Closing Bell - Closing Bell Overtime: Markets Navigate Fed Speculation, Consumer Pressure and the Next Wave of Trading Mania 5/22/26

Episode Date: May 22, 2026

Markets head into the holiday weekend with investors balancing Fed speculation, rising valuations and questions about the consumer. Our Matthew Peterson weighs in Kevin Warsh’s confirmation and what changes could be ahead. Cameron Dawson, CIO at NewEdge Wealth, joins to debate whether investors should favor stocks or bonds from here. Nasdaq Private Market CEO Tom Callahan discusses soaring valuations and the company’s new partnership with Polymarket. The focus turns to inflation and the consumer: Ron Shaich, Chairman of Cava, discusses food prices heading into Memorial Day weekend and explains how consumers are adapting to persistent inflation pressures. Plus, the growing race to bring more ETFs to market and closes with a look at the changing economics of entertainment as Julia Boorstin asks whether Star Wars movies still carry the same box office force they once did. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing end to the trading day at the NYSC U-Hall, ringing the bell and at the NASDAQ acquisition doing the honors. Welcome to closing bell overtime. We're live from Studio B at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Sox higher once again today. The Dow up about 300 points, another record high, small gains for the S&P 500 in NASDAQ, and for the third straight day, the Russell outperforming the major averages.

Those gains coming as bond yields and oil both continue to back off. The 10-year yield down to 4.55 from a high of $4.5. 4.68% earlier this week, and oil settling at $96 a barrel. For the week, once again, the Russell 2000, the best of the bunch, the NASDAQ up less than a percent. But for the S&P 500, that's an eight-week winning streak. We did seem to slow down toward the close. Yeah, we did, actually. The highs were made probably around noon or so. And even in general, over the last couple of weeks, you could say we've slowed down. Yeah, it's an eight-week win streak. Pretty extraordinary. I always say it's more of a quirk than a flu.

meaning obviously things have to break right on the weekly close level to get that happening. But usually it doesn't happen in a vacuum. Usually it's a strong underlying trend. It usually isn't a rush to an absolute peak. But from two weeks ago, the S&P's up a total of 1%. Wow. And we're still a little bit down below the week ago Thursday record high. So you basically take it as it shows you that the path of least resistance still seems

to be higher, even though maybe it gets a little tougher once we're through earnings season and you have most people pretty bold up. I thought what was really interesting this week was it was perhaps the underscoring of something that we already knew, and that is that the AIA trade is just moving away from the old characters. We had Nvidia report, very good numbers. For the week, it was down, though, 4%. Sox is up 5%. Everything else in the socks managed to move higher in a distinctive way.

I mean, Arm was up 40 plus percent. Intel was up 10 percent. I mean, it's just remarkable that this sort of rotation away from Nvidia continues even after its quarterly report. It really is true. And, you know, it's almost like, oh, NVIDIA, that's so 2023, right? We gave you the $5 trillion valuation. It's done. And the market really does keep surfing to the next wave of scarcity, pricing power,

you know, kind of upside leverage to the trend. We'll see if there's another one after the ones we've already exploited here because now we're reaching for quantum, which is years in the future and not tomorrow. All right, let's get more on today's big movers. Christina Parts and Nevelis is here with those. Well, like you guys talked about, it was a lot. week where earnings really kept the bulls in control and the Dow inch to a record close as investors just kept buying the dip. Midweek, that showed up clearly with AI hardware. You guys mentioned

Da Arm posting double digits AMD as well on optimism around a CPU rebound and also growing demand for AI devices on the edge. That strength extended into AI PCs with Dell hitting a record high after a blowout report from competitor Lenovo. There's also a wave of analyst upgrades and momentum from its Vegas event earlier in the week where the company showed off. new servers and also spoke about their AI factory demand. HPQ, also up about double digits. You had a competitor Super Micro catching a bid today too, but healthcare took the weeks top thought led by names like Mark after positive lung cancer study results. And there were also some big single stock movers I want to just go through Estee Lauder jumping roughly 11,

almost 12% after dropping a potential deal. And then you had Reddit that fell on meta-competition concerns. And lastly, Ford rallied on a new battery deal, putting the stock up more than 10% on the week and up 23% just in May so far. Christina, thank you. Christina Farton-Evelace. Oil prices down significantly this week, but still at very high levels heading into Memorial Day weekend. Pippa Stevens has that story. Pippa. Good. Hello, Melissa. So oil is down 8% on the week as the market reacts to the perception of maybe some progress on a deal, but heading into Memorial Day weekend, consumers very much feeling the impact of higher crude prices with the national average for a gallon of gas

