Power Lunch - Dow Hits 50K for First Time Ever 2/6/26

Episode Date: February 6, 2026

The Dow crosses 50,000 for the first time ever. Strategy CEO Phong Le joins the show to discuss the company's Bitcoin strategy.  And how is the market digesting the hyperscalers' large capex numbers?  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A big time end to a very volatile week. Believe it or not, the Dow, small caps, midcaps, all hitting all-time highs. Welcome to Power Lunch, everybody. Happy Friday alongside Kelly. I am Brian. Even what seems like a terrible week because of what happened at the beginning of the week? No. Stocks are rocking today. And the Dow, look at that, 49 points away from Dow 50K, Invidia leading the rebound in Big Tech. And our friend, the great Ed Yardini, is here on set to break it all down. Plus, a big interview you don't want to miss. Energy Secretary Chris Wright will join us momentarily to discuss Iran, Venezuela and energy policy back here at home as energy remains one of the best sectors in this market. Also on the rebound, Bitcoin and shares of its biggest treasury company strategy. The company posted a $17 billion operating loss on unrealized losses in those holdings.

The CEO will join us exclusively, Fong Lee, to discuss their strategy going forward. We're going to start, though, with the soaring markets, and our next guest made a big call in early December on the, the MAG 7. He said it's time to be underweight those names. It's turned out to be a prescient call. The MAG 7 is down more than 5% since then. Let's bring in Ed Yardini of Yardini research. It's great to have you here. Thank you very much. Really appreciate it. First, top level, thoughts about the market today. What do you think is going on? Happy days are here again. I mean, across the board, everybody's buying, buying, buying, not just stocks, but Bitcoin, gold. And so a lot of asset classes are doing extremely well. And I think a lot of it has to do

with all the spending that these hyperscalers are planning to do. $650 billion this year is going to be very, very stimulative to an economy that honestly doesn't really be stimulated. We also have refund checks that are coming that are going to be very large. Yeah, it's amazing to contemplate. So here's what's ironic. So Amazon shares are down 8%. Our guest last hour said, yeah, they're a little behind as far as he's concerned

and need to spend this 200 billion figure to catch up, the rest of the market is cheering. Nvidia's up 7%. Everything in the AI value chain is like, great, we're thrilled, glad to hear it. Nobody's talking about a recession, and the only question is, how big a boom are we going to have from all this? Right. I say the Atlanta, what is it?

The Atlanta GDP now, I know it fluctuates, Ed, but it's showing about a 5% GDP growth, and I think you're touching on a really important topic because we like to keep things simple here. We say, okay, meta or Amazon is spending a billion dollars on a data center. What we don't talk about is that there's probably 500 to 1,000 vendors, different companies inside of every data center, whether it's the steel company or the concrete maker or the computer company or the wiring. The company makes the wires. That trickles down across the board.

It's a huge stimulus to the economy. Well, the economy, first of all, has been amazingly resilient since the pandemic. I mean, since the pandemic, we had a two-month recession, and it was engineered by the government. They shut everybody down. They locked us up. Ever since then, it's just been up, up, and away. I mean, think about everything that's happened. We've had the pandemic.

Then we had the supply chain disruptions, inflation soared, the Fed raised interest rates. We had tariffs. And here we are, all-time record high in the markets, and the economy absolutely booming at an all-time record high. You have to think, a couple of things. I mean, one, falling interest rates now are helping chat GPT, AI. It helps, sure. You guys called this, you know, a few months ago and said, look,

the AI, while this investment is great for the broader economy, the MAG 7 are turning on each other. I love how you put it. So they're no longer little kingdoms with their protected modes, each in their own lane. Game of Thrones. Yeah. So who, do you have an opinion on who emerges triumphant or is the point that we have to wait to see? No, I mean, that's what's so exciting about it, you know, it's like for, for one day, it seems like one of the hyperscalers has an advantage or one of the LLM model makers. And now, you know, Open AI comes back with, well, we'll call your shot here and do better than you. So there's a lot of that going on.

Here's what makes me the most optimistic about the markets. And I'd love to get your take on whether this is the right view or the wrong view. Amazon, to your point, down 8% today. Amazon has actually not made investors money in just over a year and about a year and a half. Stock's kind of the same price it was in the fall of 2024. for, NVIDIA hasn't made people a lot of money. I'm talking about investors, not day traders, in about nine months. But the markets have done well, even with some of those stocks, not participating.

Very impressive, right? Because for the past few years, there's been this concern that the concentration of the market and just a handful of stocks made it very vulnerable to a bare market. It's like, lo and behold, if something terrible happens. I mean, we had deep seek as a stress test. This is sort of a deep seek moment where people are once again assessing, is all this capital spending actually going to be profitable. I think it's going to be profitable. I mean, these are smart companies run by very smart people, and they're looking at their dashboards.

Oh, my God, we're running out of capacity. You know, we could be making a ton more money if we just build that capacity. And everybody looks at all that spending relative to today's cash flow, but there's going to be a lot more cash flow down the road. Are you long-term? So a lot of people who have been in these names. are worried when they hear something like the mag seven and think this is a fight to the death and if we don't know who's going to win maybe I should move to the sidelines What is the time if you're hanging on for the long run? It sounds like you're saying it's not a problem. This is just kind of a near term Yeah, this is just a near term issue. I think

Look, the Magnificent 7 can't be magnificent without selling all of their technologies to the impressive 493 in the S&P 500 I was just asked recently about the Dow you know kind of an old-fashioned kind of index And it's doing extraordinarily well. To me, that's kind of confirmation that all of this is already and will continue to be very positive for the economy. If it's good for the economy, it's going to be good through to all these companies. All that's really happened is we're seeing more competition in the technology space. And technology, I mean, they literally eat their young.

