Power Lunch - CPI Inflation Reaction, Sarat Sethi Weighs In, Record-Breaking Lakers Sale 8/12/26

Episode Date: August 12, 2026

Stocks are moving higher on Wednesday on the back of a tame CPI inflation report as tech names like CoreWeave and Super Micro Computer are leading the markets higher. Kelly Evans and Brian Sullivan are joined on-set by DCLA Managing Partner, Sarat Sethi, for the full hour to lay out his take on the state of the markets. Meanwhile, today’s Power Insider segment is focusing on Bloom Energy as Evercore’s Nick Amicucci explains why he has an outperform rating on the stock.   Later, CNBC’s Alex Sherman joins the show to report on the headlines that Bob Iger and Josh Kushner are planning to buy the Los Angeles Lakers from Mark Walter for over $12 billion. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks now back to being less than 1% from new record highs. Welcome to Power Lunch, everybody, with Kelly. I am Brian and a special guest host. Our friend Sarat Setti Managing Partner, Doug to Cey Lane, joining us for the entire hour with real-world ideas just for you. Also happening, inflation easing, and a wave of strong tech earnings, reigniting demand for chips and memory,

and what energy-producing stocks could produce you? Some investing energy of their own. The head of Evercores, power, and utility research. research is here. And we have some key voices to help navigate all of this. Liz Ann Saunders, the chief investment strategist at Schwab and Torsten Sloc, the chief economist at Apollo. They will both be joining us coming up. But first, Sarad, before we dive into all of that, so much, I mean, we haven't talked to you about the Nvidia deal this week. AI financing, Iran, the latest there of, you know, whatever's going to happen, energy, inflation. So taking all of that in, what do you think is

most important for investors to focus on? Well, I think the AISO, I think, AI trade keeps on continuing. And you're seeing kind of now, Envidia going into really using the credit markets, borrowing, and more and more as to kind of supporting their key customers. And we saw earnings, you know, strong earnings last night, too. So that trade is still going on. What's interesting is when that trade happens, certain sectors kind of fall off. So we need kind of all the sectors or most of the ones to start moving together, but we just haven't seen that at one point. One moves and the other one moves the other way. Yeah, and so look at the market today and the names that are jumping, which some of them had been under pressure, no doubt, but core weave, super micro, nebius is up 27% after earnings, momentum is jumping.

The memory names, which that had traded, been down a lot from the highs, that's back up 7 or 8%. So what does that, what do you do? What does that tell you? Well, part of that is going to be short covering, too, right, because you did have some of the momentum kind of going against these companies too. But in the meantime, kind of this is, if you own these, you're feeling very happy, but I wouldn't chase them. I kind of look at some of the laggards today and say, hey, health care's out, financials are out. Maybe if you wanted to buy some of those in there or just as they kind of trade down to get some more exposure in there. Because valuations, they are not rich. We talked about it a bit on Squawk Box this morning.

If you look at some of these tech earnings, you can make the case for S&P 500 priced earnings at 20 times, which is historically not high, not low. But anybody with a rational mind could say that's a fairly fair valuation. Hey, listen, you know, Nvidia, Google, some of our top holdings, the question is, are these peak earnings? Are we getting closer to peak earnings? And what's the growth rate? What is the second derivative going forward for these earnings for the next three to five years? That's what the market really cares for. Well, how do we do this growth rate next year?

We got these numbers this year, and we got a comp against these numbers next year. Why am I doing so much of this? Because, and that's the issue, right? If they don't grow as fast as they have for the last year or the last 24 months, the market then automatically starts discounting it. And we've seen when multiples compress. I mean, hey, we've seen it in health care. We've seen it in financials. We've seen it in parts of technology.

Look at software companies that have gone down 40 to 65 percent just on multiple compression. And earnings have not changed. It's just what happens is investor sentiment changes. And if sentiment moves the other way, like it did for memory stocks for a few weeks there, you had, you know, stocks are up 700 percent. down 50 to 75%. So we have to be very careful as investors, make sure that you're allocated properly, but don't chase. And that's when people get to trouble, right? It's when do I kind of say, hey, should I be buying these stocks when they're at their peak or close to it? Or do I kind of nibble in at these levels and then kind of buy more later on? But be diversified because they are sectors,

not just tech, that are trading at very reasonable valuations as well, that have consistent growth rates, recurring revenue. And I think that can do well with interest rates where they are and, you know, other factors with oil the way they are, things that could actually dent the economy or slow down kind of the growth rate. All right, well, let's add a voice to this conversation. Our friend Torsten Slocke, he is Apollo's chief economist. Torsten, I would imagine you were pretty happy with that inflation read today. Absolutely.

