Power Lunch - Crude Oil Prices Higher, Health of Housing 6/25/25

Episode Date: June 25, 2025

CNBC’s Tyler Mathisen and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. “Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. 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 alongside Kelly Evans. I'm Brian Sullivan following the developments of a potential deal between two energy giants or not because we have new details about what may not happen. You have been on this for months talking about this potential story. We're also on record watch with the S&P less than a percent away from an intraday high as investors weigh cooling inflation and a ceasefire in the Middle East. But with markets pricing in a near perfect scenario, of course there could be risks to this rally. events coming up, the tariff deadline, and the president's big budget bill will talk about what could drive the next leg higher or lower and trigger the next pullback. All right, there is obviously a lot to do over this hour. We're going to begin with this, though, a developing story and energy. BP may be in play to be sold. Now, earlier today, the Wall Street Journal reporting that Shell is in early talks to buy BP. That headline sent BP stock soaring up about 7%. But as you probably

heard earlier today, we had some new reporting on this. Multiple sources telling me that it is unlikely Shell would buy all of BP. It is more likely, if anything actually occurs, that BP is sold to Shell and another buyer or buyers. In other words, Kelly, BP would be broken up and sold in parts if something were to happen. Now, BP investors have been frustrated for a while. The stock has underperformed its peers for years. In the last five years, look at that. Far worse, an Exxon, Chevron, and, oh, yes, Shell. BP has struggled since the Deepwater Horizon disaster years ago. Company was trying to transition itself more into renewable energy than oil and gas, and right in the middle of the transition, the CEO was forced to quit over inappropriate

personal relationships. For what it's worth, as Kelly kind of noted, this shell for BP chatter is not new. Back in March on Squawk Box, I interviewed the Shell CEO and asked him directly about it. We have a lot of running room within our own portfolio. We are able to grow 10% free cash per share between now and 2030 by focusing on what we do and what we do well. That's what our focus is. By the way, that doesn't mean we will not look at inorganic opportunities, but the bar is very high for inorganic because the alternative is to plow some of that capital back into our own shares, which trade at an attractive free cash flow yield, and whose risk that we really understand and we can control. And that's always the balance we're looking at.

It wasn't in there, but my question to him was, are you going to buy BP? Now, he's obviously not going to give us a direct answer to that question, but the point is that the chatter has been out there, and it's not surprising either because huge hedge fund Elliott Management has a 5% stake in BP, and they have been pushing for the sale of the company. And we did receive a comment from Shell. This is market speculation. No talks are taking place. And BP issued a firm, Kelly, no comment. Anything you would add on what is driving this? Is it, in other words, some of the competitive and operational challenges that BP has experienced? Or is it, to some extent, oil prices have been in such a bare market, right? Investors are kind of languishing with some

of these big investments. And there are activists involved. So I'm just wondering, here could be one deal, but what else might happen across the energy space, given, you know, given all of that? There's a lot of, everything you said is accurate. The oil part, I don't know, Paul Sakey can answer that in just one second. I would say this, BP, these are kind of self-inflicted wounds. Because BP decided years ago it was going to, remember, they had a marketing campaign, BP, beyond petroleum. We're going to go renewables. We're not going to focus on oil and gas. that was obviously a mistake. It may not be long term, but right now it is.

The stock is underperformed. That's the market. That's not my opinion. And then you get the CEO who is, I mean, he quit, but he was forced to resign. Right in the middle of all of this. What do they call that in soccer an own goal? Yeah, leaves him quite vulnerable to exactly something like. It does.

So let's kind of broaden this out. Talk a little more about this. Shell kind of denying it. It said no talk's happening, but it doesn't mean they haven't happened. Let's bring in the aforementioned Paul Sanky of Sanky research. Paul, thanks for joining, especially on pretty short notice. You know, I kind of threw cold water on that reporting initially. It looks like that's sort of the correct way.

But BP is, this is out there. What's your take on all of this? Well, Brian, to use the soccer term or football term, I think Bernard Luni got a yellow card and then a red card, in fact. But the strategy was definitely a huge error in 2020. And of course, they then had the opportunity to change completely with a new CEO and they went with a continuation candidate to really continue this, you know, erroneous strategy of trying to make an oil company into a renewable company as two very, very different costs of capital. And they should never have gone near to it. Additionally, as you know, and you mentioned the condo. There's been issues of safety and operational integrity over the years.