hovering right around a four-year high. Prices at the pump are now up more than 60% since the beginning of the year and an increase in demand over the summer could perch them even higher. Now, all told Americans have spent an additional $40 billion on fuel since the war began or $300 per household, that's according to Brown University. Now, if traffic does not pick up in the Strait of Hormuz, the national average could be heading towards $5 per gallon, especially with inventories rapidly depleting and the latest inventory report showing U.S. gasoline stocks down for a 14th straight week. On the flip side, if the U.S. and Iran reach a deal, oil will drop, with gas prices following at a bit of a delay. But we probably

won't be going back to the pre-Hormuz crude level in the 60s anytime soon, thanks to an added geopolitical risk premium, as well as the need to refill those inventories, all of which means that the sub-3-dollar national average is not looking likely in the months to come. Guys? Meantime, Pippa, this week we had a big jump in terms of rig counts. It was actually the biggest jump since April 2022, and I'm wondering how that will impact the oil picture. I mean, I'm assuming that a lot of this is done

because they can sell into very high prices and make more money. Yeah, so the rig count is a very important indicator, but it is a leading indicator. And so when producers decide to boost their rigs, then it typically means you won't see any production coming online, for another call it three to six months. But we have seen an uptake in drilling. We have seen some players, including Continental, say that they want to increase their output. It has been focused more, though, on the independent names as well as some of the private players versus the larger names like

Exxon and Chevron who have really stuck to their, to their CAPEX plans and to their, you know, to their growth targets that were released prior to the, to the war. But I think what we will start to see, what I should say is that we should start to see if we start to see those rigs actually being fracked because that will be the indication of whether or not we're going to see a meaningful increase in production versus producers anticipating that maybe we could see prices higher for longer and so deciding to drill now, but then staying on the sidelines before they actually bring those up, bring those wells up to production levels. PIPA thanks. PIPA Stevens. Inflationary pressure from those high energy prices will play a big role in the Fed's next move, a move that will come under

new chair, Kevin Warsh, who was sworn in earlier today. Warsh will be the 17th chair in takes over at a time where rates are rising, inflation is moving higher, and consumer sentiment is at lows. It also comes at a time when the independence of the Fed is being questioned. President Trump saying today he wants Kevin Warsh to be his own leader. I want Kevin to be totally independent. I want him to be independent and just do a great job. Don't look at me. Don't look at anybody. Just do your own thing and do a great job. Okay. Warsh has been critical of the central bank in recent years for what he called overreach, along with overextension of crisis-era policies.

Here's what he had to say about his vision for the Fed. Our mandate at the Fed is to promote price stability and maximum employment. When we pursue those aims with wisdom and clarity, independence and resolve, inflation can be lower, growth stronger, real take-home pay higher, and America can be more prosperous, and no less important, America's place in the world more secure. I will lead a reform-oriented Federal Reserve, learning from past successes and mistakes both, escaping static frameworks and models, and upholding clear standards of integrity and performance. Let's bring in Matt Peterson, senior economics writer at CNBC. Matt, great to have you here. What we also didn't mention was that it's a very divisive fed that he is stepping into, especially given Governor Waller's comments today, it really indicates a more hawkish tone. I'm wondering how you think he's going to navigate. He doesn't have much time here. I mean, it's like a less than a month till his first meeting.

I think he's probably grateful for that couple of weeks that he's got, right? You know, he doesn't have to start off talking in public today other than the little bit that we heard from him. So, yes, he's got a big, big, tough job ahead of him. And I think the question is, how much rope does he get from the President of the United States? We heard him getting a little bit today. Does anybody think that's going to last for very long? I don't know. And then he's got to somehow get all the rest of the members of the FOMC on board with him.

And as we have heard from Waller and others recently, that's going to, to be really, really difficult. But, you know, Kevin Warsh has had eight and a half years to get ready for this since the last time he was up to. And a lot of that maybe is going to have bearing on what he might characterize as the mistakes that he alluded to. He believes the Fed has made in the past. I just wonder on a policy basis from the immediate stretch of months ahead of us. I've been making the case that he has cover here by the data actually being pretty clear in an inflationary way, by the composition of the committee, by Powell being on that committee, by Treasury Secretary Besson, making noises about how well, we can't cut rates right now, but down the road. So in other words, it feels like there's

room to maneuver. And I guess that's the question. Do you think he will actually be able to just have a free hand for a while? I do. I think he is going to be in a pretty decent position. There's a lot of sort of worry about how he's going to get in trouble and sort of get laughed out of the FOMC. Remember that the last time that we've heard him talk about his actual views about rates was last year. He has not been talking in public since 2025, as far as I can remember, aside from little bits he did on the confirmation and the little bits we heard today, none of which got into any depth on his economic views. So he's had some time to think about the data and is going to be able to come out there with a fresh view. The other part of this is that this is the most persuasive guy you have ever met, put that way.

