Yahoo Finance

Hello and welcome to Market Domination sponsored by Tasty Trade. I'm Julie Hyman, and that is Josh Lipton live from our New York City headquarters. We got one hour to go until the market close, so we want to check on what's going on in stocks today. More selling is what's going on. In short, we've seen deterioration throughout the day. Things getting worse here. We're trading at around the lows of the session off by about 1260 points or give or take on the Dow. That's good for 3.25%. The S&P down about the same in percentage.Terms being led lower by the Nasdaq down 3.6% as it's not really tariffs today that are pushing the needle, at least not directly. It seems to be the rhetoric that is heating up mostly one-sided rhetoric coming from President Trump towards Fed Chair Jay Powell. I think

you're right. I think today front and center, it's not tariffs, it's not earnings. It is Trump going after Powell. It's a big story because it is so public, Julie, and it's so personal and it feels kind of relentless andYou know he's late, he's a loser, he should be preemptively cutting. I think what you're really doing, I think you see in the markets, you're justYou're just constantly creating more questions and more uncertainty at a time when you already have plenty of drama and uncertainty because if you're investors, I think you're wondering what, what, what comes after this and then you've heard the question does Trump, does he actually try to do something deliberately here to remove power? What would that look like? How would what if he did, how would markets respond or react and you see the red all across the screen today?

Yeah, one caveat I do want to mention when it comes to today's session is it feels quieter today. It actuallyIt is quieter. I was looking at the trading volume figures for the Nasdaq Specifically, trading volume is around 20% below the 100 day average. There is a drop in volume today. That said, uh, we are seeing the heaviest selling concentrated in large cap technology all red here. We've got Tesla, of course, reporting its earnings tomorrow after the close of trading. The shares have really accelerated to the downside, off by 7% today. You've got Nvidia.That's after some reporting about Huawei, uh, developing a competing chip after new export controls were imposed on Nvidia last week. So all of that combining for a lot of selling Nvidia

has not been working for a while. We do have Bernstein and Stacey Razon to come on, I believe I, I think Stacey's still bullish on this one, so he's gonna walk through the news and make the case. What is working today is gold, of course, continues to glitter yellow metal is up around roughly I think 3.30% year to date. I get, you know, weaker dollar is of course part of that story. I did check in with our friend Mark Newton. Smart charters get a technical take and, and Mark told me, listen, you know, he looks at the charts, he says, still technically attractive here overbought, he said, so technically

attractive. And we've been watching the dollar very closely as well. We're still seeing at least the dollar index continue to push a little bit lower today. As for yields, we got yields that are.Pushing a little bit higher today, so still a lot of big moves that we're seeing in the market and investors' concerns, of course, are mounting with President Trump escalating in insults towards Fed Chair Jerome Powell. He once again called on the Fed to cut interest rates, and this coming after Trump last week threatened to oust the Federal Reserve chairman. Here with more on the rising risks, we have Apollo Global management chief economist Thorsten Slack. Apollo Global, we should mention, is the parent company of Yahoo. Thorsten, fantastic to see.As always, um, man, we got a lot to weigh these days in terms of potential risks to the economy, whether it's tariffs, some of the other geopolitical things going on, and now layer this potential threat about a removal of the Fed chair on top of it as you're trying to weigh all of these risks, where do you put the risk that J. Powell would be removed in terms of what that would do to the markets and the economy?

Well that, well, first of all, thanks for having me, Julie and Joyce, it's great to be here. So I think that the first immediate risk really is the impact of tariffs, especially the tariffs on China.We all agree that there is probably a need in some form or another to level the playing field with China. Democrats, Republicans have talked about that for a long time, and it is clear that the US has the most open economy when it comes to tariffs, when it comes to non-tariff barriers, continues to for years and years have been open for the rest of the world. So the goal of trying to level set tariffs and level set global trade.This is something that I think really there's broad consensus is everyone agrees it's a good idea, but the way that this has been implemented by imposing from one day to the other 145% tariffs on companies have of course meant that those companies that import goods from China, for example, you are independent toy seller in Nebraska, your menswear store in Wyoming, you are a company that is selling.Say goggles and ski gear equipment in Colorado, they suddenly from one day to the other do not have the working capital to pay 145% more in tariffs, and that's why a lot of retailers such as those I just listed are likely going to go out of business if these policies continue. So to answer your question, Julie, I think that the problem is that the immediate risk is that small businesses are at risk of potentially.Being hit quite hard because small businesses make up 80% of employment and 80% of capital spending, and that means that yes, there are other risks and certainly the threats to J Powell is another important development more recently, but the most immediate risk for the business cycle is the impact of tariffs on the small businessworld.

You say Torsten in a note recently, you say there is now a 90% chance of what you call a VTRR. Explain what you mean by that, Thorsten.