This is very, very good news for the Fed and for Kevin Walsh and for the nine members who voted for not raising interest rates at the last meeting. because now we just got a relatively soft inflation print. Co-inflation is still two and a half, so it's still above the Fed's 2% target. Headline, of course, is about three, so that's definitely also above the Fed's target. But at the same time, if you combine that with the employment Friday, yes, there were some issues with local government hiring an education. There were some issues about the World Cup. But taken together, these things are certainly arguing for that it was a good idea that

the Fed did not raise interest rates last week. Torsten, Nancy Lazare was on last hour, and she suggested that this, there might be too much liquidity in the system, pointing to, again, some of these AI trades, sports valuation levels, you know, literally money supply, loan growth, demand for loans that we've been seeing, and is all of that a leading indicator for sticky inflation? What do you think? Well, there is an emerging new line of thought where more people are exactly, as you're saying, Kelly, starting to talk about that maybe we should be looking at measures of credit growth, measures of growth in bank lending, measures of growth in lending in private credit, and measures of growth of lending more broadly, both to consumers and to companies. Those indicators are indeed growing fairly rapidly, but at the same time, what really matters

the most for the Fed is indeed the dual mandate, namely inflation and the labor market. And on that front, I still think that the data that we've been getting more recently, especially the two more soft inflation prints, they are giving us a lot of confidence that the Fed may not have to hike rates this year. And therefore, I think the market is wrong at the moment to price in hikes because the economy is actually doing quite well while at the same time inflation is gradually drifting down towards the Fed's 2% target. One source of that inflation, people say, is fiscal spending. And we are getting the latest scorecard right now, sit tight guys, just for just a second. as we go over to Washington, the federal deficit is out with its latest, not the not reporting itself, the Treasury is out with its latest monthly report on government spending. Megan Kasella does have the info. Megan, what can you tell us? Kelly, that scorecard is here and it is not looking good.

The federal budget deficit continued to grow in July. It's up and adjusted 5% so far this fiscal year compared to last. So now it's at about $1.8 trillion. That is larger than the deficit for all of last year with two months still left to go. Now, for the month of July alone, the deficit came in and adjusted $50 billion larger than last July. So some pretty rapid growth here as spending outpaces revenue. Both of them are at all-time records for the fiscal year to date. Now, among the biggest categories for spending defense in the military up 6% this fiscal year amid the war with Iran, spending on interest on the debt is up 15%. Treasury has already spent about $1.2 trillion on interest alone this fiscal year. Now, on the revenue side, corporate taxes are coming in pretty

18% lower so far this fiscal year compared to last. And then there's the tariff angle. Tariff refunds were larger than tariff revenues in July, even with the administration putting new duties in place. So that means on net tariffs were about $8 billion drag on the budget for the month of July. Kelly? Nearly $1.2 trillion in interest on the debt. The fiscal year's not even over. I think we got it's at September. We've got a month or two to go. Megan, thank you very much, Megan Kestella, worrisome, terrible. I mean, let's just keep pounding the table about how bad it is, Sarat. And I'm not sure. that anything, there's no, the market, it's not really, we were trying to Ed Yardinney about this yesterday.

He said he expects a 5% 10 year is pretty normal. There's nothing here that's telling you the market, or I guess the public, has a big problem with this. Well, I think you see that, but it'll be interesting if and when the bond vigilantes actually wake up, and if that happens, that could scare the market. But the other side of it is you're not really kind of rates come lower. So now you have to kind of put this into your formula and say, hey, rates at 4.5%, 5%. Very different from the last. decade when we had rates at zero to two percent. So how does that affect cap rates in real estate? How does that affect your valuations going forward? And also for, you know, some of the tech

stocks also that have future cash flow. So I think as the market kind of socializes this, it'll be interesting to see how valuations fall out. You can do a lot with that $1.2 trillion. But a lot of it does, to be fair, a lot of it does go to retirees and pension funds. The money is not just thrown out. No. Right? I mean, that interest, a lot of it just gets repaid back. Oh, you mean the interest on the debt? Yes, the interest. That $1.2 trillion, it's not just like, I almost said, pied away. Well, it's going to get a little higher as more bonds come due, right? So the rates that we paid on bonds five, six, seven years ago are coming due as well.

So that's going to start accumulating by itself as well. Torsten, you have a quick comment on that? The issue is that there's just a lot of upward pressure on long yields at the moment. Of course, we just talk about inflation. That's, of course, on its own upward pressure on long-term interest rates. But this fiscal situation is just not going away. and the term premium and all the questions being asked, as we're just debating here,

they are indeed very serious issues. And the issue about tariff refunds is absolutely critical because it used to be this case that there was taxes collected because of higher tariffs. But now, reversely, we're actually seeing, of course, a payout of these tariffs because of their IEPA decision. And that's actually boosting GDP, especially going into the second half of this year.