You get in a room with him, you're going to listen to him. And I would include the president of the United States in that category, right? That is the other place where I think he is going to be trying to make some room is getting the president office back. And it sounds like he's already having some success at this, right? I mean, I think we would be foolish to expect Trump to wait forever. But he has less power over the Fed chair right now than he has had at any other point in his presidency because he has made his choice. Also, the legal system is working against him on some of these other challenges. So, Warsh, I think, does have some room to maneuver.

How do you think about reform-minded Fed? what sorts of reforms? And what kind of data could they use instead of the data that they are using now? Well, the data question is going to be a big one. Warsh has said at the confirmation hearings that he's going to start a kind of data project at the Fed, where they talk to the private sector about all the different things that he wants to hear about. We don't know exactly what he's talking about there. We'll find out pretty soon. But the rest of it, communications, right? I don't think we're going to get a dot from Kevin Warsh in June, for instance. That would normally be when we would get a dot plot from the rest of the Fed. He's signaled pretty strongly. He's not interested in doing that. We will see cutbacks and how much we hear from the rest of the Fed, from the regional bank presidents and from the governors. So this will all start coming into place, although I don't think it's going to be like a day one, flip the light switch sort of thing.

I think it's going to take some time. As an economics writer, I'm wondering how you think about having no dot plot, for instance, and having sort of we've come to come used to come used to, So much transparency surrounding the Fed, whether it be all these Fed governors talking, the dot plots, etc. How do you think about scaling back that and actually putting it behind a curtain again? Okay. I would not miss the dots personally. I wouldn't either personally. But transparency is good, right? We want to know what the Fed is thinking. We want to know what the members of the FOMC are thinking. And so we want to get that out of his head and out of the rest of the, you know, the voters' heads one way or another. But, you know,

the forward guidance was a tool that was created in the wake of the financial crisis. when they were trying to tell the markets what they were going to do at this weird time when it was really unclear, not in that time anymore. You know, I don't think it's really going to be a great loss if we all of a sudden stop having these sort of commitments that nobody really believes in put out there for a while. But if that comes with no longer learning really what the Fed is thinking from moment to moment, that's going to be tough. And that, you know, could mean more market volatility. Yeah. Less information means less efficiency, all else being equal in the market. So, Matt, good to talk to you. Thank you.

All right, well, the market is finishing a strong week on Wall Street, the S&P 500, posting its eighth straight weekly gain as we were talking about the Dow hitting an intraday high as well. All three major averages are significantly higher month to date, despite the bullish sentiment and equities. Could the real opportunity be in bonds? Is it okay to ignore bonds? Should we recall them again? Joining us now is New Edge Wealth Chief Investment Officer Cameron Dawson. Good to see you, Cameron. Good to see you. So just in terms of what your kind of gauges are telling you about where we've come.

come to in the markets. I mean, fair to say it's no longer a hated market. It's fair to say the really strong fundamental story is well understood. But that also means that a trending market can keep trending. Yeah. And I think it is very clearly a bull market, not just in prices, but certainly in earnings. And earnings estimates continue to go up, not just through the earnings season, but as we've seen after. And we've also seen a big shift in positioning, which of course has been a really important driver of this upside. You've gone from institutional investors being underweight coming out of all of the around war fears to now being overweight this market. You have things like the put call ratio being at some of the lowest it's been over the course of

recent history. That just tells you that investors are clamoring for risk and they do not care about downside at this point. So clearly it's a risk on move. And I think the question is where we go from here is we typically do see more volatility as we get into summer months, mostly in a mid-term election year. What do you think happens when there's some sort of cease, beyond a ceasefire, maybe the end of the conflict? Do we see a reversion? Do we see money come out of the AI trade and go into the other parts of the market?

I think it is exactly that where we could see that beloved broadening out finally start to happen again. The rally that we've seen coming off of the lows has been so very narrow in those AI infrastructure names and has left a lot of this market behind. Well, at the same time, we've had some kind of. kind of risk off movements under the surface. Look at your equal weight discretionary versus staples. That's been rolling over really sharply and pricing in the fact that high oil prices hurt the consumer and thus are weighing on some of those cyclical parts of the economy. So if we do see a ceasefire, those are the areas that we think would snap back the most.