Yeah, so if we really back up and think about normally, the economy is constantly faced with all kinds of what you could describe as shocks. For example, it was a shock that COVID came along, that created a recession. It was a shock when Lehman Brothers went under. That was a recession. We also had a shock in the early 1990s, of course, with the commercial estate crisis, and we had a shock in 2000 when the IT bubble popped. So what is the shock today? Well, the shock today really is a voluntary trade reset recession.In other words, from one day to the other, a politician got elected. He comes in and says, I would like to start a trade war, and this trade war is now implemented in a way where we in financial markets can only conclude that it comes with more downside risks than if it was implemented in other ways, and it is mainly the implementation that is the biggest challenge when it comes to the economic outlook, namely that it comes with the risk that there is a requirement that, for example, you're a retailer who sells toys in the Midwest.Who is now an independent store that normally has been importing from China and now needs to find other ways of getting these toys, and there is no easy quick way to do that because the same toys are not produced in the US, the same toys might not even be produced in other countries. 75% of toys that are sold in the US, they come from China. So the conclusion is that the way that this unfortunately has been implemented is going to have a more negative consequences, and that is what we will call a voluntary trade reset recession.In other words, it's voluntary. It's a trade reset, and we are worried that there's a 90% chance now that this is going to result in a recession if these tariffs stay at these levels.

Thorsten, what do you make of the argument about what the administration is trying to achieve in the end in terms of, as you say, they are resetting the trade paradigm on purpose? Is what they're aiming to do a is it achievable, and B, is it worth achieving?

Well, one important aspect, of course, is the discussion around that the manufacturing sector only makes up today around 10% of US employment and 10% of GDP. It's been declining over the last many decades from around 40, 50% if you go back to World War II, to now making up a much smaller share of the economy. So if the goal is to increase the manufacturing sector, then depreciating the dollar of course comes with another.of risks as we of course are talking about in markets today. So the question here is, is it possible to grow the manufacturing sector, and if we want to grow the manufacturing sector, is that coming then with enough value added? For example, producing last language models, producing AI of course has more value added, embedded relative to producing t-shirts and and shoes and toys, etc. So there is some veryFundamental questions around if you grow the manufacturing sector, that is definitely possible, but is the cost that has to be paid to achieve that goal going to be significant in terms of what it might mean for labor that could otherwise have been spending hours inventing last language models again in AI and technology. So to your question, Julie, yes, it is a very important part of this discussion to debate whether theThe goal is to increase manufacturing and if it's possible and desirable to increase the manufacturing sector and, and if so, what type of products is it that we are imagining should be produced in the factories that potentially has to be built in this country?

Thorsten when the president went after Powell on, on social media, he did also talk about, of course, uh preemptive cuts by the Fed. I'm just curious what you make, make of that.

Yeah, so the challenge for the Fed is, of course the following, namely that the Fed has a dual mandate. On the one side, they need to make sure inflation is 2%. On the other side, they need to make sure that growth is around 2%. And now with the trade war, we of course have that inflation is going to go up because tariffs make things we buy in the US more expensive, and estimates from the Tax Foundation, the Peter Institute, also from the Yale Budget lab point to inflation over the next 12 months going up about 1% point. So if inflation is going up, the Fed should be hiking.But if at the same time growth is slowing, the Fed should be cutting.So which side of the dual mandate should you put weight on, and that's why this debate around what should the Fed do is so important because the risk of course is that inflation is about to move higher because of tariffs. But if growth in the next several weeks, we could see potentially stores, including here in Manhattan, that will run out of goods that are no longer being imported from China. We could see supply chains getting clogged up. We could see, of course, a slowdown in tourism. We could also see inflation begin to move higher. So if growth is slowing.And inflation is moving up, then the Fed will need to decide is it time then to begin to cut interest rates, and they are saying in that dot plot that the next move is a cut, but the debate of course in markets is how quickly should they do that at the moment, especially now that the dual mandate is pointing in opposite directions.

Well, and the president has made clear where he stands on the issue. He seems to think the Fed should be doing it now, right, or yesterday or as soon as possible.And you know the market in the first Trump presidency and even now sort of struggles with how seriously to take the president's various threats when it comes to things that affect markets and the economy. So I guess I would circle back to where we started this question of how real is the risk that Jay Powell could be removed or at least that there would be a fight to remove him.And I'm curious how seriously you're weighing this and, and how you even go about weighing it.

Well, well, there is one important point also here. Let's not forget that Jay Powell's term runs out in May of 2026. There's another FOC member, Adriana Kukler, who will have to step down in January 2026. So we will probably in any case in the next 3 to 6 months, figure out who the next Fed chair is. So yes, of course this debate is very serious about removing a Fed chair that basically never happens really anywhere in the OECD area, but this debate is already.Getting to another point where, well, if we just wait another 36 months, then the Fed chair will already have to come to the conclusion that he's stepping down in May of next year and we need to appoint someone else. So that's why markets of course need to figure out whether the firing of Jal is an immediate risk or whether there is also a scenario where maybe we should just wait another again 3 to 6 months and then we will in any case have a discussion around who the next Fed chair should be.

Torsten, always great to see you. Always great to have you on the show. Thank you, sir.

Thank you, Josh.

Teslasick a day as a big first quarter earnings report now looms tomorrow after the bell. For more on what to expect from the EV giant, let's bring in our finance's senior automotive reporter Praz Suuranian. Praz.

