Power Lunch - CNBC launches CNBC Cures 1/8/26

Episode Date: January 8, 2026

MCC Global Enterprises' Michelle Caruso-Cabrera joins after her interview with Treasury Secretary Scott Bessent. Jefferies' Sheila Kahyaoglu discusses the defense and aerospace sector. And Sharon Epperson explains how to make your portfolio more tax efficient.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunch on this Thursday afternoon alongside Kelly Evans. I'm Dominic Chu, in for Brian Sullivan this afternoon. Treasury Secretary Scott Besson just wrapped up a conversation at the Economic Club of Minnesota, a wide-ranging interview on everything from Venezuela to the next Fed chair. Our Michelle Caruso-Cabrera moderated that talk, and she will join us momentarily, a contributor now, but still doing some great work on that front. Definitely looking forward to that, finding out more of what he just had to say.

The aerospace and defense stocks are rallying after the president called for a 50% increase in defense spending to a trillion and a half dollars in 2027. That's pushing these stocks to record highs, even as he comes out swinging against some of their salary comp and buyback plans. The ITA, the tracks the space, has Carmen Huntington Ingalls, L3 Harris,

the general dynamics, all hitting new all-time highs. And I believe it's the fifth day in a row for a 52 or all week. 52-week or all-time high for the ITA as well. One top-rate analysts will join us with her top three picks. And we continue to watch the markets with fourth quarter earnings season just around the corner. We've got the big banks like J.P. Morgan, Wells Fargo, B of A, all on deck to report next week. Those stocks obviously been on fire lately, making new record highs day after day.

But earnings are expected to slow this season. With consensus EPS growth of about 9% year-on-year-on-year, still pretty good. But that's a drop from the 15% we ended up with in Q. Now, looking at revenue growth, you can also see about a 7% gain. Our next guest agrees growth could slow down but says, don't worry, he's standing by his year-end S&P price target of 7,800. Also in Kwan is the chief equity strategist at Wells Fargo. Welcome.

It's good to see you again. Thanks, right? So, you know, the bar is much lower for the earnings season that we're about to go through, but how do you expect us to, it's almost like a, how do you think we'll experience earning season overall as a positive, as a rocky one? What do you think? Yeah, I mean, I think the optimism has to hold. given the recent rally that we saw.

But I think some of the weakness that we might see in Q4 is going to get overlooked because everyone knows that earnings are going to decelerate this earning season. And that's still good. I mean, 8% year on year, that's not bad, right? Yeah, yeah, that's not bad. That's actually faster, stronger growth than what we usually see, which is about 6%. So it's above trends still. But the outlook is more important.

And given that we might be on the cost of potential reflation cycle and potential demand recovery going forward, I think some of the weakness might get overlooked, but the outlook has to hold. But overlooked for a good reason, right? This is a transitionary period, kind of before we get into some of the tailwinds, macro-wise, from the one big, beautiful bill, fiscal kind of tail-wins, monetary, possibly tail-wins from the Fed. So, you know, we joke about sometimes how this is the most important earning season since last earning season.

This time around, just how much as a strategist do you want to, say, discount some of the stuff that we might see because we are going to see some sequential deceleration in earnings growth. Yeah, I think you could discuss some of the weakness, like I said, in Q4. One important aspect in the market, though, that has to hold is really the AI CAPEX, because there has been a big question mark on what AI companies are going to do in terms of their CAPEX. I think it's a little too early to call a peak in AI CAPEX. Obviously, there's that reaction function shifting in the market that CAPX is no longer rewarded. But the thing is, this isn't the first time that the market is pushing back on CPEX.

We saw that in 2024, too. And I think this is on AI arms race. I think cutting Cappex is the last thing that hyperscalers are going to do. And I think AI Cappex is going to continue. Yeah, so what does that market look like then, you know, as you kind of start getting a feel for that we come riproying out of the air with metals prices are soaring the memory stocks are soaring. So certain parts of the AI trade, NVIDIA, you know, kind of a little bit more choppy.

But what's the early read to you? What does this year feel like it's going to do? Yeah, I still like the reflation side of things, given the fiscal tailwinds that we're going to see, and we actually might be entering into a restocking cycle. So we saw the first positive reading on the inventory cycle back in December in, like, three years. So I think companies are sort of waiting and see what happens to terrorists tomorrow. It's funny because last hour, Brian Reynolds was talking about this. He said, people don't understand the inventories are still so high, and they've been that way for years.

