Power Lunch - Dow surges, closing in on 48,000 mark 11/11/25

Episode Date: November 11, 2025

Softbank sells all of its Nvidia position. The government shutdown looks to be nearing an end.  And what signs are the technicals flashing? It's all here on Power Lunch.    Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The Dow popping again as markets honor America's veterans. Welcome to Power Lunch, everybody. I am Brian Kelly back in just about a month's time. Veterans Day means the bond market is close, so stock moves, maybe more muted, but we are seeing some declines in high-flying core tech stocks like core weave slammed. It's outlook not optimistic enough. Nvidia lower, soft bank sells out, Oracle, Palantir, Micron, all seeing some selling today. We'll get more on that in a moment. Also headline in the news, day 42 and counting for the partial

government shutdown. But a deal may come later this week, some brave Democrat take heat for crossing the aisle. What is the market implication of any deal? We'll dive in. And it's getting real, real. The luxury resale site soaring. on earnings and guidance, and the real reels, very real CEO, will join us exclusively. Really? All right, all that's ahead, but let's begin the hour by hitting on one of the most important companies on the planet. That is Nvidia.

Invidia shares down, not a lot, down about 2.4%. After Japanese investing giant SoftBank did what some might have said was unthinkable before. It sold its entire stake in Nvidia. SoftBank announcing it cashed in all of its Nvidia. chips for about $5.8 billion. Masayoshi's son, who runs SoftBank, will use his company in the proceeds to fund massive investments in Open AI. So they're not getting out of AI.

They're going a little heavier into Open AI. Obviously, a lot of questions, a lot of angles here. So let's bring in McKenzie Sagalos with more big sale, big news. Yeah, it is, Brian. You've got SoftBank making one of the boldest shifts that we've seen in. in this AI cycle, exiting Nvidia to go all in on Open AI. And you said it, the firm just sold its entire Nvidia stake. We're talking about more than 32 million shares worth nearly $6 billion.

And it is part of this broader repositioning around the application layer of AI. And that includes participating in Open AI secondary share sale, which just closed last month. And, of course, SoftBank is leading that $40 billion primary round that it's expected to wrap soon. And I will say this, to raise the cash for both of those investments, SoftBank not only exited its Nvidia stake, it also sold more than $9 billion worth of T-Mobile stock, and it tapped a margin loan on its arm's stake. So it is pulling every liquidity lever here to fuel its next chapter with OpenAI. And I will say it is not a call against Nvidia's future. They've explicitly said that this isn't about valuation.

It is about where they see that next wave of value creation. And it's not in the infrastructure layer, but it's in the interface. So the platforms, agents, those tools that consumers and businesses are actually using. One of the third note, Brian, this is not the first time that SoftBank has exited out of its Nvidia stake. They also did that back in 2019. Had they not, it would be a stake worth $210 billion today. InVIDIA surge 5,000% since 2019. And even for Masayoshi's son, who I believe is the richest man in Japan, that is still a lot of money.

Let's stay on that story because they're planning to really bet the house. on Open AI, but here's what's interesting. Their biggest competitor, Anthropic, likely to make a profit a long time before Open AI. Why? Well, the Wall Street Journal just got their hands on some financial documents from both OpenAI and Anthropic, and what they show is just how, like, just how differently these two AI giants are approaching profitability. So the why is that Anthropic has always been focused on enterprise, and it's paying off. Roughly 85% of its revenue comes from business customers

compared to OpenAI's 70-30 consumer-heavy split. And that consumer side, Brian, includes products like ChatGBT, BT, that new video tool called Sora, which is very popular for them, but also deeply unprofitable, and a major driver of OpenAI's infrastructure costs, why they've committed more than $1.4 trillion to power that consumer-facing product. Now, I will say this, some of those numbers that the Wall Street Journal got, the docs,