As soon as they create one product, they're already working on destroying it by coming up with another product. That's just the nature of the business. And by doing that, they keep their margins up. I'm not too worried about technology, but I did think that it got a little over down there. And so I did call for a bit of a relative correction and a broadening in the market. These little, like, I heard it earlier on CNBC. I don't know who it was. I was listening on the radio.

Somebody said two and a half percent is the new 5 percent down. Like these little selloffs, they're smaller. They're faster. Like the Tariff Liberation Day tanking. It rebounded in three. I think it was the fastest rebound of all time. is this just what we should be used to now that selloffs are going to come faster, rebounds are going to come faster.

It's not guys running across the floor with a ticket to sell stocks anymore. Yeah, I don't want to jinx it, but once we say that these corrections are going to be pretty short term, but I think at the end of the day it's all about earnings. The earnings story has been phenomenal, and I think a lot of that is because the profit margins at an all-time record high, and that's because of productivity. You know, I hate to promote my own brand, but we've been talking about the Roaring 2020s since August of 2020, and so far, so good. I mean, we're already six years into the Roaring 2020s. Looks like we got another four years and then ask me about the roaring 2030s because it could continue.

It took me about six years to become a believer, by the way. So it's humbling to look back. And I think this is the fear a lot of us have. What do we call it phobia, fear of being in or something? You go, we finally concede. now everything that your Denny's been talking about for six years. But now that I can see it, I have to start to worry. Should we trust that if you get into the S&P right now,

or I don't know if you go so far as take a position on the triple Q's, I know you like international right now, even more so than U.S. stocks, it just feels a little nerve-wracking when you're buying at all-time highs. It does, and I think as a result of that, you're seeing a lot of rebalancing, which is good for the market, because for a while it was very concentrated. And as people get more and more nervous about the market going up, they look for opportunities where things might be somewhat cheaper. I think that explains why gold has been very strong is because people are nervous and gold is a good diversifier in case things go wrong.

Gold is the new Bitcoin. Wait, sorry, am I allowed to say it? From the guy who called it on our birthdays last year that the Genius Act was going to be a reason why. You were right. You're right. We're two days off on the birthday. By the way, speaking of big anniversaries, Kelly, you see that the dad. We could hit Dow 50,000 in this show. Maybe today, maybe not, but we're at 49, 983.

So if you're driving right now, eyes on the road, we're 17 points off. I know, Ed, the media, we love big round numbers, right? We're simple folk. So do I. But I think, I swear, I believe that these numbers matter, and here's why. Again, tell me if I'm crazy. That number, Dow 50K. will make the general news programs, right?

It'll make the morning TV shows that are not CNBC, and it gets into the public psyche, I think, in a way that is outside of our sphere of influence here. Does it matter? It absolutely does matter. It makes people feel good. I mean, you know, past few days, people haven't felt very well about the way the market's been behaving,

and then suddenly it's roaring. And it's had this characteristic of, of having temporary short-term opportunities to get in. And if you get in right, you'll do fine. But $50,000 is a nice round number. And now we can, once we get that, we can start talking about $60,000, which percentage-wise isn't going to be that hard to do.

It's going down math. We're going to go faster and faster. I mean, I've got the S&P going at $10,000 by the end of the decade, and that's kind of seemed delusional. That's four years from now. You think it's going to go up effectively another 50%. Yeah, because I think, you know,

right now, earnings this year are probably going to be north of $300 a share. I think without a recession, which, you know, I think so far is so good, we should be discounting $500 a share at the end of the decade, which is what I think will be delivered in 2030. 500 times 20 gets you 10,000, nice even number. You know what's crazy about these round numbers so they don't even include dividends? I'm trying to pull it up right now. Everyone can do this at home. You go to the S&P Dow Jones Index, do total return instead of price return.

Yes. And do you know what if the Dow would be on a total return? This means all you do, you just collect the dividend and reinvest it, which is how most of us experience the market. What number would it be at right now since $124,654? The Dow? Just reinvesting dividends. How about this?

If the Dow, if we're going to bash Dow Jones, if they hadn't swapped out, I'm kidding. If they hadn't swapped that Exxon mobile for Salesforce, the Dow would be at like $53,000 right now. That's right. That's right. Yeah. Well, these are basically. It's like a top. Yeah. I mean, they're basically managed portfolios and markets and turmoil.

Yeah, on average, those indexes have been pretty useful. I think it's emblematic. Of all the day, but we didn't plan this, by the way. We did not know when Ed was coming to set here that we were going to be five points away. I planned it. We're 10 points. Look, we are 10 points away from Dow 50K. Do we have like hats or so?

Sparklers. We didn't know. How do we celebrate? Yeah. I've got my chocolate. It's one awesome day for sure. She might share her chocolate. Ed Yardin.

Thank you. Thank you. Really appreciate Ed. Thanks. Thank you. All right. Well, in other news, no relief for home buyers. Maybe stocks will go up. You can just pay cash for a house because bond yield's sticking around the same level they've been for more than a year. Almost two years. 10-year yield was 4.2 percent two years ago.