Hey, thanks Josh. You have big earnings report on tabs questions swirl around Musk and that cheap Tesla EV. You know, as we all know, it's been a rough quarter for Tesla stock down over 40% year to date. Q1 deliveries were a big miss. Concerns about demand and a lot of that is on CEOE.Elon Musk, his political activities like Doge are sort of hurting the brand among people who disagree with his actions and then there's the effect of him not being around, right, which sort of to some some like Dan Is are calling a code red situation that needs repair.Now for the numbers, looking at around 21.43 billion, just slightly higher than a year ago, street also expecting around adjusted EPS of 44 cents a share translating to adjusted net income of 1.57 billion. So that's all great, but the bigger questions are around Musk and the status of that cheaper EV now which Reuters now says is delayed till later this year.

And so when we are listening for, to the conference call tomorrow, is that really going to be the focus or should we still be focusing on things like automotive gross margin that traditionally have also been something that investors, uh, zero in on?

Yeah, you know, I'm sure they'll be looking at those metrics to see how the auto business is doing, but, uh, from what I, we hear from the analyst community, what we hear from people, investors is, is the status of what is Musk doing? Is he gonna return, and I suppose that May deadline for when special employees to go back, uh, to the, to back out of the government. That's the big question.Is what is must status and then of course, yes, Julie, of course, you know, that cheaper EV and many have questions about when is that going to come out. That's what's the spur of the next leg of demand and sales for the company because right now we're seeing those sales sort of lag even with that new model Y that just came out in March, those haven't actually moved the needle just quite yet.

Prost, thank you so much appreciate it.And and Yahoo Finance is gonna have special coverage of all things Tesla tomorrow coverage starting at 4 p.m. Eastern. We'll be getting you the results, speaking with analysts and checking in on the earnings call. Don't want to miss it. Stay tuned. We got much more market domination still to come in the meantime.

Nvidia stocks sinking again today. This is coming after a report from Reuters saying China's Huawei is boosting AI chip production. For more now we're gonna bring in Stacey Razgan, managing director and senior analyst at Bernstein. Stacey, always great to have you on the program. So we have these reports. China's Huawei planning a new AI chip they say for mass shipment from Reuters. Look at video, we're down about 6% in today's trade, Stacy. You cover the name. What do you make of that headline?

To be honest, I don't see why it matters. Nvidia's not allowed to sell anything in China anymore as it relates to AI, so who cares? Right? I mean, to be honest, this is my issue with the, uh, the band that we got last week on Nvidia's China offerings, and they've already been heavily constrained by export controls. The part that they were allowed to sell in China, it was called H20. The performance is already very limited.And the parts that Huawei had available actually are, uh, they have better performance. They're missing some other things, software compatibility, but they have better performance. After last week, and then the government is now requiring license, um, uh, licenses for Nvidia even to ship that low end part. So effectively they can't ship any AI parts into China anymore. So I mean, to be honest, we basically just handed the China AI market to Huawei anyway. So like, I'm not surprised by any of this at all andYou know, at least from where we're standing now, I don't know that it matters. Like I said, they, they, they can't compete anyways. They're notallowed.

I mean, so, OK, so let's assume, Stacy, that policies are not permanent, right? and that you get a change in administration in a few years and things change again. Does this give Huawei such a hard head start that even if the policy changes, you know, it'll give it a leg up? How, you know, how are you thinking sort of longer term?

Yes and no, you have to remember the, the policies that were in place until last week were actually put there under the Biden administration, not under the Trump administration. And so that low end part that Nvidia was allowed to ship until last week was already well below, you know, Huawei's offerings and frankly, I doubt that those thresholds were ever going to get raised and so the gap.between, you know, what Nvidia was allowed to ship and frankly, the local capabilities was going to get bigger and bigger over time anyways. So, no, I think we were going down this path as it stands. Nvidia has even talked about the China market gets more and more competitive and you can even look at their sales into China. They, I think they did about 17 billion.Last year it was probably about $12 billion in AI sales. That was the largest on an absolute basis that they've ever shipped, but as a percentage of their total revenue was the lowest in over 10 years, right? So China increasingly was becoming less important to them. They were getting decoupled because of the nature of these policies that were put in place, and again it wasn't really Trump until recently. This was the Biden administration.

Stacey, you know, I'm looking, just looking at shares of Nvidia back at the chart. We're down now about 30% this year. I mean, it's a whole lot worse than Nasdaq 100%. I know you're, you're a believer. You're a bull on this one, Stacey. I mean, what, what is the catalyst that you think gets this one moving in the right direction again?

Yeah, I mean this is the problem right now because I do think it's funny though, in the wake of all of the tariff stuff, I could argue.That whereas tariffs and macro uncertainty, everything can cause real demand issues for a lot of markets, I actually think the AI demand has been real, right? So you could argue that that that will continue. I would also argue that like just from a pure hardware standpoint, um, given the nature of how everything is structured, the AI servers are probably a little less exposed to the direct tariff risk than some of the other end markets, you know, they can come into most of the ones going into the US at least come through Mexico.And they're complying under the USMCA. They're actually tariff free. They're exempt from all the tariffs. So it's actually like, like fundamentally it feels like AI should have a better backdrop than a lot of other end markets, but because of some of these policy, you know, changes that have been put into place and also just the broader worries about macro and everything else, they've been getting hit worse.

