Power Lunch - Dow rises 400 points, S&P 500 hits new record in second day of gains 8/13/25

Episode Date: August 13, 2025

Stocks rose Wednesday, adding to their recent momentum as expectations for lower U.S. Federal Reserve rates continue driving the major indexes to all-time highs. We’ll tell you all you need to know.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

More record highs as stocks continue to get bought. Welcome to Power Lunch, everybody. I am Brian Sullivan, and welcome to a wild Wednesday with stocks on a tear again. The NASDAQ, yeah, not up much, but it's up enough to hit a new all-time high, inflation, tariffs, and a big meeting with Vladimir Putin. Not enough to stop stocks. Oh, and we have two more names to add to the Who Might Become the Next Fed chair list. So even though we are in mid-August, it is a very, very busy day and a very busy time. It's great to have you with us and let us start with the markets and your money. Because with stocks notching new records nearly every day the last few months, your first guest today points at really two different things happening under the hood of the same market.

Number one, many market leading stocks are expensive right now, some very expensive by any historical measure. But at the same time, you have the other narrative is that there are some good reasons to believe that even with those valuations, the market rally here and maybe abroad will continue, and it could even grow. So let's try to square those seemingly conflicting narratives. Joining us out of kick it off, Chris Grosanti, chief market strategist, M-A-I-C Capital Markets. Can we square those two things? Maybe we can because I've been around long enough to see stocks go up even when people say valuations are high.

No, I'm saying maybe we can, maybe we can't, but we have to. So the deal is us value investors. We have to. We have to do anything. Yeah, you can't sit on the sidelines here because there's too much bullish short-term momentum. And the reason that's happening is real things. It's not just technical. Take four tech companies, Microsoft, Amazon, Meta, and Google. Heard of them.

Yeah, you've heard of them. 360 billion of CAPEX this year alone. That used to be the size of a stimulus package in front of Congress. I mean, there is just so much cash behind spending, behind this economy. that it's really tough to sit on the sidelines. And if you do, I think you'll be a little bit out of luck. I have another theory that's not getting a lot of attention, maybe because it's complete garbage,

or maybe there's something to it. Stock buybacks. Corporations buying their own equity are also at or near record highs. And I wonder how much that is kind of the grease of the engine of this market. I don't think it's as much as you might think, because what I'm seeing is things like bullish, the IPO, that as you were just talking about, is the final ingredient in my mind to what you need to make a bubble. So you've got momentum. You've got the buybacks, but you've also got the FOMO that's really working.

And investors that had been cautious are now throwing their money in. Okay. So you said it's the final ingredient to what may be a bubble. Right. But that doesn't, let's say the markets are in a little mini bubble. Okay. And let's just say people, there's a lot of people out there. I know watching and listening that are not in your heads right now. They agree. Right.

But that doesn't mean, again, stocks can't keep going up. No, and look, I'm a value guy. I would love to sit back and watch this bubble playoff, but that's not how you can invest. What you do is the good thing about bubbles is the cash goes one way and leave some sectors high and dry, like health care. And that's where you should be invested. You've got things like Eli Lilly that sold off, in my mind, no good reason. And that will do great if the market rolls over and people are looking for a defense. of Haven. So stay invested, but go to where the cheapness is. Well, there was a lawsuit in Texas

around I don't know enough about it. I don't want to go down that road at all. But I do want, you probably heard this yesterday on CNBC. Rick Reader of Black Rock helps oversee trillions of dollars. Right. He came on. The next Fed Chair, by the way. That's the next segment, Chris. Don't don't front run the run down. Okay. Rick Reader said this on CNBC yesterday. You said this is the best investment environment ever. I think that. You mean that?

I do. And by the way, it doesn't mean necessarily everything's going up. But there's a couple of things that play that are pretty extraordinary. First of all, you take the equity side. First of the technicals and equities are crazy. I know we've talked about it before. Amount of cash on the sideline, the amount of buybacks relative to the IPO calendar, i.e. the demand versus supply is pretty extraordinary.

Is this the best investment environment ever? Well, Ever's a long time, I think. But what I would say is if you're thinking of, say, paying down a mortgage or something like that, don't you want to be selling stocks when there's no clouds in the sky, when the Fed's going to lower rates, when all these great things are happening and you and I are talking about them, this is the time when a year, two years from now, you look back and say, gosh, I wish I'd taken some money off the table then. And so I think Rick is probably right.