And finally, the old line that a camel is a horse designed by a committee is standing on BP. which is to say it's a camel of an oil stock. You know, it's a whole mix of stuff. BPX is a big US EMP. They've got a huge refinery in the US. You have Azerbaijan in there. You've got Trinidad LNG. You name it. There's something there. And particularly naughty is the huge trading operation where BP is genuinely best in class or writes up there actually with shell. And that would be a very tricky thing to combine and a very tricky thing to split up. But the fact of the matter is that BP is so cheap now, it's trading at such low cash flow multiples, the breakup story that you're promoting, I think is the right way to look at it.

And I think that the combination of Shell and Adnock from Abbey Dhabi is another, you know, sounds like a plan type idea. But of course, as you highlighted as well, Wales at Shell is saying, we don't need to do it. Paul, sit there for just one second. We've got some breaking news coming out on Fed Capital Requirements. We'll come back to this in just a second. Let's bring in Leslie Picker. Leslie, what's the latest? Hey, Kelly, yes, the Fed announcing a proposal that was well telegraphed, well-expected that does ease some capital requirements for the biggest banks in this country. It's responsible for the rise that you see there in the big banks over the last few weeks, really, and today as well.

So the details in the proposal effectively reduce capital, tier one capital requirements by 1.4% for the biggest banks. They say that would release capital of about $13 billion for those purposes. at their depositories institution subsidiaries, that capital requirement would decline in aggregate by $210 billion, but most of that would need to be retained within the consolidated holding company due to the capital requirements. That wouldn't be eligible or available for the distribution

to shareholders in terms of buybacks and dividends. Now, what this involves is something called the SLR, the supplementary leverage requirement, the leverage ratio here, which is essentially the numerator is capital requirement. And the denominator involves all assets, including those perceived to be risk-free, such as treasuries or deposits and so forth. And during times of stress, the banks have essentially argued that this ratio binds them

to not intervene in treasury markets during times of treasury stress or taking additional deposits when they might need to do so during, say, COVID, for example. And so this proposal is seeking to solve that. Of course, you do have dissenters in the Fed, such as Michael Barr, who say that this weakens the banking system by releasing all of these capital requirements, creating less of a buffer during times of stress. So not a unanimous decision here, but one that would reduce the aggregate tier one capital requirements giving the banks a bit of a boost today. Yeah, let's quickly show the 10-year yield as well. In the market for weeks has been this idea that if banks can buy more treasuries, which this effectively allows, them to do, that could help bring those yields down someone on the margin, probably priced in

already, 430, not much movement there on the 10-year. Leslie, thank you very much. And we'll get more on this for Shri Kumar in a second, but let's go back now to our other developing story. That is the oil story, Paul Sanky. I have no idea what we just talked about with the Fed, but let's go back to oil and gas because that's a little bit more my speed. I'll leave that to the smart people like Leslie and Kelly to figure that one out. I had another person today, a source tell me that they thought that Adnock, which is the Abu Dhabi National Oil Company, could also be a potential buyer for part of BP. By the way, they just did a big deal for an Australian company that's big in Alaska.

Am I hearing you right in that you're kind of suggesting that BP is, I don't want to say too big to succeed, but certainly too, maybe too varied to succeed? Yeah, and I don't think it helps that it's quoted in London. You know, the UK government, I think, has done a horrible job of oil and gas. and has now the highest electricity prices in the OECD in the UK, which is terrible. And so, you know, whether or not BP would be defended by the UK government is debatable. They themselves have a windfall tax on the oils through 2030, which is really crushing the North Sea. But yes, it is a complicated breakup, notwithstanding as well, the UK government.

But having said that, you know, what you're seeing, and you just mentioned Adnock buying into Santos in Australia, you've got Mitsubishi coming in here to the US-EMP story. these assets are highly undervalued, not only at $80 oil, which we just saw, but also at $50 oil. You know, you're talking about extreme low valuations here on the totality of BP, and the pieces, almost undoubtedly, would trade at a much higher multiple if they were broken up. Paul, for a non-specialist, what can you buy in the energy space right now, you know, and feel like, okay, maybe there's going to be further consolidation play. I don't know if it's a target or what else might happen. Do you think the BP case, like Brian was saying earlier, is kind of unique? Or could there be more to come?