So that's why we now both have that the fiscal situation is getting worse, but we're also giving even more upward pressure on GDP, because of the reversal of tariffs now instead getting paid out to corporates rather than getting collected. All right, it's true. The tariff reversal is a big, big deal and that's hurting the bottom line

as the deficit gets worse now, Brian, than it was a year ago. Yeah, and Torsten S&P 500 companies are expected to spend more than a trillion dollars this year on AI. You say the longer it takes companies to generate ROI, the bigger the downside risk to an economy and this market and this concentrated AI trade, the 10-year yield,

sitting near 4.7 percent. I think this is technically our bond report. I think so. We've done a little bit of it already. Tucked it right in there. Oh, but there it is. We ran the animation. Torsten, your reaction to maybe how AI, AI spending, all of that impacts bonds and the debt market. Well, the key channel is absolutely issuance by the hyperscalers. The hyperscalers are issuing very long-duration debt. And when they issue long-duration debt, that happens to also be It's been great just like treasuries. So now there's suddenly much more competition for dollars that used to go into treasuries that are now instead channeled also into hypers and also into financials, which are also investment

grade. So that's why given there's not more competitive landscape now for investment grade debt, where it used to just mainly be going into U.S. treasuries, that means that not only is there upward pressure on spreads for hyperscalers, but we're also seeing dollars getting sucked out of what normally would have gone into treasuries instead being placed six, seven hundred billion into hyperscalers. And that competition is very real. And that is also another factor to add to the list of bullet points of why there's upward pressure on long-term interest rates, namely inflation, the fiscal situation, and hyperscaler issuance. And these three things are the key reasons why 30-year bonds at

the moment are way above 5%. Yeah, almost 530 earlier this week. Torsten, thanks. Appreciate you joining us, Torsten's lock of Apollo. Sarat, stay with us this hour. All right, we are just getting started on this hour. And as we tick back towards, record stock highs. Our investors may be a little too high on big tech. Liz Ann Saunders is here with more on the wrist. Plus, ever course, Nick Amacucci on the power stocks that you may want to buy right now. It's 212. We're back. Right up for this. Time now for Power Insider. And while we await publication of our latest issue, here's a sneak peek. Two of your next guest's top energy picks include Bloom Energy with a $350 price target and NRG. Let's find out why. Maybe get some

more picks as well. Nicholas Amacucci, joining us now. He has Evercore ISIs, head of power utilities and clean energy equity research. Sharad Setti, of course, with us the entire hour. Nick, welcome. Good to finally get you on them. I'm a little fired up. It's been a long day. We're just talking about that in the commercial. I think you need to tell everyone. No, what happened. A lot of coffee today. Wow. None of a decaf. Bloom Energy, NRG. I know you just brought down your price target on NRG. Yeah. But you still have about 60% upside. What it is about these two names. that you really like? Yeah, well, obviously, I mean, speed to power remains paramount, right?

And I think Bloom Energy in particular, right? We kind of view it, Brian, as this is almost the cherry on top of the icing on top of the cake for blue energy. Why? Because speed to power, they're benefiting from that because you need generation and you need it yesterday, right? But when we think about the incremental leg of demand, why are we building all of these large gigascale data centers, right? It's to support inference and reasoning and agentic.

And when you think about that leg of demand, that's where Bloom really becomes attractive to us because you don't have noise pollution, you have a limited air permit need, and you don't have the emissions profile of some of these other kind of technology. So we really get excited about that incremental leg of demand, specifically to Bloom and a company that we cover that reported this. Fair enough. Bloom's big storage company, NRG would be in many ways directly the opposite of Bloom energy. Would it not be? NRG? They're in all kinds of stuff, but they're also a giant coal producer, or at least they used to be. I mean, this is just a power production company. Yeah, no, absolutely. And they, again, power is scarce. We like NRG in particular because of that uprate opportunity as well as we don't think the market even is pricing in at anything associated with their virtual power plan opportunity. So within the LS power acquisition that they closed earlier this year, they acquired a company called C-power. And there was six gigawatts of virtual power plant opportunity within that company that addresses that speed to power and that ability to bring additional capacity online quickly.

Slightly a non-expert. When you say virtual energy and these, I understand what is going on? Think of it, Kelly, as squeezing more juice out of the orange, right? We have existing infrastructure in place. Let's leverage that to the tilt before we start to underwrite and build out new. How do you do that? How do you squeeze more? There are uprate capabilities.