So you're saying we're finally getting reads that, you know, inventory's been pared back. We've kind of grown our way out of them. And companies can start manufacturing again and all the, I think I saw the Atlanta Fed tracking number. Is it over 5% right now? I mean, this could actually be a pretty big number once again. Yeah, I think inventory levels are now normalized after three years of destocking. And I think there's a little bit of wait and see approach from the companies

before they start restocking on what happens to terrorists. We have the ruling potentially tomorrow. So I think after that, companies might start to restock again, and that's going to kickstart the manufacturing cycle. Oh, son, just because you open the door, I'm going to step right through it. But tariffs are a big variable right now, specifically what the Supreme Court may or may not do with AIPA and everything else. From your standpoint, as you look out towards your forecast and your modeling, what exactly is going to change, what variables will move around based upon the headlines that come out of the Supreme Court vis-a-vis tariffs? Yeah, so I think a lot of that optimism has been pressing already.

So if you look at our tariff Refund Beneficiary Basket, it's up about 14% since the hearing back in November when the S&P was only up to 2%. So massively outperform, I think there's a lot of optimism into that ruling tomorrow. So we might see seldom use event, but I think going forward it's going to get more tricky

because it also depends on what the administration tries to do afterwards. If they try to put tariffs back in using other measures, then it could potentially create more uncertain But I think there are also going to be sectors that may not be seen as strategically important from the national security standpoint where tariffs are just going to go away if those get overall tomorrow. And it's going to be very beneficial to those companies.

I don't think companies are going to necessarily lower prices just because terrorists go away. I think they're just going to keep their prices there. Costs are going to come down. Margins are going to expand. What industries and what sectors, what kinds of companies are going to be the most impacted? Yeah, I think a lot of consumer companies, as well as certain industrials and materials companies. All right. 5.4%.

There you go. Is the Atlanta? That's the tracking number right now. Now, obviously, this thing flies around, you know, sometimes it's way. But 5.4% after what are we printing in Q3? 4.3 or something? Is this real? That's really good, isn't it?

Yeah, yeah, for sure. All right. All right. Oh, Sung, thanks. Good to see you again. Thank you. Thank you. All right, as we mentioned, Treasury Secretary Scott Besson just finished up his

appearance at the Economic Club of Minnesota, where he covered a large number of topics regarding the state of the economy, the Trump administration's desire for lower interest rates, and how the U.S. will navigate the ongoing situation in Venezuela. So joining us now to break it all down is the woman who moderated that wide-ranging conversation. Michelle Caruso-Cabrera, she's the CEO of MCC Global Enterprises, also a CNBC contributor. Michelle, there's a lot to unpack here. So maybe from your standpoint, as the person who did the interview, what were the highlights for you? First, I was very interested to hear what Treasury's involvement in Venezuela. I knew it had to be extensive because it's Treasury that imposes sanctions.

If the oil is going to move in Venezuela, the sanctions have to be removed. So him explaining that process, how money is going to go into escrow. And then what was also important, I thought, was he described the calls he's getting from potential oil investors in Venezuela. There's been a lot of skepticism about whether or not the majors were going to go in. And he realizes that because a lot of them have, you know, boards of directors, et cetera. They're much more bureaucratic, but that they're hearing from what you would call the equivalent of wildcatters. People who will go in, they're a little more intrepid. People in the oil industry have been in difficult places all over the world. And he thinks

that they're going to have a lot of interest from those type of investors to go in there and help Venezuela rebuild its oil facilities, which are going to be needed. And he thinks that, you know, in just a few months, there's going to be a big increase if they can get started in the amount of production. The other thing that I thought was interesting was he thinks we're going to see the biggest refunds in history from taxpayers. And once he said it, it made sense to me. They passed the big, beautiful bill.

It's retroactive. But they never did any new kind of rescheduling, new, you know, new withholding, scheduled, et cetera, et cetera. And so there's a lot of items that people are going to be able to reduce their taxes by or actually get refunds, whether it's the lower rates or it's no taxes on tips. And so as a result, he thinks that's going to be one of the biggest in history. And also, he wants to get very aggressive on cracking down on the welfare fraud that we've seen that's happened here in Minnesota and has really caught a lot of the state officials, even by surprise at how widespread it appears to be. Yeah. So I would think, amid all

of that, Michelle, is $50 oil like a real target that they're aiming for? And what happens to the shale producers who are, you know, not going to be thrilled by that? Yeah, you know, he did not, so I didn't ask him that question. I wish I had now that you mention it, but I will say that he's very focused on affordability, which is why they're going to increase the deduction on a new car when it comes to how much interest you pay, etc. Very, very focused on that, supportive of the president's desire to prohibit institutional investors from buying single-family homes. So if the price of oil falls, I'm not convinced that that's going to bother him very much because he's very concerned, just like the president is,