It's at 4.21 percent today. We do have a lot of economic data out next week. We'll see if that changes the story. And after the break, Energy Secretary, Chris Wright will join us. Remember, there's that whole Iran issue. We're going to talk Venezuela, energy policy here in the U.S. US. Power lunch will be right back. All right, time now for a big energy interview.

Earlier today, Energy Secretary Christopher Wright spoke about the electric grid, keeping it on, and keeping power affordable during severe weather, like much what we had the last two weeks. And by the way, what's coming next week? And it got really close, this super cold spell and winter storm with data centers being asked to really told to use diesel generators to make sure their homes, make sure homes rather, have power. Let's talk about that.

Energy and oil is Brent Crudepops. back above 68 a barrel. And welcome back in Energy Secretary Christopher Wright. Secretary Wright, thank you for joining us, really short notice. I'm going to get to the grid and electrical power orders in a moment. I do want to start with oil, though, in Iran, the Foreign Minister of Iran, telling state media the nuclear discussions, which are ongoing right now, we're off to a, quote, good start. But worst case, if something were to happen with Iran and it's 3.2 or so million barrels a day,

would the U.S. oil and gas industry have the ability and wherewithal? to fill any gap? Look, the broader energy sector, the United States and all our allied nations, can absolutely fill that gap. And that's where President Trump's agenda was big picture. Let's grow American energy production. Let's grow our relations with the other energy producers in the world, particularly those that are our major allies, our big allies besides Israel in the Middle East are the major oil

and gas producers. So the world is very well supplied with oil right now. And I think it gives President Trump more leverage in his geopolitical actions to not worry about a crazy spike in oil prices. And that kind of falls to the Venezuela story as well. I know you've talked about Venezuela. Where does Venezuela right now fit into the U.S. and global oil scheme? So right now, you know, Venezuela is only producing about 900,000 barrels of oil a day. It has the potential to produce vastly more than that.

But here's a case where President Trump is playing geopolitics. We're in Venezuela because of their criminality, because they're harboring our adversary nations, because they're exporting of crimes and guns and kidnapping Americans. That's why we're in Venezuela. But President Trump is seeing there's a very unique thing we can do here is we can dramatically pivot the behavior of Venezuela to the betterment of Venezuelans and Americans and our hemisphere without American troops on the ground, but simply with energy and with commerce. So by controlling the sales of Venezuelan oil, which we are doing right now, and bringing some stability and hopefully ultimately a better business environment to Venezuela, we can see huge growth in Venezuelan oil production over the next few years.

And that benefits Americans, that benefits Venezuelans. It benefits the world. And again, also makes us robust to interruptions that might come up with Iran or any other nation around the world. And you and I talked about this a few weeks ago down in Florida in person. Do you think Venezuela could, It's not going to be overnight. The country, it's a dilapidated oil system. There's a lot of work to do. But do you think Venezuela can get over a million barrels a day relatively quickly and then scale from there? Absolutely. Absolutely.

I think you'll see several hundred thousand barrels a day of growth in Venezuelan production this year. It will be a substantial percent of global demand growth this year. Yeah, Venezuela is going to be another helpful stabilizer of energy markets. and, of course, bring that extra heavy crude that so many of the U.S. refineries were built to refine. Secretary, we know that there is this enormous demand for more data centers, more compute. We just heard Jensen Wong reiterating it last hour here on the network. What can you tell us about the bottleneck? How quickly can power be brought online?

How can we make sure there are no blackouts and that prices aren't going up for users? Yeah, well, first on the last point on prices, data centers are actually a road to drive electricity prices down, not up. If you look over the last five years, the states with rapid demand growth are the states that have had no rise in electricity prices or rises well below the rate of inflation. States like New York and California and Massachusetts, they produce less electricity today than they did five years ago. Those are the states with very rapid rises in electricity prices. So data centers are a force for good. And President Trump's common sense energy agenda is going to allow us relatively rapidly to grow the production of electricity in this country as we sweep out so much of the nonsense that was left behind. But we just went through an epic demand surge with this very large cold front that covered a huge amount of the country.

And even the common sense policies the last 12 months made a huge difference there. We kept 17 gigawatts of coal power plants open. That was critical to saving American lives to the storm we just went through. Coal was the second largest source of electricity generation after natural gas during these storms, because you can ramp it up when peak demand. And unfortunately, wind and solar that we've invested so much in, went on vacation when we needed them most. Real quick, in New England, at the very peak demand time,

That is the design criterion for an electric grid. Keep the lights on and homes warm at peak demand. At peak demand time, wind, solar and batteries provided 2% of the electricity in New England, well below the 3% provided by burning trash and wood. And I post some of that data, Mr. Secretary, and people, I'm sure they come after you. They come after me online about it. There's such an energy. We're starting to learn, I think, about how powerful.

is produced. And at one point last week, I think it was 37% of all electricity from Connecticut to Maine often thought of as a, quote, clean energy grid was oil. Usually it's zero percent or a couple percent. 37 percent was oil. You could make the case that New England had the dirtiest grid, the most polluting grid in the United States. Why isn't this getting through more to the public and the policymakers who control the policy that were burning trash, wood, and oil to make electricity in the year 20, 26. Might as to go back to Moby Dick and start wailing off of Nantucket, because that's what it feels like we're going backwards in parts of America. We are, and it's in the name of climate change or green energy, really which are marketing

terms. None of these things are doing anything meaningful to lower global emissions. But Brian, the number you just gave was actually the number at peak demand time. 37% from oil. Secretary, right. I hope you don't mind if I jump in here. We just crossed above 50,000 on the Dow Jones Industrial Average for the first time. You don't need to comment on that unless you're doing. Listen, he's a former public company CEO.

