Power Lunch - Dow tumble as Treasury yields continue to push higher 05/21/25

Episode Date: May 21, 2025

Stocks are selling off once again, pressured by a sharp spike higher in Treasury yields as traders grow worried that a new U.S. budget bill could put even more stress on the country’s already large deficit. 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.

All right, markets turn in South. Big tech beginning to sell off. Welcome to Power Lunch, everybody, with Kelly. I'm Brian, Alphabet, Amazon, and Invidia, oh my. All in focus today, as we look at Google's latest AI offering and hone in on Amazon's annual meeting. All as we said, stocks start to sell off. Yeah, we'll talk more about that. We had some big news moments to go in the corporate world. Former Apple design guru Johnny Ive will take an expansive role at OpenAI. His company being acquired there for $6.5 billion.

dollars. That's leading shares of Apple to sell off. But Apple is also lower as the broad markets, Brian, react to those higher bond yields and pressure from the 20-year auction last time. Johnny Yive, congrats to him and his team. He made more money in this deal than he ever made creating the iPhone, the iPod, the iPad. And he still has another company. This is just one of the companies. One of his many companies. All right, there's a lot going on. Let's start, though, really at the beginning of the alphabet. Our K. Rooney is following the story of Amazon, their annual meeting. Also, are you, the AI stuff and John, what is it? I heard like 18 people in my head right now.

Kay Rudy, how about this? Talk about whatever you want. We're going to pivot. Thank you. I love that. Brian, you know, I'm going to choose my own adventure here. We are going to talk about opening I. You mentioned the deal news. That is making waves today. Apple shares, as you guys mentioned, dipped when this headline crossed initially opening I as far as the details has agreed to buy Johnny Ives AI startup. It is called I.O. Products. Ive, of course, is a legendary name in tech, he's best known for designing the iPhone, basically any other popular Apple product you can think of or interact with. He did leave Apple back in 2019 to start his own firm, Love From.

That company is still going to remain independent. So today's roughly $6.5 billion deal. It is all equity. Open AI already owns about 23% of this device's startup I.O. So they're going to be putting in roughly another $5 billion. It does signal what we're seeing in AI. this all-out race right now for AI devices, Open AI clearly plans to go big here. They are paying billions for Johnny Ive to lead the effort.

His devices company, guys, does not have a product on the market right now. So this is really paying for what is possible here. As part of the deal, Ives is going to be taking a much bigger role at Open AI. He's going to assume what they say is deep, creative, and design responsibilities across both open AI and I.O. It is a wake-up call for Apple, which, as you mentioned, shares were down. They have teamed up with Open AI to integrate with Siri and then Amazon as well. You mentioned the shareholder meeting.

They're in the midst of rolling out Alexa Plus. So it's a bit more proof that hardware and devices are shaping up to be a major battleground in AI. It's not just chatbots. It's going to be what Sam Altman described as the future of computing, guys. So basically, this is a big win for Open AI, but more important, which is private. So our viewers like, well, why do I care? But it might be a bigger hit for the public. to companies that are out there because Johnny Ive, I'm assuming,

is kind of like the, quote, best athlete out there, right, Kate? And so now that he's going to one team, it hurts the other teams. Yeah, exactly. You can sort of think of it as zero-sum. He had left Apple, to be clear, and been doing his own consulting. But if you think about this as not just chatbots and underlying software, if this is the future of devices and you have the goat, you've got the Tom Brady of devices going to one of your competitors,

it signals that OpenAI is not comfortable just being a software platform. They want to own everything here. They want to own the future of computing. They want to own hardware. So it makes sense that Apple investors would be a bit spooked by this. Also Amazon. You think of Alexa as being the go-to device along with Siri. It is a major threat to a lot of those guys.

And you are just seeing this hardware race really kick off. And these founders, you know, Johnny Ive is one. But Miramorati, who left Open AI. There are people leaving these companies. who do not have a product on the shelf. They have an idea. They're just invested in the person. So it also speaks to some of the valuations. I think you could say, yes, it's a good deal for Open AI,

but the price tag. You've got to wonder if that is going to pay off. Clearly, they think so. And a lot has gone into underwriting that number. But $6.5 billion for a company that does not have a product. I think it says a lot about where we are in the AI cycle. Indeed. Kate really appreciated. Kate Rooney reporting there.

Shares of Apple as mentioned down about 2% on the news. For more, let's bring in Laura Martin, senior internet analyst at Needham. Laura, it's great to have you here today. And we're seeing all of the sudden, you know, first we have shares of Alphabet, which are still rising on this halo effect from their announcements. Apple not only has to contend with whatever Open AI might now be up to, but more reports about how it wasn't able to push forward with its own AI development. So how do you see this landscape shifting competitively?

