off their 52-week highs. What do you make of the rally yesterday and the pullback today? Nothing really fundamentally changed from yesterday. Why do you think we're seeing such a sharp pullback today? We're looking at NVIDIA shares down more than 3.5 percent, Microsoft pulling back about 1.5 percent. We're going to get to your Microsoft call in just a minute. It's like being in a storm. And then you come out in a hurricane or tornado. And you come out, what's the damage?
The damage is real. I mean, uncertainty. I mean, we talk to so many out there in the field, in the U.S., in Europe, across Asia. And I think the reality is like this has created a lot of uncertainty for the tech world.
But China is the hearts and lungs of the tech world. And those tariffs are going to continue to increase. And I think that's the worry here is that you're playing with a third rail issue when it comes to China. And that's from Apple to NVIDIA and the rest of tech. Let's get to your Microsoft call. You lower Microsoft's price target from 550 down to 475. Part of your thesis is that tech spending, CapEx spending related to data centers and everything is pulled back 10 to 15 percent. And you're saying that's conservative.
Why? I mean, the tariffs, if we're being fair, and Brett Gerstner pointed this out, they've only been in place for about a week, maybe 10 days. And we had some insight they were going to come. What has fundamentally changed so much that you think spending is going to pull back 10 to 15 percent? CapEx plans are paused. I mean, from a large. But why don't they just restart? Isn't that the whole thing? Because ultimately, it's like once you start that snowball, you can't just stop it. And when you look at it, it's still paused. But then it all comes down to China. China is the epicenter. How many companies are exposed to China on the tech?
side, from when you think about shipping, what's coming in, parts. If a CIO ordered something, it's $100,000. Is now they paying another $100,000? Is it going to be double? So I think that's part of the issue. When it comes to Microsoft, and you'll see this with Google, you'll see with Amazon in terms of hyperscale or spending, I think it's possible.
paused a lot of what we're seeing. Let me push back on you. You're saying it's paused and you're saying it's primarily because the China tariffs that, again, have jumped up to 125 percent right now. But if there's a deal made with China, the president seems to be very confident that he can make a deal. Does that change the whole outlook? Does that go back to boosting capex spending? And then how do the sector tariffs and the metals tariffs, how do those impact? No, it's a great question. First off, I think at this point, Street's going to look at June quarter is basically a mulligan.
In other words, June quarter is going to be very, very soft. And I think investors will look to any sort of sign of a China deal and a de-escalation. To your point, the reason we haven't downgraded one tech stock, we've lowered target, is because my view, it's going to be the COVID playbook. You throw out two three-quarters, you look at 26 earnings.
And you look at a worst-based best case, and that's the way that you pick the valuation of the winners. Let me ask you something that I'm sure you're at least beginning to think about. So a lot of these big-time tech CEOs, they were at the inauguration. They've been going to meet with the president. And the president's been very proud to say that they're going to increase their spending, like Apple increasing its spending here in the U.S. If they pull back, does that raise the risk of them drawing, like, the ire of the president and maybe an administration that's not so friendly? Of course.
Because the reality is all those projects that you're talking about in terms of Stargate and everything else and some of the app projects, how are you building that? Where is it coming from in terms of the products? I mean, it comes down, China is the epicenter. So it comes down, the unintended consequences here are key. And look, big tech, they're caught in the middle. And I think that's,
They are still trying to get their grasp. Apple's not flying four airplanes of iPhones if they felt that they were ahead of the game. It's a game of high-stakes poker. Tech caught in the middle. All right. We'll go back to your call today. You're moving your price target on Microsoft.
from 550 down to 475, you think tech spending overall declines by 10%, maybe 15%? I think street numbers right now, you're assuming, really across the board, you're going to see earnings cuts of about 10% across Internet, across big tech. And I think anything worse, that's why you'll see a lot of volatility, buckle the seatbelts, going into this earnings season. Big call for one of the biggest bulls on Wall Street, one of the biggest tech bulls, period. I am calling it like it is. Dan Ives, great to see you. Thank you. Thank you very much.