We mentioned bonds. Obviously, it's been considered more in the risk factor part of the equation in terms of could yields break out from here and kind of spoil the party. But how should an investor be thinking about them? Oh, we want to take a look, by the way, at the CBO flows. Because military veterans are ringing the closing bell at the CBO in Chicago in honor, of course, of Memorial Day. Thank you for your service, all of you out there. So this ends a regular trading day for options. And so, you know, historically, you're kind of going to earn your initial yield over a cycle in bonds. But how do you think about them as whether they can diversify away from equities or not? Yeah. So first from an equity perspective, I think we have to appreciate that there's

two different reasons why bond yields can go up, good reasons and bad reasons. The good reasons are because you have things like economic surprises or better economic data pushing upward pressure on yields. That has played a factor in this upward move on yields that we've seen recently. Then the bad reasons are things like higher inflation, tighter Fed policy, fiscal dominance concerns, certainly what we're seeing globally. And so we've actually had a bit of a mix of those two, the good reasons and the bad reasons behind this recent bond move. We actually nibbled at bonds earlier this week and nibbled at duration. Reason being is that in the last two summers, you have seen a softer patch of economic data. Labor data has weakened slightly. You've seen economic surprises turn lower.

that's created a summer rally in bonds. So we thought now was a good time to put some capital to work. It sounds like that's a trade, though, Cameron. I mean, do you think that that's the, that's the investment to hold? Well, so our base case for the tenure, for example, going through all this year was effectively a wide choppy range, 4-6 to 4-8 on the upside, sub-4-percent, slightly sub-4% on the downside. So we'd say we'd be buyers at bonds when yields are close to that 4-6-48 level, sellers of bonds when it gets down to the lower end. So it's not a hold. It's a hold. It's a trade. Cameron, thank you. Good to see you. Cameron Dawson. The increased interest in private companies leading NASAC private market to make a deal with

polymarket, but it comes as predictions markets face increased scrutiny over allegations of insider trading. We'll dig deeper into the potential problems with the prediction markets. You're watching closing bell overtime. Live from the NASAC market site. New scrutiny of prediction markets today. House Oversight and Government Reform Committee Chair James Comer announcing on Squatbox today an investigation into insider trading on CalShe and Polymarket, the Republican congressman citing a number of trades made on the platforms tied to elections and related to military action in Venezuela and Iran. Here's what he had to say. So we want to not only launch investigation to see how widespread this has been thus far,

but also to prove a case that we've got to pass some type of legislation. And I think it wouldn't be too much to ask to say members of Congress can't participate in the predictions market, nor can government employees or people in the president's administration. Calci responding, saying, quote, as a U.S. regulated exchange, we are proud of our comprehensive protections against insider trading. We look forward to engaging with the committee and its members about the systems and processes

that we've spent years building. Polymarket has yet to respond. The probe comes as Minnesota becomes the first state to ban the platforms. And, you know, obviously they become so big, so fast and encompassed such a range of activity that clearly you're going to have, yeah, a lot of, hesitation. It also seems like it's operating through multiple loopholes here. Especially polymarket, which is overseas, really, and not domiciled here in the United States. So that's, that's an additional concern. I mean, it's interesting what they'll turn up.

You know, this committee is requesting documents surrounding, you know, your customer sort of safeguards and how they actually crack down on suspicious trading. I don't know if that's going to yield anything. But in the meantime, time everybody else is going full steam ahead because this is where the money is being made at this point by the exchanges, not by the average people, by the way, engaging in the trades. Without a doubt, I also think from an exchange point of view, these things where you could have somebody like, you know, a military official who says his privilege information are going to make money front running an actual action, that's really not where the volume is. Like, it's, they're

sports betting. I mean, it's still predominates in terms of what their business is dependent on. So they might as all take the high road and say, yeah, we want to stamp out any of that suspicious stuff away from the core business. Yeah, but they're not doing that yet. No, no, no, but they want to say that they're willing to do that. Right, right, exactly. Speaking of the prediction markets, Polly Market announcing it is launching prediction markets on private companies for an exclusive agreement with NASDAQ private market, which will provide data on valuations, IPO timing, and secondary market activity. Joining us now to discuss as NASAC private market CEO, Tom Callahan. Tom, great to see you.