Well, I think the most loser here is meta, right? because meta got to this whole notion that they wanted to create a competitive, you know, a computing platform with the goggles, with the Rayban glasses. And Google yesterday announced they're coming hard into this race of devices. And you just got the best device guy going to the best, arguably, the best software platform at OpenAI. So what it's telling you is race is on. Consumer products are going to be integrated hardware software. And all of them are trying to displace Apple because Apple is the device.

every consumer's hands or the 50% of the wealthiest consumers' hands in America, and they are charge of 30% tithe. So everybody else wants to be that platform that charges a 30% tithe on every app that comes to it. So race is on. Yeah, I think that's well said. And Met, of course, has been a strong performer, but lately, you know, but maybe taking a little bit of a timeout. So as far as Apple's concerned, a lot of people who are in the stock, for a very long time, say, you know what, they're going to figure it out. So much, so a lot's

unclear. Their buybacks probably trump anything else that's going on, but it is coming off kind of this. Now, what is it, six days down in a row? And it deserves to be because they are doing three billion dollars of capax in the same year, 2025, when Google's doing 80, meta's doing 65, Amazon's doing $104 billion. All of those tens of billions being allocated to just this, like Open AI and the promise of everything being retooled in the American economy at a lower cost basis. And Apple's like, we're just going to ignore this and do $3 billion of KaffX. So Apple is ignoring the single biggest technology disruption in the last decade since mobile.

You also, Laura, to sort of continue on with my best athlete analogy, you also have somebody that not only is, quote, the best athlete, but is somebody that knows how Apple works. To your point, they're not just going to a competitor's per se. They're bringing trade. Now, there may be NDAs and stuff like that stuff he can't say, but he knows not only the inner workings of Apple, but the men and women who are making all the decisions. now he's bringing that institutional knowledge to open AI. That's a powerful thing.

Well, and Brian, building on that point you just made, he is starting with a clean piece of paper over at Sal Malmonds firm, whereas Apple, there are a lot more restrictions. There are a lot more, you know, brand is everything to Apple. So they were slow, and he was constrained. Now you have the best device maker, like you say, sort of living today, with a clean piece of paper that can make. make something that none of us have ever dreamed of.

How cool is that? Although, to jump on the analogy, I think about all the Patriots, you know, coaches over the years who went to all the other teams and they never panned out and the franchises were never as successful. So does Johnny Ive just continued to kind of get the halo effect of, you know, Belichick and Brady was him and Steve Jobs. And now he's going somewhere without a product per se. And we're all just speculating about whether you can even kind of create, recreate that

magic once again. So I would take the over. because creative people are creative. And I think this is one of the most creative hardware guys with one of the most powerful new technologies. I think it's going to be awesome. It might take a year or two, but watch out Apple because he is coming for you.

Yeah. Anything you'd add, Laura, with Alphabet shares, obviously, both of us, it caught our attention, a $250 subscription service. Yes, that's a high number. Open AI, though, offers this $200 kind of professional version for chat GPT now that, you know, I know a fair number of people are using, so maybe they'll get some take-up. You know, I think it's expensive.

$250 a month. But yeah, Claude has a $200 a month product. An AI has a 200-month product. They're trying to get sort of the high end of the developers in this product. And then my gut feel is they're going to have dialogues between this very high-end power user. It's paying a $50 premium. That's a 25% premium over what else is out there from competitors. they want to get that developer talking to them about how to make their product better faster over at Google.

And all those people talk in the same language that none of the rest of us common people understand. That's who they're targeting for this $250. It is not a consumer product. It is a high-end, brilliant generative AI power user. Well, at $250 a month plus tax, it better be a power user. get the value out of that. Laura Martin, always the best athlete in the room. Thank you.

Bye. All right, bye-bye. All right, on deck. We've got a long way to go. We're going to tally the recent big deals in energy, and you may not believe some of these numbers. Plus, we're going to speak with a real power player whose company sits firmly in the intersection of energy,

crypto, and nuclear. That's next. All right, welcome back to Power Lunch. The race for electricity is becoming a dealmaker's dream. The deals to gain power are heating up fast and furious. If you're not paying attention, you should be. Here's what's happened recently. On Monday, Blackstone agreed to buy New Mexico power producer TXNM for $5.7 billion.

