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Hello and welcome to Market Domination sponsored by KC Trade. I'm Julie Hyman live from our New York City headquarters. Stocks are mixed with the S&P 500 as well as the Nasdaq aiming for a 4th straight day of gains. Here's our headline blitz getting up to speed one hour before the closing bell rings on Wall Street.

There's oneissue that every investor should be paying attention to, and that is guidance. Now managements have no incentive to provide guidance because they have the perfect excuse uh in in the tariffs, but we are hearing teams, uh, management teams saying things like we're upholding or we're raising our guidance, uh, in the current tariff environment. The problem is nobody knows what that that actually means.

I would say this is the first quarter that we've heard them talk about the benefits from AI overall. We've been in a wait and see mode for some time, just given their overall, you know, investment in Gemini, in search, in AI, and the list goes on and on. Frankly, what we heard this quarter was, um, actual search revenue grew 10% thereabouts. Uh, that's a positives better than we were expected.

You just saw an announcement today about Apple saying they were going to be making iPhones in India and if you look at the most strategic, uh, partnership to the US over this next decade, it will be India. Uh, they tease about America and India being AI Modi said that very directly, uh, in terms of the opportunity. So I think you will see iPhones being made in India, uh, less in China, and you'll see iPhones being made in the US and strike the balance on it.

We got 1 hour to go until the market closes. I'm joined by Lou Bathany's the Bigskinny.com founder and prairie operating company executive vice president of market strategy. He's gonna be hanging with me for today's show. So let's take a look at what's going on here in markets today and relatively quiet day compared to what we've been seeing recently. The Dow not quite making it in terms of making it, uh, these 4 straight day of gains.Not right now.

I'll take 4. Yeah, exactly.

Right now it's very little change. The S&P 500 is up about 6 1% and the Nasdaq is up about 1.1%. Now we did get some more tariff headlines, sort of, and some commentary, right? There was an interview with Time Magazine with President Trump that was released this morning, and then he did make some comments this afternoon.But none of it shed much clarity. He kind of says there's stuff coming. Yeah,

I think it's indicative of any negotiation, right? You allude to coming to an agreement and then you go back the other way. So I think there's some good cop bad cop going on between the president and Scott Besson and for investors unfortunately it's just the life we have to live with, right? There's no.There's no no clarity until there's the finality

in terms of well, and it's just so confusing too when the president says, um, you know, uh, I've he sort of left it ambiguous about whether he's talked to President Xi says I've talked to him a lot, but it sounds like he probably hasn't talked to him since he imposed the tariffs,

right? And I look, I, I hate to say it, but we're stuck in this situation right now. I just don't do we get resolution in 90 days? I think you absolutely have to because if we get past that.You start really talking about economic knock-on effects that the president, he can't just solve by badgering or jawboning Jerome Powell to cut interest rates. So I think there's a definitive window here. Expect volatility. 4 days of up is I'll take thatout

of 5. Sure. So let's look at the week real quick. There's the Nasdaq up 6.6%. The S&P 5 out of 5, 4.5%, and I would say also with regards to this window, it feels like the window is already done. In other words, there's.Economic damage being done right now and yesterday and the day before that. I mean, anecdotally I'm hearing about it. I'm sure you're hearing about it too.

Yeah, no, there's definitely, and I think you're seeing it starting to show up in the hard data you're seeing kind of front loading of orders and inventory and anticipation of weakness coming.You can't have that keep stacking up. I mean, prior to this week we had all the soft anecdotal data that didn't indicate that we're definitely there yet. I think you're starting to cross that trans of networks. You're going to see it more and more in the data in the employment reports, in consumer sentiment today was, you know, it was a little bit betterrevision,

but what people are expecting for their financial conditions 12 months from now was terrible. Yes,

andthe inflation picture is terrible too,

exactly, just.At some of the movers that I want to point out here today, we've got to point out what's going on with Alphabet because that's part of the story this week too, even though Alphabet didn't report until yesterday, still, the sort of optimism that we're coming into this period where big tech is going to report and maybe we'll be less pessimistic about the big sigh

of relief, and I, I'm full disclosure an alphabet shareholder, but Tesla was last week, right, and was just a total disappointment.So I love seeing this green in the big tech screen. It is

interesting to see Tesla up 10%. We're gonna, as I said, we're gonna talk about it later. Don't want to give too much away right now. And then Nvidia also we should point out is up better than 4%. And as we always remind folks, Nvidia doesn't report on the same cadence as everybody else. We have to wait longer to hear from them, but nonetheless interesting and chips

fromthe last 5 days, the chip sector as a whole has been up about.9%. So you're seeing good follow through in that in various areas of tech. Yeah,

justa quick check on those chips over the 5 day period. You can see some of the gains for Nvidia 9%, broadcom up 12%, and TSM up almost 9%. Let's talk more about the latest market moves now. For that, let's welcome in David Wagner, Apus Capital Advisors, portfolio manager.David, it's good to see you, um, and I know one of the things at your firm that you guys think about is risk management, management and mitigation, and you just heard what Lou and I were talking about where right now we are in this kind of stuck period, but how are you thinking through, considering how much we don't know, how are you thinking through that risk management and, uh, and mitigation?