Well, and what about this sort of um there have been some reports bubbling up about some of the big hyper scalers like Microsoft or Amazon today. There's an analyst report that they're considering.Sort of pulling back on some of that big data center spending. How worried are you about that?

Yeah, I, I actually don't think that spending this year changes very much. I, I, I think that what was in the books is going to be in the books, but look, there, there's been always worries that like oh we had a capex peak, and, and, you know, a lot of people, even before all the tariffs are people worried that, you know, could 2026E come under pressure just because they're investing so much in 2025, they worry about the digestion.I mean, look, at the end of the day, they're macro exposed like everybody else. I mean, is it possible that CapEx could be down in 26 because of macro issue? Sure. Is that an Nvidia specific issue? Absolutely not. Like, look, if we go into a recession.And, and the way things are looking, like, who knows? I mean, I, I think all bets are off, but I don't think that those are, are isolated necessarily to AI spending or, or Nvidia. I think those are broad risks. And look, the longer this goes on, I think the bigger those risks are.

A kind of a broader question I have for you, Stacey, you know, the US government, obviously, it imposes these export controls. We're trying to slow down, uh, Beijing's tech ambitions, chip ambitions. How effective do you think those export controls are gonna prove to be?

I mean, it, it,they, they are in they are. So in, in the near term, does it throw up barriers, sure.But at the same time, like the, the Chinese are not stupid, right? And we're forcing them down paths that maybe they would not have taken. I like I've said this before, but we're sort of forcing them to be creative.In all senses that we're again, it's, it's not just AI it's AI, it's also semi-cap, it's analog, semiconductors, it's all these things where there are increasingly like local domestic substitutes.And you know, those, those subsidies, they are going to take more share than they would ordinarily deserve to take because they have no choice. They have to. And so yes, does it slow them down? It probably does, but if I'm looking out, you know, 5 years or 10 years, might we be faced with a more competitive China because they were, they were forced to be creative, because engineers tend to do their best work when they when they're under constraints and because they are not stupid and they have no choice. I, I mean, yeah, I, I wonder if we're opening up gates.That maybe in hindsight we'll have regretted pushing them through. It's certainly possible.

So Stacey,there's one question that I imagine many of our viewers want to know, and that is whether they should buy Nvidia right now given all of this and given the job.

I, I mean, look, we, we still like the fundamental story. I like the story around AI demand. I still think that they are by far the winner in, in this space. I mean, but there's clearly like more uncertainty around everything. And again, like I said, it's not just Nvidia. Like it's, I mean, it's down a lot this year. The whole semiconductor industry is probably down, not quite as much, but almost as much as Nvidia. I mean, the whole the sector has just got wrecked.On all the tariff stuff, it's it's just one of the most global sectors that's out there and and it's both directly and indirectly, it's it's, it's exposed and they get impacted. So my issue is right now, I don't know when all of this eases, but the thing is it could ease tomorrow. It could ease literally with a tweet.

It could, although not another tweet will probably send it back down again. This are the times we live in, Stacey. So hope you're doing lots of yoga or something. Good to see

you.You, you try to find it where you can, but like I have to put safe Harbord like, like statements on my notes now. They're only accurate as of the time of publication. Like things are are changing very quickly.

We are all trying to adapt. Thank you so much. It's great to see you as always.

You bet, you bet.

Thanks.Now time for some of today's trending tickers. We're checking in on Amazon, Salesforce, and Uber. Let's start with shares of Amazon getting pressed today. Raymond James downgrading the company to outperform from strong by while also cutting its price target on Amazon from 275 down to 195. In other news, Wells Fargo saying that Amazon's delayed some commitments around new data center leases. That's something I was just talking about. We asked Stacey Raskin about and he said he doesn't think that spending plans are going to change much this year.But you know, beyond that, we could see if if things change and what kind of effects as well with regard to Amazon the tariffs are going to have. Yeah,

we'll soonhear from those CEOs and the CFOs about some of these reports. What, what do they actually say, right, um, on this Raymond James downgrade, I mean on a scale of downgrades going from strong buy to outperform, I still really like it, just not as much kind of the idea. I does think earnings could come under some pressure. They talk about tariffs on imports from China. They talk about investment intensity at the company. They do take.The target to 195, which per Bloomberg, that is a street low. Your average target is more like 253.

Yeah, and by the way, when speaking of earnings, they are set to report on May 1st. There you go. So that's when we will get that commentary that more

insight on the Salesforce and Focus say that's after receiving both an upgrade and downgrade from Wall Street analysts. Shares are falling as DA Davidson downgraded the stock to underperform from neutral, lower the price target from 250 to 200. On the other side, Guggenheim raised its rating on the tech giant.Shares to neutral, uh, DA Davidson, that would be the one and only Gil Luria from the show. We like Gil so he downgrades Mr. Benioff's company to underperform, so equivalent of a cell, and neglecting its core business, he says, to pursue a premature AI opportunity. He says, yes, he told his clients Agent Force doesn't make strategic sense, but betting the whole company on this effort may be at the expense of other, the other 98% of the company's business. Also, I thought it was interesting.his checks like the good responsible analyst that he is there, and Gill says he did his checks on Asian Force and said many of the customers do not have the appropriate data stack, nor do they have the confidence in the ROI, especially given the evolving price models.