Thank you, Melissa. Thank you so much. having me. So we were just talking about this investigation to polymarkets and in Cal Sheen. I'm wondering if you're concerned at all that you're handing over information to polymarket and potentially this is a market that's not regulated enough to prevent insider trading from happening. Melissa, to me, this is a story of access and you really have to zoom out as it relates specifically to the private markets, which is my area of expertise. This is a market that. has grown exponentially in the last 15 or 20 years. And it's really part of a bigger story that gets down to fairness and access and how millions of investors are going to invest for

retirement. You know, if you go back 25 years ago, we had 8,000 public companies. And after some regulatory changes in the early double-Os, you know, we have half that today. If you go back a decade ago, you had about 175 unicorns. Everyone knows what a unicorn is, a private company worth a billion dollars. Today we have 1,500. And if you look across the most transformative sectors in our economy, space, AI, defense tech,

biotech, robotics, the leaders are all private. The problem is that as we're seeing with this new wave of IPOs we're about to see, you basically have to become a trillicorn before these companies go public. And that means for the average

investor, there really is just no opportunity to get access to these names. You know, I think back to when Amazon went public in 1997, three-year-old company with $16 million in revenue, that company would never go public today. So there's a lot of innovations that are happening in the market. I think Polly Market is one of them. We are their exclusive data provider because we are the sort of benchmark reference data and valuation provider in the private markets. So we want to make sure that any of those contracts are settled off the most valid press.

So I'm sorry, let me get this straight. So you're saying that the answer to giving access to individuals to these unicorns that are going public now is to open up the predictions markets to this. Like that is the way. It's not to make some sort of other product based off the private market trades for individuals. It's one of many solutions. And at NPM, you know, I think the best way to describe it, Melissa, these markets have outgrown their infrastructure. And that's what we're trying to do at MPM is build essentially efficient infrastructure that in every other asset class other than privates is really taken for granted. You know, transparent data. If you want to know the price of a public stock, you can find out in three seconds on your phone. Private markets, there is no public trade of valuations. So we, through a lot of data science and AI, are able to pull together amazing valuations for private companies. So that's a big part of it.

efficient trading, efficient settlement. The big story is how do we make the private markets more efficient through infrastructure and technology? And, you know, the polymarket solution is but one, but I would not say it is the answer. It is part of these markets evolving and growing. I would think that private equity firms and venture capitalists would say that the infrastructure is not being outgrown. They're just private markets are deeper and bigger than they've ever been before. You have thousands of companies in funds, private equity funds, buyout funds, and you know, a private company like Open AI can do a $90 billion raise, which was unprecedented and, you know, not too long ago. And I just wonder if you're ever going to be able to bridge that.

Now, clearly opening up access to more people, one, that companies are still private, maybe that makes sense. But yeah, it's arguable. That side of the business has become more able to handle that size. You're exactly right, Mike. And, you know, I think a big part of this story is, and I think the question that needs to be asked, have we overregulated the public markets? You know, how come companies are waiting until they're worth a trillion dollars to IPO? And do we need to go back and look at some of those regulations? You know, we're all products of our incentives, has the public markets than a disincentive to go public? And do we need to look at the public markets, as well. But to your point, Mike, the private markets have grown up and you have companies able to

raise astonishing amounts of capital. You mentioned OpenEI. I think their last round was $122 billion. So the private markets have grown where you don't need to go public to raise capital. You know, the IPO used to be a capital formation event. You would go public in order to get capital to go your business. Now it's really evolving to be more of a liquidity event. And that's part of the evolution of both the public and the private markets. Yeah, and I guess the risk there is that public investors become the exit liquidity and most of the value accrues before they get a shot at it. Tom, good to talk to you. Thank you very much. Tom Callagher. Thank you for having me.

All right, record highs today for both the Dow, 30 of the biggest stocks, as well as the Russell, roughly 2,000 smaller ones, but what is the fair value of these indexes based on earnings? We're going to dig into that next on closing bill overtime. day of gains for the quantum computing stocks continuing yesterday's moves when the stocks jumped after the Commerce Department announced an investment. Look at those week-to-date gains nearly 50% for Raghetti. The Cains and Quantum and other momentum stocks comes as bond yields back off their highs. So Mike is taking a look at the relationship between bond yields and earnings on valuation. Exactly. I mean, there's this perpetual effort to figure out our stocks expensive or cheap

relative to where rates are. There's no fixed relationship here, but there are attempts to figure out what fair value might look like. So this is the earnings yield of the S&P 500. That's forward expected earnings divided by the price against the real treasury yield, real 10-year treasury, which is inflation-adjusted. So when this is very high, it means stocks are very cheap relative to bond. So the earnings yield is very high relative to rates. So there you have the low in 2008 and then 2011, and this is 2022. And now it looks like we're getting on the expensive side. So actually a little bit less so because earnings estimates are going up, but that's the real trough over there. The late 90s was kind of Exhibit A for when stocks, in theory, we're not giving you value, but most of that

period of time, stocks were going up a lot, right? So it's not like in a given one or two year forward period. It's going to tell you what to do. It's more just kind of the relative opportunity between stocks and bonds. And so obviously, if rates go up a lot, if real rates go up a lot, this is going to look that much more expensive unless earnings go out. And the key here is it's relative. It's not, it doesn't tell you about the opportunity in stocks per se. Exactly. And stocks always looked kind of really reasonably valued when we were in zero interest rate policy.