It's a terrific environment, but the market looks forward. It doesn't stay in the present. Okay, so what's the biggest risk? I think the biggest risk, frankly, is economic slowdown. You saw it in the job numbers that were revised when the poor woman lost her job. And what I think might happen is tariffs catch up with companies that have been kind of like dears in the headlights and afraid to make capital allocation decisions. So I think that's the biggest risk. So is this kind of like, then, a hold your nose, Rale?

You said people are, they're skeptical, but you have to do something because stocks just keep going up. Right. You can hate it. You can disbelieve it. You don't have to believe it. Valuations can be what they are. Right. But every day, and every day, if you're not in this market, you're watching the market or watching other people, hopefully watching us, and you're thinking, well, shoot, I'm missing. Here's a dirty little secret, though. Don't tell it about. Which is that individual investors actually have an advantage over institutional investors in a way you can afford to underperform for a little while. And what I mean is go to the safe place. If Lily doesn't go up as much as Palantir for. six months, that's okay. But the dirty little secret is that you make more money by avoiding disasters than you do by picking the next successful. Well, you also don't get fired. You're not going to fire yourself. You're going to be annoyed that you love some money on the table. Right. Maybe you missed

it. Because let's be frank. Let's be very, very honest. A lot of people, for good reason, probably sold in early April. Now, the only tweet I've ever deleted because it just was so annoying was I said, you don't lose money until you sell. Right. And about a million people told me why I was wrong and stupid and all this other stuff. So I just got sick of it. Deleted. It wasn't wrong.

The reality is that premise, as long as you can withstand it, five years from now, markets are going to be higher, probably. Probably. But this is the best investment environment ever, according to Rick. So I'd be careful because the next environment isn't going to be the best ever. It's going to be something else. Well, don't we want, if you've got money, if you're sitting on the, cash, if you missed this, you wouldn't mind seeing a 10 to 20% fall. By the way, they happen almost

every year. Right. They tend to be healthy and they tend to be longer term buying opportunities. And what I'm saying is you don't have to miss it. Just don't go to the super expensive go-go stocks. Go to where the money has left behind. And again, I like health care, but there's other things as well. Well, health care certainly has been one of the few sectors that has not only not participated, but gotten its, you know what, handed to it. Sure. Maybe for good reasons. but we're watching health care. Maybe it is a value. Biotech, too, in a lot of ways, hasn't done much.

Right. Chris Cresanti, M-A-I, really appreciate the view. Good investing advice. Thank you. Thank you, Brian. All right, you're very welcome. All right, now to the Federal Reserve and the future of what you may pay to borrow money. Now, in just the last hour or so, we had two different Fed speakers.

But that is not the only big news today. There are also two new names being added to the list of potential candidates to run the Federal Reserve. Let's talk about all of it. And get a preview of the Fed's big conference in Wyoming next week. Bring in Steve Leesman, Steve. We are soon, we've got a board here, a graphic. We're going to run out of room on the graphic for all the people whose names have now been thrown into the mix.

Yeah, we've got three new ones, Brian. Rick Reeder, who you just showed a clip from, David Zervos, on this show and others a lot a lot. and as well as, I'm sorry, I'm trying to reader and Larry Lindsay also on the one o'clock show, former Federal Reserve Governor. So lots of former Fed folks, a couple current Fed folks, at least two or three of them. But Brian, I want to just get to the news real quick because I think we have an interesting kind of real-time developing story here about the Fed. Gools be making a couple comments just now, the Chicago Fed president, who's a voter this week or this year, not incredibly convinced the Fed ought to be cutting rates.

Let's listen to what he said about stagflation. Tariffs, in my view, are a stagflationary shock. It makes both sides of the mandate go bad at the same time. And that's the worst position that a central bank could be in. So he said December is a live meeting, but he's not really committing to a cut, not convinced tariffs are one-time price increases. That follows comments by. Jeff Schmidt, the Kansas City Fed President, who will be our host next week. We'll be talking to him, hopefully.