All right, coming up here on Worldwide Exchange, uncertainty on Wall Street and on Capitol Hill. A rough day shaping up for Speaker Mike Johnson and President Trump's tax agenda. Our Emily Wilkins is standing by with the very latest. Stay with us. Welcome back. Turning now to a developing story on Capitol Hill, House Speaker Mike Johnson is vowing to try again today to pass a budget framework. After several Republican holdouts, they managed to block action on President Trump's big, beautiful bill late yesterday. Our Emily Wilkins joins us now from D.C. Emily, good morning.
Good morning, Frank. Well, yeah, really some 11th hour drama in Congress last night as House leaders tried and then failed to advance Donald Trump's tax cuts and legislative agenda. And really, this is a group of more than a dozen fiscal hawks that said they could not support the measure even after
after Trump pushed them this week to fall in line and to get this done. Now, Johnson, we're waiting to see exactly when this morning the House will try again. But we just have to note here, there are really deep divides between the House and Senate Republicans when it comes to spending cuts.
If the House, if you look at the text, they want to cut at least $1.5 trillion in spending with strong incentives to go ahead and chop over $2 trillion. Senators say they want the same, but their blueprint, it only contains $4 billion in cuts. Congressman Lloyd Smucker, a Republican from Pennsylvania, warned on the floor last night that the Senate portion of the bill has the potential to add trillions to the debt.
We know the fiscal trajectory that we're on. We know this won't end well if we constrain, if we don't restrain our runaway spending. I think this is our opportunity to do it and the four billion dollar floor in spending savings in that Senate bill just simply are not acceptable.
Now, the senators argue that setting a low floor for spending cuts leaves them a lot of leeway later on as they negotiate specific policies. Remember, this is just the framework, but the framework really locks Congress in. If the cuts and policies that they ultimately agree to are even a dollar less than the floor the framework sets up, the whole thing's going to fall apart. So this is
spot is very critical. The House has floated making some changes to the bill and sending it back to the Senate, but that would drag out the process even longer. And of course, remember, this was supposed to be the easy part, just getting the framework done. The next step to actually fill it in with specific policies on things like Medicaid cuts, the SALT cap, green energy credits, that is going to be a much tougher task.
lift and shows just how long the road is ahead for congressional Republicans here. Frank? You know, Emily, we were talking about this a bit yesterday, but is it still on the table to raise taxes on high-income earners? Is that still a possibility in this bill?
I would say, and a lot of lawmakers would say, that that is still on the table, noting, of course, that there are many things on the table. What I think Republicans have kind of said here is that, look, they know that to enact some of Trump's policies that he wants to do, no tax on tips, that's going to cost. If you want to have some sort of a discount tax break for seniors, that's going to cost. If you want to raise the SALT cap, that's going to cost.
At some point, they might have to figure out a way to pay for some of this stuff. And so that's one of the things that are on the table. It's not the only thing. I wouldn't say it's a guarantee at this point. Very far from it. But it is being looked at. You know, with this president, we know the tables can turn at any minute, as we saw yesterday. So you never know. Emily Wilkins, live in D.C. Great to see you as always. All right. Coming up here, Worldwide Exchange with the world's wealthiest are saying about Trump's tariff pause and what they're doing with their money right now. We're going to be right back after this break.
Welcome back to Worldwide Exchange. It was a banner day for billionaires yesterday as the market soared after President Trump paused tariffs on most U.S. trading partners, the world's wealthiest, adding a combined $304 billion to their net worth, the biggest one-day gain ever for the Bloomberg Billionaires Index that beat the previous record of $233 billion set back in March of 2022 when Fed Chair Jay Powell hiked rates for the first time in years while also reassuring investors the U.S. economy was resilient.
Elon Musk seeing the biggest, largest individual gain yesterday, adding $36 billion to his fortune as Tesla stock jumped more than 20%. He was followed by Meta CEO Mark Zuckerberg, who gained almost $26 billion. NVIDIA CEO Jensen Wang seeing his wealth rise more than $15 billion as the chipmaker's shares rebounded 19% yesterday.