Obviously, there's more good looking at there. All right. Time now for our CNBC News update with Julia Borson, Julia. Hi, Melissa. A federal judge in Tennessee today throughout an indictment against Kilmar-Abrego-Garcia, the Salvadorian man mistakenly deported by the Trump administration last year. He had been charged with human smuggling. The judge granted his request to dismiss the criminal charges on the grounds that the Justice Department's prosecution was vindictive and selective.

Shares of Reddit were down 6% today after Meta released a standalone test app for Facebook groups called Forum, which will host discussion groups just like Reddit does. Reddit stock is down about 40% this year, despite reporting its seventh straight quarter of growth in April. And President Trump announced today that. he won't be attending his son Don Jr.'s wedding reception to celebrate his marriage to socialite Bettina Anderson. Trump congratulated the couple on truth social, but said, quote, circumstances pertaining to government won't allow him to attend. The New York Times reported this afternoon

that the couple actually married yesterday in Florida. Back over to you. All right. Julia, thank you. Julia Borson. Well, it is Memorial Day weekend when many people like to throw a steak on the barbecue, but things may cost a little more this year, whether you eat at home or head out to a restaurant coming up. We'll talk to Kava Chairman Ron Shake about those rising prices and the impact on consumer spending. Overtime, be right back. Welcome back to closing bail overtime, live for the NASDAQ market site. Stock's closing higher today. The Dow up nearly 300 points. That is a record close. Smaller gains for the S&P 500 in NASDAQ, the rustle up nearly 1%. On the week, more green. The S&P 500 higher for the eighth straight week, a gain of 1100 points

or 17% over that span. Well, any grilling you do this Memorial Day weekend will cost you more, especially in the meat aisle. Ground beef, steaks, and hot dogs are all up double-digit percentages year over year. This beef sticker shock comes at a time when red meat is gaining in popularity as well, sending demand through the roof as cattle supplies hit near record lows. Ground beef prices recently hit $690 per pound and is a new record. Two food bright spots for consumers, the chicken and the egg. Prices of both are falling versus last year.

I mean, in, you know, food commodities, usually the cure for high prices is high prices, ultimately, but it takes a while when it comes to refilling the cattle herd and all the rest. Like growing a whole new cow. Exactly. It takes some time. Not the same as going through the hen cycle. Yeah. Good news on the egg front and on the chicken front. You can't grill an egg though, course.

But I would suspect that a lot more cookouts. You're going to see chicken. You would think so. Different cuts. we keep hearing that from restaurants, you know, going down a little bit and the switching all the I was looking to at a previous high, like in the mid-2010s for beef, like ground beef was like more like 420. And even if you adjust for what inflation is done in general since then, it doesn't catch up to what it's cost today.

Well, food prices, of course, a big issue for the restaurant sector with companies like Kava, Chipotle Shake Shack, and Yum recently noting rising costs in their earnings reports. Elevated prices have dented consumer sentiment, which came in at the lowest level on record today. So what does it all mean for the restaurant sector? Joining us now in an exclusive interview is Ron Shake. He is at Three Holdings, CEO and managing partner. He is a founder and former chairman and CEO Panera Bread and current chairman of Kava. Ron, great to see you.

Thanks for joining us. Been a while, Melissa. How are you? It has been a while. I know you say that it is a K-shaped economy and that there's not one consumer, but still overall, the environment is such that it's a tough go for the restaurant sector. in all the stocks, whether you cater to the higher-end consumer or the lower-end consumer, they haven't done well year-to-date.

So I'm wondering how you characterize the stretch that we're in in the industry versus past periods of inflation. Look, here's the reality. multiples go up and down. Volatility is part of it. But the reality is those companies that are building a long-term consumer proposition, a better competitive alternative, went over the long-term. When I ran Panera, I ran it for 27 years.

years. Its last 20 years, its last two decades as a public company, we delivered the highest returns of any public restaurant company over two decades. But no single year was at the best performing stock. The same thing applies. You take a company like Kava, we went public. We were in public in the low 20s. Today we're trading in approximately 80. It's up strongly. It's certainly been among the best, if not the single best restaurant IPO of the last half decade. That's the kind of way in which you build a company. You build it over the long term with a better consumer proposition. Ron, is casual restaurants not more punishing, though, in a competitive sense out there?