And then you just had Rafael Bostick from Atlanta, and he just made a comment as well. Let me just find it here. He said it feels like we have the luxury today to wait to make a policy adjustment because the labor market remains strong. So Bostick, not a voter, but I'm sure he's just not alone in this comment. And of course, you have the two dissenters from July that want to cut rates now, if not for sure in September. So a split developing not just among the committee members, Brian, but also among the voters on the committee. Yeah, and we know the committee is going to change. We know the head of the Federal Reserve is going to change. I guess the question that really matters, the multi-trillion dollar question, Steve, is that when all this change occurs, how much will the bond market change,

if at all? That's a great question because I went immediately to look at the bond market, and I'm going to look at it again because it's been a couple minutes and things can change. But when I look at the bond market, I'm not seeing much change at all. I mean, it looks like, in fact, yields are a little bit lower if you got a chart of the two-year-up or the 10-year. Today, not sure why the market, Brian, is very convinced and confident in the, there you go, 369 and had been as low as 368, is convinced that this, two things. One is that the tariffs will not cause a broader inflation, and two, the Fed will cut. rates. I think we have the probabilities ready. We're doing this live, as you know, Brian,

so we're just kind of put it together. I'm going to look at my probability chart. And going into this, we had 100% probability of a rate cut in September and about a 67, 68%, there it is, of a rate cut in October. And a third one for December. So there's the market, which, I mean, they have not been wrong, at least certainly the stock market has not been wrong, to see a benign tariff inflation outcome to this point. And they think the Fed is going to focus on jobs, whereas you now have both Bostic and Schmidt and Gouldsby say they think the labor market's fine. So there could be a reckoning and maybe that the Fed reverses course. And these somewhat hawkish comments become doveish ones ahead of a record in September, or the market has some reckoning to do with a Fed that's not quite as ready to cut as the market wants it to be.

Yeah. And the variables always can and do change, by the way. All those estimates that you just gave, they could adjust when the bond market says, eh, we're going to change it up. Steve Leasman, thank you very much. I'm going to be listening to Santelli. I want to know his take on all this because he's the guy with his, you know, he's got like his feet are rooted into that bond market down there.

They don't even move. They're just rooted right in. Steve Leasman, thank you very much. Again, another guy clearly reading the rundown because it is time for the bond report. It is time for the aforementioned Rick Santelli. Rick, you just heard Steve Leasman, comment about the Fed and bond market. What say you? I say that the short end of the market is probably going to get a rate cut or two before the end of the year,

and that indeed will help. But let's put it in the bigger context of what everybody's really thinking about here. Do you think credit cards that are in the mid-20s, 25 percent, how much are they going to come down? Housing. Housing's probably the whole key. That is the one missing piece of this economy because I think there's parts of the economy they're starting to cook in Greece So in a way I agree with Rick Reader's comments, but I don't know that the Fed's going to be able to outside of QE To make a long-term difference in the long end of the market and therein lies the rub

Now if we look at twos and tens we can see that since CPI the yields are moving down This is very normal and I know that the Treasury Secretary has made comments about lowering rates, I would be shocked if he made comments about raising rates, but I'm sure that maybe had some effect. But look at CPI last month when we released it in mid-July. There's twos and tens. You can see how both of those maturities yields moved lower, because once you're beyond the unknown nervousness of CPI, even if it's a little warmer, there's a side of relief in the markets. It happened than the last one. It happened the one before that. So we want to pay attention. But the one market that's maybe paying attention

to all the pressure this administration is putting out there for lowering rates, well, it's a dollar index because it has a wider audience of speculative trading. Right now, if it closed here, it'd be a two-week low close. But what's key, as you see on that chart, is when you open it up to the multi-year low we had in early July, you can see that we have taken a good chunk that bounce away, any of these closes below 98 are going to be considered by technicians to keep putting selling pressure on the dollar. Back to you. That's a big point. And it's, by the way, a big graphic. And we do an Asia show every night. If you're in Asia right now, or you're going to be there soon, you can tune in at 6 a.m. and catch us doing that show.

It's called U.S. Markets Edition. And we talk a lot about currencies because they matter. That dollar fall is, I think, one of the biggest stories, the market, Rick, that's not getting a lot of attention. Well, you know, I think it gets some attention for the wrong reason. The fact that it might be the worst start of the year in decades, to me that doesn't mean much because COVID distorted the value of the dollar to the upside. I think the story is, is that how closely the dollar index is following what's going on with interest rates and the yield curve. The steepening yield curve with pressure on two-year yields and pressure on the Fed to lower rates, that hits right home on the dollar index. Yeah, and maybe it also helps mitigate some of the impact of tariffs.