Yeah, yeah, Lou, Julie, thanks for having me back here. That's exactly what ATA's bailiwick is. It's trying to own volatility as an asset class because we're firm believers that, you know, fixed income, which is kind of in the ballast of safety and allocations. Historically speaking for the last 40, 50 years, it may not be that balanced if we look through the windshield moving forward.We might see a positive correlation between stocks and bonds moving forward in the future. So I think if you can sprinkle in some volatilities and asset class through long puts or other long va mechanisms, it's, it's the best way to play this market because as you guys are just speaking about right now, the most may be in a low for a little bit, but we're really gonna find out what happens to these tariffs with that 90 day extension.Here just in a few months and we will make sure that all of our allocations are very much prepared.

Yeah, David, speaking about risk management, do you think that corporate executives should be managing risk a little bit more in terms of guidance revisions, being more transparent, maybe being more cautious and revising more negatively to the downside just to prepare for maybe worst case scenarios instead of middle of the road? Are you surprised by those revisions or lack thereof?

You know, I think that's the million dollar question heading into this earnings because obviously Q1 is what we're reporting right now. A whole lot of the tariff jargon wasn't going on in the first three months of the year. Obviously, liberation Day was on April 2nd, so everyone should try to figure out what this overall guidance is right now. But Luke, you bring up a good point, like, I, I wouldn't bet against the resiliency of corporate America. We learned that during theFinancial crisis, we obviously learned it during COVID. So I, I have full faith in the mainstreams to make the right decision to move forward. Like, if I personally, if, if I was a CEO, I would just maintain guidance and maybe expand the bounds of guidance just slightly because there's still a lot of unknown in the next few months, but I wouldn't make a whole lot of changes in the near term just because this is still just the first quarter. We still have 3 quarters remaining left in the year.

Um, it's interesting we've heard a lot of companies being very specific about their guidance too, which I, I found really fascinating throughout earnings season where they are really quantifying very specifically, OK, here's the hit potentially related to China, related to other regions, etc. that way they have sort of some flexibility to say, OK, it wasn't as bad so we can take that that off. That's been an interesting development. David, you talked about the resilience.of corporate America. What about the resiliency of consuming America, right, which has really been the thing that over the past few years, as there were predictions of a recession, people kept spending, but it feels like now already that Americans are starting to pull back if you look at travel data for example.

Yeah, yeah, no doubt. I mean, that's the other million dollar question. I, I guess that's out there is like, is all that soft data that we've seen, the survey sentiment data, is that going to transition into hard data? One thing we've been telling our clients, and it's probably not a popular take is that there's no better time than, you know, the United States to implement tariffs right now. You know, if you look at the from a consumer standpoint, just.Going back two months ago, consumer spending was growing at like 6.5% year to year. Obviously you have to look at that number in context from the historical perspective and historically, the consumer has spent, you know, between 3 and 5.5% on a year to year basis. So we're kind of already out kicking our coverage from a consumer spending perspective like the numbers come down a little bit, but investors balance sheet in my first.Opinion still remains very strong. If you go back over the last 10 years, the net household net wealth has increased by like 100% since pre-COVID, it's still up 40%. So, uh, it's hard for me to bet against corporate America. It's hard for me to bet against the propensity of the consumer to spend right now because they still, they're still spending right now, even though soft data kind of says that may slow down in the near term.

And uh it's, it's interesting to hear you say that, um, especially about um sort of there being no better time for tariffs. I think a lot of people would quibble with that particular uh part of your statement, David. um, let's get to strategy for a moment, OK? So where are you seeing then if, if not opportunity right now or maybe you are seeing opportunity, but where are you seeing places to go maybe that we'll see less damage?

Yeah, I, I think we can take a look at that from two different perspectives. One from an allocation standpoint, but also then from like, where, what do I like within the market? And right now within the market, I, I love small caps, and I love the mega cap names actually. I, I love barbelling that strategy. The cap expend on the Mag sense that continues. We saw that yesterday with Google. And then you kind of play a valuation side on the other side of that barbell by by any small caps. But from an overall asset allocation standpoint, I did just mention.We're not bullish on bonds. It's not the ballast moving forward, but one big thing that we do here at ATA is one of our mentalities that we want to do better in the tails. And in fact, heading into this year, my outlook for the mark was based off the 1980s movie Airplane. So it kind of plays in the fact like can the Fed land the plane on a runway that's getting smaller, but also like tailored are gonna occur in this market moving forward more often than what we're accustomed to. Um, this year, probably this decade alone, we've seen 3 20% intraday pullback.By the S&P 500, you know, just seeing two within the 1st 5 years of a decade is basically uh unprecedented. But moving forward, I, I think given the newfound characteristic within the S&P 500 and it's operating leverage in my opinion, obviously the top 10 stocks account for 38% of the benchmark, and they own that characteristic of operating leverage. And when operating leverage is working for you, you have great stock market returns like you saw in 23 and 24, but when operating leverage cuts against you, you can see some.Turns that we've seen here in 2025 because obviously the market hates when the possibility of slowing growth occurs and also profitability and when operating leverage cuts against you, it it hurts the overall growth trajectory and also margins. So I think that's how you have to think about allocations moving forward. It's like, hey, how can I do well in right tail events but also left tail events. Yeah,

David, I want to lean in on small caps a little bit. I've been pounding the table on small caps early and often, which means I've been wrong.Um, so I wanna, you know, as a fellow, uh, commiserator in that space with you that's a believer, what do you see as the catalyst in the setup for, for small caps in this market?