Well, I've got this sort of Benjamin Graham, very noble value argument for the oils, which is that I do think that the equities are fundamentally undervalued against the future free cash flows. They'll generate high cash return. And that the management and strategies are much, much better. BP is a major underperformer, partly because the exons, chevrons of the world, Conoco is in great shape. One theme here I think for you guys is there could be much more mega M&A, particularly during the Trump administration, because the way for these guys to get people excited is definitely to get bigger and cut costs or break up and sell assets.

So, you know, I think it's an important story and we'll be watching it. And I think that oil, in the market, oil and gas, especially in the context of AI and energy demand, is badly undervalued at the moment. And also the trading side, right? We never talk about that, Paul. It's not just putting a pipe in the ground and taking out oil or gas, but it's that you've got, Shell has, I think, the world's biggest and maybe the most profitable energy trading business out there. BP does well, but it's kind of lost in the shuffle, right?

It's hard to know what's valuable inside of BP. Yeah, and it's lost in the financials as well. The market chatter was that BP made $10 billion trading in 2022. And yeah, these are highly valuable company, very volatile businesses, which is what makes them so hard to value. Additionally, they somewhat depend on a big asset base. So, you know, you can't break out the trading unit. You'll see the Glenn Corps of the world, which is really what we're talking about, have major assets in order to help their trading.

And that becomes another complication around the best way to break up BP. But you're right. Shell also has an outstanding trading operation. And it's volatile, but it makes a ton of money in the volatile years, such as the past month. Well, Shell says no talks are ongoing. Doesn't mean talks haven't happened. But my sources, sounds like yours, the same way, Paul, kind of saying, probably not going to be a shell for BP deal, at least not yet.

Paul Sanky is Sanky research. Thank you very much, Paul. Appreciate it. All right. Switching down to the broader markets, the NASDAQ is higher again right now. The NASDAQ has now hit a new record high, both intraday and on a closing basis. What an amazing turn for stocks. Look at this chart, folks. When Trump first announced the larger than expected tariffs, the NASDAQ and the market crashed, 25%. scary time. But since then, the NASDAQ has soared back over 30%, which means in less than

three months, the NASDAQ, and of course much else of the market, has done an historic 60% round trip top to bottom to top. One of the sharpest and fastest we've ever seen, really. But hold the phone. If you're thinking about buying the rally or wishing that you had, Our next guest is forecasting 10% correction by year end, says it's time to lower your exposure to U.S. stocks. Here to go out on that limb is Shri Kumar, the president of Shri Kumar Global Strategy. Sri, it's great to have you back. Good to be back, Kelly. And yes, I am going out on a limb and on a record day to be talking about a 10% correction coming by the end of the year.

But the various macro factors that I'm looking at seems to suggest that there is no way this situation can continue. What are they? We are looking at truce in a sense in three different areas. One is the Iran and Israel War. The second is truce on tariffs and then truths with respect to the fiscal deficit, the big, beautiful bill. You have one uneasy truce taking place in the Middle East, but the other two are still basically unknown where they are going to go. You're going to have a pickup in the rate of inflation, as Jerome Powell has said yesterday and today. And I think that is going to be reflected during the second half of this year with yields going up.

That is going to be negative for NASDAQ in particular. And I think S&P is not going to be free from that being attacked by that either. So there was also interesting, when we talked to Brian Reynolds last hour, who said he watches corporate tax receipts and says those were down significantly in the quarter, which could be a warning sign for earnings, could even be a problem for government revenues, but thinks prices will ultimately keep going higher because of stock buyback. So I wonder if you think that we're going to actually go from all of this excitement over being back to all-time highs to a little bit of a reality check in earnings season, that, yeah, those tariff revenues are coming out of corporate profits. Yeah, I think one element of the reality check, Kelly, is, as you said, what is happening with corporate earnings, not being as strong as they used to be. But the second is also the macroeconomic influences, which are also going to be negative. And that, I think, is also going, is not being taken into account by the market. And if you look at what is happening to the 10-year yield, which you want to read side by side with the SNP 500 and NASDAQ, is that they have not shared the optimism that you see in equities.