He was at the board of Oakville. And energy stocks, by the way, as you know, are at record high. Many of the oil and gas stocks record high. The solar ETF, by the way, is at record highs playing into this Dow Ford. 50K. This is confidence in American leadership. We have a president in the leader today that doesn't want to end our energy industry or end our innovations in technology. He wants to unleash Americans, business, consumers, and capitalists. And yes, you see it first reflected in the stock market. You will see it reflected in a very robust economy this year and next year in the United States.

As all these plants and factories are under construction in our country, businesses have the confidence to expand and invest in the future. And that's not just energy policy. That's just common sense across the board. Energy Secretary, Chris Wright, we appreciate your views. Dow at 50,012, energy, a big part of that story, affordability, hopefully a big part of the story going forward. Mr. Secretary, we really appreciate you joining us. Thank you very much. Thanks for having me. Thank you. Incredible moment here. I don't know if we can just take one more second. You should. It's been three and a half years since we crossed us.

above the last round number, which was Dow 40,000. As Domchu mentioned, the biggest drivers of the Dow the past six months, of course, it's a price index, have been Caterpillar and Goldman. So this is not even really an AI story. And well, Caterpillar, and people I know CEMUS talked about this. Caterpillar, can we bring up CAT? Caterpillar is an energy story as well. We think of them, of course, for the big tractors and bulldozers. They make them great. But they're getting huge into energy as well because they're learning how to convert some of their turbines into natural gas pipeline machines. Baker Hughes, their turbines, a lot of people don't realize this, they're basically twisted versions in a way, for lack of a better term, of jet engines from when they were

part of GE. Wow. You take a giant jet engine, you change it, tweak it, and make it into a pump for natural gas through pipelines. Caterpillar's doing the same thing. They're a big part of the story. Caterpillar stock, Goldman Stock, those have helped propel the doubt to the level it's at now. Of course, we haven't even had much participation from the Mag 7 to get to this point. Those names also in VIN. It's a small price number. It's a huge mega market cap stock.

But this Dowell milestone is significant. Again, three and a half years to get here, took 3.8 years the previous time. Every time now that we continue to run through these numbers, Brian, the percentage change gets smaller. And I know, listen, what Secretary Wright said, and he and I don't agree on everything, you know, he talks a lot about what he views is important. And there's a big debate there around a lot of those things. But I will say this, whether or not it's the the administration or just market forces. If you go to Kansas and they're paying $2.25, $2.10, a gallon for gas. For most families in America that drive, they use about 50 gallons a month. That's about the average.

That money matters. It matters a lot and it goes into other parts of the economy. And I think it's interesting to watch this energy record high story. And even solar stocks, by the way. Bring up the tan. It's not just oil and gas, folks. solar is also booming. And in fact, there's been more investment in solar the last year than any time in his.

Yeah. And again, what Ed Yardinney, who is with us just top of the hour, just missed this moment by a couple of minutes. But what he said, and he's been bullish on internationally. It just goes back to earnings. The earnings season that we're still going through is on track possibly to still show double-digit growth, which would be the fifth straight quarter in a row. So, yes, the price is rising. The earnings in many cases are there, too.

And Brian, there's Caterpillar up 6% today. Oh, is Ed's still here? Bring him back. Grab it. Is he actually coming back? That's great. It's like Ed Yardinney is still here. Actually, there he is.

This is the benefit of having somebody on set. Come on over. Come on, step into our light here. We're going to take a short break. Ed Yardinney's back. We'll talk Dow 50,000 for the first time ever. Get some popcorn, folks. We're back right after that.

Welcome back. We just saw the Dow cross above 50,000 intraday for the first time in history. Ed Yardini is here on set. with us. 1,100 point rally now, and we're sitting comfortably above this level. Two and a quarter percent gain, Ed. And as you've said, your whole thesis here was we were

going to have the roaring 20s. And maybe in 2026, we're now shaking off the pandemic enough, looking at AI and admitting, okay, maybe you're right. Well, I think the big story really is productivity. And back at the beginning of the decade, I'm a baby boomer, and I knew that all my friends are retiring. I'm still working for a living.

I don't play golf, so I don't know what else I would do with myself. But I knew that my friends would be retiring. And, you know, the baby boomers are sitting on $85 trillion of net worth. And as they retire, guess what? They're spending it. So that explains the resilience of the consumer. And, of course, the resilience of capital spending can be explained by the technology revolution that we've been.

And actually, since the mid-1960s, with the IBM mainframe. And so we've evolved all the way to the cloud, which is a huge development. and now to AI, which is really just another app, if you will, but it's an app that lends itself to all sorts of applications. So I think productivity deserves all the credit for all this. It has made a comeback. It certainly was very strong last year. And I think we're going to wrap up the next four years of the roaring 2020s

with continuing very strong productivity. How much of this, and this is 100 years ago, I was briefly a commodities trader, so I still think it's supply and demand. When I got into this business, there's about 8,000 public equities of the United States, give or take, 7,800,000. Yeah, yeah. There's about 35 to 3,600 now. Right.