I, I love the optimism you have. Small caps I run a small cap strategy for 12 years right now. And it's just really been an as a class that everyone is absolutely hated. Like, nothing's been able to work for. Like, even when the market started abroad and earlier on this year, within, you know, the S&P 493 and international area, like small caps weren't invited to the party. Everyone expected like small caps can work when rates come down, which we saw.The beginning part of this year. Small caps didn't perform well at all during that period of time. Just because like that R word just keeps getting tossed around and that just stands for recession. And when that R word gets tossed around, like, people could care less about valuation for small caps or performance. I think for small caps to work, you do need to see integrates come down slightly, but also I think you need to see growth really start to inflect, which is something that hasn't happened overThe last few quarters, some analysts are calling for that to, uh, for the equilibrium between large cap growth and small cap growth to happen in the second half this year. That keeps getting pushed out, but Lou for small caps to work, you just have to have growth really start to come back with this within the smaller cohort of thismarket.

Man, you guys are on an island with this one. I, one, I am not, I'm not joining you on, but, but I hope you have good cocktails there. David, thank you so much for joining us. Appreciate it.

Thanks y'all.

We're just getting started here on market domination. Coming up, another round of earnings this morning means more companies lowering or pulling their guidance. We'll get you the latest on the other side. Plus retail among the sectors facing an uphill battle navigating President Trump's trade war. We'll speak to an expert later about the impact that consumers could start seeing. Stick around, much more market domination still to come.Welcome back to Market Domination sponsored by Tasty Trade. We have been on daily tariff watch this earnings season. Let's round up some of the latest commentary from companies. We've seen multiple companies, of course, cutting their full year guidance this week. Procter and Gamble, Pepsi, Kimberly Clark, Colgate Palmol becoming one of the latest names to lower its outlook for the year due to President Trump's tariffs. CEO Noel Wallace saying on the earnings call this morning that the impact of tariffs in 2025 will be roughly.$200 million. The CFO elaborated further on the impact on the call, saying the incremental impacts are primarily tariffs on raw materials and finished goods coming from China into the US and from the US into China because of course a company like Colgate Palm also sells into China and more companies pulling guidance, including Sketchers that a shoemaker reporting first quarter earnings yesterday withdrawing its 2025 guidance due to macroeconomic uncertainty. The Sketchers.Saying on the earnings call with an effective tariff rate at about 159%, products from China to the US are prohibitively prohibitively expensive. And then there's Carter's, the children's apparel company also suspending its forward guidance in light of tariffs. The company does still have some exposures from tariffs on China, but it has been over the past several years been making a push to expand its supply chain operations to other countries. The CFO is saying on the call.We have now have a broadly diversified production base. Vietnam, Cambodia, Bangladesh, and India represent our largest countries of origin. Uh, Lou Basiny is still with me here, but, uh, and that's just like a sprinkling, a slight sampling. Obviously everyone is being asked about it on the conference calls. You were just, we were just talking about it with David Aptis, our portfolio manager, and you guys were discussing like what is, what is the duty of companies.Do you want to hear from companies in terms of how they're thinking so

while David and I agree on small capital I'm gonna deviate from the point where he said, hey, let's not go too fast to change revisions. Don't underestimate the resiliency of corporate America but I think the duty of executives right now is to be transparent and say there's complete uncertainty. I mean, how do you have a model that can calculate your tariff impact for a tariff that one day is 20%, the next day is 35%, and maybe 3 weeks from now it could be 0%, right? So I think.I would be of the conviction from the communication standpoint. Let's flush out all the bad news, right? Like how bad could it get? So we've seen a couple of companies that give twofold guidance now. Here's guidance, no tariff impact tariff impact. I think that's a responsibility to shareholders. Give them what could be the potential impact.And then in the back half of the year then you can just adjust expectations. Hey, it wasn't as bad as we thought because

it's better to come out and say that the opposite.

I'drather you tell me, give me permission up front to underestimate what you're doing. Don't ask for forgiveness later when you said, hey, it was worse than we thought. Yes,

and, and the sort of phrase I'm hearing a lot recently both from companies and also investors is scenario modeling, right? Like what kind of the like the decision tree or all the branches and the different.Um, scenarios that could take place and what do you do in each of those? Yeah,

it's risk mitigation, but getting back to what David Wagner was talking about, I'm most surprised by that 2026 guidance yet that it hasn't come down yet, the estimates for for earnings. Look, I believe in the long term resiliency of these companies if we get tax cuts or at least keep the tax regime that we have, that that's going to be a back half of the year catalyst.But just the revisions haven't changed, and I think it's more important for the unmaggnificent 493, right? They're they're supposed to show about a doubling of the earnings growth rate. If that evaporates, then the whole underpinning of this market broad-based rally evaporates with it because then it's just back to the mag 7.Do they have the ability to sustain the rally for the market forever and keep being the leader? I don't think so. I think we're seeing cracks in that

thesis. OK, wellthat's a little worrying. All right, we'll talk more about it. Retail is among the sectors, of course, that's facing an uphill battle navigating President Trump's trade war. Retailers like Carter's and Sketchers withdrawing their forward looking guidance setting macroeconomic uncertainty, and the tariffs adding another pain point for the ever shifting retail landscape here with more on what.Ahead is Storage advisor CEO Gerald Storch, of course he was also former chairman and CEO of Toys R Us and executive at Hudson's Bay as well. Jerry, it's always great to get your insight into these matters. I'm, I'm sure that you are having a lot of tough conversations with, uh, your former colleagues in, in the retail space right now about what they're experiencing. What to you is the sort of biggest pain point for them right now?