I feel like you always see these chains that really seem to be hitting on something, and the stocks do well, and they're very highly valued, and then something happens. taste change, maybe they run out of easy expansion opportunities, and they come on hard times, whether that's even like a wing stop, which still seems to be in decent shape, but at one point they could do no wrong, and now the stock has actually had a big pullback. You know, Mike, we have a $2 billion investment vehicle, and we invested in Kava when it was two restaurants. We led its acquisition of Zoe's, a public restaurant company. We're invested in other private companies, L-99.

Tate, Life Alive, Honest Greens in Barcelona, in Spain. Every one of these companies has produced and built value over the long term. Why? Because they're focused on building a better value proposition. Value isn't simply price. It's the quality of the experience. We're invested in a company called BJ's, BJ's restaurants, a public restaurant company.

We own approximately 10% of that company. That company has been up because it's improved. quality and yet it's appealing to a middle income consumer. The value proposition is not simply about price. It's also about the quality of the experience. We all talk about Chili's. The Chili's transition. Stock that's been up very strongly. What Kevin did is he delivered a better experience by focusing on quality, by focusing on a number of products, and what he did is he ensured that his own teams could do a better job. Look at the restaurant industry, it's the second oldest industry in the world.

You know, it's been around. It's about hospitality. And the truth is there's been winners and losers. In any given year, there's a fad. But what you care about as an investor, what we care about is building sustaining brands that last for the long term. Sure, but there can be rough patches

in that long-term trend, Ron. And I'm wondering if there is a certain point at which you say, you know, oil prices or gas prices are here, and if it stays here for another month, that's going to be difficult for the consumer, whether your high end or low end. We're long-term investment. You take Kava. We invested almost 10 years ago in a category called Mediterranean.

We then help Kava become the dominant player in that category. The restaurant industry is the industry of winners take all. Kava is winning. It's now a $10 billion company. It's winning because the market perceives it as the dominant player. Market believes it will have 1,000 plus stores. the market believes it will continue to deliver cops. On any given quarter, in any given year, there will be ups and downs.

There will be things that affect every restaurant company. Prices go up and down. Labor costs go up and down. Policy changes. But the reality is that smart management teams, and we have a great CEO and Brett Shulman, smart management teams like Brett, adjust to the conditions. And they continue to deliver a better consumer proposition.

You cannot make broad statements about the industry, what you want to look at is over time who's building and running a better company. Ron, I mean, given the fact that we've kind of been through this full cycle at a time when, you know, delivery to the home has become so normalized and so many restaurants now obviously have that as a big part of their business, is it harder to pull people into an actual restaurant, get them to stop, you know, on their way to somewhere else, or is it same as it ever us. Well, no, look, I think it's, we often in the media and generally make these broad conclusions. Yes, delivery is up. But yet delivery in most brands are 15, 20, 25% of sales. 75% of sales are not through delivery. And the reality is if the entire industry is focused on delivery, as a contrarian, that's exactly the time I want to be investing in in store. You know, you can take Starbucks.

Starbucks made this dramatic transition in the face of COVID to delivery only. They turned themselves into an adult beverage bending machine. You now have Brian Nichols who's come in and has to reassert what Starbucks used to be, which is third place. What you don't want to do when you're building a brand, especially a brand of scale with hundreds, if not thousands of stores, is be swinging your brand on the fat of the year up and down. What you want to build is that the consumer proposition, that lasts for the long term. And that's what we're doing at Kava and in every brand that we're

invested in. Last quick question. What's your favorite Kava menu item, Ron? Oh, a crazy fed. If you got to have the crazy fed. It's extreme. And also the grilled meatballs. The lamb meatballs are wonderful. All right. Almost in their time. Ron, thanks. Always good to see you. Ron Shaig. Good to see, Melissa. Take care of me. All right. We've seen a large number of space-related ATFs launch in anticipation of SpaceX's IPO. But space isn't the only category we're seeing a surge of ETFs. We're going to have the details on this trend straight ahead. And Texas Instruments, one of the top performers in the S&P 500 today closing at a new high. Seaport securities upgrading the stock to buy from neutral, setting a price target of $400, citing increasing