We'll see. Rick Santelli, thank you. Well, you know, in more ways than one, if you're a multinational company CEO, you're dancing on the rooftop to see a weaker dollar brings in more export profits. But if you're a middle class person who likes to do some consumerism, of course, your purchasing power on imports goes down as the dollar index weakens. Well said. We'll leave it there. Rick Santelli, Rick, thank you. very much. All right, folks, there is much to do today and coming up why this might be the biggest week ever for President Trump on the global stage. Plus, bulls on parade, why investors aren't getting deterred by these record highs for stocks and some staggering food stats that

might make you wonder if the consumer is finally starting to come down. All right, welcome back. Let's talk about the big geopolitical story right now. President Trump and Vladimir Putin meeting in person on Friday in Alaska. Today, Trump and Vice President Vance holding virtual talks with European Union leaders and Ukrainian President Zelensky. Zalinski did say that President Trump, quote, expressed support for a ceasefire

between Ukraine and Russia during the call, but there are still many more questions than answers, so let us walk through them. Fred Kemp is president, CEO of the Atlantic Council. He's also a CNBC contributor. Fred, welcome. What exactly is at stake for Ukraine, Russia, and maybe all of Europe on Friday?

Well, you know, there are three possible outcomes. The first would be the horror scenario for Ukraine, for NATO, I think also for the United States, and that would be the abandonment of Ukraine, making a land deal over the heads of the Ukrainians and the Europeans with Russia, and not giving Ukraine what it needs to take care of its own security, and doing that all without Ukraine at the table. The best case outcome would be a difference,

deal where Trump realizes he's been had by Putin, he's been humiliated, he's been, as he called, tapped along. He continues to provide support for Ukraine, even if it's by selling weaponry to the Europeans. And he slaps tough new sanctions on Putin. And those sanctions already, in the Senate already, there are more than 80 co-sponsors for a bill that he's been holding up. I think the most likely scenario is probably the third scenario, which is it's a good meeting. Everyone walks away from it pretty positively, but they set up another meeting. They're talking about a second meeting with Zelensky in the room as well. Trump reassured European leaders that he's not going to make decisions over the head of the Ukrainians on their land. He said he's going to work

more toward a ceasefire than the land swap they talked about before. So it's an incredibly important meeting because you just never really know exactly what Trump is going to do in a single meeting. On the other hand, I think at this point, we're most more likely not to have the horror scenario, not have the best case scenario, but have some sort of messy middle and continue the talks afterward. Trump himself said yesterday he does not speak for Ukraine, but he's clearly trying to accomplish something. What do you think he's going to try to convince Vladimir Putin of? Well, he's called it a feel-out meeting. But with the European leaders, he said that there will be consequences for Putin to pay if he doesn't stop his war.

I've been talking to Trump insiders, people in the administration, and they confirmed that Trump really hates the bloodshed. He hates it wherever he sees it. But he particularly hates seeing it in Ukraine after Putin has talked to him. So Putin gives him nice words on a call. And then the next day, he's hitting a kindergarten or he's hitting a hospital in Ukraine. And he hates that. What he could do, you know, people point to the situation of Iran where he gave the Iranian leaders 60 days to negotiate with him. At the end of those 60 days, after the Israelis had already kicked the Iranians and the defense missile teeth, he then sent B-2s and he struck three nuclear facilities.

Now, he's not going to do that on Russia. He's not going to bomb Russia with B-2s. But what's the moral equivalent? I think the moral equivalent is getting tough on sanctions. The moral equivalent is making clear that Ukraine will have security guarantees, mostly from the Europeans, but some backup from the United States. And then the weaponry will continue to flow, because Putin is not going to be ready to make a good deal for Ukraine in its future at the current situation where he actually thinks the momentum is on his side.

There are already many economic sanctions on Russia. They are effectively cut off from the banking and insurance. systems for the Western world. Still doing a lot of business with India and China. We get that. The sanctions, though, you would have to admit, Fred, have not necessarily been enforced to the level at which one might want them to, because as I'm sure you have to, talk to people in the former administration.

You also don't want to send oil prices to $140 a barrel because then gasoline goes to $6 and it's a political non-starter. Are there sanctions, new sanctions, or the enforcement of existing sanctions that we could do that would really hurt Putin. So I have talked to Trump administration officials, and they seem to feel that there's just much more latitude to get tough on the oil sanctions. The Senate sanctions would be secondary sanctions on countries like India and China who are buying oil.

And don't forget, Trump has now threatened to put a 50% tariff on India because of, in no small part because of the oil that's buying from Russia. And that was really a message to Russia that he's willing to get tougher on that. So he could get tougher. They feel that they could get tougher on that, particularly as oil prices are relatively low right now, and they don't feel that they would jump in the same way that they might have earlier. But you are right. The Biden administration never wanted to get too tough on the sanctions that were in place on oil, partly because of the inflationary impact you can have and even the impact it might have had

on the last presidential election. So it's always sensitive, but I'm hearing that they're more in a mood to do it now. The interesting thing is Trump doesn't like being humiliated. He doesn't like being played along. He usually responds quickly on that. He has been very, very slow to respond to Putin's and calcitrance. The real question is will he be really willing to do it now?