Well, it really depends on the company. Uh, if, you know, the hardest hit are, uh, retailers who are selling footwear, apparel, products like that that are heavily imported, heavily from China. If they didn't diversify their sourcing base away from China like they should have done after the first round of the Trump tariffs, and they're getting hit very, very hard by this, and it's difficult actually to have a short.Term answer for it. If, if they did, then they have a lot of options. And so I think people are scrambling looking for sources of manufacture outside of China because it's not so bad in the other countries in terms of how high the tariffs are. They can handle that and also looking for domestic sources of manufacturing. Meanwhile, there's almost nothing coming from China. You'd be almost foolish to do.You were talking about decision trees to follow the branch that says I'm gonna bring it into the United States and pay this doubling or tripling of the price and uh and then the rug might be pulled out from under me tomorrow if that if a negotiation should be successful. So, so that's not happening. So, so I think you're seeing a significant retreat from purchases and imports from China.

Jerry, I just want to thank you for making Toys R Us a staple in my youth very nostalgic. Um, did have a question for you though regarding some retailers that may have some more insulation or buffer to weather some of this tariff uncertainty. Are there any pockets of maybe more safe opportunities? Maybe it's companies that are more dominated with online sales versus brick and mortar from your vantage point? Is there some area we should be focusing on asinvestors?

Of course, of course, and I believe that, uh.You know that when you've looked at what the market's done, there has been differentiation in terms of what's happened to the share share price if people have kind of figured out some of this, though I think net, it's more likely this is an overreaction than an under reaction to what we're going to see in the future. But companies, for example, that are, that are heavily, uh, into, into, uh, consumables that are manufactured in the US or or food companies, aside from bananas and, uh, and coffee, there are, there are subsidies.It's available in, you know, domestically. So I, I think a lot of these companies like Walmart or Costco are, are, are very heavily insulated, frankly, in terms of the overall impact on their business, certainly their sectors within their businesses that will be, will be hit. And a company like TJX, even though it's apparel, uh, they, they thrive in an environment where the mainstream apparel sellers, uh, are making a lot of mistakes or having a lot of problems. So, so they should continue to do very well.And by the way, their stocks held up pretty well, uh, during this period. So, so it's not true that all of retailing is bad. You know, I see these pictures, uh, online or in, uh, in newspapers of empty store shelves, and they claim that's what it's gonna look like in a few months. You'd have to think that, that, uh, that these retailers are pretty, pretty stupid, frankly, or that, or that, uh, capitalism doesn't work. I think the shelves will actually be empty. I think that's what you're gonna see. You're gonna see maybe substitute products.You're going to see people using this as an opportunity to get rid of their clearance that they need to get, get, get, get, uh, you know, get rid of. I think other than companies that are very specific, like, say, having specific parts that you need that, you know, that that there's only one part that serves its purpose, you're not going to be seeing widespread empty shelves. That's just an absurdity when I see those pictures.

I mean, to be fair, we saw widespread empty shelves during COVID, right? So because there is this notion.That at least when we're talking about goods from China, it won't be that they're even still coming in at all, that there is this sort of pause or freeze in orders, but I guess what you're suggesting is even if there's a freeze in orders from China that most of these retailers have a, you know, with COVID it was everywhere, right? You're suggesting these retailers have a diverse enough supply chain, most of them, that even if they can't get say t-shirts from one place, they'll manage to get it from another.

Yeah, COVID was a totally different situation, but the empty store shelves that I recall from COVID actually wore the messly made products like toilet paper, things that where there were runs on them, sort of panics that took place. There wasn't any need for it in most cases, by the way. It was totally manufactured or sort of hype type of a type of a problem even then. But, uh, but there weren't.store shelves, uh, throughout the store that's just not true. It's, you know, it's things that, uh, that again someone read an article somewhere that said you, you, you'd have problems if you didn't buy 12 months of toilet paper and something did, things like that. So, so, you know, that, that's all bizarre at the time. Uh, the, the, the real, the where it's similar to COVID is that once you get a supply chain out of whack.It takes a long time to get it back. And so what you do see is people, you know, sort of panicking that's retailers, manufacturers, and, and moving to other sources of manufacture, buying other things. They can get something grabbing it, even if they may not need it in the future. So there are big risks that their inventory out of balance as we come out of this, and you have to think we're probably gonna come out of this, that there will be some negotiated settlement of.This, uh, in the intermediate future, if not, if not more quickly. And so when that happens, they're gonna be, gonna be, uh, you know, found holding very different decks of cards based on how well they played this, how well they, their decision trees were used to calculate what they should be doing. So everyone's not going to be in the same place. And there I continue to bet on the same people, frankly, Walmart, Costco, TJX that have been delivering.year after year time someone like an Amazon, even though they're getting hit hard in the marketplace area because a lot of these Chinese goods that they, they're bringing in and selling to the marketplace that, you know, are are are not going to be there, they'll be, they, they can sell everything. That's what they do. They're a marketplace, so they'll put other products on there that they will sell,

right? Exactly. Jerry, good to see you. Thanks so much.

My pleasure.

Well, the Justice Department wants Google to sell its Chrome browser and potentially its Android operating system, among other remedies. Some companies have already expressed some interest in buying and buying Chrome if it does indeed go up for sale. For more, we've got Yahoo Finance's Alexis Keenan, who, as always, has been pouring through the court filings. What have you found, Alexis?