about reducing costs. And so lower oil prices will mean lower prices at the pump as well. Michelle, oil and Venezuela are front of mind right now for very obvious reasons. But maybe not too far behind that is what's going to happen with America's central bank in the next six months. And I know that that conversation had to have drifted at some point towards the Fed, its policies and interest rates. Secretary Besant, alongside others in the Trump administration, have been very vocal about the need for America to have lower interest rates. So what exactly is the new evolution, if you will? It's not exactly revolutionary. But what exactly does Secretary Besson think about that situation right now? Yeah, he thinks the neutral.

rate is somewhere between two and a half and three percent. He was very clear about that. So clearly he wants the numbers to go lower. And the other thing that surprised me was, you know, I thought most of the reporting indicated that there were only two people left in the running, the two Kevin's, Kevin Warsh and Kevin Hassett, but he says no. Actually, there are four still, Chris Waller, and also Rick Reeder, and that Rick Reeder hasn't had his interview yet. And so, you know, the president's going to decide, but he's got to do that interview still. And he mentioned how much money Rick Reeder manages over at Black Rock is the CIO of the Global Fixed Income Fund, and that he was also the only one who didn't have any kind of central bank or, you know,

Fed experience, et cetera. And I asked him if that was actually something that would benefit Rick Reader. And he said, you know, that's up to the president. He wouldn't show his hand there. But but he reiterated that there's still, that there's still four in the running. That's super interesting. And, you know, obviously everyone's trying to figure out, you know, how soon that might mean lower interest rates or, you know, what happens to the long end and so forth. Is there anything else that jumped out to you, Michelle, from the conversation or kind of from the raft of announcements that we've heard from the administration in the last couple of days, which are on housing, like you said, and autos and oil. And, you know, Aeman asking them,

okay, are we done now or what might be next? Yeah, so two things. I did ask him about, so, okay, so the Fed controls overnight rates, the short end of the curve. I mean, I know they muck around in the long end as well, but are you confident if they, they, they, they, they, they, they, they, cut short rates that the long end of the curve is actually going to behave the way that you want. And he said yes, because they've actually contracted, the fiscal deficit is actually contracted, and he thinks a lot of what was driving of the long end of the curve was concerns about too much spending. So he thinks that that is an important reason why that that is going to be just fine when it comes to the long end of the curve, which is, of course, what controls mortgage rates,

what controls auto loans, et cetera. He believes that if they cut on the low end, it will will feed through to the long end of the curve. Yeah, and that may be the case. I mean, the trajectory is in that direction, so maybe at some point it'll happen. Michelle, great stuff. Thanks so much for joining us. Really appreciate it. A pleasure to join you.

Thanks for having me. Michelle Caruso Cabrera. Coming up, defense stocks have been like a seesaw the past 24 hours. You can see Lockheed and RTX falling initially on the Trump announcement about stock bybacks, then rising later on a big announcement about military spending. We'll check in with Jeffrey's Sheila Kailu with her best ideas in the defense. space after the break. Welcome back.

Defense stocks are jumping again today, although losing a little bit of steam right now intraday, after President Trump called for a $1.5 trillion dollar defense budget in 2027. That would be a 50% increase from what we have this year. The defense ETF, ticker ITA, also hitting a new all-time high in today's session. Now, these moves come a day after President Trump's announcement that he will not permit dividends or share buybacks for defense companies until they ramp up production, which put pressure on the group in that session. So let's get some insight on all of this back and forth from someone who covers the entire industry. Sheila Kiyalu is an aerospace and defense analyst over at Jeffries.

We often turn to her for some of these types of analyses. So, Sheila, let's talk about these defense contractors, tailwinds and headwinds from almost the same. social media post. On balance, what do you think? Positive or negative? On balance, it's a positive. I think it's a positive for a few reasons. That $500 billion bump in the defense budget, which we don't know if it'll come in one year, but we assume some of that positivity. But I think the global threat environment is very positive for defense contractors. And I think the executive order for no dividends and no buybacks, because their programs might be lacking. None of the four major primes actually have contracts that are in terrible shape.