And while yields have come down some, we are still in the 435, 440 range. But you know where we are seeing optimism in the credit markets? And I think it was Rick Santelli who pointed this out earlier today, high yield. You know, it's – so it would be one thing if you said, okay, the stock market is all because of higher prices. and buybacks, and that's fine. But when you see high-yield, junk credit, all those kinds of things also performing well, doesn't that tell you?

Goldman had a note out this morning saying even the subprime consumer is holding up better than they expected. Maybe the fundamentals are just stronger than where we thought we'd be. You mentioned high yield. I think it's a very good point. The reason being high yield is where you take an additional amount of risk

that you do not take in U.S. treasuries. U.S. treasuries, all the risk you take, despite all the downgrades that we have had, the risk you're taking is duration risk. You're not taking a credit risk. But high yield in that sense, even though it's fixed income, it's comparable to equities. And it is somewhere where you take a higher level of risk. So I think I can understand why high yield is doing well, even if you have caution in terms of fixed income. When Leslie was breaking the news on the bank loan requirements, I saw you.

very keenly looking at the screen. Sort of there's a lot, you know, that's a complicated. Well, it's a complicated issue. So what does that mean? What it means, and I think there have been a lot of champions in the government, in the administration, that if that was done, there will be more of buying of treasuries by the banks as a result of the freed up reserves.

Now, the question is, what do the banks do with it? Do they buy treasuries? do they do something else in terms of the cash that is on hand. But the expectation is some of the money flowing to treasuries is going to bring down yields and will bring down the debt service cost, which is, I think, one reason where the administration is supportive of it. The other side of it, Brian, is when you do that, you also are reducing the amount of control that you have on the banking system.

When the Federal Reserve does that and allows the banks, Let's look at the extreme. Let's go to the extreme where you don't have any much reserves at all. Then there is no way in which you can pull and push in terms of the central bank wanting to stimulate or cut back. Here, I think they are losing a point of leverage by doing what they have done. And it seems to me it was largely prompted by the need to counter the fiscal deficit and how to finance it at a reasonable cost. Yeah.

Shri Kumar, Shri Kumar Global Strategies, you rolled with breaking energy news and with Fed News. Thank you. Thank you very much. Good afternoon to be with you both. The chip stocks were a key player in this massive comeback from the lows. NVIDIA is on a record high watch. We had a new intraday earlier today. And there's another name to watch in that sector as well. We'll break it down next. Some of the other stories on today's menu are coming up, real estate, Louisiana. Their big AI bet. Power lunch will be right back. Welcome back.

Incredible outperformance by the semi-stocks again. AMD and Nvidia are among the top performers in the NASDAQ 100, which is racing toward another record close. Invidia surpassing its own record intraday high set back in January. And another chip stock you should also be watching closely today is Micron on Spring and Christina of Parts in Revelis. Christina. Kylie tips are back on top for the entire year. The only stragglers in the red right now are on semi and global foundries. Over the last month, investors have really been rotating into less popular AI plays, like Micron, you mentioned, AMD, Marvell, Arm.

You can see all up over 20%, just in the last month, outpacing the usual suspects like TSMC, Taiwan Semi, and NVIDIA. And yes, you talked about NVIDIA did hit an all-time high, but the Chips Rally really isn't just about NVIDIA anymore. It's about the staining power of the AI buildout. Luke Capital thinks the shift to more AI compute could create $900 billion in demand, and Bank of America goes even bigger, saying AI could drive over a trillion dollars in spending by 2030. This afternoon, Micron will give us our first glimpse into this future. Their shares are up more than 35% just this past month and 45% for the year. The key for Micron is high bandwidth memory, or HBM, and they're completely sold out of HBM for 2025,

with 2026DEMN already in discussions. Tonight's numbers really could validate whether memory has finally broken free from those boom and bust cycles. In other words, cyclicality. Right, exactly. But I mean, I'm sure people would say, look, once a cyclical stock, always a cyclical stock. But in Micron, to my understanding, Christina, is benefiting from the fact that its high-speed memory chips are in such high demand by NVIDIA for these Blackwell GPUs that it's kind of a secular shift for them. Precisely, which is why they can capitalize on this AI buildout. And they said they already sold out for 2025. And so with these earnings number,