Yeah, Julie, so the interest in acquiring the internet's most popular browser, that came in some testimony in court in the remedies phase that is in trial now, that the DOJ won against Google last year. And so this remedies phase, it's really meant to help the judge figure out how to restore competition in search. So there was some testimony from Google's competitors. WeExecutives from AI powered search startups. You had Perplexity executives, Microsoft backed OpenAI's executives, all expressing interest in Chrome. We also had Yahoo's own general manager for Search, Brian Provost. He told a judge that the company would like to put in a bid for Chrome. That is if it is put up for sale, and that would mean a judge orders it be put up for sale and divested from.Alphabet's Google. Now today you also had vice president, a vice president, uh, at Microsoft's Bing testifying that the key to search is really distribution. So that's where Chrome comes into play. Uh, the testimony was that, you know, these companies, these search competitors to Google search, they want their own data. They don't want to have to rely on necessarily Google's index. So there's a lot of debate about the impact of what a Chrome sale would really mean for Google. Google, uh, forThe part, they say that it would hurt consumers, that it would hurt the economy, it would hurt innovation, that it would risk the fact that Chrome's underlying open source technology could be shuttered by a third party, a new buyer, and also that the privacy and data security that Google provides that could be jeopardized too. Now I spoke with a data scientist who said that he disagreed. He thought that Google could easily withstand a chrome divestment.That really traditional search he said was a dying market in a couple years, 12 years' time that everyone will have shifted to AI powered search and that Chrome, once it's decoupled, if, if it's decoupled from search, that that makes Chrome just inherently less valuable from the get-go, and it really hastens the demise of that traditional search. Now, that all would be maybe a much bigger problem though, because another thing the DOJ has on the.Cable is wanting to limit how Google uses its own AI to boost up its own products. They want there to be some sharing there with competitors. So a lot is in the mix here, but we continue to watch the testimony as it comes out in the remedies phase here, and the judge's decision is expected following the testimony in August thisyear.

OK, the clock is ticking. Thank you, Alexis. Appreciate it.Now time for some of today's training takes, and we want to talk more about Alphabet and that possibility of course we're looking at the earnings, but also there is this trial hanging over the company. Yesterday we spoke to DA Davidson analyst Gil Luria, and he talked about the potential breakup of Google and why he thinks maybe it should happen.

The Department of Justice is hell bent on Google not having a monopoly going forward, so breaking up the three monopolies that it says Google already has in order to prevent Google from having a monopoly going forward with chat. So instead of Google dragging its feet, which is what it's been doing so far, we think Google would be better off being proactive, spinning off these businesses. It would probably release value to shareholders.

So let's do a deeper dive now into alphabet and Tesla and guess what, we have an alphabet bowl sitting right next to me here in the form of Lou Basany. I want to ask you specifically about what Gil was just saying there, this idea that maybe they should get ahead ofit.

Wholeheartedly disagree. Why would you give up your assets willingly or spin them off? I mean, I think in this case the sum of the parts is not better separated. It's part of the whole. I think you create more consumer confusion than encouraging competition if you divest Chrome.I mean, let's be fair, what other search engines are you going to use? I mean it's so embedded and entrenched, it's synonymous with the word search.Is there really going to be an upstart that does it differently?

Well, there maybe there wouldn't be another search. Maybe the the search paradigm just changes to generative AI, for example. In other words, maybe it's not another search, quote unquote company, maybe it's perplexity or maybe it's

that'll happen with the natural evolution of AI, right? This becomes the next S curve of innovation where search is now it's the waning end of it and we're gonna jump to generative AI and it.Matter, right? So from that standpoint, from a shareholder stand,

I guess you don't have to break it up because there's competitive pressures coming anyway.

Exactly. And so I think from that standpoint, I think that's why the stock is so cheap. I mean, relatively speaking, it's about 1718 times forward earnings. A year ago is at like 26 or 27. It's this threat of being broken up, being forced to not pursue the dominant position that they've had, uh, and having that protected. I think this latest report.Showed exactly why you want to own it, right? AI is contributing to better advertising results, which will lead to even in uncertain economic times, marketers continuing to spend on marketing, which is you

don't think ad spend is going to pull back.

I mean ad spend ironically always pulls back in a recession, which makes no sense. Like if you have a business and advertising drives your business and you know you're going to a weak spot, why are you going to stop advertising, right? You don't have as much money. I agree with that, but I think it has to be moderated, so I think you see an overreaction tradition.Like I, I used to traditionally think of meta as a great short in a recessionary environment because 98.9% of the revenue was all advertising, right? And people cut back. So yeah, I think there's some risk there, but I think what you're doing is you're counterbalancing that risk with AI improving results. So if, if I think that I'm not gonna make as much, but then I can use AI based search to make more, I can bridge that gap.

So and you own Alphabet

I do full

disclosure. All right, let's talk about a stock that you do not own.Don't believe I do not, and that's Tesla. It did surge as much as 10% today. The Department of Transportation rolled out a new framework for self-driving car regulation, including what it's saying streamlining some reporting requirements for cars equipped with automated or driver assist systems. There was also some reporting out of India that Tesla had made a move sort of canceling people's deposits on Model 3s. That was seen as perhaps a precursor to selling.Cars there maybe, but regardless, Tesla is a bigger story than just these two

headlines that we're talking about for me it's a decision of do I invest based upon do I think this is a car company or a technology company? I come down on the side that this is nothing but a car company again, the, the, the revenue determines what type of company it is, right? 90% of it is related to automobiles. The other 10% power storage and maybe.It's the new technology that everyone the Bulls wanna lean into, right? So the other side is, hey, this is not a car company. The car, the cars, the automobiles are the platform to deliver self-driving cars, artificial intelligence, and everything else that we want to think about.That falls apart though for me as an investor because there's other opportunities where I don't have to buy into the future promise and potential and pay up for it like Tesla's trading at evaluations that in this market I feel like I can get better bargains. I mean, even

after the collapse and

it stopped, even after the collapse and like this is what I was saying I think I shared it with Madison.Like the Mag 7 is a boy band that needs to desperately break up. It's not a singular trade anymore. It's not a like, and I think this is a bifurcation here. Get rid of Tesla. You focus on the alphabets of the world. Apple situationally, when it pulls back too sharply, um, I don't think it's a block that you can just own and hold, uh, if you haven't been doing that already, right? I'm not advocating just go get out of what you, you've held, but if I'm putting new money to work, I'm gonna be biased towards value.And real earnings and revenue, not future earnings andrevenue.