You can transition piker plants into more baseload type of profiles that then allow you to, again, kind of enhance the existing infrastructure. And is that what NRG does? NRG through their virtual power plant, through the virtual power plant opportunity has that capability. They are also building new generation. So there's a lot to like there. Is this throughout one of the names you like as well? No, we don't own it, and it's a very interesting company. It's done well.

It's kind of pulled back a little bit, too. And one of the things that we kind of struggle with is always the pricing, right? Because as consumers now feel more pricing is coming, and then they kind of blame the data centers on it. So how do companies like NRG get around that? Is it more that they're going to produce to your point? We're going to get more efficient and we'll get more production out of it, but not raise prices. Is it a volume? Because if it comes to pricing and then all of a sudden, you know, you get the states and

You get the government involved. So how does that happen? Yeah, well, I think, look, you're going to have prices. You're able to ring fence it to someone, right? You're able to allocate it. You know who the off taker is, who's driving, who's actually going to need that incremental power that you're generating. So you're able to kind of ring fence it and tether it towards them.

So you are seeing kind of PPAs associated with particular hyperscalers, right? They are able to underwrite those certain pricing profiles, which is actually very attractive for all of the IPPs, right? Because now you're able to have a predictable cash flow stream that's coming in as opposed to relying on the merchant generation. So the customer is big tech, not, not, you know, the public. Correct, correct. A lot of this is happening in Texas. And I know a lot of people in our audience probably think Texas is kind of like the Wild West.

Just do whatever you want. Build some over here. No problem. No. There is a long regulatory backlog in Texas as well. Does that impact your evaluation on either? of these companies who are both doing projects, a lot of them or operate in Texas? Yeah, I mean, look, obviously it's a concern, and you can't fight political headlines, right?

But it's well-known. We kind of addressed Governor Abbott's commentary early last week. Early last week that really kind of had drove NRG shares down right on the back of their earnings. But we do think, look, I mean, you have a batch zero process in place. I mean, when you're calling for it. It's a regulatory regime in tech, in ERCOT, specifically, that is basically highlighting and allocating batches of generation projects that will be brought online. And so when you're talking about kind of an audit, so to speak, of projects, we have one in place. So it really is kind of, you know, we're not going to fight the headlines.

We're not going to fight the political rhetoric. But I do think that ultimately we get into November and December and these things are largely in the rear view. They're showing Bloom Energy, which had had a tough recent spell, but it's up 13% today. This is fuel cells, right? Correct. Which I've always been like, are they or aren't they, the future story, which a little bit more so they are. There's a big role for them to play here. Why do you like it?

Well, again, you think, Kelly, there's an incremental leg of demand that people aren't even pontificating yet. They have the capacity. They're operating capacity that we kind of frame it as. Now, they're not currently manufacturing 5 gigawatts per year, but they're not currently manufacturing 5 gigawatts per year, have that capability and they can bring on manufacturing capacity faster than they would actually need to deploy those assets and those units. So we think the, I mean, the demand for power is real. The demand for certainty and execution and deployable power, dispatchable power is very real.

And we think that's, I mean, it fits right into those buckets. All right. I know, you're more in the Exxon show. I mean, is that space, Nick, you still feel fine about it? Just a difference of kind of, you know, more momentum names versus kind of a steady eddies, that kind of thing. Yeah, I mean, I would defer to my colleague Steve Richardson on those names particularly, but I think, yeah,

I think, look, it's kind of a rising title of a soul boat's when it comes to power, demand, and the need for the... Evercourt does like Chevron, Steven. He needs to write me back. But this is kind of like... I can't help you with that one. No, no, you can talk to him, tap on the shoulder? What were you going to say? No, I was going to say, like, the Chevron's

exons are kind of the value cash flow ownership, and this is kind of like the growth option value, because if this works... Do they have a political issue, Do you think this is all just rhetoric that comes from the president? I mean, look what he's tried to do with defense companies. Obviously, he's talking about the price. They want them to lower the gasoline prices.

Is that all just noise? For the most part, yeah. I mean, it's going to be kind of making sure that prices don't go up higher than they should. But over time, the oil companies, price will meet the market. You're the oil expert on this. They're going to raise the prices when they have to. All right. And my father owned a gas station when I was a child.

Not for very long, but my grandfather also had a gas station. I got a lot of respect for gas station owners. It's mostly families. Oftentimes, big oil doesn't own many gas stations. Families that own them, often first generation Americans, they don't set the price of gasoline. Gasoline may be high because they have to make up for losses on other tanks. I just want to get that out there.

Not just fine prices. I'm just saying don't pick on the gas station owner. It's not, I'm sure there are bad people out there, but it's not their fault. I'm just throwing that out. We will take your message to the president. Sea Crest out. Sirot and Nick, thank you, Nick, Nick Emacucci. Still ahead, AI is back in the driver's seat today.