The number of public companies basically been cut in half. Yep. The available stock that's out there has gone down by a lot, but money M2, M5, all the money supply numbers keep going up. How much of this is literally just more money chasing fewer assets? I think there's something to be said for that. I don't know it's not very sexy. Well, I think at the end of the day, the arithmetic is. is even simpler, and that is PE times E.

And the reality is fewer companies are making a ton of money with earnings at a record I think it's about three quarters in a row where they've risen to a record high for the S&P 500. The GDP profits is an all-time record high. So I think that's partly the story, but we wouldn't be here if these companies weren't extraordinarily profitable, which they are. The profit margin, as I said before, is an all-time record high. revenues are an all-time record high, which is really amazing because, you know, some of those revenues come from overseas, so it demonstrates that not only is the U.S. economy resilient,

but so is the global economy, which is great, great news, because it was stressed us with all those tariffs last year, and yet look where we are today. So I'll ask you one more. A lot of people, especially younger people, kind of the crypto believers and the rest that they say, of course, it's at 50,000, the dollar's imploding. You know, like, in other words, the idea that real estate's expensive, the stuff. Stock market's expensive. Anything price in dollars is up because the dollar's been debased over the decades.

Well, let's put it in the context. I think what we're down about 10% last year, I mean, that's just a garden variety correction. It's not like in a free fall. And, you know, and a lot of that is by looking at something called DXY, which is the dollar index, which is a bizarre kind of index because it's fixed weight and it's just, I mean, the euro is 57% in there. And, you know, are the Europeans doing anything particularly special and unique and exceptional that would make the dollar go down? I don't think so.

And by the way, as soon as we have like another crisis, I think you'll see the dollar going up because it's still, the U.S. is still the safe haven. Yeah, their argument would they take it even further and say all fiat. It's just fiat's competing against each other in a race to the bottom, and so these stock prices are unbelievable.

Well, you know, I've always counseled against getting into these hangups. These kind of IDs that are driving, ideology that drives your investments. Don't let politics, don't let philosophy, don't let big picture theories get in the way of making money. And that's the important thing. And you really want to start with the data.

Don't start with a presupposition of how the world actually is working. Look at how it's actually working. Yeah, I hate the term cash on the sidelines. I think it's kind of overused. It's like a platitude almost this point. But I do wonder, how much, Ed, do you think, is still just sloshing around out there. And some people do buy at the top, right?

For good or real, the Dow 50K, maybe they put money in. How much money is actually just sitting around still not invested? I think we have to look at it dynamically, you know, instead of statically. And when you look at it dynamically, the world has never been wealthier. I'm not saying that we don't have income inequality and wealth inequality we do. But the world, not just the United States, has never been wealthier. I mean, here in the United States, we've never had a generation retiring with as much money as they have, which is $85 trillion in net worth. A lot of them paid off their mortgages and all that.

So I think what you're saying here is that all that wealth needs to be somewhere. I love all these people who are saying, you know, we're going to have a debt crisis any minute. And some of them talk to me or they talk to their investment advisors and said, well, what are you really worried? about it. So, well, I'm really worried about all this debt. And the market's all-time record high. I'm getting nervous. So if you want to be out of equities, what do you want to be? And 10-year treasuries would be okay with me. So in other words, there's a demand for debt. Look at where the bond yield is. So there hasn't been a debt crisis. But there is a constant need for rebalancing. I mean, the market goes up. It goes up on seven stocks and so, well, maybe

it's time to move into some other areas of the marketplace. Maybe it's time to move into gold. has a very good long-term trend relationship with the stock market. So if I'm right, and the S&P gets to $10,000 by the end of the decade, that could justify gold getting to $10,000, not on any thesis or theory, just on rebalancing. And I think just a quick quota to what you said, it's so important what you mentioned, which is all the, you know, we have an aging society, they're now withdrawn.

All of the gains we see in the market now are going to be withdrawn, and you think converted into consumer spending by a lot of the generation. My friends are going on cruises. I get seasick on these cruises. No. So I just wanted to say, so they're texting me, said, Ed, we wish you could be here. We're having a great time.

And by the way, whatever you're doing, I love the market going up. They're having a tough time spending their nest day because it just keeps going up in value. But they're not spending their nest. So this, I think, Kelly, I know time is tight, but it's now 50K. Let's blow all the commercial breaks.

Let's celebrate, right? I think you hit something really important. So the greatest, I don't say lie, but I think wrong, the wrongest thing said about the market was years ago, 10 years ago, people said, well, the baby boomers are going to all age out, they're going to sell all their socks in the market's crash. If you have enough money, I know to Ed's point, a lot of people don't have the money. CNBC, we know who we're talking to. If you have money in the market, you're probably just spending your gains. You're not even touching principal, Kelly's dividend yield that she referenced earlier.

Right? You got a couple million in the market. I know a lot of people don't, but a lot of people do. You're spending, you're not touching the print. You're not selling anything. You know, we've seen a lot of these consumer competence measures really depressed. And you kind of look at the consumer confidence surveys and you look at the stock market. How could this be happening?

And I think a lot of it is demographics. I mean, I think there's a lot of people that aren't participating in the prosperity that they were experiencing, especially younger kids coming out of college. And many of them are finding it very hard to find a job. Many of them don't have any net worth. They have student debt. But from my own experience and my friend's experiences and some surveys I've seen,

a lot of the baby boomers are helping out their young adult. They are. Absolutely. And they should, by the way. Don't hoard the money. Yeah, absolutely. I mean, we're leaving them all this government debt, right? I mean, the government debt that's accumulated is basically, let me be blunt about it.