So now my gears are turning like, OK, which boy band member is Tesla compared

to Joey Fatone's in some in there somewhere.

I don't know my boy bands well enough to have like the 1 to 1 comparisons there. Let's stick around. We got much more market domination coming up.Saint Cobain shares rising today after the French supplier of construction materials posted better than expected revenue for the first quarter. It also reaffirmed guidance amid tariff concerns. For more we've got Mark Rayfield, Saint Cobain, North America CEO. Mark, it's good to see you again. Thanks a lot for being here.

Nice to see you as well. Thanks for having me.

So as we've talked about before, but just to reiterate here for our viewers, you guys are not very exposed to tariffs because the construction materials you're selling in the US, roofing, drywall, etc. it's pretty much made in the US, right? Talk me through, um, you know, kind of the, the flow of your supply chain just briefly for, for people who aren't familiar.

Sure, I'd love to. So we have about 60 plants in the US and 30 plants in Canada.To service those local markets, we manufacture the roofing and gypsum very local to where they're supplied. So we have plants in Florida for the Southeast and New England for the Northeast. They're very heavy products. The raw materials are local, the customers are local. So we're not very heavily impacted by tariffs at all. There's some very minor raw materials that may cross the border here or there, but really we're a local business for local customers.

So I have a question for you. Julie and I were here discussing right before you came on just what's next for the housing markets, right? We see this kind of conflicting data that's an uncertain path. Who better to ask than someone that serves that directly with supplies? I mean, how do you we make sense of the fact that we have more finished homes right now in the US?Than we did right around, you know, pandemic levels right the last crisis, um, and is it a pricing issue? Is it interest rates? Is it a supply, you know, inflation? Where do you come down on that and what, what is the, the, the factor that breaks the levee so that housing really, uh, rekindles its growth?

Yeah, I, I'll give you an opinion. I, I think the answer is a very difficult answer, and I probably don't have the correct one. I mean, the reality is there's so many different indicators going forward. What we look at is the basic fundamentals of housing are strong, the family creation, the underbuilt concept of about 2 to 3 million in the US and almost 2 million in can of underbuilt homes. So there is a demand there, there's a need there for housing in the short, mid and long term.You have lots of different numbers coming out. So you have the very low new uh existing home sales number that just came out this week. When you look at that, you say, OK, this is the end of the world. If you look at the other side of that, you could say, OK, inventories now are building up to a normal level of homes for sale. That's bringing prices down below inflation, which is making affordability, which has been one of the bigger issues.Off the table to some degree. So I think when interest rates get to 6% or so, you have a releasing of a lot of activity, and then you have a consumer confidence issue that kind of touches on everything from that perspective. Having said that, a lot of our business, a lot of business in the building materials business is renovation and remodeling. And you can take the same both sides of the coin view there thatWhen you sell a house, you remodel it before you sell it. When you buy it, you remodel it so it fits what you want. By the same token, if you stay in it longer, decide not to sell because you couldn't find the right house, you again remodel there like we saw in COVID. So, each indicator that we look at has kind of a counterbalance to it. And what gives us comfort is our great results in the first quarter, and the fact that over 2/3 of our business is renovation, remodeling.And a good portion of that is non-discretionary. Your roof leaks, you replace your roof. Your sidings damaged, you replace your siding.

And so Mark, is that the case even if there were to be a recession? And I want to ask this question not just for the United States but for Canada, which is a big market for you guys as well and which is definitely at risk from tariffs. So when you start to see, even if it's just shy of a recession, say, if you do see an economic pullback, we already know that consumer sentiment is lousy. um, how do you expect all of that to affect spending on your products in this market and in our northern neighbor?

Well, I think, you know, what we're seeing in Canada today is actually kind of surprising. We're seeing an uptick in housing right now there. So they're actually having a good swing up off of a low base. But, but if there's a recession, it would probably impact everybody. But again, it doesn't impact renovation and remodeling anywhere near the level it does new house building, and it doesn't impact non-discretionary spending, which most of your roofing, a good portion of your siding is in the non-discretionary side of the business.And a lot of your commercial projects where your gypsum and insulation go into or long-term projects that are started. So, I mean, you're always looking at the economy, looking at risk going forward, but, but in essence, and I, I do the same thing you do. Look at all the reports coming out every day and, you know, part of your body goes, oh my God, this could be really bad here. Then you go back and look at the counter side of it, and then you look at what we're seeing in the market, which is still good demand.Some of our businesses are still sold out, and we're still seeing good pull through under distribution and into the marketplace.

Yeah, I, I think, I guess what are the negative potential risks for the business because I sit here not very accustomed with your company and now I, I'm intrigued because you're essentially a consumer staple in the real estate market, right, for non-discretionary spending. You're not exposed to tariffs, which is a complete rarity today. Um, is there a valuation concern? What do you see as the potential risks that could change the business for you?