And I think nobody knows that except for President Trump himself. And as I've argued, the most important square foot of geopolitical space right now is between his ears. Yeah. And the dirty secret is Russia selling more liquefied natural gas to Europe than any time ever in history. It's kind of not been told, I think, for anybody but us. We're trying. Fred Kemp of the Atlantic Council. Fred, really appreciate your insight.

Thank you. Thank you so much, Brian. Should be interesting on Friday. Yes, it should. All right, on deck. The Wall Street Journal's Gungeon Banerjee is in-house on why nothing seems to scare off stock traders right now. Well, welcome back with the NASDAQ and the S&P 500, both hitting new record highs again today. We'll get some insight into what the so-called retail, you know, the at-home trader, is buying. Your next guest says that most investors are still bullish and they continue to pile money into some, what might consider, risky assets. Here now on set to name some names is Gungeon Banergy, lead writer for Markets

Live at the Wall Street Journal, also a CNBC contributor. Gungeon, good to have you on set. Good to be here. Thanks, Brian. We just, we led the show. I don't know if you saw the top of the show of Chris Grosanti about how you could hate this market. You could say it's overvalue. You could say it's a bubble, but people are still buying. And that includes the retail investor. They are still buying. They are still bullish. And you know, I think people think of 2021 as the peak of the speculative mania in markets, and they think things have calmed down since then. I think things are more speculative than they were even back then. I think people are embracing more risk than they were even during the 2021 mania. Oh, okay, hold on now. That's a big statement because

2021 literally books are written about it. The Wall Street Betts crowd, Reddit investors, we did whole segments on it. You think right now might be more speculative than then? All you have to do is look at the amount of leverage out there, right? I'm sure you saw a FINRA margin debt balances at all time. Yeah, look at it all the time. Well, and also individual investors, they tend to favor leveraged ETPs, assets under management for leveraged exchange traded funds tied to equities. So these are bullish on equities. Those have topped around $119 billion. That's the highest level ever going back to Morningstar direct records, going back to 1990. Are these some of those products? And we're not picking on any one product in particular folks.

But are you talking about the ones that are like 2x and 3x, bullish products, like you buy something. Yeah, but if they go down, you're down three times, two times your money. Sure, sure. And take a look at what's happening in options, right? Individual investors loom larger in options than they did in 2021. You know, zero DTEs, prediction markets. You can now bet on where cryptocurrency prices will be within the next hour. So the market has become more gamified since 2021, and people have also embraced risk more than they have back then.

That's, you know, what you said is so important because you can not only, and my producer and friend Max Meyer said this years ago on last call. It was good. I don't know if you saw that program. I love joining you on last call. But it was the gamification of the stock market because the idea is it's not that you just even own a stock anymore. To your point, you can bet on where things are going without actually owning that thing. Exactly. It's like instead of betting on the outcome of a sports game, you're betting on how many points LeBron James is going to make in the fourth quarter or something like that. So the time frame over which

you can make bets on stocks and ETFs has gotten compressed and people want to play the game. Is there, I don't, I'm not, again, not picking on any company, but there's definitely a big game going on, I'm using my words carefully, in crypto right now. Yes. Today we have Bullish. That's the name of a company. It's an IPO. Started about five years ago out of the Cayman Islands. That stock's soaring. We could probably show that. You've got bitmine immersion technologies. Tom Lee's executive chairman.

That stock, all it does is go up. What do we make of all the stuff going on around crypto? To me, it feels like the new flavor of the SPAC, right? The SPAC was the hot thing a few years ago. Right now it's these companies that are just buying loads of cryptocurrencies because people want to make these leveraged bets on crypto. I think a lot of the speculation is happening in Bitcoin, Ethereum, companies tied to that. It's happening in tech.

When you look at some of the top names traded on interactive brokers, Fidelity, right, those are the tech names. It's the NVIDIAs, AMD, Tesla. You're seeing animal spirits around stocks like Figma emerge as well. Yeah, I wonder in those, by the way, interactive brokers, those names, they're down to one day, does not a trend make. They are down today. Some of the MAG7 are actually down. I mean, it's actually. Can you believe it?