They expose the fact that OpenAI expects to lose $74 billion in 2028 alone, burning through 14 times more cash than Anthropic before it turns a profit in 2030. And that's a big concern here. Bernstein analysts, they did some back of the envelope math based off of Microsoft's latest quarterly print. OpenAI burned $12 billion in Q3. So I want to be clear where you just said vis-a-vis the Wall Street Journal, Open AI plans to lose $70-plus billion in three. years, not this year, not next year, three years from now, they still see losses greater than the market cap of the majority of American companies. But CEO Sam Altman would say, in fact, he just said at the end of last week that they are on track to bring in revenue on the scale

of hundreds of billions of dollars by 2030. That was a sharp revision upward. So they're saying that, you know, we're spending to make money. Yeah, listen, a lot of companies make a lot of billions. they try to make profit on those billions, not lose money, but it's early. We'll see how it shakes out, and we'll see how patient investors are going to be. McKenzie Seagalos, thank you. All right, so how does soft banks big NVIDIA move impact the broader AI landscape? Let's talk about that and more with Futurum Group CEO Daniel Newman. He advises major tech companies on things like artificial intelligence.

He's at the NASDAQ where AMD's Analyst Day is taking place. Otherwise, Dan, we would welcome you here on our lovely set in New Jersey. Was I making too big of a deal about the $76 billion? Because if your internal documents, they're going to lose $76 billion in three years, even for Open AI, that is a lot of money. Yeah, it's a great point. Good to be with you, Brian. The overall bubble case, we've heard the Burry story come up,

is largely rooted in this Open AI, trillion dollars plus of expense, multiple years of losses, is this going to become a problem? And I've had the benefit of spending time with some of Open AI's investors, some of them that have come in at rounds at, you know, quarter trillion dollars. And I've asked them the question about this kind of endless liquidity. And the bottom line is, is that this is not a company that's just going to be the application layer. This is a company that its biggest backers and investors believe will become the largest hyperscaler in the future.

So it isn't just going to compete for these software and for these chat GPT and video making models. They are going to be focusing on taking over this AI layer, going down the path of Anthropic, playing in the enterprise, developing these bigger models, and then ultimately developing a model to make money. But the patience, for me, it's very hard when you see what Anthropic is doing, but at the same time, the investors said the appetite, just like Lisa Sue said today about AI, is insatiable. They have oversubscribed rounds, and that trillion dollar IPO is very real. So they can bet on this long term, even if they don't get to profitability, and they'll still have the money to keep rolling forward. Okay, Michael Burry, best known from the big short,

he was a short seller of subprime. You know, he, we believe, because he posted it to X, and we looked at his 13 Fs and some other things, that we believe his short, NVIDIA and maybe Palantir via the options market. Again, we can't know. It looks like he is. He also just posted to X, kind of accusing some of these hyperscalers of manipulating accounting rules because what people don't realize that semiconductors like the stuff, the chips that Nvidia make, they die. They need to be replaced. And then he thinks they're not factoring in a fast enough replacement cycle,

effectively kind of skirting accounting rules. It's complicated. I tried to make it simple. Dan, is there anything here? Yeah, is there a there there? I mean, we talked about Corweave and it's selling today. under pressure. It's not directly related to depreciation, but one of the concerns around Corweave has been specifically this multi-year depreciation. It is buying so much Nvidia. Will this

hardware last for five or six years? There's really a story on both sides here. TPUs that Google produce, these Hopper instances. We heard the CEO of Corweave talk about renewals of contracts on these older chips for 95% of the value still today. So these things are lasting longer than a few years. But at the same time, the argument on the other side is that these new chips, NVIDIA, Jensen's coming out with a new generation twice a year right now. And these new generations are so much more efficient. And with the cost of infrastructure, the demand on energy, there is a there. Having said that, I think he's reaching, he's grasping its straws to say it's fraud or suggest they're doing something illegal. I think they're using the maker's

depreciation schedules, the accelerated depreciation schedules that are available to them. to show income, and as long as these things continue to run and continue to be monetized, I think that these companies are okay, and I think they're following rules and depreciation the way it's been intended to be followed. Fair enough, but I want to make this point, because I talk a lot about energy, as you know, Dan, we talk a lot about oils, oil wells, they can go dry, you need to keep investing money so you can get new oil out, right? And many people would argue that the oil industry is underinvested.