I just wonder how much is already priced in. So I should preface that the stock is really climbed just within the last three weeks or so. So are we going to have a blowout quarter? I don't know. And is that going to justify a huge stock increase going forward on this name, post earnings just like four? Exactly. We'll see what happens the afternoon. For now, Christina, Appreciate it. Christina Parts in Evelace, and CNBC will be following those results. We also have the CEO of Mike Kron. He'll be joining at 9.15 a.m. Eastern tomorrow morning, the squawk on the street team to talk more about all the transformations happening with the company. A political upset upsetting the New York City real estate market.

What New York's mayoral election may mean for the sector, which is down across the board in a big way. Stick around. CryptoWatch is sponsored by crypto.com. Crypto.com is America's premier crypto platform. Welcome back to Power Lunch. The new data out this morning, pretty gloomy picture of the housing market as new home sales. nearly 14% in May, high mortgage rates and affordability, continuing to challenge buyers. And that was the biggest monthly drop in almost three years.

Let's get some more insight on here with power broker Ryan Sourhand, the founder and CEO of Sourhand. And Ryan, I can't resist. So, I mean, we've got all the developments in New York City in particular today, right? I'm Donnie and all the rest of it. Then you have kind of this broader national story of what's going on with home prices. I don't know which of the two you think is more pressing right now. They're all pressing all at the same time. Here's what I'll say.

First, everyone needs to stay calm and carry on. Headlines can be contradictory. So if we talk about the housing market to start, home prices have grown in the slowest place in two years. Home prices have hit an all-time high. The market is dynamic. It's competitive, but not frenzied the way it was. Buyers have more power. Sellers might have to negotiate and give concessions, but also at record highs.

So when you look at these headlines and they say, oh, the market's the slowest. It's been in three years as it kind of finds a new normal, but we've also hit record highs. So it's okay if sellers are having to negotiate. It's okay that buyers have more options to choose from, and it's okay that they have a little bit more power. Inventory right now is growing. We have 20% more homes on the market right now year over year, and it's still not enough. Seasonally adjusted annual stales are flat for the third year in a row for just about 4 million home sales nationally. So that's context to where we are.

But if your home is priced appropriately, it sells. There's significant demand right now. If it's not, it will sit. And then New York City is a different story. I know. Do you want to talk about it? What's your take? I, sure.

I can talk about it. I think, you know, and I wasn't intending to when we booked this, but here's what I'll say. Someone told me a long time ago that the road to hell is paved with good intentions. And it's true. Like, why did New York City rise to greatness from the mid-90s to Bloomberg? Right. You had plummeting crime. You had an economic boom.

You had the quality of life skyrocketing. Okay. Tourism boomed, I think, 33 million tourists in the late 90s, well over 50 million tourists a year by 2013. You had public and private innovation. You had a real estate renaissance. And you had this brand of New York City. city as being globally accepting and globally cool. New York City meant aspiration. What happened after Bloomberg? You had a decline, the de Blasio era. Crime rebounded. You had an anti-business

sentiment. You have increased homelessness in a mental health crisis. You have fiscal irresponsibility. You have declining schools. You have gifted and talented programs that have been scrapped. Charter growth is stalled. And you have COVID response missteps that I think a lot of of people yesterday put on Cuomo shoulders, whether they were his or not. True. So why is the real estate market and a lot of income earners who pay taxes in New York City panicking as of yesterday? Well, first, the election is not until November.

It's just a primary. And as we saw last November, primaries aren't always indicative of election results. But so far, as progressive as he's been, he's been somewhat of an anti-capitalism crusader. And I think capitalism with good intentions, is. is good for a city like New York City that is in a budget deficit at all times. He's talked about defunding the police and been part of that ideologue. It increases fear, fuels crime, right? He's talked about anti-growth, anti-job.