It's theft from the younger people. So the government's stealing from the younger generation, but the boomers are giving it back. Yeah, and the governments are giving inequity, and we're leaving them debt. So I think we do owe the younger people. But you, Kelly, earlier you referenced Scott's Wapner's interview with Jensen Wong and Brad Gerster,

and I think they were excellent. And Brad was the architect of that, you know, basically, the Trump accounts. And again, not a political statement, folks, but given $1,000 in equity, that was Brad and some other people's idea. He pushed that for years and putting people in the market that would not normally be in the market, I think is a huge psychological aspect. Absolutely.

Yeah, as a matter of fact, I promoted that in a book I wrote about profits, in praise of profits, back in 2021. I said we should establish these kind of accounts, and I'm glad that Brad followed up on that idea. It's fabulous. But yeah, we want to have people with skin in the game. I mean, we want them to have an experience with what capitalism delivers. I happen to think that you give them $1,000 and they have to hold it until they're 60, 65, and then maybe we don't have to pay quite as much of Social Security. And let the stock market do some of the heavy lifting for the...

Well, that was the whole thing with Social Security all along, is why shouldn't it be benefiting? If you just had put a portion of the proceeds in the S&P 500, and I think we've talked about this, but it's kind of frustrating when we hear constantly about the problems we're facing. On the flip side of that could be this, you know, this return to ourselves from all of this, you know, CAPEX. Yeah, I don't think these accounts should be accessible when you're 18. I think you should watch this net worth go up as you get older. And then you get excited about the market and about capitalism. You know, Chile did that, the country of Chile. Did it? They did. They gave everybody little pass books with parts of the equity market.

they're not exactly a model, but they're a lot better than a lot of other countries in South America. Ed, thank you so much for coming back. We didn't let you leave the building, so that was always locked the door from the inside. Now you can't leave. Let's do this again at 10,000 on the S&B 500. Ed really appreciate it. Thank you. As we mark Dow 50,000, a major tech stock has been disappointing investors.

Even today, it's Amazon. The shares down nearly 7% after the hefty spending forecast caught investors by surprise. And Amazon is on track for its. its worst weekly performance since 2022. Amongst the Mag 7, only Microsoft has had a worst start to the year. Let's bring in Ken Goreski. He's an analyst at Wells Fargo. Still has an overweight on Amazon with the 305 target.

Guillory at last hour, Ken suggested that they really are in a place of somewhat competitive weakness with AWS. You disagree? Yeah, I do. First of all, thanks so much for having me on. I do disagree. Look, I would say this. This was the incumbent in the cloud.

business. They were number one player for a long time. And I would argue that they were late to recognize the opportunity in AI compute capacity. And what they've been doing is rapidly addressing that need. They've been building out capacity. They've laid out for the market that they will double compute capacity by the end of 27. And so we think they're taking active steps. And we think this is really a great opportunity in Amazon. You do. Okay. So in that case, would you say you're not, you don't have like the existential Game of Thrones concern amongst them that we were just talking to Ed Yardinney about? No, look, I see this. We are, and I think, you know, Brad and Jensen earlier today on the network, on your network talked about this is there is a massive, massive imbalance between demand and supply for compute capacity, AI, compute capacity. And really, Amazon and AWS is a play on this. Google is also, and so you've seen

across Google, Amazon, meta, massive, massive cap-ex raises for last year or for this year. You know, if you look back since 2003, these companies, their revenues are up 50%, but their cap-x is up five times, five times on 50% higher revenues. So, you know, you have $8 trillion of market cap and probably less than $50 billion of free cash flow this year. This is a massive investment wave. It is. And I would see what you're seeing here is investors are getting a little bit nervous. They want to see returns.

They want to feel like there are returns on the other side of this. And I think our view is this will be the bottom for free cash flow across these three mega caps. we will start to see better returns. And in Amazon specifically has been behind the curve. We think with this doubling of capacity, we see a massive expansion of revenue growth. We see real acceleration at Amazon to 35, 36 percent growth. And that's from, you know, that doubles growth that we just saw in the second quarter.

What about meta? That was another one that Gill was picking on a little bit, saying, look, they're kind of running out of cash to meet their massive CAPX commitments. Now, of course, they're going to the debt markets, and that's fine. But do you take the view that they're going to easily monetize and have much richer cash generation going forward because of these investments? Or would you like to see them pull back on it? Yeah. So we don't see them pulling back anytime soon. So meta is in a little different situation because they don't have a hyperscale. They don't have a cloud in an enterprise business that they sell compute to others.

So think about this is meta spending, you know, roughly $75, $80 billion of KPEX on returns that are kind of unknown, right? They're making a big bet on compute capacity without an enterprise business to actively monetize it. That's the difference between Meta today and Google and Amazon. But the two, Google and Amazon are actively monetizing those investments. Meta is a bit of a bet on the future. Like Mark Zuckerberg is making a bet that AI and will have many use cases and that he's betting, that he's got we, he will have this latent capacity. And when the opportunity is there, they will pounce and they will run a scaled network

business. And look, they've been tremendously successful in the past. So it's hard to bet against them. All right. Ken, we'll leave it there. Thanks so much for your time this afternoon. Appreciate it. Thank you. Ken Go Rescue with Wells Fargo Securities. All right in the meantime, strategy shares soaring right now. Up over 20 percent, best day since April of last year. But it does come after the stock fell. About 17 percent on Thursday because it really moves on every shift in Bitcoin. Strategy, the single largest repository of Bitcoin.