AI and the hyper-scalers, they're the same way, right? These Nvidia and AMD and whatever chips you're using, they don't last forever. In fact, some people might suggest they last a couple of years, then you have to replace them. So every couple years, you're buying more. You're buying more. I don't think that's a story that's widely reported or understood. Yeah, I think there is buying more. I think that every couple years that all of them need to be replaced isn't true,

but some of these most intense workloads are definitely. You've heard Sam Altman and Elon Musk say our GPUs are melting. This is that capacity constraint. And to your point about energy, there is a reason that these new interesting AI utility companies, the ciphers and the Iron Limited's have been popping up of interest because they're bringing together that energy, capacity, high-performance compute, AI, and building it all in one place. Corweave today got knocked mostly not because of demand.

He said insatiable demand as well, right on CNBC, I heard them. But they got knocked because building these data centers is hard. You know this from being an energy. Building the infrastructure to build the capacity is hard, and Corweave doesn't control it. And that is one of the biggest issues right now is that how fast we build is rate limited by things like turbines and thermals and things that are nothing to do with the chips themselves, even if we can build those fast enough. By the way, I'll take it one step further and think we had Cipher on last week. We had Paul Pregor of Terrell, if he's been on a number of times, had Hutt eight on yesterday.

Concrete. Just finding the concrete to build the slab that the data center goes on. Those are the things nobody thinks about, but the data center is really just a giant building with a bunch of computers and wires in it. I mean, I hate to say this. They're not that complicated. It's 100% the case, but it does take a lot of time. Every part of the supply chain, Brian, to build data centers right now is sold out. through the end of the decade. Every data point we have says through the end of the

decade, we can't have a demand issue because we can't even meet that we can't even meet the demand with the supply that we have. That's it. I mean, that was what I was down in Miami at an energy conference yesterday. That's all anybody was talking about. Glad you're on to talk about it. Dan Newman, thank you very much. By the way, Lisa Sue of AMD will be on Squawk Box tomorrow. All right. After the break, it is day 42. The longest government shutdown in American history, but a new funding bill. to the House, is Washington really any closer to reopening the doors? We'll talk more about it. Next.

All right, welcome back. Hopefully the end of this embarrassing and troublesome, partial government shutdown is just a few days away. Eight Democratic senators chose to vote for the good of the federal workers out of a paycheck instead of just voting with other Democrats. aside, any reopening of the closed parts of the government would mean the people get paid again. And investors will again begin to receive crucial economic data, which means, of course, we could have kind of like a fire hose of information coming at you. So what should you really be paying attention to? Joining us now with more is Chris Krueger. He is managing director of the Washington Research Group at TD Cowan. Always, always a must read. So Chris, you are dialed in as much

as anybody, you're down there. Is this government shutdown going to end by the end of the week? Yes. It might even end, probably ends tomorrow night. The House Rules Committee is meeting in a couple hours. The votes should start tomorrow around 4 p.m. Once the House with a simple majority vote passes the Senate-passed bill, President Trump signs that bill.

The government is reopened and funded until the end of January. So what would be the fastest best case scenario? Legislatively, how would it work? Yeah, no, I mean, I think that's pretty much it. I mean, I think the one thing to watch here is the vote is going to be a, it's a tight margin. House Republicans only have a two-seat majority. And they're, as I'm sure people are aware, there's a lot, there are a lot of issues with the airports. I don't know if you can hear the wind outside. It's howling in northern Virginia. So if the vote is delayed, I suspect it's just for attendance issues. But all signs point to the government reopening tomorrow night, certainly by Thursday.

Yeah, I flew today. I flew from Miami Airport up here. And again, just thank all the TSA workers. Thank the air traffic controllers, although you don't see them in person. At least I don't. Maybe you do because we appreciate them being there. So we had eight senators go from Democrat. I'm sure they're going to take a lot of heat for it.

They probably are. People are going to call them all kinds of names. But they're probably doing the right thing for the federal workers that just want a paycheck. Will we see the same thing in the House? Do you think House Democrats will, some of them will come across so we don't need just a two vote or two vote carry by the GOP? You know, we will see. I suspect there will probably be a handful of House Democrats to vote for this measure, whether it's folks who are in the so-called problem-solvers caucus,

folks who represent a number of federal employees, folks who represent a number of our nation's military. And again, once the government reopens, the paychecks will flow. There will be clarity around those SNAP payments as well. The SNAP benefits will start getting the BLL. data. And then we'll also probably get some of the details around the planned $12 to $15 billion farmer bailout. So the government reopens this whole process sort of, you know, there is a level of kind of arsonist firefighting here. We're basically reverting to the status quo.