Lockheed as an example, although it's relatively underperformed on the F-35. In 2025, it delivered 191 F-35 aircraft that's up almost 60 units from the prior year. So the contractors are actually doing quite well. And internationally, the environment's positive as well. And obviously, the defense budget news is positive, although we don't know how much of that you'll actually see in the fiscal 26 defense budget. Sheila, if you look at all of those defense primes, there There's some of the names that we often talk about. The four or five of them that are always in the mix. We're talking about, of course, RTX, companies like Boeing, Lockheed Martin, Northrop Grumman.

Are there any ones that stand out to you as top picks, given kind of what you know about what the administration's tilt is towards these things, like buyback restrictions and dividend restrictions, executive compensation, and which of these companies are, so to speak, on time or on kind of like schedule with their deliveries? Sure. Well, the executive order, which limits buybacks and dividends, is great for Boeing because they don't have one. So we've been a big supporter of Boeing and continue to support it for its commercial production ramp. On the defense side, we're essentially hold rated across the contractors, but Raytheon would be my preferred play, given its commercial aerospace exposure.

But primarily within its defense arena, it has 44% of its backlog is to international customers where they tend to generate higher revenues. And where we're seeing defense budget spending is primarily in shipbuilding, where you could play. play general dynamics or in missiles where you'd play Raytheon and Lockheed specifically exposed to those areas. So in general, the defense budgets are improving, which are helpful to the contractors and you're seeing some of that share price performance and the market's acting very rationally because the 10% moves at the start of the day, we're irrational because some of their buybacks will have to come back. And the companies in general, the contractors provide 55% of their free cash flow towards buybacks and dividends. So if we cut that, it'll of course cut their earnings.

You know, and Brian Reynolds, I don't know if you caught that interview last hour, Sheila, we were just talking to him because he always tracks buybacks and he said, you know, look, if the president ultimately does this, it's going to be capital unfriendly for these companies. And if he wants the best companies to make the best products and we get the best outcome, then this could potentially undermine those goals. Because that's a big number of their CAPEX that's going to buybacks. So I'm just curious what you make of that argument. I think the defense company contractors are actually very equally split. So they invest about 55% back to shareholders via dividends and buybacks. And the remaining 45% is back to capital expenditures and R&D. So they are quite balanced. But what I think it'll get the defense contractors to do is perhaps become more nimble. What we've seen is the rise of Anderol, companies like Firefly and Voyager, which recently went public. So perhaps more nimble companies will emerge.

Arrow Environment is another example where we have a buy rating. So the defense contractors might even change form with the executive order. Because if they can't do buybacks and dividends, where else do they deploy, given they deploy so much into their CAPX already? Yeah. So I guess, you know, on that front, then the, and even this issue about kind of limiting or capping salaries, you think could that be, do the, do you take any of this seriously? I mean, do you think the companies are going to react to that?

You know, I think limiting executive pay would change the structure of the defense industry. And the U.S. dependence industry, as we've seen in recent weeks and months, is at the forefront of technology. So limiting executive potential and limiting the potential of these companies, I think, changes how much they invest as well. So I think perhaps that's not for the government to touch, but who knows, who am I to say? Yeah. He's like, maybe they'll go private. He said, maybe SpaceX won't even go public now if it's going to be lumped in that group. We'll see.

Sheila, thanks so much for now. Appreciate it. Sheila, Kayaloo of Jeffries. Speaking of defense and Venezuela, big day in Washington tomorrow, the president is expected to meet with top oil execs, including leaders from Chevron, Exxon, and ConocoPhillips. They will reportedly be in the room. Those shares are all up 3 to 5 percent today, by the way. The president's saying American oil companies could invest billions of dollars into Venezuela's

oil sector, something to keep an eye on. something that Dan Yergan and Dom just last hour said was a big departure from anything he's seen in the past. Coming up, the two tech giants battling for second place behind Nvidia to be the second largest company in the world. Mike Santoli has more on those moves after the break. A major shift at the top of the market, alphabet hitting an all-time high today for the first time since. late November. And with this move, it leapfrogs Apple to become the world's second largest company by market cap. At the same time, Apple under a bit of pressure. On a seven-day losing streak now, it's longest since May, a clear divergence between the two tech titans. Let's get to