That rally yesterday also benefiting the fortunes of other wealthy investors. But with volatility still swirling, they're making some strategic moves in how they're allocating their money. Joining me now is Barbara Goodstein, managing partner at R360, our premier invite-only peer community for the ultra high net worth individuals and their families. Good morning. Thanks for being here. Good morning. All right. So I'm going to ask you, did the wealthy people, the wealthy people in R360, did they buy yesterday or were they still worried about volatility?
Well, every crisis presents opportunity. And we've been talking about what are the opportunities and where should we be looking. And we have had a parade of investment specialists and economists talking to us, as well as bankers presenting distressed asset opportunities. So some people are buying. Other people are still in the wait and see mode. So wait and see mode. I want to get your take on a post from the president yesterday. It was just after the opening bell yesterday. He posted it was pretty short. This is a great time to buy.
Is this something that you and your members have talked about? What's your take? So we do think there are opportunities to buy. But just like Warren Buffett, we're also willing to be steady. We're sitting on a lot of cash. Warren Buffett's sitting on $344 billion. We're sitting on a good amount of cash, looking for the right opportunities. We're not jumping into things quickly. We want to find the right opportunities and go forward. Are your members, are they encouraged about that signaling? Or do they have any specific thoughts about the president posting something like that?
Well, I think that we're trying to analyze what the president's doing, which is why we're bringing in this rotation of all the top banks and bankers and investment managers. And when you're in a community like this, you have the benefit of all of these great minds. So everybody's trying to sort of figure out where things are going. He's playing 3D chess and we're all trying to anticipate what's going to come next. Right now you're kind of listening and learning.
Yes. Now, I thought this was fascinating. You said that most of your members only have about 16% of their assets in the stock market, and most of them are holding about 10% to 12% in cash. So what now?
Well, now there are lots of opportunities in private credit markets. There's opportunities to buy in defense. We're spread across different sectors and across different regions. So we're looking at making different moves in both those areas. Private credit, as I said, has huge upside opportunities. We're looking at hedge funds again. Gold is popular. And then, of course, there's Bitcoin.
which has been a popular favorite with our members. You said that before. So we've seen a lot of volatility in Bitcoin, in all fairness, a lot of volatility in the equity markets. But it seems like Bitcoin kind of moves with big cap tech or the triple Q's. Is that still seen as an alternative to the stock market when it kind of moves in a similar direction? It's more volatile, but still moves directionally the same.
So actually, Bitcoin is not really correlated to the stock market. It seems like it is over a few days and a few weeks. But if you look at it quarter by quarter, it's not correlated. In fact, it's a good hedge against the stock market. Bitcoin is like digital gold. So basically, we're advising people that everybody should have some Bitcoin and Bitcoin at eighty two thousand.
is a buy. Bitcoin's a good opportunity now. What about bonds? Bonds have become such a big part of the market narrative and seems like even part of trade policy after yesterday, according to reports. How are your members, how are they viewing the bond market right now? Is it attractive right now? Are they thinking that a Fed cut's coming up? How are they seeing things?
So we think that the Fed cut probably will come up. But again, we're consulting some of the best advisors in the in this space because nobody knows. It looks like that's what Trump is trying to create. He's resetting the global landscape. He's resetting the domestic landscape. So we're all waiting to see what happens. All right, Barbara Goodstein, it's always great to hear from you and your members from R360. Have a great day. Thank you.
Thank you. All right. Coming up here on Worldwide Exchange, we've got a lot more futures. They're pointing to sharp losses at the open, while my next guest says now may be the time to get more exposure to big tech. And if you haven't already, you should follow our podcast. If you miss Worldwide Exchange, check us out on Apple, Spotify or other apps. We'll be right back.
And welcome back to Worldwide Exchange. We close in on the 6 a.m. hour. Check on a few big stories that we're following this morning and give you a little tip. It's all about China. Top leaders in Beijing reportedly meeting today to discuss additional economic stimulus in the face of Trump's new 125 percent tariffs. China's own tariffs on U.S. goods also going into effect today.