I think they, they evolved. I mean, there was a risk when interest rates were going up, that people were waiting for lower interest rates. I think that settled a little bit. I think now people might be thinking, you know, a 6 on the interest rate versus a 3 is a good interest rate, so we're closer to that number going forward. You have an affordability index. So again, the, the number of homes that are on the market now increasing, while it could be viewed as a negative as far as month on month sales, actually is bringing deflation into the marketplace, making it more affordable, that perspective. And then there's alwaysOn a good market, the challenge we look at is labor, making sure there's enough labor to build and renovate homes going forward. And that's always kind of has been the, the point of, of, you know, inflection, so to speak, on when the housing market picks up that can slow us down.

Mark, good to catch up. Thanks for joining us. Yeah,

thanks for your time. Have a great

Friday. You too.Coming up, Amgen is becoming the latest drug maker pledging to increase US capacity amid looming tariff threats. We'll get you the details and discuss the best ways to be positioned in the pharma sector on the other side. Stick around, more market domination still to come.Amgen today announcing a $900 million expansion of its Ohio biotech manufacturing facility. Yahoo Finance is Angeli Kamlani joining us now with the details on this. So this is the latest, right, of this sort of reshoring of farmermanufacturing.

That's right. And you can see all these companies basically jumping in line to make announcements for things that may have actually already been preplanned or in the works for a number of years or months. Uh, Amgen is the latest for that right now with that $900 million expansion in addition to a $1 billion announcement.Last month I believe or a little bit earlier for North Carolina and so that just adds to what we're seeing um there you see it on your screen and that that adds to what they've said is like a total since the Tax Act of 2017 and that's something that I found kind of interesting was something that has been happening if you take a look at the numbers for all the different uh companies that have made announcements in the recent past, the largest by far, $55 billion from Johnson and Johnson and then on the smaller end moves like Amgen as well and this is.Uh, being credited to some of the moves that they've made as a result of the tax cut Act in 2017, so it seems like maybe some of this is, uh, you know, tariff fear and trying to, you know, play towards the administration, but it also seems to be attributed to, uh, ongoing,

right?Yeah, and I, I do wonder as well, you know, one of the things that we've tried to suss out when lots of companies come out and make these announcements was that things they were already planning that now.that now they are making these, you know, maybe with more fanfare in order to, you know, sort of curry favor or conversely not incur the wrath of the administration.

Definitely more fanfare. I mean we saw the Eli Lilly announcement, uh, for that $27 billion in DC of all places, um, the $55 billion from J&J is a huge number and largely in earnings these used to just go by like it's just a single line item you would never hear them call it out and make sure to ensure that it's.In the press release, it's in it's visible to folks like us.

So how much more expensive is it for them to do their manufacturing in the US?

That is something that we are just getting, uh, a handle on. It also depends on what specifically is going to be taxed. That's the part of the equation that is still unknown. We know that there's a report out, I believe, uh, today that looked at, um, you know, what the overall cost would be something in the ballpark of $51 billion but if you're looking at that.Um, that just talks about the whole cost of the product and so the portions of it, which is somewhere in the ballpark of 30% that comes from, uh, China and, and India and the like, and then you've got, you know, 70% of all products coming overseas. It's a very big mixed bag and so piecing, you know, getting those pieces out, um, is still in the

works. Novavax shares sinking today. What can you tell us more about

Yes, poor Novavax, they have really been, I mean, since this company tried to come out with a vaccine, it has just been.Under pressure, still on the topic of its COVID-19 vaccine, the FDA taking a second look, asking for a new trial, and this is just as the company was about to essentially hand the reins over to a partner that's Sanofi, to get the product commercialized and finally approved outside of authorization. So just another, uh, speed bump essentially for

maybe to give it up on a couple other names that were advancing and getting regulatory pressure just let go.

Well, we did see already the pullback from the Trump administration on nextgen COVID-19 vaccines, so there is definitely a focus on this specific product line

Angelli stick around because we're gonna keep talking about Pharma. A recent report saying the US pharmaceutical tariffs would raise US drug costs by $51 billion annually. That's according to Reuters. That report's tied to pharma companies like Amgen, Eli Lilly, and Pfizer, and it could affect the stocks going into the second half of the year. We're navigating how to play the pharmaceutical sector.The Yahoo Finance playbook. Joining us now is Tim Anderson, senior farmer and biotech analyst at BFA Securities, and our Angeli Kamlani, Yahoo Finance senior health reporter, is still with us as well. Tim, thanks for being here. So we were just talking about this cost equation of these companies trying to reshore, but obviously that's gonna take time. So let's take a snapshot of what's happening right now given the tariff landscape. What do you think is going to be the hit to your covered companies and how are they navigating it?

Yeah, so, uh, the companies haven't really uh quantified this at all yet. Uh, when we do kind of back to the envelope math, I think that if tariffs went through, uh, and you really had, uh, things like a 25% tariff or a 20% tariff, uh, coming out of Europe where you manufacture commonly in, in countries like Ireland, you're probably looking at an earnings impact that would be, you know, maybe somewhere in the single digit percent.Uh, no company has quantified it at all. It's not, uh, surprising because we don't have any firm specifics on the policy coming out of the administration. Uh, so until you have those, all you can do is really, you know, rough back the envelope math. It is the topic, you know, number one that's coming up on earnings calls and despite incessant questioning, you're just not getting a whole lot of answers.