Well, guess what? There's another analyst who's on the other side of this trade today, um, and that's John De Fucci, another smart analyst over at Guggenheim. Now much like him being, you know, the other analysts on Amazon, we were discussing less bullish but still bullish, this is not a power.The table by by any measure. Deucci is upgrading this to neutral from sell when it comes to Salesforce and removing the price target. They said the stock fell to their prior price target and so basically the valuation now looks less unattractive, I guess you won't say it looks attractive, but it looks like it looks less unattractive here. And so now they're saying that some of the changes that we've seen also in the dollar might be more positive for something like

a sales. you got to get him on here for a good old fashioned.I guess self versus neutral debate, although that's not as not as dramatic, but still those would be two analysts, yeah,

yeah, a little debate and the Federal Trade Commission filed a lawsuit today alleging that Uber, a rideshare and delivery giant, was charged consumers for its Uber One subscription service without their consent, as well as failing to deliver promised savings and made it difficult for users to cancel the service despite its cancel anytime promises. Now this is interesting on a number of different fronts, right? I don't, do you have Uber one?I don't, I don't have it either, at least not that I know of, but, um, you know, this is something, this is sort of traditional FTC bread and butter, right, saying that companies make it too hard for you to cancel a subscription, but this is another signal that the FTC is sort of business as usual in some respects, including a case like this. Yeah,

I mean this administration continues to go after right big tech Google Meta got Uber.Uh, maybe not terribly surprising. I mean, Trump often to talk about, you know, how we used to say he liked little tech, didn't love big tech. It sounded like Uber, by the way, does have a statement out. They did tell Bloomberg, um, Uber once sign up and cancellation process is clear, simple, and follow the letter and spirit of the law that Uber does not sign up or charge consumers without their consent. Cancelations can now be done any time in the app and take most people 20 seconds or less, so they're fighting back. It sounds like, yeah,

sounds that way.Well, stocks are sinking today with tariff concerns top of mind. For more on where investors should be focused amid the uncertainty, let's welcome in Troy Gaalevski, FS Investment chief market strategist, and by the way, FS, an alternative asset manager with more than $80 billion in assets under management. It's good to see you, Troy. Um, you know, it is obviously a tumultuous time in the markets here. I mentioned tariffs in the intro, but now you also have the contention.Of a potential conflict between the Fed Chair Jay Powell and President Trump to layer on on top of that, what is sort of the top concern that you're hearing from clients right now as all of this is going on?

Yeah, great to see you, Julie, and you know, as we discussed before Covaniea, I'm really glad that we're focused on the alternative asset management business, where you have obviously far less volatility in these uncertain times. But, you know, I think the main point to remember, as we discussed today, which I've made the past, you know, 6 weeks, is that, you know, you really never had a president or a cabinet that's been willing to run a reasonably high risk of a recession.And we're already have had a bear market in order to achieve uh trade goals, right? as noble as they may be, you know, that's a very big risk to run and you're seeing the market reaction and, you know, you can kind of think of this a variety of ways. Our favorite kind of, uh, comparison is to 2022, which was the original galacticmor version. A lot of the forces that had driven.Equity prices, well in excess of corporate profit growth, um, and nominal GDP growth had been reversed. And one of those forces was lower interest rates, interest rates went up a lot. The other was the Fed printed money like crazy, and then the Fed started to constrain money supply. This time around though, it's caused by really a full-on assault on those that benefited the most from globalization.Which have been primary, primarily been US multinationals, which make up the largest market cap in the world in US markets, as well as our trade partners, which certainly in some ways took advantage of us, but, you know, they were playing by the rules that we established as a country. So the, the, the point there is when you think of the pain that we've had so far, which is certainly if you've had too much beta.Coming into this environment, it's been very painful. Um, it's gonna take quite a long period of time to sort out because, you know, corporate profit margins were expected to increase, uh, from 12% to 13% this year, which always seemed pretty crazy. And now there's a realistic probability they can press and we get flat earnings growth or, or no earnings growth, even if we can avoid recession.

You know, Troy, today it did not seem like tariffs or earnings were front and center for investors. I mean really what seemed to be front and center, it was Trump going after Powell very, very publicly and very personally, you know, he's late, he's a loser. They should be preemptively cutting. I'm just curious. I mean, you saw that. Do you think, do you think Trump could really try and make a definitive, deliberate move here to get Powell removed? And two, if he did do that, Troy, what do you think the response and reaction of the markets could be?

Yeah, so I, I think oftentimes there's a lot of rhetoric that comes from the president that he, uh, fortunately doesn't follow through with. Um, that being said, to your point, what's exacerbated this downturn, right, is you, you've had all these flows of capital that have supported US markets internationally.Um, really go in reverse at a, at a very rapid pace. You think of how much the dollar is weakened versus the euro as an example, which, you know, the euro was up super strong today, over 1% versus the dollar. You think of the ugly price action at the back end of the curve, the, the 10 year and 30-year, uh, treasury bonds are getting slaughtered again today. And, and again, if you, if you're selling US assets, and you'reThe overseas, you only have deep liquid market choices, which of course bring you back to uh the Magnificent Seven, you know, listed equities on the NASDAQ or on the S&P. And so both the dollar, the bond market, and equity markets are taken on the chin, some of which was undoubtedly exacerbated by the comments directed at Chairman Powell.