We're hearing from Bill Ackman and Ray Dalio on the China issue. Ackman says time is not on China's side. Dalio says he hopes China will negotiate in good faith and Trump will cut a deal. And Goldman Sachs revising its GDP growth outlook for China in light of the tariff picture. 2025 now pegged at 4% revised to the downside from 4.5%, 2026 falling to 3.5%.
All right, turning back to the U.S. markets, giving back some gains following yesterday's massive rally. Taking a look. Futures in the red across the board right now. The Dow looks like it would open up 500 points lower. We also take a look at small caps getting the worst of it after it's their best day since 2020. Small cap futures pulling back just about two and a half percent right now. Let's bring in Nimrit Kang, CIO and senior portfolio manager at Northstar Asset Management. Nimrit, good morning. Good to see you.
Good morning, Frank. All right, let's start off. After a historic rally on Wall Street yesterday, what is your word of the day today? My word of the day, week, month, and the year is fortitude because that's what we need to navigate this headline-driven market.
OK, well, easy answer right there. So it sounds like you got a lot of fortitude. I want to ask you about your pick for us today. Your pick for us today is Microsoft. We just had Dan Ives noted bull when it comes to tech. He actually reduced his price target on Microsoft from 550 down to 475 and said tech spending in general is going to be reduced anywhere from 10 to 15 percent. Are you keeping your fortitude on Microsoft and some of the risk in that name?
We definitely are and we would take a measured approach so it's not an all in kind of an approach. We take a dollar cost averaging approach to building positions, but Microsoft is one where we have a long term conviction in the fundamentals. We think AI is here to stay. Microsoft is one of those companies that benefits both
revenue side being able to monetize. A I have to generate more revenue but also cost reductions because of their huge distribution on cloud and Microsoft three sixty five now what has changed Frank is that the stock from its highs in July of twenty twenty four has D rated almost
almost 30 percent from a P of 35 to about 27, 28. Can it go lower? Of course it can. And we're not going to know for sure. But that's where we would leg into the position. You know, if you've been sitting on the sidelines, this is where we have a long term conviction. You have a long term conviction there.
I want to talk about an economic report coming up later today. This used to be the biggest thing in the world. It doesn't seem like it has the same weight, at least not this morning. We have CPI coming up later today. Estimates have it declining. How important is the CPI picture, the inflation picture when you're looking at your portfolio?
The trend is towards higher inflation expectations, right? So, you know, the Michigan consumer inflation expectations came up where forward inflation expectations are around 5% for consumers. That's at a high level. But again, you know, a lot of that is not related to monetary policy. It's one of this tariff shock.
We don't really know how it shows up until it shows up. And that's why there's a lot of wait and see. And it's difficult to anticipate the reaction to what the CPI is going to be ahead of that, only to risk getting whipsawed. So you're still seeing some risk of getting whipsawed right now. One area we've seen a lot of movement, and I don't know if it's quite whipsaw, but the bond market, just very quickly, what's your take on the bond market? Is it attractive, short end, long end? The long end are good.
Our general approach is anywhere when you see 10-year going above 4.5%, it's a good indicator of forward five-year returns. So 10-year long end to us, well, we would say intermediate term, anywhere from five to 10 years, we feel comfortable there. If we think 4.5% 10-year is a normalized range for the 10-year, which we think it is, then on that metric, the lower end is definitely needs to come down.
Nimrit Kang, your pick for us today at Microsoft. Great to see you. Thank you very much.
Thank you. All right. We've got a market flash for you right now on autos. Goldman Sachs and UBS cutting their price target on Tesla this morning. UBS also downgrading General Motors. Goldman downgrading Ford. Take a look at those shares this morning. You can see they're in the red across the board, all of them down more than 3%. We want to take one last quick look at futures this morning. Futures in the red across the board as well. Looks like the Dow would open almost 600 points lower. The S&P and the NASDAQ, again, also deep in the red. That does it for Worldwide Exchange.
You've been listening to CNBC's Worldwide Exchange. You can always catch us live weekdays at 5 a.m. Eastern.
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