That's definitely true, Tim. Angela here I know that, uh, for Johnson and Johnson specifically they did talk about the medtech impact. I know that's sort of a, a carve out or sort of a different subsector for some of these large cap companies. I'm curious, you know, they have been talking about working with the administration a potential carve out. Could that sort of rein in some of the, uh, you know, the guidance that we're seeing and some of the hits that we're seeing to that subsector?

Uh, yeah, well, you know, I don't cover the medtech space or the medical device space, so it's really just on the farm side. In terms of, uh, you know, a carveout for pharma specifically, or, you know, drug-producing company that I really think at this stage, everything is potentially negotiable. If you listen to what uh Trump and the administration is saying,You know, when they're talking about national security issues, it's really a reference to China. It's not obviously the countries like Ireland. So I just don't honestly know what to expect is gonna, uh, actually, uh, become firm policy and then from there, you'd have to see how the companies adjust, uh, and along the way, uh, you know, how they can kind of negotiate more favorable terms. So as you probably know, you know, the government started this 232 investigation.There's some time that will elapse, uh, get the order of months. It probably goes faster this time around with Trump, uh, but during this window, I wouldn't be surprised if the industry is, uh, you know, in, in the hallways trying to negotiate the eventual outcome.

Tim, I had a question for you. It seems like every 5 to 7 years in pharma we get a new hot mechanism of action or class of drugs before the GLP-1s, it was the immunotherapies and CARIs. Where in your mind are we in that phase of the trend with GLP1s? Are we at risk of getting oversaturated like we saw with Merk Key Trudeau where there was call it 2000 combination trials underway, or are we still in the early innings of growth and opportunity in the GLP ones?

Yeah, so, you know, obesity is certainly the hot big category, probably ends up being the biggest category ever, uh, currently dominated right now, two companies, Eli Lilly and Novo Nordis, and those companies will have such a moat around them that it will be very difficult for late entrant companies to take much more than just marginal market share. So you're really not looking at anyone else coming in, most likely until something like 2028.Um, and then there will be a flood of products, but they won't really change the market. So where are Lillianovo now at the moment? I'd say, you know, use the baseball analogy, still in the first inning, maybe the second inning at most. Uh, so you've got a lot of innovation that's still ahead in terms of new drugs that are being rolled out, even though we're still early on in rolling out the current products, uh, both companies are already on, you know, 3rd generation products.Both injectable and oral and so it's gonna be kind of a constant stream of innovation that again, I think those two incumbent companies will dominate. Uh, so commercial we're rolling out the US is the most advanced market so far on that front, even there it's early and then internationally, we're just barely scratching the surface.

And and Tim, I believe Eli Lilly is one of the stocks that you have as a buy rated one. It is that is the obesity piece, the main impetus behind that. Uh, we're gonna hear from the company, by the way, reporting next week, May 1st is coming out with its numbers, or are you looking at it more as sort of a well rounded play?

I'd say, you know, Lily.Absolutely the driver's obesity, right? It, it's gonna dominate the P&L, it's gonna dominate the story. It's certainly gonna dominate the news flow across biopharma in 2025. Uh, it is more diversified than their incumbent competitor, Nova Nordisk, and so I do think that does give a measure of comfort to investors. And in the other areas where they play like oncology, they have a good, you know, stable, growing, performing book of business.But, you know, don't be fooled. Obesity is really what drives the bus. And that, you know, the good thing for Lily is that they really provides them not only a high level of growth, but a durable, uh, P&L over the course of a decade, really. And the industry, one of the problems the industry faces is you get in the late 2020s, there's so many big patent experts that start to poke major holes in income statements.And Lily just sails through that period because of this wave of obesity growth that's ahead of them. So not only is it a high level of growth, it's a durable level of growth. And for the reason I talked about earlier, uh, it's pretty insulated from competitors.

And I know we're also watching to see if it becomes the 1st $1 trillion dollar healthcare company. We'll see, we'll see about that with him, um, question for you on healthcare broadly as a sector tends to be, uh, thought of as safe during, you know, recessionary periods or during volatility in the market, and we're not.Seeing that anymore in part because of the drug pricing pressure in the past year as well as in the on the biotech side, you know, funding cuts uh different uh level of interest waning from investors so I'm curious how should we think about health care now and, and does it kind of move away from being sort of a safe sector?

I think it moved away from being a safe sector.15 years ago, 20 years ago. Uh, it's, it's heavily regulated. There's so much binary event risk, uh, with these names. You know, usually what gets people excited about drug stocks is a phase 3 trial about to report out or new drug about to make it to market. And that just does risk, right? Most of the time, those drugs are going to make it, but you're still left with something like 30% of drugs in phase 3 that ultimately don't make it.So that sort of thing creates a lot of volatility in the sector. And politically, you know, you've been under attack for drug pricing. So uh we see that in the current administration and many prior administrations for that. So it still acts defensively, you know, you don't have to look any further back than 2 months ago, 3 months ago when the markets were starting to melt down and there was this kind of flood of money coming into pharma.Um, but, you know, then Trump starts talking about drug pricing and tariffs on pharma, um, and I think that that kind of reminded investors, it's not the safe sector that it used to be a long time ago.So I do think it's changed a little bit.

Tim, really interesting insight. Thank you so much and thanks, Ange.

Thank you.

We're wrapping up today's market domination. We don't go anywhere. We got you covered with all the action following the closing bell. Stay tuned for market domination over time.