AI data center demand for its chips. Stock closed up 3.6% at 309. We'll call it the ETF Everything Boom. According to Morningstar, in fact, set roughly 466 new ETFs launched so far this year, pulling in $62.3 billion in assets. More than a quarter of the launches are tied to a single stock commodity or concentrated asset, meaning the ETF wrapper is increasingly being used to package very specific market bets. And right now, one of the hottest is space, as investors await the SpaceX IPO. Six new space ETFs have debuted in the last three months, pulling in $1.3 billion in April, bringing the category to $3.3 billion. The winner has been the Team of Space Innovators ETF, ticker NASA, which took in about $1.27 billion

in just seven weeks. That's more than the original space ETF, UFO, has gathered in roughly seven years. I mean, obviously, this is a lot of sort of opportunistic, sort of gimmicky. Let's just throw it up against the wall and see what six. Jason's why the great personal finance writer at the Wall Street Journal has a funny piece today about this, which I was, you know, now informed of the Tuddle UFO discovery ETF, which is a basket of companies which supposedly will benefit if in fact it is disclosed by the government that UFOs exist. Which is great. Like who is thinking to themselves, I wish there was a vehicle where I can know. If only. And here it is. It's come true. Yeah. I mean, and so I think the,

The other part of this is that a lot of ETS get shut down every year because they don't get the critical massive assets. I think it was like 150 to 200 last year shut down. There's like 14,000 ETFs globally right now, way more than the number of stocks. So it shows you that it's the preferred vehicle. There are reasons for it. But the original reasons for it, which was low cost, diversification, tax efficiency, that's mostly applies to indexes. Yeah. Not to these thematic sense.

The expense ratios are high for these very specialized ETFs could be, you know, 0.8%. Completely. Multiple of what a vanilla index is. Exactly. Of next, find out what's at stake for Disney and the Star Wars franchise of this weekend's release of the Mandalorian and Grogu. Welcome back to overtime. The latest Hollywood blockbuster may end up not even being a movie. A source telling CNBC that IMAX has had preliminary, preliminary sales talks with entertainment companies through intermediaries. CEO Rich Gelfon told investors he was open to a sale late last year. IMAX generated $1.28 billion in box office sales last year, a 40% jump from 2024, thanks to the increasing popularity of premium theatrical experiences. Gelfand will discuss a potential deal Tuesday on Squawk on the street. That should be very interesting.

Very interesting. Obviously, kind of a levered play on big event movies, which have been a hot street. Yeah, and who could buy it? Netflix, Apple? Yeah, I would think one of the studios might test it or, yeah, like an Apple or somebody like that, who's, you know, tech-oriented and entertainment-oriented. So what he says on Tuesday. Speaking of movies, Disney's latest Star Wars film is opening this holiday weekend,

or Julia Borson, joins us now to explain why it's such a high-stakes moment for Disney's new CEO, Josh DiMaro. Julia. Well, Melissa, the Mandalorian and Grogu is the first Star Wars theatrical release we've seen since 2019. It's a test of the ability to transition a successful TV series to the big screen to revitalize the franchise after a theatrical hiatus. The film has brought in about $12 million from Thursday previews. And while the audience has given it an 88% rating, critics give it just a 63% score, according to Rotten Tomatoes.

And the film could have the lowest opening for a Star Wars film since Disney purchased Lucas film. Mandalorian is on track for an $80 million domestic opening, which would be below Solo's opening in 2018. Now, the Mandalorian has proven a valuable franchise across the company. The show was the most watched original on Disney Plus with over 1.3 billion hours streamed globally, and there were over 13 million Grogu Toys sold in the show's first two years. And Disney's continuing to bet on the Mandalorian. It extended the film into Fortnite, and it introduced a new Mandalorian storyline to one of the big Star Wars rides at Disneyland. So we'll be watching this weekend's box office performance to see if it makes CEO Josh DeMar rethink the franchise's strategy, especially when it comes to that balance between theatrical and streaming content.

Guys? Yeah, Julie, it almost seems as if, I mean, more so than even most Disney products, it seems like the theatrical release is kind of the marketing vehicle for the rest of the company. And I guess what does it mean for, you know, they used to be these super ambitious, you know, Lucasfilm properties where they had to. to move along the epic story and everything else. This seems like a bit of a sideline. This is a little bit of a sideline, and it's also unusual, and then we're seeing a TV show come to the big screen. Usually it's the other way around.

You see a hit movie then be expanded onto TV. But I think there's this broader question here of, you know, a couple years ago. There was maybe a little bit of Star Wars fatigue. Big fans weren't as crazy about the final film in that last round of Star Wars film. So now will we see the extension of the franchise, younger people who loved the TV series rush out to theaters, or are we suffering from an overall decline in the box office? And will that hurt the chances of this particular Mandalorian movie? Disney is still very much committed to Star Wars across the company. But this is a real test of the ability for Mandalorian to have those theatrical legs like other Star Wars films have had. Julia, thanks. Julia Borsden.

I think next year is the 50th anniversary of the first Star Wars movie. So I think they might have something planned for that. that we'll have to see news you can use yes as we go for nine straight weeks uh on the s mp 500 perhaps next week that's going to do it for overtime