Mike Santoli with more from the New York Stock Exchange. Mike. Yeah, Kelly, I mean, money is just rushing toward the cleanest perceived story in the AI world. That's one way I would interpret this way that Alphabet has just plowed through its peers to get to the second rank. Look at the three year chart of alphabet relative to Apple. This is essentially capturing the entire chat GPT era. And it's gone from obviously Google seeming as if it was a potential AI victim to being one that has the clearest monetization path. The other thing about Apple is it got to a very expensive valuation for its own history, by its own standards, and it's been hard to kind of get any upside off of that. It also treats as a little bit of a haven play. So when the market

is in an offensive mood and going after cyclicals and risk appetite is high, Apple often doesn't perform that well. I'd also point out just massive back and forth pushpole among the Mag 7 stocks. Both Microsoft and Invidia have surrendered half a trillion dollars in market cap in the last two months. Okay, the last two months has seen the S&P go sideways and the average stock do better, cyclical stocks do better, Mag 7 as a group do not much of anything. So there may be some AI fatigue, maybe there's just only so much capital to go around

to try and put an evaluation on some of these AI hopes and dreams. I also would just want to point out it was only eight months ago that meta was seen as the cleanest story in AI and the one that was going to monetize the fastest. So fortunes and attitudes can change pretty quickly here. Yeah, you wonder if meta, Amazon, and the others out there in the MAG7 are going to find some way to kind of write that story, Mike Santoli. All right, thank you very much. 2026 is going to be a fantastic year to watch those mega-cap stocks.

Now, a quick look at the memory and data storage stocks as well. The Red Hawk Group has gone ice cold with Sandisk pacing for its worst day in nearly a month. In fact, Seagate, Western Digital Sandusk are the three biggest laggards in the S&P 500 right now, although admittedly a big day yesterday. Sandisk has been on a heater recently, soaring by more than 600 percent just over the last six months alone. So keep an eye on that highly volatile memory chip industry. Now to the Treasury markets, the benchmarked 10 years. your note yield holding steady right around, call it 4.14 or 5% today.

We're getting another read on the labor market tomorrow as well. Rick Santelli joins us now with the bond report. Rick, we got it 4.18 for the 10 year. What's on your radar? Yeah, I'll tell you what. These yields are firming up, and a lot of that, of course, has to do with this morning's data as the markets and market participants may be getting a little nervous about the jobs market tomorrow. Let's look at the data points, Dom. Unreal.

If we look at a bar chart of productivity, wow, 4.9%. And I urge investors out there and listeners to look at the revisions on this data series because initially on my data, when it printed, this would have been the best productivity going back to 2020. But there was so many large revisions, that got cut to 2023. Look at the revisions. Now, if we look at what's going on with respect to the trade deficit, I have never seen trade deficits get smaller so quickly. It is amazing. In March of this year, 2025, the trade deficit was $136 billion.

Today, it's at a 17-year low, and it moved to $29.4 billion. That is unbelievable to me, and it really does. accentuate what's going on with Atlanta GDP now. What did we see? We saw exports up and imports down. That is an equation to boost GDP. And indeed, 5.45% hasn't been at these levels since 2009. And I would caution us, I'm sorry, 2023, productivity and all the other metrics I mentioned go farther back.

2023 on Atlanta GDP. Now, and I also caution, we may not get there. These numbers may not happen, but just the fact they shut up, we need to pay closer attention to the growth variable. And how did the markets respond? That's easy. Twos, $10s, dollar index, six-hour chart. Rates moved up, dollar moved up. Dollars up a quarter of a cent right now. We're up three basis points in a 10. We're up two basis points in the twos. And remember, we haven't closed above a 420 yield in tens since the beginning of September, that's the area to pay attention to. Kelly, back to you. It's almost a little too hot, Rick. Almost, but it really never gets too hot, does it?

Rick, thanks very much, Rick Santelli. Let's get to Kate Rogers now for the CNBC News Update. Hi, Kate. Hi, Kelly. Minnesota State Investigator said today the FBI is taking over the probe into the fatal shooting of a Minneapolis woman by an ICE agent. The Minnesota Bureau of Criminal Apprehension said today it no longer has access to case materials seen evidence or investigative interviews. Governor Tim Walls says this afternoon he is pessimistic that a fair outcome will come from the federal investigation. Discraced Hollywood producer Harvey Weinstein is weighing a plea deal on a New York rape charge to avoid going to trial for a third time in the state. A judge shared the news of the potential deal today after denying Weinstein's request to toss out a

sexual assault conviction, which carries a potential sentence of up to 25 years. Weinstein denies all of the charges. And a judge ruled today a fifth federal prosecutor appointed by Attorney General Pam Bondi is serving unlawfully. The federal judge said Albany's top prosecutor John Sarkone III should be barred from any further inquiries into the state AG Letitia James. The DOJ didn't immediately comment, Kelly. Back over to you. All right, Kate. Thank you very much. Coming up, we're going to tell you about a new initiative we're launching today, CNBC Cures. Becky Quick is here with us

after the break to tell us more. Today we're launching CNBC Cures, a brand new initiative focused on raising awareness of rare diseases and improving the lives of those who have them. It's a cause near and dear to our friend and colleague Becky Quick, who joins us now with more details.