He's opposed rezoning and he's had, you know, and pro-business incentives. He wants rank control everywhere, even on new construction. That's going to create zero. Brian, hey, Brian, sorry to interrupt. But isn't that contrary to, he, he, wants to lower housing costs. You're in the housing market. The only way to lower costs is to have more of something or either through building more or driving people out. So do you think either one, it doesn't sign the former building more is going to happen because if things are rent control,

people just don't build. It's just the way, because they can't make any money on it, so they're not going to build it. So do you really think people are going to leave because of this? I look to April 2020. When I told myself and all of our agents, because we had just started Surnat in New York City, and everyone was in panic mode, and I told them that markets and policy and politics don't dictate success. They don't get to, but they do dictate your strategy. So if we're sheltering in place in a two-bedroom that's 900 square feet or in a house in Westport, Connecticut, what do you think people are going to choose? So with a socialist, let's say, indoctrination, right, who wants the state to control more of the economy, I don't know what the plan is to lower housing prices. Sure, if you overtax everybody and have them go to other companies, aka other states, who are more incentivized to bring in new employers, then sure, I guess. I guess pricing will go down at the detriment of the city because you'll have less people paying tax, less people hiring.

other employees, less people think jobs. And what you're really going to do is not punish the housing market. I'm in the real estate business, but you're going to punish success, right? You're going to create Portland and San Francisco 2.0 because high tax earners, luxury homeowners and businesses that create taxable income in New York City are what fund this entire metropolis. And I don't think having a recipe for an exodus of entrepreneurs and employers is the right path forward. And I think that's why I woke up to 77 text messages from clients asking how quickly they could get to Florida. Wow. Did you really? 78. Maybe it was 77. It was a lot.

Is it too late, Ryan, for you to get in on the campaign trail? How does it work? You have to have some paperwork filed, I think, by now? You want me to run for bear? Yeah. Oh, my. Go for it. Listen, I don't know. I have to call my dad.

I'm the CEO. This guy, everything's great. I like what I do. And I like working with the people we work with, right? I believe in having affordable housing. The city needs more affordable housing. They need to build more buildings. That's how you lower prices.

It's not complicated. Build more housing. Manhattan. It's really hard to build anything. I got an idea for you, Ryan. Maybe it's not running for mayor, but a new Netflix show called selling Manhattan. No, that show kind of came out already and it didn't do well and didn't get for a second season to win. That was owning Manhattan.

This would be selling Manhattan. Owning Manhattan crushed it, greatest TV show in the history of the world. We just finished filming season two. It comes back sometime later this year. It took a long time to film it. And it's very stressful to do it. do, so I immediately went and shaved my head. And so now this is my new look. Brad Pitt did it the next day. I don't know if you noticed. He's always following everybody. Yes. But you want to stimulate housing

supply through market-driven policies, right? And yes, some regulatory reform, I think is important. And that will be strongly supported by not just the real estate industry, but the people who live, work, and visit the greatest city in the world, which is New York City. And I intend to do everything possible to help keep it that way. Ryan, we appreciate you joining us today and weighing in. all of this. It's really good to hear your point of view. Ryan Sourhant is the founder and CEO of Sirhant. There was a show called Selling the City. No, I'm... But there's owning Manhattan, selling the city, we'll combine the two. Yes, selling Manhattan. States are betting big on AI, and there's no better example of what

is happening than all the way right there. Look at that. Down in Louisiana, we've got Scott Cohn in Cajun country. I don't know what this accent is, but we're in. next. Go back. As you heard earlier in the program, AI spending is running strong. And companies that build out AI, often called hyperscalers, also need to spend a lot of money on data centers to power the AI. So this year, as CNBC searches for our top state for business, Scott Cohn is visiting what could be the biggest data center yet. It's being backed by meta, and it's going to require a lot of electricity to run it. Scott is at the construction site in Richland Parish. Louisiana with a very special guest. Scott.

Hey Brian, yeah, $10 billion they're pumping into this. It is a big deal. This will be the largest data center in the Western Hemisphere at least. And we're about to talk to someone who was instrumental in bringing it here, we're told. Jeff Landry is the 57th governor of the state of Louisiana. You've called this transformational. We can see the physical transformation, but you meant more than that. How is this transformational for your state? Well, because in Louisiana, most of the economic activity for all of Louisiana's history since entering the Union has been primarily along the coast, along what we have, a refining alley, along the Mississippi River.