Yeah. And unfortunately, we probably have to do this again in late January. Yeah, do the dance again. It's really, what did somebody say, the definition of insanity is just doing the same thing over and over again and hoping for a different outcome? come either. I mean, that's kind of where we are. So let me ask you about the economic data, because we're CNBC, by the way. Is that just all going to come out at once, or will they, you know, are the people that are there, they're going to have to come back and put it together? Could there still be a lag or is the data being compiled even while parts of the government are shut down? It's a great question. I mean, I think what, there is some precedence here.

So the 2019 shutdown, which was 35 days. So this broke. that record. When the government reopened in 2019, the Bureau of Labor Statistics put out a special schedule so that investors would know when those reports were coming out because they will move markets. So probably maybe Friday we will get that schedule. The September jobs report is effectively done, right? The government shut down on October 1, so all that work had been done in September. I would be a little surprised if we get the October inflation report just because no one was working in October. So there are going to be some unique moments, but on a go forward, the data will be collected, but there will be a lag, although we do expect a schedule.

So there won't be sort of one day you'll get everything. And then you know what's going to happen. And if the data comes in and it's not great, there's going to be people that say, well, it's not compiled completely correctly and you've got to give it a few months. I mean, I think that's what's going to happen, right? I mean, there's going to be people grousing about the quality of the data. Probably, I mean, you know, the BLS already had some controversies associated with it before, you know, a 42-day, 43-day shutdown. But at least the government's reopened. The money's moving forward. I think what's also important within the deal, three separate appropriation bills are going to be passed. So even if we go through this exercise again in January, the SNAP program is funded through the end of September. So we can

at least take that off the risk table. Good stuff there. I'm sure you and your team have been super busy because you have not taken the time off. Chris Kruger, TD, Kowen, really appreciate your views. As always, Chris, thank you. Thanks, Brian. All right, so even though the bill to fund the government is making its way through Congress, the FAA is also increasing flight cuts. So we're going to keep doing that even as this bill goes through until something gets finalized. There is a 6% flight reduction today. There will be a 10% reduction on Friday. Oh, and you heard Chris reference the weather. I landed today. I can assure you, if you don't like flying, Today was not your day to fly.

And flying may get worse before it gets better. Philibault joining us now with more and exactly where we are because you throw a little northeastern weather into the mix, Phil, and it just gets even more beautiful. And we saw that here in Chicago yesterday. Look, the cancellations today, they're fewer than they were yesterday. But keep in mind, Tuesday is a far slower day for the airline industry in the United States than compared to Monday or Sunday or Friday. So cancellations today, over 1,200 and counting.

There will be reviewed flights tomorrow and Thursday. And let me make this clear. I have checked with the number of airlines. They've got their Thursday schedules locked in. So even if this gets approved tomorrow night, it's not going to be a snapback on Thursday. The airlines are planning their weekend schedules right now. My gut tells me that if this gets approved and the government reopens Wednesday night, Thursday morning, by the weekend, you probably see schedules return. to where they were before the shutdown.

All of this depends on air traffic controller staffing. We've talked about this time and again. The DOT has said we do not want our air traffic controllers handling the same level of flights given the fact that there have been a number of air traffic controllers who have not reported to work. They're not getting paid. That's a separate side discussion, whether or not that's right or wrong, but that's the reality that is out there.

So as a result, you've seen them bring down the number of flights that are being handled, by the different air traffic control centers. And we've also seen ground stops when there hasn't been enough staffing. Take a look at the airline stocks. Since Saturday, there have been more than 8,000 flights canceled. 2,000 a day, Brian. And I know a number of people, I'm sure you do too, who have said, look, I'm scheduled to go somewhere on Wednesday or Thursday.