So Troy, let's talk a little bit more about alternatives and there's sort of this, this, um, rising drumbeat recently, especially from some of the private equity giants that folks should change their allocation and sort of away from 60/40 and maybe do 40, 40, 20, for example, 20% alternatives. But as we know, alternatives is a big bucket. So yeah, so I, I'm just curious when we're talking about alternatives for people who are not as familiar.At a time like this, if your argument is that this is a good time, I imagine you always say it's a good time to be an alternative, but if now is a specifically a good time,

why I'm a straight shooter.

That's

true.

That's true. I give you credit. So but if that's true, why and where within alternatives?

Yeah, so I, I think when you step back, there's 2, there's actually 4 buckets, but I'll just focus on 2 for the audience today. You know, one would be private equity, um, instead of public equity. So, you know, public equities, uh, the S&P, for instance, you know, about 40% of its revenue comes internationally, and some of that, uh, revenue is challenged right now, um, not to mention, you know, some of the assaults on profit margins. Um, in, in the US middle market, which makes up about a third.Of private sector GDP, which would be the 3rd largest sector in the world, uh, or 3rd largest economy in the world, US, China, then the US mid market, you know, 86% of the revenue comes domestically, and the vast majority of those companies are service oriented, so they have far less, you know, pressure on their inputs from the tariffs than say a classic manufacturing company would have. And, and the interesting thing about middle market private equity in particular is coming into this dislocation.You know, valuations had not appreciated at all in in lockstep with the S&P or the Russell 2000.So there should therefore be much less of any downside in valuation since they're pretty much stuck at the bottom. Um, furthermore, you know, revenue growth is typically, let's call it 3 or 1.5 to 2.5x that of US nominal GDP. So even though we're gonna get lower nominal GDP growth this year, barring an apocalyptic, uh, recession, which we don't expect, you should still have positive.growth and some degree of earnings growth, even in a tough market. So if you're solving for growth and you're trying to solve for that growth at a reasonable price, you know, middle market private equity continues to shine like a beacon of light in an environment where you, you had to pay a lot for growth and you're now taking it on the chin, or you just couldn't get growth at all. So, so that's one example, Julie. Happy to get into private credit as well, if, if I have time.

I think we got to leave it for today, but we will say private credit for another day, I assure you, Troy, and we'll have you back to talk about it.

Thank you so much, Julie. Have a great rest of

your day.Let's get a quick check of the markets right here as we're counting down to the closing bell on Wall Street. Uh, bottom line, you got red across the screen. We have the Dow down 1100 points. The broad gauge S&P 500, it looks like we're down about 2.7%. I'm just looking closely at the Nasdaq. tech heavy Nasdaq is down 3%, of course, all that coming as, as you know, President Trump again going after Powell on social media, uh, very personally and very publicly again. Stick around, much more market domination, that's still to come.

Welcome back to Market Domination sponsored by Tasty Trey. Let's do a quick check of the markets here. Not seeing much relief, a little bit of a bounce off the lows, but still the Dow down by almost 1100 points, almost a drop of 3%. The S&P 500 down about the same, and the Nasdaq down about 3% um as we see the selling continue here today.Taking a look at the bond market as well. We've been watching the 10 year pushing higher again today after jumping last week following Fed Chair Jay Powell's comments on tariff uncertainty and more tension brewing with President Trump venting his frustrations with Powell on Truth Social this morning. For more, bringing in Chip Huey, managing director of fixed income at Truest Wealth. Thanks for being.Here we have been trying to sort of get sort of suss out what people are thinking today about how realistic it would be, how far President Trump is willing to go to try to remove J Powell as Fed chair. How are you thinking about that and do you think the market is even sort of considering pricing in that kind of a scenario?

Yeah, I do. I think it's hard to say obviously how, how it plays out and obviously this has been in a very public.A very public forum that we have seen that, but I do think that today's market reaction does suggest that the market does really, really value an independent Fed, one that's focused on the dual mandate, which Fed Chair Powell was seemed very committed to last week. I think that's still a very important priority for the market, and today's volatility that we're seeing, I think, supports that notion.

And Chip, also relevant, of course, in your universe is Trump's tax plan. We talked to US Treasury Treasury Secretary Scott Besson last week. This is his, his outlook. Take a listen.

So the tax bill is moving through the Senate, moving through the House. I think we're gonna have some permanents for the 2017 tax cuts and Jobs Act, uh, probably by Fourth of July.

So Chip, I'm just curious, what are your thoughts? You hear that on the impact of all this bill on yields?