It's allowed. Apparently, it's legal. But I do wonder if some of that money is going to. going to shift from the apples or NVIDIAs, whatever, of the world to the bullishes of the world? Yeah, you mean go into stuff? Like, say, you know what, I'm done with the AI trade? Let's go into Bitcoin. Let's go into crypto.

I don't know. It feels that when you look at a circle, when you look at a bullish, when you look at a bitmind immersion technologies, it seems kind of that way. I think you are seeing a lot of people go into those crypto trades, but it does not seem like people are tired of the AI trade just yet, not when you look at it. the top names traded on these brokerages, not when you look at the price action this year in some of these trades. You must, you probably get much nicer comments than I do. You must hear from readers and viewers. What did they say? Because a half of my feed is like, we're doomed, but they've been

wrong. You can make a good case of why stocks should go down 20%, but they don't. So I recently wrote about generation by the dip, you know, this cohort of individual investors. A lot of them are younger, a lot of them haven't experienced 2008, the dot-com boom, when it took a lot longer for stocks to recover and reclaim new highs. The bouncebacks the past few years have been a lot quicker. And I got a lot of constructive criticism around that piece. And a lot of it was... Is that what we say now, it's constructive criticism? No, I had a lot of people, I love hearing from readers and viewers, by the way. And a lot of people reached out and said, I think stocks are so overvalued. But I feel like people have been saying that the past few years in the market

has just kept marching on, right? And that makes it incredibly tough to bet against this weekend. Well, we'll wrap it there. Two things. Number one, the market swooned that we had in April around tariffs was the fastest recovery ever. So to your point, young investors like, see, markets always come back. Number two, if anybody out there does have constructive criticism about this segment, Gungeon welcomes all your comments on Twitter or on email. Gungeon Banerjee. Really appreciate it. Great stuff. Thank you. Great to be here. Be well. All right. Restaurant names like Kava getting crushed on some disappointing results. But this restaurant owner is bucking the trend. We'll show you a different side of the food

story coming up. All right. Well, that animation can only signal one thing. It is a news alert, and it is a news alert on Apple. And if it's Apple, that means it's Steve Kovac. And he's here. What's going on? Yeah, we saw Apple shares spike a bit a few minutes ago on this Bloomberg report, Brian, that Apple's preparing a slate of new AI products. Now, these products have been reported on before. One is a sort of smart home hub. Think of it as an iPad that you can use to control all your smart home gizmos and gadgets. I was actually supposed to Brian launch this year that's been pushed to next year because

that delay to Siri, this big AI upgrade to Siri that was delayed back in the spring. It's now expected to happen next spring, and it's going to sort of enable this new wave of products. the first one I told you about. Then there's another one. How about this, Brian, a robotic arm with, think of it like with an iPad on it that can move around as you're talking in a conference and talk to you and interject with an AI assistant and things like that. It sounds like an enterprise play. That is supposedly now, according to Bloomberg, coming in 2027. So those are the big two things. It's really Apple using Siri as the leverage and hub for all these new kind of products. I know I'm getting old, but you ever heard the term vaporware?

Yes. And for the viewers, that is still a term that you use. Yeah, it's basically a term for software that companies promote or talk about, but that either never happens or is much later than we thought. Is there a risk this is vaporware from Apple or is this going to happen? This may not happen. And Apple works in things all the time. Famously, they were working on a car up until a little over a year ago. So, yes, it is possible this doesn't happen.

But it's all hinges on whether or not. this update to Siri can happen. And so this report is also saying Siri is going to get kind of a bit, a little bit more personality to it and things like that. But we'll have to wait and see what approach they take because they have lost a lot of key engineers working on Siri and their large language models. They might have to end up licensing or partnering for it. Or partner with the robot arm. That could work too. That they're that they're talking about. I mean, yeah. I mean, maybe if you, maybe you're really need, you're tired of FaceTiming, why hold up the phone? When the robot arm? When the robot arm is.

Take the garbage out and make the robot arm do it. Yeah. Hopefully there's another part of the robot, not just the arm. I think it just stuck on the table is what it's being reported now. I like it. Yeah. Robot arms. Thank you.

You got it. All right. We're going to switch from Apple to food. Kava reporting yesterday in the street not liking the numbers. Kava shares down big today over 15% and down 38% for the year. It reported lighter than expected same store sales numbers and it cut a number of its guidance metrics. Now, Sweet Green, kind of in a similar situation. situation after its earnings last week.