But after June's chip wreck, if we can call it that, is this rally built to last? Liz Ann Saunders weighs in on that next. Let's get back to the markets and some potential risks emerging. Your next guest points out that even though the S&P is near all-time highs, just 4% of its stocks are trading at or above their 52-week highs. Lizanne Saunders is the chief investment strategist at the Schwab Center for Financial Research. Thrat Setti is still with us as well. Lizan, it's great to see you. You too.

And we've had this big correction in momentum areas like the memory stocks over the past couple of months. And financials, industrials, I mean, there are other areas that are pushing us towards these highs, right? Oh, absolutely. And that's just the rotational nature of the market and the churn under the surface. And I think that's the clearer picture that you get about what the market is done versus looking at the index level.

And all LSQL, I think it's a healthy development. There is much more rotation than is typically. seen. And you can measure that through breath statistics. You can measure that through dispersion on a week-to-week basis at the sector level. And I think that backdrop is likely to persist. We've been saying for a while now that rotation is the new momentum trade. So I think that sticks with us. The latest move, though, a bit back into that AI story space. We have to talk some health care. And not just because Sarat is here, you know, but I know he's excited about this. So this is an area often seen as defensive, others would say underperforming, but it's had some really good

outliers lately. And it's kind of getting its mojo back. What would you say about that? Well, that's one of the four sectors on which we have favorable ratings. So we would agree with that. I think that because the earnings profile has been relatively depressed, you start to look at beneficial base effects on a going forward basis. You can't say that about many other sectors, where the base effects will start to work in the opposite direction, given just how strong earnings have been across a number of more cyclical sectors. So you've got the valuation impetus and the trajectory of earnings growth impetus behind healthcare, at least in the aggregate.

Do you want to jump in? Yeah, to your point, when you look at kind of the driving factors of the AI trade, the momentum trade, it's funds that are quantitative driven. What will it take, you know, as fundamental investors to get other non-fundamental investors or other people interested in, you know, the sectors like health care, financial, the ones you like, we like materials, you know, we like the commodity trade, but it doesn't seem like money flows into these. It's kind of, they use them a source of funds, especially when, you know, days like today or momentum goes. So in your experience, what do you see that can kind of change

that as we go forward for long-term kind of investors who are fundamental investors? I think the channel could be through an increased interest in active investing styles as opposed to passive investing styles. Passive automatically drives you. into those mega cap areas. And if passive continues to be all the rage, then you're not going to see that impetus. But for active investors, whether it's individual investors or investors considering more active funds versus passive funds, that's where it gets a little bit intriguing because it's not necessarily going to be a function of weakness in tech or communication services that drives money into other areas, but just an increasing knowledge of the opportunity cost of not having more

diversification, given the stronger performance via this process of rotation that you're seeing in other areas of the market. Here's a story that made me chuckle. Lizanne, I'm not sure quite what you'd make of it. Norway's wealth fund, it's sovereign wealth fund, the biggie, is warning that the top 10 companies in its portfolio now represent 20% of the fund's value. Most of those are in the tech industry. The head of the fund said, quote, it's chips, chips, chips, chips, chips.

We've never seen such concentration before. apparently the problem is that any change to their strategy would have to come from Norway's parliament, which is a process that could normally take years. Now, other people, I guess, can just, you just, you sell and you rebalance. What do you make of this? Well, let me also just say that I'm 100% Norwegian. I just got back from Norway on Saturday night. That's right. We didn't even do that with that in mind. So, yeah, go Norway. Takfanoga. Tell Erling Holland we said hi.

Oh, yeah, no, I talk to them every day. I will. This is an issue because foreign investors, whether it's sovereign wealth funds, big institutions, retail investors, through typically passive approaches, just buying ETFs in the U.S., do see that concentration problem. It depends on the structure and frequency of the rebalancing, whether it's just rebalancing yet staying in that more passive approach or rebalancing that might. bring in more active strategies. And remember when foreigners are investing in, say, U.S. tech in whatever form or just the U.S. stock market in general, it's a double bet because you've got the currency piece of it too. Right. So any weakness that you start to see show up in the stocks, if it's accompanied by a weaker dollar as well, that's a bit of a double headwind for some of that for money. And then what I mentioned earlier, the opportunity cost of not being in areas that are

getting their day in the sun could cause a little bit of that shift because of just the opportunity costs, not necessarily because you start to see meaningful weakness in the tech and tech-adjacent space. And Sarat, this is going to sound a little glib, but because I haven't had to manage this kind of money with this much at stake. But there is a positive to them not being able to rebalance, which is they continue to reap the benefits of the performance of these. I'm sure if they could have prudent portfolio diversification would have gotten them out of there. much early price points. Instead, look how well they're doing. So I guess those who've been in the market and seeing the other sides of these cycles would say, well, you're trying to avoid the downside that could come. But right now, they've benefited a lot from this.