And really investors on both sides, both long and short, are kind of fighting. sometimes in public to make their case about the stock. So let's talk about it more with somebody who is deeply and personally involved. Fong Lee is the CEO of Strategy. And he joins us now for an exclusive interview. Fong, thanks for joining us. This is a great day today. Obviously, the market's up, Dow 50K, Bitcoin's up.

But the last couple of weeks and months have been tough for crypto investors and for strategy. Shareholders, you're speaking to them right now. What is your message to your message to your, investors. My message is to hold on. We've been through Bitcoin downturns in the past. In 2022, Bitcoin got up to 68K, went down to 16. That was a 75% drawdown.

Now, Bitcoin went up to 125K, got down to 60. That's a 50% drawdown. Seven years from now when Bitcoin's at a million, it goes to 750K, it'll be a 25% drawdown. Everyone will think it's the end of Bitcoin. And I'll say, hold on then too. What if it doesn't go to a million dollars, Fong? What if it goes to $10,000 instead?

Well, first of all, I don't think Bitcoin will go down to $10,000. I think it's extremely unlikely. What's happening with Bitcoin right now is the government's fully behind it. We have a Bitcoin president. We have a Bitcoin headed the SEC, head of the Treasury. We have Bitcoin headed the CFTC. So the regulatory issues that, I think, five years ago, people worried about Bitcoin are gone. I think Bitcoin is a technological transformation as digital capital.

I don't think it's going to go down $10,000. Right, but you're running a business where you kind of have to have a strategy for that. No pun intended. As I understand, I was looking through it a little bit last night. The $17 billion loss in the quarter, of course, was before crypto fell, Bitcoin fell to almost below 60. Can you comment on what the loss is for the current quarter? Yeah, it's a gap loss, right? And if you look on our website, we have information on the loss.

Those are really just gap mark-to-market losses. It's really not a true cash loss for the company. Bitcoin goes down to $8,000 for five years. Maybe then we start to have issues around whether we need to sell Bitcoin. But the gap loss isn't really something we're concerned about. And is that because you have $2 billion or so in cash on the balance sheet? Did I see that correctly? Yeah, we have a fortress balance sheet.

And I think that's sometimes a misconception that we have high leverage. I'll start with. We have about 10% leverage. I think it's 12% if you look at our website on our metrics today. Average S&P 500, AAA rated investment grade company has 20% leverage. We're half of that. In addition to your point, we have $2.25 billion a cash in our balance sheet. We put that on our balance sheet so we could have a digital fortress to back up our dividend

payments. So exactly at your point, not worried about the leverage, not worried about our dividend payment, it's not concerned about Bitcoin price. right now. You have drawdowns like you did earlier the week. Investors are. I'm sorry to jump in. Investors are the stock fell 17% yesterday. It's making more than that up today. I've been following Michael and micro strategy and now strategy for 20 years since it began. It's obviously changed dramatically. What then are investors and short sellers getting wrong? What's the wrongest thing they've got in their thesis around strategy? There's there's two.

things. One, there are people who do not believe in Bitcoin as a long-term digital sovereign store value. And you can have that debate for hours and many have had that. I'll put that aside. If you believe in Bitcoin, what investors don't quite understand is we're leveraged, amplified Bitcoin. We're built to outperform Bitcoin on a Bitcoin per share basis. So if you like Bitcoin, then you should like, if you want something that's leveraged and amplified, right? And that's what most business are, they're leveraged off of a certain commodity. They're leveraged off of a certain product. That's what we are. We're leveraged Bitcoin. I don't think people understand. Some folks are like, hey, you should be just trading at Bitcoin value. We provide value on top of Bitcoin.

We innovate. We create new products. Sorry about that. It must be frustrating because if your average price is 76, I'm sure you'd love to be buying in the 50s, right? If you're bullish on Bitcoin, you want a lower cost basis. So what do you do about that? If the strategy is still to be long Bitcoin, assuming the price appreciation continues, but you can't buy when it falls certainly below these levels? No, I don't think that's well. First of all, that's not true. The average price that we bought Bitcoin at $76,000, it's just a line in the sand.

It's just a marker. What we look at is, is it accretive to buy Bitcoin? And it's accretive to buy Bitcoin when we're trading above the asset value of Bitcoin. That's what's accrued. So the average price of Bitcoin isn't exactly the indicator of when we'll buy Bitcoin or not. What would be the indicators to just say that again? And can you comment on whether you're buying right now? Oh, I can't comment on whether we're buying right now, but you can assume we're buying often, right?

We've bought every single quarter since we started the strategy. It's primarily whether it's accretive to Bitcoin per share for our shareholders, right? And that's why we have products like Stretch, so it's not just about issuing equity. It's about issuing digital credit, which is where our Stretch product, is. And anytime we can issue that, it's accretive for our shareholders to buy Bitcoin. And finally, Fong, I've seen, you know, Jim Kramer and others have been, I can't say that I understand it completely, but would issuing zero coupon convertibles or something like that be a strategy through a time like this or no?