Shares tank the days after reporting and are now down 70% this year. Salads, folks, not all they're cracked up to be. But what's interesting is that if you look elsewhere in the restaurant space, it's kind of weird. Blumen Brands, which is the parent company of Outback Steakhouse, down 44%. But cheesecake factory is up 34%. Blumen Brands down. Cheesecake Factory up.

Is there any trend here at all helping us to make sense of this? Morgan Stanley Restaurant and Food Distribution analyst Brian Harbour. Brian, you know, the Kava's of the world aside, we can get to that specifically in a moment. How do we explain why one stock is up so much? The other one is down. Is it just execution, consumer taste? Well, the truth is full service, notwithstanding on glooment, as you just showed. Full service is actually doing pretty well right, right?

Why is that? I think somewhat people are still going out to eat. They're still looking for experiences. There's a little bit of a bifurcated economy here, right? I think where that higher end occasion is doing okay versus you might think of more of the transactional stuff. I think that's still pretty tough. That's been visible here if they're earnings season. Yeah. People are, I mean, salads and Kava aside are so people are moving away from what they call fast food or quick service to sit down. Is that because if a couple bucks extra, they can feel like they're having a real sit-down meal? I think that's part of what it is, right? People still want to go out with family and friends. Quick service is always a little more transactional, right?

It's more depending on a workday lunch. You can very easily replace it at home. I think the message is, you know, people aren't cutting out on that meal where they go out with their family. But if you, you know, go to Starbucks a little bit less often, if you buy, you know, fewer sales during the work day, I think that's kind of what it is, you know, in this economy. This was the reality of it. In your coverage universe, Brian, listen, when I see stocks down 70%, I think maybe there's an opportunity there. Things either stop going down or they turn around.

Are there any stocks you love right now? We like Chipotle, right? Tripoli's had a tough year so far, and they had negative same store sales in the 2Q, right? Some of that's just comparison issues. Things have absolutely slowed, right? That's been true across a lot of this fast schedule landscape. But when you think about a company, it still has very good value, still opening new stores, that are performing well, still has very good margins. I mean, I think the story is still very good

for Chipotle. But what happened at Kava? There's, weren't they to quote Chipotle of Mediterranean? Well, look, this is a bit of an expectations, right? It was an expensive stock, very high expectations before. Those have just come in a bit, right? Nothing's really going wrong at Kava. They're opening very strong new restaurants. Actually, if you look at earnings, it was a little bit ahead of our estimates yesterday. So I don't think there's anything off track here, but some of the growing some of the expectations of mismatch. You just have to work through that. I think that's really what it was today. All right. Brian Harbor, Morgan Stanley, says Chipotle, still a good deal in this market. Brian, appreciate it. Thank you very much. Thank you. All right. Let's get right now to Courtney Reagan for a CBC news update.

Hi, Brian. President Trump said today Congress will need to pass a bill that would allow for the long-term extension of federal police control in Washington, D.C. Without that action, there is a 30-day limit. The president announced the takeover as well as the deployment of the National Guard earlier this week to address crime in the nation's capital. Well, federal judge ordered the Trump administration to reinstate millions of dollars in grants awarded to UCLA. The judge ruled the National Science Foundation tried to evade an earlier ruling requiring the funds to be restored. The judge also said the administration appeared to be cutting grants with liberal causes rather than addressing its goal of countering alleged racism and anti-Semitism on campus. And fewer Americans are drinking alcohol

A new Gallup poll today released that only 54% of adults in the U.S. say they're drinkers. That's down to 8% in 2023 and the lowest level in Gallup's nearly 90 years of tracking the data. 53% of adults now say moderate drinking is bad for their health, which is up 25% from just 10 years ago. Brian, I think we all know it's bad for you. Well, but are they California sober? You know what that is? I don't even know what that means. You don't drink booze, but you do a lot of.

cannabis, do a lot of weed. So you're stoned, but you're not drunk, I'm told. I don't know if that question was specifically asked, but I'll look into it. I want to see the next poll to see how many people are, say, well, I'm drinking less, but I got a few gummies on the side. I know half of them are on the turnpike. I thought it was going to be like drinking healthier alcohol or something, but I guess that's not it. Is that a thing? I hope it is. Courtney Reagan, thank you very much. All right, coming up, a power check on this mystery stock. It's up 30% in three months. I don't know what it is. The big reveal coming up. Crypto watch is sponsored by Crypto.com. Crypto.com is America's premier crypto platform.