I'm not doing it. Maybe it was a business trip. Maybe it was a personal trip. And that's just the reality, as people are not sure about what the schedule is going to look like. Yeah. You know, I can tell you this much, unless I have to. I'm done. I went to a business conference yesterday. You saw that. Thanks to everybody that made it down. By the way, some people didn't make it done. Not on our team, but some of the guests that were coming to the conference. I know because I was supposed to meet with some of them. They didn't make it. There are people who are just going to say, I'm not going to deal with this. It's going to hit him in the, it's going to hit. I guarantee you when Phila Bow is reporting airline earnings at the end of the quarter. We're going to hear about this. This is starting to hurt.

Yes. There is an impact. There's no doubt about that. Now, how has it been quantified at this point? Nobody knows. Nobody's put out even estimates at this point. Yes, you'll hear people say, well, there's $100 million minimum impact to the airlines and to the travel industry per day. And it rises as you go further and further into these flight cuts. But the reality is nobody's going to be quite sure until we see the end of the government shutdown. And then when we see flights return, we go from there. Phil Leboe, we really appreciate the views. It's rough out there in many ways today, by the way, Phil. Thank you very much. All right, coming up, investors, they are rushing into certain types of bonds. They're doing it, though, not by buying bonds, but certain types of stock market vehicles. What those are, how they work, and their outlook with the great, the handsome, Dom Chu. All right, welcome back. Again, it is Veterans Day. So the bond market is closed.

So a little bit of muted trading, but we are seeing booms in the Dow Jones Industrial Average. The S&P 500 is now positive. The NASDAQ big tech, that is a little bit lower. But again, today we're going to welcome in Dom Choo with Market Navigator, Dom. But it's fair to say on a day, and you're the former fund manager, so you tell me, on a day where the bond market is closed,

it is hard to read too much of anything into stocks, yes or no? It is because there's just, not as much liquidity around the whole financial system, but it's not going to stop us from talking about bonds. So it may not get as much attention as the AI trade, but investor demand for those fixed income assets, specifically ETFs for bonds, has surged. So what's behind the climb? Will it continue in 2026? And more importantly, perhaps, what does it tell us about the health of the market and the overall economy? Here to unpack all that is Joanne Bianco, senior investment strategist over at bond blocks. Joanne, we've talked a lot about the AI trade, but just how important

important is the bond flow ETF story to the overall market narrative? Having me today. It's been a very big story. There's been record inflows into fixed income ETFs this year. And what we're basically seeing is that investors, you know, obviously they're doing well in the equity market, but they also want investments that provide more reliable income and liquidity, and they're getting that in fixed income ETFs at these elevated yields. And Joanne, what kind of bond ETFs, what segment of the ETF market in terms of fixed income is getting the most attention and will get the most attention in 2026? In 2026. Well, I think that, you know, there's, there have been flows across a variety of

asset classes within fixed income. But what we're seeing, at bond blocks is that investors want more precision in terms of their fixed income exposures. It's less about broad market exposure and more about finding places where they can enhance their performance. I mean, we've definitely seen that with our, for example, like our high-yield ETFs, we have a double B one and a triple C one, and they've gotten very strong inflows this year as investors have recognized the performance benefits of these funds amid very strong credit fundamentals and still a pretty resilient U.S. economy. All right.

So keeping on those high yield spreads and high yield yields, Joanne Bianco at Bondblocks, thank you very much for that. Brian, I'm going to send things back over to you. All right. Dominic Chu, thank you very much. Our coming up, the S&P sector trading at its highest levels of the year, your next guest says this needs to be on your screen and no. No, it is not pure technology.

What it is coming up. Welcome back. It is Veterans Day. So, of course, we send out a huge thank you to all the veterans that are out there, including my dad, who's on the USS James C. Owens and the older USS Dewey back in the 1960s. Thank you, Dad. It also means that the bond market is closed, so it's a great day to kind of take a breath, namaste, and do a little strategy session. So let's talk technicals because there have been some key technical signs flashing in major stock market averages.

In fact, on Friday before the rally, the S&P 500 fell below its 50-day moving average. It doesn't sound like a big deal, except it was the first time that happened in 132 trading days. And if that sounds like a long time, it's because it is. In fact, it's the longest streak above the 50-day moving average going all the way back to 2007. Your next guest also noting, there are some signs of market breadth narrowing a bit that he is keeping his eye on. Let's find out what those eyes are looking at. Joining us now is Piper, Sandler, chief market technician and friend of show Craig Johnson. Does that little break below the 50-day moving average after months?