No, what our strategy is to issue digital credit, right? You know, Hal Finney, who founded the, who was the first person to run Bitcoin beyond Satoshi Nakamoto. 16 years ago, he said Bitcoin's high-powered money issued as digital cash. And that's what we see stretch as, as high-powered money. And if we can issue stretch, and remember, you were talking about yields earlier in the conversation before this, stretches 11% yields backed by Bitcoin. If we can issue that and we use that to buy Bitcoin, which is what we do, then we're providing amplification to increase Bitcoin per share.

And that's what causes our valuation to be higher than Bitcoin. All right. Fongley, you know, of all the week, this is like a battleground week and the fact that you are coming on to give a clear answer to your intentions about Bitcoin as it has one of its worst weeks in recent memory. We very much appreciate. Thanks for joining us. Thank you for happening. Fongley is the CEO of strategy, I should say. Let's get to Dom Chuna with the market navigator. Dom.

All right, guys. So big milestone on the Wall Street just now. A lot of focus on the recent value-oriented stock rotation, energy industrial staples hitting record highs. So let's bring in Brian Stutland, the portfolio manager over at Rational Equity Armour Fund. Again, Brian, the 50,000 mark has kind of epitomized this trade of value over growth. Do you think it has legs? Yeah, I mean, when you look at it about a week ago, Trump basically nominated possibly Warsh as an ex-fed governor. And from there, it's not ironic. Noa Khan's great divide song was released that same day, and we've had this division.

Dow hitting 50,000 sort of represents that value side of the trade, where something like the NASDAQ on the other side of the S&P is, that growth trade. And really, we're seeing that divide happen. And I think that continues. Look, if we have lower rates, if we have an economy that is going to be less dependent on, all this software that's going on, you hear all the AI talk and software. And if that makes those value companies a little bit more efficient and profit margins go up, it makes sense to own these value kind of trade names. All right. So how do you express that view structurally with a transaction that kind of gets you to that kind of movement? Yeah, I think, well, as an option trader here,

I look at it this way, right? If I'm looking at IvyE, the value, the value, E.T.F. I can buy that call the 225 call in March. At the same time, finance that by selling the triple Q's NASDAQ's NASDAQA calls, the 632 call. Net net, I actually collect $5 to do this trade. The 632 call versus a 225 call in IVE.E. I collect $5 waiting for the markets to move higher. I'll get long value. If it's above 225, I'll get short the NASDAQ if it's above 632 in the queues. And I think that's a great way just to sort of collect some money and play this sort of great divide that's happening. And really quickly, what's the risk here? Well, the risk here is the NASDAQ starts moving and moves significantly higher about 4% out of the money of these calls, right?

So if the NASDAQ moves above that level, I am short the triple Q's. I would be long IVE against it. So it's sort of like becomes a long, short trade. So the risk is NASDAQ just keeps going. I've got to sort of protect that short at that moment. So I'll be watching that closely, sort of as this month plays out all the way through March expiration. All right, Brian. Thanks for helping us navigate through that. We appreciate it. Have a nice weekend. things back over to you guys. Kelly Bryant. Thank you, Dom. Dow will hitting and now above 50,000 for the first time in history. Stay with us for more after the break. Folks, we got one hour and like three minutes up to go. We're almost done. Dow hitting 50,000. If you're just

joining us now, the Dow this hour hit 50K. We'll see if we close there. But right now, Dow hitting 50,000. Jay Woods, chief market strategist, freedom capital markets. Jay, we're going to, we got stocks to talk you about. But well, you have a 50K hat? What does that say? We do. How did you get that made so quickly? Listen, I had my old 10,000 from 99, and you know, we like big round numbers here. So we got

the 50,000, which will dawn. So you have to know people, Brian. I don't know anybody. I don't know any, I don't know anybody. But our point to Ed Yardini earlier, and I know people are listening and watching, do these round numbers matter because they, like, it'll get picked up by like the nightly news. Like, they'll mention this.

You don't have to be a CBC viewer, I think they have some weird, like a stock split. Kind of a weird psychological effect. It's exactly that. It's psychological. We like big round numbers. We celebrate with hats. But no, there's a big bifurcation going on in this market. And this rotation speaks volumes when the Dow hits 50,000.

Because people that don't understand the market too much, they think everything is great. But under the surface, the technology names have been getting beaten down. We'd like to see that market stabilized. We had that sell-off in crypto. It looks like we're getting a nice little reversal now. But I don't think the worst is over in some of these big names. But when you look at the Dow, 30 stocks, my God, you have seven of them making new highs today. And it's a nice broad basket of leadership.

But it's not the leadership that's going to take the SMP 500 much higher than where it is right now. You know, when I worked down there, Jay, with you, I would get a hat. Yes, you did. Where is my hat? Well, he doesn't want to mess up his hair. Yeah, yeah. You know, it's all screwed up now. Jay, I think we should talk a total return, $125K on the doubt.

I saw your tweet. I know. This is a hill that Kelly will die on. I will. When you talk about the dividends, and these are great stocks that pay healthy dividends, and they've rotated out. We don't longer have GE. We no longer have Walgreen Boots Alliance.

Thank goodness. But we also, you know, we've seen. Amazon and Nvidia join the Dow. It rotates accordingly, and that's why this index is probably the best index, emblematic of the whole sector. So to me, it's just a celebratory moment, but there's more work to be done. Ring the bell. We'll do that in an hour. We'll see usually when we cross above it, it closes there within a day or so.

So it might be today, but it'll be soon. Dave, thanks for watching. We appreciate it. Closing bell starts right now.