Yeah, I think it's certainly a situation that we're monitoring. I don't think that the market is too focused on that yet. It's still focused on this back and forth from a, from a tariff standpoint. I do think that there's some effect of some flows going away from US assets into areas like Germany, Switzerland, Japan, andAreas like gold, I think that's really what you're seeing now that could change. And once we get a little bit more detail on that tax plan, it will have implications potentially for deficits. What does that mean for our debt supply outlook? That when that moves into the spotlight, then you could, you could certainly see more tax related reactions within the yield curve.

And and Chip, when we talk about where funds are sort of flowing here, we know that people are getting out of stocks or at least lightening up on stocks, but it's not clear that they're going into treasuries, right, because we've had this sort of back and forth, um, price movement there. So where are those funds funds glowing? Are they going into cash? What, what are you seeing?

I think some are going to cash. Some are going to other international safe haven type areas. I will say that the front end of the US Treasury yield curve has been remarkably resilient. It's actually been, you know, very stable based on the expectation the market is pricing in is about 3 or 4 rate cuts this year. That's been pretty stable. I think where there's more trepidation.is taking on a lot of long duration, right, a lot of long dated fixed income exposure way out the curve that that has been more hesitancy there. But I do think that there, whether it's cash or whether it's with a little bit less interest rate exposure in the front of the curve, you're still seeing some interest there in in US Treasury in the US Treasury market.

Chip, kind of just a broader policy question, you know, you look at the 10 year here, so 442, Chip, when you listen to Besson and you know, the administration, the policy goal here, they, they talk about a lot, Chip, and you've heard this is get those rates down. Do you think their policy mix, as it stands now, Chip, is that the right policy mix to achieve that objective?

Well, I do think it's powerful when you talk about getting the 10 year down right and also getting oil prices down, which has an inflation, you know, a disinflationary effect which can put downward pressure on yields. Just jawboning it and talking about it, you know, does, does help. I think that what we need to do in order to achieve that is likely get through this period, this period of uncertainty, get some clarity on the policy front, and then I think it'sBecomes much more achievable. The concerns about, hey, is there going to be an inflationary impact? How sustainable, you know, is it based on tariffs that are put forth right now, which the market also feels like could really change minute to minute if we can get some more stability there and a little bit more clarity, some reliable information on where we're headed. I actually think that it's still achievable.

Chip, great to have you on the show today. Thanks for joining us. Thanks

for having me.

Shares of Chipotle falling as the market sell-off accelerates. The company set to report first quarter earnings on Wednesday. For more we're bringing in Yahoo Finance's senior reporter Brooke De Palma. Brooke, yeah,

good afternoon to you both. Chipotle results expected to be a bit overshadowed here, of course, by those President Trump's trade war. It certainly is wondering or leaving Wall Street wondering the impact on both Chipotle's cost of goods as well as the impact on consumer behavior. If you take a closer look at the numbers, we are still expected to see a slight.Ever so slight increase for both adjusted earnings per share as well as revenue, but same source sales growth far lower as well as expectations go than what we saw last year. Same source sales expected to grow nearly just 2% in this environment as consumers are perhaps pinching a bit of their wallet. Traffic growth expect to see a modest decline for the first time since 2022. Now higher average check could offset that a bit. We are expecting to see a big.Of an increase when it comes to the average check size, roughly an increase of 2.69%. Now some key things that investors are watching for here includes the performance of that LTO offering, that honey chicken, uh, protein offering they had. It had a great test run, but Wall Street certainly does not think that it played out as well as it did in the test run. Also guidance for 2025, the company previously said that they expect seam source sales to increase in the low to mid single digits.Range and of course President Trump's tariffs are expected to be top of mind for Wall Street going into this report. We know that about 2% of sales of Chipotle sales are sourced from Mexico. That includes half of Chipotle's avocados. It also includes other ingredients like tomatoes, limes, and peppers. We know that right now most of produce coming from Mexico is exempt under that United States, Mexico Canada agreement. Tomatoes into the summer will go off that.Exempt lift, we also know that they have diversified so much, so much of their sourcing of avocados now are coming from the Dominican Republic, Guatemala, Colombia, Peru, as well as Brazil. And so perhaps as they diversified where they were getting their avocados from, now the 50% that they're getting from Mexico are exempt at this very moment.

Well, and speaking of diversifying, now there's a report that they are diversifying geographically as well. They're planning their first location in Mexico,

right, in Mexico exactly, and they're planning to open up.One location as far as we know with Alsy it's a restaurant operator that's primarily known in Latin America as well as Europe that's expected to open in early 2026 and then the idea is that they'll sort of assess where they go from there. Alie known to have other franchise models in Mexico including Domino's, Starbucks, Burger King, Chili's. So certainly one to watch. This is not the first international expansion for Chipotle. We know that they expanded expanded in the Middle East back in July of 2023, partnering with another.operator there but certainly something to watch. I mean expanding internationally during this time definitely an interesting move. Yeah,

and it'salso interesting, aren't most of their locations, especially in the US, owned by and operated by Chipotle

company owned exactly. So this is a new business model that they're certainly testing the waters on here, uh, but all company owned in the US. They also have long term goals to have 7000 locations in both the US and Canada right now they have about 3500.

Oh, dumpling. All right, thank you so much, Brooke, appreciate it.And tune in on Wednesday. Yahoo Finance will be interviewing Chipotle CEO Scott Boatwright at 40 p.m. Eastern. Stick around, we've got much more market domination still to come.