This is the first time we've seen this size project up in this area of the state, and that is going to be transformational. But it is the best place to have it right now in Louisiana. And so, again, this is going to transform the northern part of Louisiana. And it's something that I said was going to happen when I ran for governor, and we made it happen. It's a big site, and a lot of people working on the construction, but in the end, it's only going to be 500 jobs. Talk a little bit about that. Well, whether it's 500 jobs, I'll take it here.

Five jobs in this area was a big thing before this came here. I don't know where other people are that complain about 500 jobs or where you are, but I'll take them. In Louisiana, we'll take every job that we can. And what we do believe, though, is that when you add, The 500 jobs plus the 5,000 construction jobs, it starts to build out. Remember, Jesus started with 12. And look how big as church is. This is not free for the state of Louisiana.

One of the things that you did in your first year in office was pushed through the sales tax break that could cost the state billions of dollars. META made $165 billion in revenue last year. The state clearly needs the money more than META does. Why is this a good deal? Well, because this deal wouldn't be here. Zero from zero is zero. Look, I'm a business guy. We did that tax break at the same time we did tax reform.

And in two weeks, Louisiana left 16 positions in the tax foundation going from 42 to 26 and one tax reform session. What we know is that when you look at the overall comprehensive package here, it is in the black. It's in the black for local government. It's in the black for the state. So the bottom line, how you get to the bottom line is irrespective to me as long as when you look at the bottom line, the numbers in the black and not in the red. We're going to talk a little bit about the budget because it is a fact. in competitiveness. I don't know if you're talking to your fellow Louisiana Speaker Mike Johnson, but we're looking at, first of all, a potential total change in FEMA, which I've got to imagine

is an issue for this state. How is that going to work out? Are you okay with that? Look, I've been to Congress. The place over there is completely dysfunctional until President Trump came along and really started breaking the most, which needed to be done. Who knows what's going to happen? Here's what I believe. I believe when you fix your state, we fix the country. And here in Louisiana, we know that when we have projects like that, we lift the economic outlook, the economic quality of life here in Louisiana. And so we're focusing on Louisiana and we're not going to worry about Washington. But focusing on Louisiana, $19 billion Medicaid budget, most of which comes from Washington unless that changes. How do you deal with that? I mean, there's math that you've got to

make work. Look, again, we are talking. I've spoken to the speaker as early as yesterday, spoke to the majority leader, spoke to our senators, explained to them what we want. Look, we know that the Medicaid program needs to change. Ever since there was a Medicaid expansion, the program has grown exponentially. So there is an opportunity for us to scale back. The question is whether Congress will give us an off-ramp to be able to properly manage that. Everyone knows the project. The program's out of control. And so the ability to to have that off ramp and ensure that we take care of people. But here's what I know.

These types of projects take people from dependents to independence. These types of projects take people from the Medicaid Road to private insurance. And that's why we love it. Well, congratulations on it, Governor. Continued success. We thank you for taking the time. Jeff Landry is the governor of Louisiana. Remember our top states revealed on July 10th.

And you can follow our journey at topstates.c.c.com. Kelly? Fascinating. Thank you, Scott. And our thanks to the governor. as well. Let's get to Bertha Coombs now for the CNBC News Update, Bertha. Kelly, the Trump administration is escalating its battle with the federal judiciary, taking the unusual step of suing the District Court of Maryland and its 15 judges over an order issued

just last month that automatically blocks the deportation of immigrants for two days if they file a lawsuit challenging their detention. The Justice Department is claiming judicial overreach, and argues it conflicts with Supreme Court precedent. New Jersey Congresswoman La Monica McIver today pleaded not guilty to federal charges of obstructing law enforcement outside an immigration detention facility in Newark. McIver was charged after a struggle between agents and protesters at that detention center last month.

Her trial is scheduled for November. And dating service Bumble announced today it's laying off 30% of its workforce. The cuts, which amount to almost 250 people, are part of the company's broader effort to revamp its platform as the industry as a whole deals with declining user engagement. Bumble shares are up more than 20% today. Kelly, I wonder whether people are doing the old-fashioned thing and meeting in person.