Kelly, thank you. Dom, thank you. One in ten Americans lives with a rare disease, half of them are children. My daughter, Kaylee, is one of them. When Kaylee was diagnosed with Syngap 1 six years ago, my husband, Matt, and I knew that our world was about to completely change. When we got the diagnosis, it was just before Kaylee turned three. It was, it was September of 2019. And so it's just before Kaylee turned three and just before COVID. I remember where we were. It's like one of those moments you know exactly where you were.

We were driving on 9W. We got the phone call. We pulled over into an office building right by CNBC's headquarters, and we pulled into the back parking lot. Still know every time I drive by that building, that's the first thing I think about is sitting in that parking lot, crying. but at least there was an answer a little bit.

But the answer was not very clear because it was so we didn't know what Syngap was. Nobody knew what Syngap was. And our neurologist didn't know what it was. I had to look it up and said, you know, you'll probably know more about this. It was a Friday. You'll probably know more about this by the end of the weekend than we do. Yeah, she went into immediate, you know, reporter mode.

immediate. Like she was calling, she was researching, she got people on the phone, she's getting doctors on the phone, we're gathering an awful lot of information because at least finally we have some kind of, you know, direction. Kids who have Syngap, most of them have autism, virtually all of them have seizures,

they have developmental delays. Oh, yeah. There are behaviors that are associated with it, and intellectual disability. That's what's in gap is. We're working on ways to raise awareness for rare diseases like Cayley's and the rare diseases that impact more than 30 million Americans. We figure we've got a lot we can learn from each other, and hopefully this initiative will make those who are personally impacted by rare diseases feel less alone.

We have a new weekly newsletter that you can sign up for by scanning the QR code on the screen right now. There's also a new podcast series, The Path with Becky Quick, where we talk about these issues and much more. We've got an hour-long documentary that will be airing later this year. And on March 3rd, we're hosting the CNBC Cures Summit. It's a live event focused entirely on rare diseases. You can register for that and hear more about our family's rare disease journey at cnbc.com slash cures. You know, it was so striking that you said even the neurologist didn't know what it was. You know, and you're sitting there in the position of saying, well, we don't know what this is.

And you don't know what this is. And like you said, at least you have some resources. And now all of, is that what this is as well? To launch it now, CBCC cures now and kind of be able to bring together a lot of those resources, like you said, whether it's this issue or so many different ones out. So it's crowdsourcing is, in essence, what it is, right? To some extent, we've got multiple things that we want to accomplish with this. One is to bring these communities together so that every one of them doesn't have to go about reinventing the wheel

and making the same mistakes again and again. We can learn from each other. But secondly, the audience of CNBC is a really powerful. one. There are amazing scientific advances that are being made. Things that even a couple of years ago, I didn't think were possible when it comes to things like gene editing, CRISPR, ASO therapies. They're making enormous advances. AI is speeding that up even more. But there's a huge lag time between getting these things from the lab into the arms of the patients. Part of that is because rare is pretty unique. It's unique in that it's not easy to raise either the money or even the patients

that you would need to start a phase one trial. It's very different than what you would do with the big disease, like Alzheimer's or different types of cancer that have lots and lots of patients. So what we need is the legislators, the regulators, investors, biotech and pharma companies, along with the researchers, kind of all working together with the families. And I think CNBC is the unique place for that

because we have the people who can really make a difference. Yeah, I mean, we as a group, and you especially, the reporters that work in financial media, especially those who kind of work around the head. health care sector, have talked about these orphan drug companies for a while, right? We've talked about the business model and construct around what it is like economically to commit resources to solving a problem that only affects a certain part, a small part of the population.