Is that just like a neat historical marker? Does it actually mean something? Brian, thanks for having me back on the show. I think it is meaningful that we are seeing the market coming back and retesting these important support levels. The 50-day getting probed last week and then ultimately turning around intraday, rallying off of that, follow-through Monday, and then follow-through today is certainly of interest. And also, Brian, what is interest, too, is just the breadth of this market, the way this has been participating. The number of new highs has been quite weak. The number of stocks. above their 40-week or 200-day moving average has been in deterioration. And then today, you look at today's action, and it's sort of as worst the first.

Some of the stocks that are leading the Dow higher today are Nike, McDonald's. It's not tech. It's a very interesting makeup. It feels like it's a little bit of a dive to what hasn't been working as a place to go hide right now. Is it like a temporary hiding place, or do you think that I, and I hate to say it, because every time I ask if this is a real rotation, I get my you-know-what handed to me because people just pile back into tech stocks. But maybe at some point it will happen.

You think it is the sign of some kind of real rotation out of bigger tech into Big Macs? I think it is a rotation that is happening. I mean, the winners that we've seen this year, the AI trade, people have been using the word FOMO. Perhaps we're going to go back to the JOMO, the joy of missing out for those that took some profits. But it does seem like a market that is rotating. to a degree at this point in time. And again, I got to listen to what the market is telling us as a technician. When you have very few groups making new highs, very few stocks remaining above their 200-day moving average or 40-week moving average, Brian. And then you're starting

to see stocks like Nike, great company, but had not performed well this year. Or the Big Mac, McDonald's, had not performed well this year. But yet, we're now seeing what's not working today is Caterpillar and Invidia and all these names. It's a very interesting rotation. And one, I know it's a bond market's close today, but we've got to pay attention to what the market is telling us, and this is definitely something worthwhile to keep an eye on. Well, we got to get to our mystery chart that we teased before the break. That chart is health care. Why are we looking at that chart? Brian, the reason we're looking at health care overall right now is because it seems to have a heartbeat once again. And you go through and you start

looking at some of these downturn reversals, whether it is exact sciences, a name that we recently bought, or if it's something like Lily or Merck or some of these other names, they are definitely looking a lot more constructive. And Brian, they're also not straight up the AI flagpole at this point in time. So it feels like it's a good place to take some money off, buy some of these out-of-favor areas that are starting to show signs of improvement. Yeah, I'm going to actually front-run. I put a little read, what we call in the industry point say reader, in the next segment about biotechs and Europe, but I'm going to kill that reader and just bring it back to you.

This is why my team either loves or hates me. I can't decide because let's talk about biotex. Biotex were left to rot for the most part for years. The IBB is now at record highs. In fact, today we look six different biotech stocks, a couple names, Ligon pharmaceuticals, Amgen, a Biggie, and others. They're at record highs. Do you have a take on biotech or do they roll into your health care view?

They definitely roll into the health care view. And this is an interesting play, whether it's Gilead, Regeneron, Amgen, all these charts are definitely improving. You even go down cap and you start looking at some of these smaller cap names that are in the XBI. And those names are making big, huge, multi-year bases. Brian, something is definitely happening here in that space in biotech. It feels like biotech is back. And it looks like a pretty constructive place to put some money to. to work. And by the way, a little bit of money coming out of Invidia or some of the AI trade going

into biotech, you're probably going to get some of the same sort of risk profile, but you probably got a better setup and perhaps a less risky return, just given the size of the moves between the two. Yeah, two weeks ago in San Francisco, we interviewed a ton of different biotech execs. By the way, some of those interviews are on cnbc.com. They did not air on television, and I'll tweet some of them out. I'm not tooting our own horn, but we saw this move and wanted to get some of these people on TV because, you know, we like read your reports, so we kind of know what's going on, Craig. Here's the problem, though, is that those stocks don't have the ability to move the market where Nvidia does, right? So if Nvidia goes up, it's pretty hard for the market to go