Wouldn't that be nice? A lot of people think AI technology, going to drive everything back to In the Real World, so we'll see. Bertha Thanks very much, Bertha Coombs. Coming up, the run-up in stocks, hitting a bit of a speed bump today. That said, all signs say we're back, but for how much longer? That's in Market Navigator next. All right, another day, another new high for technology stocks.

The NASDAQ is only up one-tenth of 1%. Dom Chu, I didn't go to Cornell. I'm not a super math guy, but I do know this. When you hit a record and you go up from there, it's a new record. How about fresh record all-time highs? Or is that just repetitive, repetitive, repetitive? All the words. All the words.

All right. So as Brian points out, we're focusing on big tech because it's kind of breaking out. It's leading again with this push in the NASDAQ 100 to another all-time record high. So what are the driving factors for the rally and how much further can it all go? Here to help us make sense of it is Carter Worth, the founder and CEO at Worth charting. A technician looks at the patterns. Carter. us through the narrative. We're about 1% away from a high in the NASDAQ 100, or I'm sorry,

even the NASDAQ composite overall. Does this mean higher highs ahead? All right. Men, great to be here. And the question is this, it's always at the index level versus the constituent level. Of the 11 sectors in the S&P 500, for instance, two have managed to recoup all losses and make slight new highs. That would be industrials and technology. But the big one is technology, of course, right, at 30 plus percent weight. And the interesting thing is this, if you were to look at where the sector is now, and you referred to it as an all-time high, in relation to the February 18th market peak, we know that it has broken out and made a new high. But interestingly, of the 69 constituents that comprise that sector, only five are

up since their respective February 18th high. The median stock in the sector is down five and a half percent since February, even as the sector is making new highs. And the average stock is down seven. So it remains the case that it's so thin in terms of a few big names, we know them, making sharp new highs. But the real question is, of course, on a relative basis, despite this, tech is actually underperforming the market on a trailing 12-month basis, albeit barely, but that is the case. Now, if that's the case, Carter, it begs the question. Maybe we do see. higher highs, given the move that we've seen in the mega caps. But if there's no broadening out and the leadership is narrow, how much runway is there for these new all-time record highs?

Right. So the market itself, we're again to default to the S&P 500, were slightly, slightly below the highs that it made in February. Now, what constitutes a breakout? That really is, and you all started with that, right, if you make a new high. If you make a new high, If you go up for one day, make a slightly high and fall 30 percent, is that a breakout? How about if you go up for two days and then drop 5 percent, meaning there has to be some rule of thumb, the one that I learned, and it might be not appropriate for all people or other people might have different rules of them, is that you've really got a clear former high by three and a half percent. That has not happened certainly in the tech sector. Yet, we shall see. All right.

It sure sounds like Carter Braxton Worth is a little bit more cautious and tempered about his bullish view there. But I will, and who might argue with Carter, I'm not going to, but I will add this. If you're a viewer, a listener, and you've bought an S&P 500 index fund. Sure, as may you do. In your 401K, do you really care if 490 stocks don't participate when the 10 that are are big enough to drag the whole index to record highs, right? Carter, it doesn't really matter to you, I don't think. All you know is you're at a record high, your investments. Yeah, you make the point of it.

indexing, right, and to be a passive investor and not focus on markets or charts and playing off. But if one is trying to play chess with the benchmark, not what you're talking about, right? You're just owning the SP. Then to generate alpha, it is trying to pick pieces and parts, themes, sectors, sub-sectors, in order to outperform, because otherwise there's no point in playing or said differently, no point in paying someone a fee to beat an index. All good points. Carter Worth, thank you. You again. More power lunch. Next. Yes, it's true. Stocks are near session lows today, but we're still 1% of the all-time highs for the S&P. Micron reports after the bell, and it is this space, the chip space, which has been powering us higher from the April lows. Shares of Micron are up a cool, you know, 58% in the last two months, Brian. Let's hear it for DRAM. And just to reiterate, the headline there, Shell may be looking to buy BP. My source has said the story not really, not really accurate on its face.

be multiple bidders. Looks like others have kind of come along that thinking. So I don't think BP is going to get bought entirely by show. Look at the shares are up one and a half percent to your point. So we'll see if anything really is consummated. And thanks for watching Power Lunch. Closing bell starts right now.