But this is something that can be changed, like you said, by artificial intelligence and the emergence of technology. So what exactly do you think you could see? What are you hopeful for in terms of the path for the coming, say, one, three, and five years. So rare diseases is something that happens less than, in less than seven out of every 10,000 people. That's what you have to be to be rare. Some of these are incredibly ultra rare diseases. Maybe there's five, 15, 50 patients who have this. For Kaylee's disease, right now it's only 1,707 people. It was less than 1,000 when she was first diagnosed with this six and a half years ago. So really small

populations, and you're right, Dom, it's not the type of population where traditionally investors would say, I'm going to put money to work here because it's not profitable. We cover that all the time in capitalism. We know that that's the case. By bringing together similar diseases or maybe finding things that would work from a gene editing perspective on multiple diseases, if you tweak it slightly or in ASO therapies, if you tweak it slightly, then you can create a large enough market, a tangible, addressable market that then suddenly makes sense to investors. Look, I think we need help from the regulatory perspective of being able to streamline the process for rare and ultra rare diseases. I think we need help from legislators to try and make sure the money for research is being spent in the right places, too. But I also think we need to think about this collectively, as we haven't before.

They're not just a bunch of orphan diseases. Collectively, there's 30 million Americans who have a rare disease, and 300 to 400 million people around the globe. And that is a market that suddenly makes sense if you can find ways to tie them together. It's an amazing story. Any parent out there would be. Anyway, Becky, thank you so much. for bringing us. And again, CNBC cures a massive initiative. And we look forward to not just your live event, but the newsletter and everything else as well. Thank you guys. All right. Thanks very much.

We'll be back after this break. All right, welcome back to Power Lynch. Let's turn out to our market navigator segment with geopolitical tensions on the rise. What specific stocks are immune possibly from the turmoil or could in fact benefit from all of the turmoil and uncertainty. Joining us now is Skyler Wynand. He's the chief investment officer over at Regan Capital. Skyler, thank you very much for joining us here. Let's start first of all with the geopolitical tensions and those types of companies that you are looking at that could be immune, so to speak, on a relative basis from the rest of the market. What types of companies are you looking at? We like some of the IT companies like Roblox that is down almost 50%

from its high. If you have kids, Roblox is the super app. It is going to replace YouTube. It is going to replace Xbox. It's going to replace PS3, PS5. You know, almost 50% of American kids under 16 are monthly users of Roblox. And they're using it three hours a day. And so it's the video game company, the super app. They're growing revenue by 35, 40% per year, earning $5 billion in the year. So we love Roblox. We don't really see political tensions really affecting kids logging onto their apps, their iPads or their iPhones to be able to use Roblox and play games. All right. So Roblox is on a relative basis immune, relatively speaking. Let's talk about one of those stocks that you think could actually benefit from all the geopolitical terminal outside

of the defense contractors that we've been talking about quite a bit for the last couple of days. We like TPL, Texas Pacific Land Group, one of the largest owners of land in West Texas. They own almost a million acres of land. They already have revenue streams from land leases. They're one of the biggest water service providers for drillers in West Texas. And they just signed a contract with Bolt, co-founded by Eric Schmidt, the former CEO of Google. to build data centers. So it's really everything tied into one. You have AI, you have land, you have minerals, you have the ability of all of that coming together in TPL that should benefit from political tensions, whether it's onshoreing, whether it's use of fossil fuels like oil,

kind of all wrapped into one. And we think it's fairly cheaply valued. It's down about 40% from its high, trading at a $20 billion market cap, generating almost a billion dollars a year in revenue. Well, Skyler, thanks to shows like Landman, a lot of Americans now think about things like surface leases and mineral rights and everything else. So we appreciate that. Skyler, thank you very much. We'll see you later on. Thank you. Dom, that's literally, just having this conversation with someone the other day, he said, I want to go do that. Anyway, are you paying more taxes on your portfolio than you should be? Well, good news. Sharon Epperson, well, bad news, but Sharon Epperson is going to be here to tell you how not too, right after the break.

The IRS says this year's tax filing season will start on Monday, January 26th. And as you know, you have until April 15th to file your return. This month, well, this month is January. But it's also a good time for retail investors to plan how to minimize the tax hit and increase the value of your portfolio. It's an overlooked aspect. huge aspect of all of the stuff we talk about. Sharon Epperson is here with more on what people should consider. And there have been so many changes this year, right? There have been a lot of changes, and it's so important to think about what you can control in light of your investments

with uncertainty in the markets and all of that. And the first thing that you should be doing is taking a look at your tax advantage account. And there have been changes for 2026, an increase in what people can do in terms of contributing to tax advantage accounts, like your IRA or your 401K. So the first thing is to look at the increase that. we're seeing there. We're seeing about $7,500 is now the maximum that you can put into an IRA. That's a regular IRA or a Roth IRA. And if you're 50 or older, you can do a catch-up contribution of up to $1,100. Now, of course, when you're talking about Roth IRAs that a lot of folks like to do, there are income limits. But for people who are just starting out investing

