2 00 in our trading day on the east coast. Nasdaq composite leading the way again up 1. 6 . The s p 500 adding more than a percent. Dow jones industrial are the laggard but higher by half a percent and chip stocks helping to boost that. Nvidia now up 85 this year. Its added almost a trillion dollars in market cap in 2024 so far. Its only march 7th. Micron higher on the upgrade from stifel and intel gaining on reports its expected to receive 3. 5 billion from the government to develop advanced chips for the military. All about the chips. 900 a share. I mean. For nvidia. I remember when it was 700. Unbelievable. I remember back when it was 700 about two weeks ago. Gosh. Lets move on now and begin with the state of the union. The president is expected to propose, among other things, a 21 minimum tax on corporations and a quadrupling of the tax on corporate buybacks. Bob pisani joins us from the nyse and you followed buybacks for years and what would the impact of what the president is proposing be . It likely wouldnt change things too much. Corporate america is flush with cash and theyre buying back a near record amount of stock this year. Thats good news. President biden the taxes on the buybacks reportedly going to propose an increase in the buyback tax from 1 to 4 . The theory imposing additional taxes might encourage companies to invest in hiring more people or capital expenditures. The validity of that is debatable no doubt Corporate America appears to be embarking on a buyback spree. February the second month strongest ever and 24 looks to be a record year. Wide latitude in what it does with the cash flow but it falls into buybacks, dividends and capital expenditures. The percentage that goes to bucket ebbs and flows Corporate America has shown a greater pension for buybacks and the reason is buybacks are Immediate Gratification for the shareholders. In theory it should reduce shares outstanding and improve earnings her share. What causes companies to spend more on one bucket over another if youre a tech Company Investing in ai technological growth will cause you to expend more. Its really about Economic Growth. Higher growth means more money to hire more people. Slower growth likely means diverting available cash to buybacks and dividends. Would higher taxes really discourage buybacks and divert spending to more hiring . In early february meta authorized an expanded 50 billion Share Buyback program equivalent at that time to 5 a of the shares outstanding. Under the current tax the company would pay 500 million. Under bidens tax the proposed one it would rise to 2 billion. Thats a lot of money, but its not clear if it would cause meta to divert money from buybacks to Capital Investment and hiring people. The bottom line here, guys, its Economic Growth that encourages companies to hire. Back to you. All right. Bob, thank you very much. Bob pisani reporting. These higher tax proposals the continuation of what Corporate Leaders consider to be an antibusiness stance from the Biden Administration. Listen to what conna cophillips ceo said earlier on cnbc. One you poll most of the ceos today its attacking us from every direction, every three letter acronym in the government today. Its the blm, the ftc, the sec, now coming out with some of their rules and that its just that environment that is not pro business, but not sort of enhancing what we could be doing better than what were doing today. Joining us now is edded mills, managing director and washington policy analyst at Raymond James. Glad you can be with us. Respond, why dont you, to ryan lances comment that this is a validly antibusiness administration. That seems to be what he was saying there. Do you agree . I think what the Biden Administration would say is they would point to a lot of the different fiscal stimulus programs that were passed under this administration, the bipartisan infrastructure bill, the inflation reduction act, chips and science act, all being what we considered at Raymond James the hidden stimulus in this economy that is causing businesses to invest a lot in manufacturing, invest a lot in the workforce, driving up wages, keeping people employed and part of why we have been calling for a soft landing. I do think what we heard from the Biden Administration, cnbc had Lael Brainard on today, talking about how this is not the biden agenda, this is the american peoples agenda, and thats because a lot of these things, despite what we might not like in the Business Community or for corporations, has a lot of popular support, so a lot of these things have to be viewed more for the political language than kind of through this market angle were required to look at it. Lets talk about possible tax heights. Bob mentioned one potentially on buybacks. Im curious there. Corporate minimum tax increasing the maximum rates there or the rates there to 15 from 15 to like 21 or Something Like that. Are those likely to pass in any theyre not going to pass this year but in a new congress and if biden wins, he would ask for them, presumably, his opponent would not. Yeah. This is all about next decembers expiration of the 2017 trump era tax cuts. On december 31st of next year the Corporate Tax changes are permanentbut the individual tax provisions all expire. This really is a political speech tonight setting up what is going to be a contrast between the Biden Campaign and the trump campaign. What biden will be saying is if i get reelected we shouldnt keep the corporate side permanent. If you want to extend out some of the individual tax provisions, we should balance this off with changes to the Corporate Tax code. Now that doesnt happen unless theres a demographic sweep, but also, whats keeping a little less pressure on democrats on the individual side is that if democrats do nothing if they