down. If some biotechs go up, eh. Well, Brian, to that point, Nvidia, with earnings coming out on the 19th, there's going to be a very important earnings numbers to watch. Again, keep in mind that what goes up might also come down, too. I mean, I remind a lot of listeners that if you go back and you just look at how many ETFs that Nvidia is included in now, I pretty much been shocking a lot of clients. They're telling him it's about 1,600 ETFs that Nvidia is now included in. So I really hope that's a good number. That's a good print. And it's a great guide because there's a lot hanging on that one particular stock for this overall market. Yeah, the 19th. Everybody needs to circle that

in a big red sharpie. That number is going to, I feel confident saying move markets either way. Craig Johnson of Piper Sandler, always love your views. Thank you. Thank you, Brian. All right, take care. All right. Now, let's get over to Seema Modi with a CNBC news update.

Brian, President Trump is reportedly planning to allow new oil and gas drilling off the California coast, likely setting up a clash with Governor Gavin Newsom. Now, the New York Times reporting the Interior Department, could announce a proposal as soon as this week, it would clear the way for fossil fuel development along the coast for the first time in roughly 40 years. The Dallas Mavericks firing general manager Nico Harrison nine months after his controversial Luca Donchich trade. The trade for Anthony Davis, Max Christie, and a first round pick was widely criticized as Donchish was selected to five straight All-Star and all-NBA first times from 2020 through 2024. The Maverick's current

3 and 8 record is the first, worst in the NBA right now. And Mercedes Formula One Chief Toto Wolfe will reportedly sell part of his 33% stake in the racing team at a $6 billion valuation. That's according to Sportico, which could not identify the buyer. If the sale does go through, it would be a record valuation for the sport following last month's $4.7 billion sale for a stake in the McLaren team. Brian? And we have a new team coming next year. I just wonder, as a lifelong F1 fan, these numbers are getting pretty big. Cima, are you a Formula One fan?

I think I need to point that question to you, Brian, but you're all about cars. You tell me what you think about this. Yes, I think clearly people are trying to diversify and look at other ways to consume sports and entertainment. But what are your thoughts? Well, we have the Cadillac team coming next year with Valtteri Botes with a sweet mustache and mullet and Sergio Perez. We'll see what that. So maybe it's good time to sell it. A lot of valuation, a lot of money in F1.

A lot of new fans, too, by the way. But Simomodi, thank you. All right, let's get your motor running because up next, things are about to get real. We have the CEO of The Real Real. That stock's up 35% today. You'll hear from her next. All right, welcome back. Your next guest has a unique view of what the consumer is.

buying now because she runs The Real Real. The world's largest online marketplace for resale luxury goods. Share is rocking 34% right now, adding to what has already been a stellar year. The Real Real up more than 300% in 2025. Third quarter revenue beat, and the company just raised its full year guidance. Ravi, Radi Sahi Lavek is president, CEO of the Real Real. Joining us now exclusively on Power Lunch. Roddy, it's great to have you on the program. I mean, what a day. What is behind the turn, besides, of course, your leadership,

what is behind the turn for the Real Real and its investors this year? Yes, thanks for the question. We're pretty excited about the momentum. The Real Real is the leader in luxury resale. And there's definitely been a market shift into resale. So it's great to see more awareness in resale. We'll hit $2 billion of GMV this year for the first time in TR's history.

And, you know, like I said, there's been a market shift happening. So there's a fundamental change in the way people are shopping for fashion, and we're leading that change. So really exciting to see one stat, you know, that gets me excited is 58% of consumers now prefer the secondary market outright over the primary market. So they just, they'll go directly to the secondary market. By the stock market loves it. Key Bank Capital Market saying we're feeling good for real. Roth Capital saying the transformation is for real. Apparently everybody, including myself, like to make puns with the company's name. But they also note that your physical locations, you've got 19 physical locations make a difference. How big of a difference are the brick and mortar stores making for you?

Yeah. They're a great way to meet the consigner where they are, right? We want to create as less as least amount of friction as we can for the consigners when they're consigning. It's a great way to consign, find jewelry, watches, handbags, and being able to, we come to your home to pick up your product when you're ready to sell. We also, you can drop off in a store, you can send an item directly to us, we'll have a van pickup on demand. So all of these kind of tactics to bring in supply and really be where the consigner is helps us bring you know, a great amount of volume into our ecosystem. So how much more expansion might be planned on the physical side?