Just a few days before that, Vistra said it'll pay $1.9 billion for seven natural gas power plants. Oh, and on May 12th, NRG made a massive $12 billion deal to buy 18 power plants from LS power. And of course the year began with the biggest deal of all, Constellation energy paying $19 billion to buy power producer Calpine. That deal still has to close. And while most of those focused on natural gas power, nuclear is becoming a bigger and bigger part of the story as well. Anybody remember nuclear? Last year, Microsoft agreed to help fund the restarting of Pennsylvania's Three Mile Island. Got to get permitted, whatever, but the deal is out there.

and there's been talk of other nuclear power plants also restarting, again, if they can get the funding and most importantly, the permits and approval. Almost all of this is to make sure there's enough power for data centers and AI. Some of that, though, also being used for crypto mining. And at the forefront of both is publicly traded Terawolf and its CEO, Paul Prager, rejoins us now. Paul, thanks for coming on. I know you've got specific things with your company, but can we bring this? that graphic backup, guys? Blackstone, Vistra, NRG, Constellation. These are big names spending big money. What do you make of it? I think it makes sense. The demand for power in the United States is

significant. It takes four to five years to bring new generation online. I think you need power to be able to provide the necessary fuel, the electricity for all the data center. demand. And so people are trying to lock that in. Terer Wolf has access to power, significant, scalable, sustainable power, and near-term power. We have power ready to roll right now for a data center customers. And you know about our recent customer deal with Core 42, backed by G42. Yeah, and it's really amazing because we talked about this for so long. And then, of course, the tariffs kind of took everything off the front page, and now we're back to talking about these deals. I guess, Paul, and you are a dealmaker by trade.

I mean, you've built companies and sold them, and now you're building a new company. Are there a lot more assets out there that would be for sale? No, I don't think so. I think that power supply is in real demand. And not all sites, by the way, that have energy are appropriate for high power compute and AI. So that's even a far more important value point. And so Terowulf is well positioned because we have a site scalable right now for 750 megawatts. Most of the energy is hydro and nuclear and 93%.

And so it's very compelling for that a company like Core 42 that wants to have, you know, high power compute and AI at the site. I'm going to ask you a question then you not only won't answer, but you probably legally can't, but I'm going to ask it anyway. Are you for sale? No, Terrell is that. I mean, we have wonderful investors and they could buy our stock all the time, but Terrell is certainly not for sale. I will tell you that in our prior life as energy infrastructure developers, we did deals and we managed fleet for Blackstone NRG and had a partnership with the constellation on. your list. So three out of the four, we've done a lot of business with, but Terowulf is at the intersection between energy infrastructure and high power compute and AI. And our business today is focused exclusively on evolving to a high yield HPC AI provider for customers like Core 42. And to your point, you've got power that's already been built. And I think that's why we're

seeing these deals, because to build a new nuclear power plant takes, I don't a decade minimum, a lot of permitting, a lot of, maybe the decade, maybe the permits. I think you're at least a decade away from nuclear power. Gasfire generation is available five years. So I think the access to power and the near term access to power is critical. Yeah. It's kind of this, I almost feel like it's a little game theory-ish where you buy because you don't want somebody else to buy it. We'll bring that chart back up on the wall, guys, because we showed four deals. Three of them are not like the other one, because the Blackstone deal is to buy a regulated utility, TXNM, which operates primarily in the NM, New Mexico.

Is it smart to buy a regulated utility? The other three are kind of like you can just use the power for what you want to a point. What do you make of the regulated utility deal? You know, again, our focus is on supplying energy to folks that need it for HPCAI. I think regulated utility play is a great play because the country is short generation and we need to need to invest in new generation for the United States. So I think no matter what, you're looking at a nice return and a very, very interesting business because the demands for energy are increasing every day, particularly as a result of the new demand from the HPC AI sector. And what's also amazing, it's not just AI, Paul, because you guys sort of built your bones, the infrastructure

part of it on crypto mining, and now you've moved into AI and shifting with hydro, new, which are carbon-free, as we know. Talk to us about, we don't ever talk anymore about the demand for crypto power. We used to talk about it all the time, and now we talk about AI. How strong is the demand for crypto mining right now, and what role do you play in that? So, you know, the site that we have at Lake Mariner is the site that we actually owned and operated when we sold power to the grid. We were looking for the highest value used for our megawatts, And that was, in fact, Bitcoin mining, which is a very flexible load. Not while Bitcoin miners are appropriate to make the shift to high power compute and AI

because they don't have redundant power, they don't have gold-plated utility standard energy infrastructure, and they may not be in a location that makes sense. In the case of Terrell-Wilf's Lake Mariner, it is in a location that is entirely appropriate for HPCAI. We have redundant 345 KV lines. We have access to plenty of fiber. We have a very scalable site. We have 1,800 acres there. So I think there are still plenty of sites that are appropriate, if you will, for Bitcoin mining.