win the election in november, that 10,000 cap on s. A. L. T. Also got away. Thats about a trillion dollar tax cut for a lot of constituents of democrats especially in these high cost states. We have a long way to go until the election and we know things are very dynamic and change all the time, but as of right now it does seem that former President Trump may have a slight lead over current President Biden for a possible reelection. If that happens, what do you expect the market will do or will behave at this point . Yeah. Courtney, this week we put out a report here at Raymond James that looked at the election probabilities and as the things stand right now, we do think that former President Trump has a slight lead. However what was interesting to us when we look at the composition of congress you could make an argument that if trump is reelected theres a high probability of a republican sweep. If biden is reelected theres a decent reelection of a democratic sweep. On these tax ssues, if you have a sweep, that unlocks reconciliation and thats the ability to do this on party line. Even if theres not a sweep, we believe whoever is in the white house is going to make the determination on these fiscal cliff issues like taxes and so the market will react with some uncertainty in that democratic sweep or biden reelection, but its not all bad as i talked about the fact that the s. A. L. T. Cap goes away. Thats a real positive for a lot of folks if it is a trump reelection, the expectation will be most, if not all of the trump taxcuts stay in place after 2025. Ed mills, thank you very much for running us through this ahead of the state of the union tonight. Thank you. So how will the president s proposed tax increases impact the stock markets. We asked ed mills about the future. Our next guest says hes concerned about what gets traction in the past than whats proposed. Lets bring in the Portfolio Manager at grady investments. Thank you for being with usp we have the state of the union tonight, the election is some ways off. Many people who will be paying attention to what biden has to say potentially the unofficial launch of this new campaign, but will markets actually react if it is just a proposal at this point as we suggest . Short answer is no. I really honestly dont think so. I think everybody is in relative agreement that nothing is going to happen until november, right. Were kind of in a period of stasis where theyre going to go out and run. Thats what theyre going to go out and do right now and a lot of proposals as a result of running and as we get closer and as we get nearer to the election time, you know, i think even a month beforehand in 2016 there was a probability it was hillarys to lose at that point. You never know beforehand. We never take a shot. We never try to forecast all that stuff beforehand. Well monitor and pay attention, but really, especially around Portfolio Actions we are not going to do anything in advance of these potential type of things that really dont have a lot of traction to pass up until after the agendas are set after the election. Our previous guest ed mills suggested that some of the programs that biden had put into place are kind of just now really starting to pay off, and he called it a hidden fiscal stimulus, things like the chips act and infrastructure bill. When you look at where we are currently and with the state of the inflation and the state of the economy, do you believe that recession is off the table . Do you believe that some of these policies have helped that or is it all about the fed . Its funny, i dont think theyre that hidden. You know, weve been talking about the inflation reduction act, reshoring the chips act is all within that and if you look at the performance of the industrials who would benefit from structure and these kinds of things its about the best performing sector out there. I think over 48 of companies in the s p 500 are at alltime highs. Its not really all that hidden. The companies have benefitted from that and frankly their valuations have certainly benefitted from it. So to answer your second question, whether a recession, i just i dont see where is it, where is the recession at . I really dont see it in the near term. Theres nothing that would suggest us rolling over especially right now that would suggest that. Were in recessionary conditions. Now are we going to continue to accelerate and accelerate . Probably not. Were probably more of a stable to decelerating economy. But i just dont see the avenue especially in the near term for recessionary conditions in any way, shape, or form. You point out industrials have had a nice run broadening out the market rally. Do you think they have gotten over extended and would you lighten up on them . Yes. I think they have. If you look at the valuations of industrials, theres a lot of them, especially in the cycle space trading at at least tenyear highs in valuation. Now, does that mean theyre going to collapse tomorrow . Absolutely not. But what it does mean if youre an incremental buyer or holder today, you have to make sure that these companies are going to not only meet, but exceed their numbers going forward. In a decelerating economy, thats going to be difficult for them to do. So from our perspective right now, that just there seems to be a little bit of a dislocation there, the alltime high in valuations, usually are areas where they think its a cycle trough. Were not at a cycle trough at this point right now so i have a little bit of hesitation being a buyer of those stlails have worked really well over the past six months. That famous saying in baseball, hit them where they aint. Where are the aints where i should be hitting . Yeah. You know, one of the aints that, you know, is starting to work here a little bit is we like