No, they have. But, you know, the point of chip-chips is today, the S&P, 20% of the S&P is in semiconductors. It's not just we're talking about overall technology. It's semiconductors when there. And if you're, as Lizanne was saying, you're in these index funds or you're in these passive funds, you don't really do a look through unless you're doing what Norway does. and you're just saying, well, we're diversified. We're across the market. We have all these stocks, but you're really then buying them. And if you're not really diversifying, you're just adding more to those. And then the other sectors that are going to be the smallest part of the market, just don't get the capital. You don't think the index will rebalance itself to some extent?

Not if money keeps on flowing in. They just keep on buying the same stocks. But over time, you know, after they. Look at what's happened with the memory trade. That was down 40 percent. It's to some extent from the highs to the lows. And the S&P was making new highs in the meantime. Well, the equal weight it will rebalance itself, but not what the market weighted, because that'll just get them higher and higher and higher and higher. And then over time, that kind of, unless people kind of come out of it. Lizanne, you should go back to Norway and tell them you are here to help with these problems. Why don't I go on a research trip on behalf of CNBC and I'll come back with a lot of juicy information? And salted herring.

Oh, no, no, no, no. But I did have whale for the first time. My tie is all whales. It's all about whales today. Lesanne, thank you very much. Lizanne Saunders of the Schwab and the Center for Financial Research. All right. Meantime, let's go to Brandon Gomez with a CNBC News update.

Hey there, Brian. U.S. Army troops reportedly faced off against Ukrainian drone operators in a military exercise earlier this year and came out on the losing end. The Wall Street Journal reports that during the exercise, Ukrainian drone units easily spotted and defeated U.S. troops and armored vehicles, The operation was part of a semi-annual exercise focused on training for large-scale ground combat operations. Lawyers for Tyler Robinson, who is charged with the murder of conservative activist Charlie Kirk, say he shouldn't be eligible for the death penalty because the shooter hit the intended target

and didn't endanger others at the event. That would be a potentially aggravating factor under Utah law that would make it a capital crime. It's just one of several arguments laid forth by the defense in new documents filed with the court. Robinson has yet to enter a plea. And the Associated Press projects former NFL sideline reporter Michelle Tafoya won the Republican Senate primary in Minnesota last night. She'll face progressive lieutenant governor Peggy Flanagan in the general election. They're competing to replace retiring Democrat Tina Smith.

Brian, something's back to you. Brandon, thank you very much. Roy. Big Data. Smarter stock picks a real-time read on your day's biggest movers. The Chip Complex is catching a bid today, software taking a breather, and we have some key names reporting after the bell, like the one on your screen there, Cisco, with some action under the surface. It's up about 3% today.

Here with more insight is Bob Sloan. He's the founder of S3 Partners, which provides market data on positioning within stocks and sectors. I can't start with Cisco, though. Do you know where I have to start? Do you remember what you said the last time that you were on with us

at the end of June? Yes, I do. You warned about the memory trade. Yeah. Do you know what day the memory trade peaked? June 22. So, Bob, as I lean in, What do you, and today we have DRAM rebounding to the tune of 8% is that can people jump back in there?

Are there new areas of leadership? What's going on? So, you know, SpaceX kind of rules all. And that's the gravity by which everything else is pulled toward. So, yeah, you're seeing a lot of short covering in that. And you're seeing short covering across the board like in stocks like CoreWeave, etc. We're seeing a lot of that. Let's go back to what you just.

SpaceX rules all. I mean, I thought this was a stock that was set it and forget it. Retail buys it, they put it away, it's a generational thing. You say it's much more important than that. Yeah, it is. It's a trillion, you know, a trillion and three-quarters billion dollar IPO. It's the biggest IPO on the planet ever. And everybody owns it, and it affects everything.

So you're either a believer or not. And that, you either kind of say it rules the world or it doesn't. And the amount of short interest bets on SpaceX, has gone to $32 billion down to $24 billion in 60 days. We've never seen anything like this. Have you ever seen that? He's cleared out the shorts to that extent, you mean? Yeah.

Okay. So, again, I would say this is an idiosyncratic Elon Musk story. Why is it so important and what does it tell you about the broader markets? Well, you know, technology, software, memory, I think, to... Certainly SpaceX is probably the frothiest trade ever. it bleeds into other sectors and has an effect. And you're seeing that. You know, when that stock moves, it moves other things along.