and just starting out saving for retirement, this can be a great place to start or a great place to supplement your workplace plan. Workplace plans, those contribution limits are also increasing up to $24,500 in a 401k plan and a catch-up contribution can be as much as $8,000 this year. That's also an increase. And that's for 50 or older. If you're 60 to 63, you get to put in even more money. $11,250. It's a catch-up contribution there. I want the money out. I want to be still putting it in. Exactly. And this is whether you're doing a pre-tax 401K or if you're doing the Roth 401K. You know, again, the tax rate. have been moving around, and there's always tax strategies tax loss harvesting at the end of the year

and things like that. What else do you think people should be focused on to make sure they're ready for the best possible return this year? Well, I think the people who are maxing out their 401Ks are often older investors and those who are higher earners. And those folks have the opportunity to do a catch-up contribution often. I think it's important to realize that no longer will you have the choice about whether putting that catch-up contribution using pre-tax dollars or after-tax. Starting this year, your catch-up contribution, if you're 50-year-old, or has to be a Roth contribution. So you're no longer going to get that upfront tax break.

That's something to consider as you're thinking about the tax strategy and where you're going to put your money. But so much of this, Sharon, is about trying to control your own destiny as much as possible, learning as much as you can. The number of conversations I've had just in the last couple of years about what types of benefits or features workplace retirement plans have. Some, for instance, have this ability to put even more money in your money, or 401k, above the whatever, $25,000 a year on an after-tax basis, up to around $70,000,

I think, on that part. And then other plans actually have programmatic systems that will automatically convert pre-tax holdings in contributions into Roth holdings on a regular basis. Those are all things that are very important to look at. But they're not all available to all plans. So you actually have to do some work, right? Exactly. You have to do some work to find out because even if the plan is eligible to do that, the plan sponsor has to say, yes, our plan is going to be able to offer that. So it is important to see if you have that after tax contribution like some companies will allow you to do. And if you can take that after tax contribution and then make it into a Roth, convert it to a Roth, is also a great strategy. Basically, the bottom line is when you're looking at tax efficient strategies, you want to look at the asset location, not just what the assets are. So is it going to be in a tax deferred plan? Is it going to be a Roth account? Is it going to be in a taxable account? And what

assets should go where? Should you have your stocks in something that you can have tax-free growth and then tax-free withdraws like a Roth account as opposed to your fixed income or municipal bonds being in that taxable account? So that's important. You mentioned tax lost harvesting. That is important. We talk about that all the time about selling that depressed investment and making sure that you can offset the gain. But tasks gain harvesting is also important. You want to make sure that if you have great gains and you are a charitable person already, that's something you can put into a donor-advised fund, that appreciated stock. And there's some change with that this year, or it's half a percent or something? I don't know. There are some changes for higher earners there,

but the strategy is still the same. You want to make sure that you try to put those high-percentage gains in something that's going to allow you not to have to pay as much capital gains tax. And so a donor-advised fund might be a great way to do that. Tax, what do it call it, tax gain harvesting. There you go. game harvesting. All right, Sharon Epperson, thank you so much. Always news you can use there on more tax-efficient investing. Now, be sure to go to the Sharon's Money 101 newsletter at CNBC.com slash Money 101. Sharon's got a lot of great news you can use with regard to financial planning and, of course, those tax-efficient strategies. And coming up on the show, something we

talk about often on this network, stumped three Jeopardy champions last night. We're going to show you what that stumping was right after this. Now to a moment that stopped even the smartest people in the room. Last night on Jeopardy, one of the categories was give me some money. And it's a topic very familiar to our audience, of course. But here, let's see if you can answer it, here's the question. ETF stands for this kind of traded fund, for the type of marketplace at which they can be bought sold. Cameron, what is electronic? No. Harvey or Jason? It's an exchange traded fund.

Now. Okay, so here's what I would say. I'd say that many of our audience knows that we have a franchise here at CNBC called ETF Edge. That happens every Monday. I am oftentimes the host of that program. And so it shocked me last night when only one person, by the way, electronic is a good guess. They might know what an ETF is. They just don't know what it stands more. Exchange traded fund edge. ETFedge.cbc.com, by the way, just so you know. Anyway, all right, gamblers are betting that three times as much on prediction markets and on sports books themselves. That's according to a report from citizens. The average prediction bet is $185 for regulated sports books. $55. The report also found that the average player using prediction markets is losing

more money compared to all other forms of gambling. What it gives us good poll number. So, why not? Great. Thanks, Dom. All right. Thanks for watching. Lange, every closing ball starts now.