Yeah, we're probably open. We say about one to three stores a year. We're a digital first company, so, you know, really focus there. But it's a nice halo that we see on our brand. And again, meeting where the consigners where they are, but we also see sellers can sign more value when they use a store. So they can sign more. their LTV is higher.

So a really great way to get someone to be more sticky with our brand. Is this, do you consider yourself kind of a counter-cyclical economic indicator where people say, you know, things are a little tighter right now, I want to go to the real real and buy something on consignment? Or is this a different class of shopper, a different class of consumer that is just looking, listen, clothes are expensive, and people have really nice things. their clothes are not wearing, and I would like to wear those things. Yeah, you know, I mean, there's, you know, let's start with the TAM.

There's $200 billion trapped in people's closets. That's just in the U.S., right? So really exciting there. But then also, our intersection, our value play, our business model is quite flexible. And that intersection between luxury and value makes it interesting. So as far as consumer goes, like we're seeing a strong willingness to spend. We're seeing fine jewelry, watches, handbags, that high value product, really strong for us right now. And then that diversification of product and the curation is really, you know, we're seeing a lot of engagement with that types of brands.

When the Real Real launched, Roddy, and I know you know this, but before you were CEO, it launched, and the knock on the Real Real was that, you know, it's so labor intensive to go through somebody's stuff and say, this has a lot of value. I'm sorry, this does not. That's, I assume you've gotten a lot better on the technology side, maybe AI. How are you using technology and maybe even AI in the business to streamline that part? Because that would be, that would to me seem a lot harder than selling something. Right, right. Yeah, no, it's a really good point. And, you know, no one's better positioned.

We're very much uniquely positioned because of all the data and insights that we have. So we have 40 million members in our community that we've built trust with. We have over 50 million items that we've sold. And now we can take those data and insights and really leverage AI. So we launched something less than a year ago called Athena. And now we can process the items faster. And we're taking dollars out of each cost per unit over the medium term. So really excited to see that.

And I will say that's a little bit of misunderstanding for sure as far as how much it costs to process these items. So it's definitely a bit misunderstood. But then we're also getting better and better at it for sure. I think looking at the stock, the market has figured it out because you're up 34% today, up more than 300% on the year. And we don't want to leave 200 billion trapped in closet. We don't want to leave anything trapped in a closet. Rodi, Sahi Leveck. That's it. Don't get trapped in there. Rodi Sallevec. Really appreciate you coming on. CNBC. Thank you so much. Yeah, thank you. Thanks for having us. All right. On deck. Pro sports doing major damage control as more alleged gambling scandals

rock the country. What is the industry saying about it? What are they doing about it? Contessa Brewer is up next with that. All right, the sports books in Major League Baseball already agreeing to make some changes in light of the the most recent gambling scandal that has seeped into professional sports. Folks, all that's at risk is, you know, America's trust that pro sports are fair and not fixed by dirty players. So this is kind of a big deal. Contessa Brewer, also a big deal.

Joining us out the details on exactly what the industry is doing to try to maintain some of that confidence, I imagine. Yeah, so what happened was Major League Baseball got together at Sportsbook Partners, which cover like 98% of the legal sports betting market in the United States and extracted from them commitments to limit bets on individual pitches to $200 max. Now, that's not really a hard commitment to make because most bets that would come in called micro bets, you know, in-game betting on whether a pitch is going to be a strike or a ball or a hit. Well, you wouldn't be betting $200 for the most part anyway. A bet of $200 or more is likely to get attention and flag the

kind of scrutiny that these pitches got when the two guardians pitchers were throwing balls in the first pitches out and led to the indictments. Now, the bigger deal, I think, is that these individual pitch bets will be excluded from parley's. Remember, parlays are those bets that you stack together in order to win. You would have to win all of that. And those are really the profit drivers for these sports books, Brian. Yeah, there will have to be some changes. And at least the industry is trying to get out ahead of those changes. Unfortunately, we've got to go now. We're out of Showtime, Contessa Brewer, but we appreciate you coming on. Thank you very much. Folks, technology's not doing a lot, but the Dow is soaring. The S&P is now up. Could be a rocking final hour trading and closing bell with it. Starts right now.