Well, it's won't. It's wonky, and I don't want to go too deep into it. But if you look at something like Delta One, which is like a strategy for synthetic baskets of stocks on Wall Street, we don't, our retail audience doesn't do it, but hedge funds do it. Tesla used to be the most important stock in the world because it was in all these Delta One option strategies,

people hedged against it. Right? There's a lot more to a SpaceX and a Tesla. these Musk stocks, right, than just the stock itself. Sure. They influence, I think what you're saying, all these weird other things that we never think about. Well, I mean, you guys think about them.

But our viewer at home is probably what's that? Is SpaceX a memory stock? Is it a launch stock? What is it? Is it a satellite? AI? AI. So many different things, and that's why it has an effect on so many different sectors.

So, Bob, and you just mentioned, the short interest has gone down. stock has kind of rebounded quite a bit. Have the shorts then moved on to other parts of the AI trade saying, hey, listen, we don't want to mess with SpaceX, because it's just other things happen. So, you know, you mentioned CoreWeave, you mentioned some of the memory stocks, is that kind of starting to back as soon as these things get the momentum to the short start pressing on that area? Or are they kind of looking at other areas in the market now?

Well, positioning matters more than just what the short sellers are doing, right? So I think one of the things that we're looking at is what's the real. ratio of active longs to shorts and things that are adjacent to SpaceX. So for example, like, you know, Viastat, like Planet Systems, those stocks are skewing long. And so those things are, I would say, pro-SpaceX on the Elon Musk influence side. And then you have things like intuitive and AST Space Mobile. which are being skewing to the negative side, and because they're seen as being competitive to Elon Musk and SpaceX.

Let me bring this back to Cisco, which is one of these names that is suddenly very exciting again. And it's up a couple percent today. It reports after the bell. But the recent momentum areas of the market have been security, networking, identification, cyber-sides. Because these are the areas where AI agent traffic is exploding. The defenses need to be protected, and these stocks are all implicated. What do you see happening with Cisco? So we have a, you know, we're not an investment advisor like Sirada's.

We're a data company. Having said that, you know, we feed a lot of the institutional investors, long interest and short interest data on a daily basis. And one of the ways that they use short interest is a signal to how a stock is going to react in earnings. And Cisco is a classic case in point. You have basically flat short interest when the stock is rising. So you can tell that the momentum and the energy bond, behind the short bets, it's just not there.

And so you can see that after the tape, as it sets up, Cisco's, we have a bullish call on Cisco at the end of them. You do. And would you say that this is the new leadership area of the market, broadly speaking? I think it's too early to say that. But, you know, the way what we're looking for is our stats and our data and where we see a very clear signal and a setup in an earnings call and where we're going to see a move after earnings, given the relationship between our data and the press. And last comment, anything else you want to mention to our audience before you go about, you know, kind of what you see coiled to move one way or the other?

Just look at health care. Health care, when we talked about this a little bit last. Did you send him up? No, I did not send him up. We have not talked about this. No, we have not. Look at health care. Health care is a crowded trade.

It returns of a mediocre. There is just a lot of people looking for a return. And in other words, they're close to getting frustrated? Yeah, I think so. Interesting. That's a warning. It's a lot. It's a good contraindicator either.

Like you said, you just provide the data. We're just the data. Just the data. Just the data. Bob, thanks very much today. Thank you for having me. Bob Sloan of S3 partners. And be sure to tune in when Cisco CEO Chuck Robbins joined Squawk on the street tomorrow morning at 9 a.m. Eastern.

All right, coming up from Mickey to Magic, former Disney CEO Bob Iger, set to become one of the new owners of the Los Angeles Lakers. Talk more about this potential mega deal coming up. It is the possible deal that is shot. in the sports world, former Disney CEO, Bob Iger, leading a group that is planning to buy the famed L.A. Lakers for a reported $12.5 billion. Now, if the deal happens, it would mean that current owner Mark Walter and his group could make over $2 billion, owning the team for about one year. Joining us now is CBC Media and sports reporter Alex Sherman. I guess my question, Bob Igers is a very successful human being. by any measure. $12 billion is a lot of money.

Iger didn't found a company. He's a CEO. Where's the money coming from? We don't know. It's funny that you said leading the bid, because we don't know exactly who's leading the bid at this point. In fact, the only two names associated with this are Joshua Kushner and Bob Iger. If I were to guess, I would say Joshua Kushner is probably leading the bid.

Because to your point, Bob Iger, while very successful, is not a mega-billionaire. No, probably not even a billionaire. Like, that's not a thing. I mean, I'd love to be a billionaire. But still, I mean, successful guy, but he didn't found a company. He was a CEO. He got paid a lot of money, a lot of money, but taxes take about half of that. Where's the money coming from?