The US dollar sank while gold futures touched new records after Trump warned in a post on social media of a slowing of the economy. Our next guest today says that gold and the dollar have a complex, often inverse relationship. For more, let's welcome in now Kenny Polcari, Slatestone, wealth chief market strategist and host of course, of the Yahoo Finance podcast Trader Talk. Kenny, great to see you. Always

a pleasure. Thanks for having

me. Let's start with with gold, which continues to shine. I was talking to Mark Newton.And I checked in with Mark over at Fon Strat, the very smart Chartist technician, and I said, technically what does it look like to you? And Newton said it's still attractive. He had overbought, but technically he still said

attractive. I, I agree. I mean, if you look at it on the chat, it goes straight up. I mean, it's up 25%. It was straight to $2700 in January 3 to 30, we, we traded another century mark today, right? 3400. So it's up 700 bucks in 4.5 months. So yes, it looks, it's straight up, but I think it just screams uncertainty and.Nervousness and anxiety and so that's the move. I still like gold as well, but I wouldn't be surprised if we get one good headline that suddenly you might see a quick reversal in it, but I still like gold in the long

and then could have a quick reversal in the other

100% of the headline from minute to minute,

right? And of course, as we, as we said in the intro, the gold and the dollar tend to have this inverse relationship and the dollar has been down. So do you expect that move to continue

all? Yes, I think if the dollar.We can look, we, we breached 100 today on the dollar, right? So now we're trading below that. So as the dollar continues to get weaker, it'll just, you know, commodities are priced in dollars. Gold is a commodities, so a weaker dollar will, will allow gold to go higher, right, as it will, uh, other commodities. But, uh, in this case, I think as the dollar, if the dollar continues to weaken, uh, then I think that's just more fuel for gold because a weaker dollar is just going to continue to cause nervousness and angst, and investors and about the economy.And so therefore they'll, they'll run into the ultimate safe haven play, which is

gold. Let's talk more broadly and look at the SPX. So we're down right now about 2.5%, uh, 5149. What are the levels you're watching?

So I, I, I'm really looking for us to test the lows that we made 4835, right? So I fully expect at some point we're going there. So between here and there, I'm really, I'm just waiting for it to see it 4835. I think it'll hold there. Um, I'm not necessarily saying we're gonna go there, but I wouldn't be surprised if we do.But anywhere in here, look down at the, down at the 5000 is kind of the big round number, right? So if you ask me a number right in the line, I'd say 5000, but I really think 4835, I think it's got the potential to test it. And if we keep getting headlines like we're getting today, the, you know, the negativity and the nervousness and calling Jome Powell names and telling them to cut rates, and I'm going to throw you out, I wouldn't be surprised if we test it fairly quickly.

Kenny, it's so interesting this whole J Pyle stuff. We we talked earlier to Troy Gayevki over at FS Investments.And we were talking about this idea of how seriously to take the president when he says stuff like this, and I think we were in an environment where people before, before this current term where people sort of discounted, they said, oh, he's gonna say what he's gonna say and he's not gonna do this stuff but then tariffs came and people said maybe he is gonna do the stuff. So how do you overlay that on this J Powellcommentary?

So you don't, and that's what, that's what bothers me a little bit because I think the.There has to be a definite, you know, separation between church and state, right, between the, the White House and the Fed. There has to be, uh, and the fact that he's throwing it out there and he's, you know, he's maligning them and calling them names and threatening to throw them out is only adding more chaos to an already chaotic situation. So I'd like to think that Powell is not going anywhere that, you know, if he's asked to resign, he says no, that he serves out his term. I don't think it's going to be very easy if Trump really wants to throw him out. I think he's gonna have to start jumping through hoops to do it. I don't think it's going to be.That easy to do it, but in the end, I think Jay Powell in this case, I think he's right. I don't think there's any reason to cut rates right now. I don't think the, the, the macro data suggests that the soft, you know, some of the data, the soft data might be suggesting a little bit of concern, but the hard data is not suggesting that to me yet. So I think Jay Powell is right in holding it steady in light of everything that's happening tariffs and the chaos and the, you know, the, the uncertainty. And look, you and I both know this too. The, the market can price in bad information.As well as pricing good information, but it's this uncertain stuff every day that is creating this chaos that people just say they're tired of it and they throw it out, which I think obviously also is not the right thing to do, right? Getting emotional in, in your trading or you're investing, especially if you're a long term investor, if you're a day trader, you love this chaos because you want to go up and down more often, right? But as a long term investor, you really wanna kind of, you, you, you need to stay the course and you just need to make sure that the names you own.The thesis on why you originally bought them continues to be the thesis why you wanna own them,

right?Kenny, always great to see you, my friend. Always a

pleasure to have me. Thank you

very much. And be sure, of course, to tune in every Wednesday at 12 p.m. Eastern to the Iowa Finance podcast Trader Talk hosted by Kenny Pocari. You can scan the QR code below to stay up to date with the latest content.And while we're wrapping up today's market domination, don't go anywhere. We've got you covered with all the action following the closing bell. Stay tuned for market domination over time.