the Health Care Space outside of glp1. One of the areas thats been hit positive glp1 drugs is the diabetes market. We think that thats an attractive space to be playing in right now. We think theres both growth and relative value in those spaces. Whether youre buying something growthy like a dexcom which still is growing over 25 organically in that market or whether thats an avid or medtronic more in the value space not growing as fast but very opportunistic in there. We think thats a space where, you know, you were talking about hit them where they aint, we think thats an area where people have shied away from because of the glp1 dynamics, but we still think thats a very positive longterm secular market thats going to continue to grow for these companies and continue to expand in that area. All right. Thank you very much. We appreciate your time today. Thank you. Jeremy bryant joining us today. Coming up the fight against spam. Google says its doubling down on lowquality search results but might be a while before you see any improvements. Well dig into the details in todays tech check. A conflicting forecast. The Solar Industry wrapped up a record year but Solar Companies are facing a different picture. Well shed light on that topic when power lunch returns. You got this. Lets go. Gobble gobble. Ive seen bigger legs on a turkey rude. Who are you . Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. Before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. Shares of google positive today but under performing on the year down almost 4 over concerns over threats to its core search business. One executive is tampenning down those. Hi, d. We got an update on the status and resill yensz of search that could make the bears think twice. It was alphabets chief Business OfficerPhilip Schindler spoke at Morgan Stanleys tmt conference just down the street from us here in san francisco, and for all of those fears around chat boths eating googles lunch he said theyve seen positive search query growth in the last 12 months and as they experiment with sge or search generative experience, thats like their chatbot in traditional search theyre still running ads above and below the results. Instead of this idea or fear that google is going to cannibalize their cash cow search ads theyre incorporating gen ai products into the business. Ha does that look like in the feature . Schindler sees a world where there are gen ai based ads integrated into generative ai answers. He believes google can create consumer and advertiser value over time making ads more like commercial experiences. Theyre thinking about it in a different way and the big advantage they have is distribution, right. Its been rolling out generative ai features to billions of users already, maybe more accurate to say hundreds of millions of users many who arent looking for chat bots but may be getting familiar with them nonetheless. I dont know if youve noticed some of the features when you do google searches you have to opt in but it will give you a gen ai answer. Have you noticed that . I havent. It looks differently . Sometimes it shows up as a box and tries to answer your question directly like it would in a chat bot. Sometimes its a button that says would you like to see a generative ai here. We have a video. Look out for i guess this is kind of like the bull and bear case, right, is that you have to maybe be looking for it, but the other case is that youre not looking for it but getting comfortable with this kind of search and may not know it. Thats what its about, right. The changing habits right now and whether google will be left behind. Can i ask, everything that has gone on with these ai snafus weve been talking about with gemini and yesterday we were talking about some of the microsoft snafus, has that slowed any innovation in the rollouts with ai in other use cases for these companies specifically . Well, i dont think it has slowed anything down, but in the case of google they wanted to do things boldly and responsibly, so they may have rushed gemini out earlier than they would have liked because they see what openai and chatgpt and all these things are doing, only to have to pause it, right. So in this space, i think you have to allow for a certain amount of mistakes along the way and theyre not unique to google. We talked about copilot yesterday. I was at salesforces trailblazer event yesterday talking to their head of ai and she said that it just things like this, these snafus dont slow them down. They motivate her to continue to improve on it. I guess thats the message, is its so early were going to see a lot more of this. Quick question, the genius of google, i think, most would agree, is how they have integrated advertising into the search product. How are they going to advertise integrate advertising into the ai product . Tyler, you hit the nail on the head there, right. Theyve been able to integrate advertising and sometimes you dont know its advertising. Thats been to their benefit and some users dont like that at all. Thats what Philip Schindler their chief Business Officer said theyre doing with generative ai. He says theyre providing that generative ai answer. And theyre still advertising above and below it. Not necessarily disrupting their business model. Theyre adding it in and critics would say thats not enough and chatgpt has become a blip and they need to do more. Thanks, d. Further ahead, rivian unveiled a smaller suv dubbed the r2 and announced a costsavings plan. Well speak with the ceo r. J. Scaringe when power lunch returns. Rylee from rylees realty hi this listing sounds incredible. Lets check it out. Says here it gets plenty of light. And this must be the ocean view . Of aruba . Huh. This listing is misleading. Well, when at t says we give businesses get our b