All right, let's get a power check on a couple of stocks preparing to report their earnings and one stock trading at its highest level of the year. First up, Cisco. That's stock down a a little bit head of its results after the bell tonight. Despite today's decline, shares still trading levels. Not seen since the year. Remember Cisco briefly, the biggest company in the world. John Deere also on deck. Investors will be watching for our tariffs might have been impacting its overall business. And then finally, the mystery chart was D.R. Horton, the home builder. It's up more than 30% over the past three months, D.H.I. Joining us how to break down his trades on these names, Lee Munson, president and

CIO at Portfolio Wealth Advisors. Lee, listen, Cisco, good for them. Chuck Robbins. He's a guest on CBC tomorrow morning. Stock's at the highest in 25 years. What do you make of it? Well, I love that people are getting their money back back from the dot-com crash back in 2001. Here's my issue. You've got artificial intelligence at full megascaler levels, and this company is still looking at mid-single-digit growth rate.

I don't think it's enough. It's still trading at almost a 30-pe. It's got a nice yield, but I think it's a value trap. If you can't show me low-double-digit growth, in this type of market on AI and all the promise, I don't know what we're going to do if that starts slowing down in the middle or late next year. So I think it's not a stock that you go into. I think Cisco, along with Intel, greatest hits moving on, not for me. What's a take on John Deere? I've got to imagine that commodity farm prices are a lot more

important to John Deere than Terros, but what do I know? No, that's exactly what you know. I was long this earlier this year. For full disclosure, I sold some yesterday. I don't want to go to earnings on it. I was long earlier this year because 80% of everything they make, all those parts are inside the U.S. So they're somewhat insulated from the tariff threat as far as their supply chain to make the stuff. But you know what? I care about their customers. And right now, they're the first to admit that forestry and construction are going to get hit. So even though John Deere doesn't directly get hit by this trade war, their customers downstream are going to get hit for the trade war. So I'm going to take my big profits this year and I'm just going to sit it

out. If it pops on earnings, it can do it without me. I'll look at it later. Amazing. DR. Horton, that was our mystery chart. 30% gains, even as mortgage rates to stay stubbornly stuck around 7%. I can't believe I'm long and not wrong. I started owning this last year thinking it was at the peak. I've been just eating humble pie all year. Since their earnings, it was beating the market. Today, it's up huge. It's not that I'm in disbelief, but let me tell you, for all those people listening, here's what the home bills are all about. The home builders always start popping well before everything else. So we don't need Fed cuts in September. I don't think we're going to get it. The market has adjusted. D.R. Horton's got

all the cards. They have the land to build. They have first-time home buyers that are in demand. And I think investors are seeing through. We're going to get cuts next May. Why do we care about September? I'm long. I'd love to add to the position. Appreciate the candor and humility and honesty. Lee Munson. Thank you very much. Thank you. All right, you're welcome. Still ahead, why President Trump's meeting with Vladimir Putin could help decide the price you pay at the gaspillar. All right.

Welcome back. Doing a quick hit on energy because there are really two stories right now to focus in on number one. The continued problems with wind turbine maker Orsted, well, the market continues to think there are anyway. The American ADRs are down again right now. This on top of the big losses since Monday. Orsted is primarily traded in Denmark. It's one of the largest wind energy companies in the world. Of course, like we said yesterday, we've reached out to Orsted to try to get their CEO on, still waiting to hear back, shares now

at more than 10-year lows and down another 3.5% today. Also, we're watching the price of oil. Now, prices continue to fall. Oil prices at 6551. And really one of the big underlying stories in oil right now is some of the growing differences between where different groups see production going in the future. OPEC, of course, is adding more barrels to the market, while another energy group, the IEA, is worried about too much oil on the market ahead. Now, it should be noted that the IEA has tended to be way more bearish on oil demand the last few years, with some of their estimates having to be revised upwards. In other words, they kind of got it wrong, but this growing difference in oil production estimates is becoming a big kind of tug-of-war in the oil and energy

markets. All right. Still ahead. It is not just American stocks that all-time highs. We're going to highlight some of the other markets around the world, soaring. We're hitting new record highs for the NASDAQ today, but to be clear, it is not just us. Many markets around the world are also hitting new all-time highs. There are some of the names, South Korea, Taiwan, Japan, and more, all at all-time record highs. Mexico doing well. It is not just the United States. That is rocking. It is really, all the global markets, not all, but most the global markets doing very, very well. Just something to put in the back of your big doggins. Thanks for watching. Power Lunch,

everybody. See you tomorrow. Closing bell starts now.