We don't know yet. And it's not necessarily a red flag that we don't know. Look, any deal, it would take months and months for it to be approved. Money can still come in. This is very similar to what happened with the Boston Celtics sale, where there was an announced price more than $6 billion. We didn't exactly know where the money was coming from. And then in the end, the money shows up.

And I think the money's going to show up here also because Kushner and Eiger have been on the hunt for capital to buy the expansion, Vegas team. The Las Vegas expansion team. Correct. Which wouldn't have been at evaluation of $12.5 billion, but rumored price, you know, I was seeing $8 billion, maybe even $9 billion for that. So you're going to need a lot of money to buy that team.

So one of the questions that we have as reporters is to figure out, well, who have you lined up already? And are those people also coming in with you on this deal? Remember, there is a cap of 30% for private equity for the NBA. So some of that money may be private equity. We know some of it is obviously coming from Joshua Kushner's venture slash private equity firm. so that's going to be some chunk of cash there. But they're still going to need a lot more from outside investors. We just don't know those firms or names at this point.

And wasn't there Saudi involvement with Mark Walters purchased in the first place from last year? And so there very well may be sovereign money in this deal as well. That is yet another place that you could tap for capital. Yes. Why do you think he's selling? And why was there no auction process? Right. We talked to one of the sports banker last hour.

He said he's almost never seen a sale of this magnitude. not have an auction process and didn't rule out that an auction could have brought in more money. And the biggest question, the one you didn't say there is, why is he selling after less than one year? That is unheard of. Now, he is making $2 billion or so. So at one extreme, you could say, well, maybe that's why he's selling. He got this offer and he said, why not? That's a huge amount of money. $2 billion in a year. ESPN is reporting that Iger and whatever approached Walter, that they basically were like, hey, sell us the team. And I wonder if you could make. $2 billion less of the year, why not? It is possible. That's why he's doing it. But you do need to,

I think, especially as reporters, it's our job to point out the fact that there are several insurance companies and Guggenheim securities, which Mark Walter owns that are under investigation right now by U.S. prosecutors and the SEC for potential financial impropriety there. There was also a recent article in the Wall Street Journal that was questioning Mark Walter's health. So there are some unanswered questions here, and we won't know the answers to that until either we do more reporting, or we hear from Mark Walter about exactly why he's selling the team. Or if we see that the proceeds are going to pay down fines or whatever. Then at least you could have a guess about why he might be selling, and only selling the Lakers rather than his whole sports portfolio, which is the case right now.

He owns the Dodgers. He owns the Sparks, the WNBA team. He has an interest in the Cadillac F1 team. He owns the Cadillac F1 team. He owns Andrews. Ready Auto Sport. Wow. And MSA as well, he's like, TWG Group is like the king of cars. I guess if you've ever wanted the Dodgers, for instance, now might be a time.

Maybe. Maybe you should pick up the phone and call just like apparently Josh Kushner and Bob Iger did. Exactly. Alex, thanks. Alex Sherman. We appreciate it. More power lunch right after the break. A lot of chatter lately on the growth stocks in this market.

Surat's got a couple of names that you've been adding to because you think they are just too cheap. On a cash flow and a fundamental basis. These are companies that I think you want to own, like Disney, for example. We're talking about Iger. 14 times earnings. Disney is one of the stocks? Disney's one of the stocks.

They're at 14 times. 14 times earnings. They just came out with very strong earnings. They've got a new leader. You don't have the overhang anymore. Their theme parks are doing really well. Streaming is doing really well. Buying back shares, increasing their dividend.

But at this point, if you think about the overhang on the media sector, including their parent company at Comcast, there's just no longer our parent company, by the way. But I saw a charter today that that one's selling off. The other name that you like has nothing to do with Disney, but the area you've been talking about this hour, which is health care. Which is health care. And if you look at a company like Stryker, there's orthopedics. Ted Stryker?

So, you know, it's got knees, shoulders. I mean, fundamentally growth, as a Democratic gets bigger. Stryker had an issue with their cybersecurity that they're resolving. It's a fantastic management team and a good growth rate. Again, out of favor, trading at 20% of a multiple that has. had literally six months ago. People need knees. Exactly.

But all they want to do is buy micron. Yeah, maybe the chips go in the knees. Do you have any thoughts about the kind of memory trade being back in the... It's popping today. You saw those results last night. It is popping today. And part of that will be short covering. And part of that will be the earnings they came out.

And again, it'll be fundamentally investing. And look, we own semiconductors. I have no issues with owning growth, but you've got to diversify. Media up 3%. Sarat's been a pleasure. Thank you, Sirot. Thanks for watching Power Lunch. Closing Bell starts right now.