But we prefer to go to a predictable, long-term, contracted revenue stream. That's what HPC AI is. Now, Terowulf still does Bitcoin mining at the site. Yeah. And in fact, it's providing great cash flow. But it also provides a useful mechanism to buffer the grid because, as you know, HPCAI requires the five dimes of quality in terms of its electricity. So we have that Bitcoin mining that we can, it's very flexible, used to assist the grid operator. And we'll wrap it up with that, Paul.

And thank you. And what I also like about it is that you're kind of also, listen, upstate New York where Lake Mariner is, not exactly the hottest job. job market, so you're built, sort of bringing a new industry to an area that's, let's say, had its economic challenges right up there in upstate New York. Paul Prager, CEO and founder of Terowulf, Paul, thank you very much. Thank you very much. Thank you. As we head to break, stocks are off session lows, but still in the red across the board. And actually, not far off of those lows. The Dow's down 757 points. The S&P is down nearly one and a half percent. We'll check in on the bond market, which has been one of the key research.

why we're seeing much more selling pressure this afternoon. Rick Santelli after this. Welcome back to Power Lunch and take a look at yields. The yield on the 20-year bond is higher, now about a couple year high, 5-11 after the 1 p.m. auction that push yields up on the long end across the board, really. Let's turn to Rick Santelli for more with the bond report, joining us out of Chicago.

Rick, stocks were certainly not happy about this one. No, and I can understand that. Before we get to my charts, I've been getting tweets all morning and afternoon. Is this a Liz Trust moment in the markets? It feels like it. And my answer to that is really, really easy. The 10-year, where do you think the 10-year closed at the end of last year, Kelly?

I'll tell you, 457. Where is it now? 4-58. I would think a list-trust moment be worth more than one basis point personally. Does that mean it's not important? Of course not. Does that mean I'm not tickled that we're. We're finally paying attention to debt.

Yes, hooray. Let's start at the beginning now. Let's look at a chart of 20-year bonds and 30-year bonds U.S. because right now, both of them are above levels from January of this year that we were comping to, and we zoomed all the way back to around November 1st of 2023. So that level for the 30-year would be just a whisker under 5%. That level for the 20-year is around 506, and as you pointed out, we're well above that. Now, many are paying extra attention to the 30-year bond, and that's all great.

But, you know, back when I started trading bonds in the early 80s, the 30-year was the king of the curve. That's not true anymore. It's the 10s. But the 30-year is now gaining distance. Look at the knob spread. This is the 30-year yield minus the 10-year yield. And you could see that we are virtually, virtually at the highest levels going back to 2021. That's important because I expect turn.

premium in these spreads between the maturities to keep widening, but don't lose perspective on which maturities are the most important at this point in time. Everybody was looking at the close today with the 30-year Japanese government bond. It closed at 313. They first had an issuance of this bond in September of 1999, which that chart goes back to. You see what it looks like? Of course, we have blown through all the yields were higher than ever before. Now, let's Keep that date, Cep of 1999. And look at the dollar yen based on the interest rate differential for foreign exchange. And notice, we're at 143 in change.

Notice how 140's been a bottom for years. And notice how historically it's a very lofty level for the dollar still. And that's important to keep in mind. Take a macro view when everybody's hair is on fire. Kelly, back to you. Rick, trying to calm everybody down. I just, you know, I'll get used to it. at some point, Rick, thank you very much.

The FAA ordering immediate cuts to flights in and out of Newark Liberty Airport. After weeks of delays and disruptions amid staffing and tech issues, we'll speak to an industry insider about what needs to be fixed right after this. If you are flying in or out of Newark, New Jersey Airport, anytime soon, listen up. The bad is just about to get worse. The FAA just ordering Newark Airport to cut back on flights. The order was issued yesterday as an attempt to relieve some of the delays that have plagued the airport and maybe even your flight, regardless if you are going in or out of Newark Airport. Let's talk more about why you care, even if you don't go to Newark or New York.

And welcome back in. Dr. Captain Dennis Taser, he is an American Airlines pilot. He is the spokesman for the Allied Pilots Association. Last time he was here on set, but Dennis, or captain, excuse me, we're glad to have you. you here either way. A lot of our viewers are like, they live in Denver or Miami or Dallas, like, I don't care what happens in Newark. Explain to them why they should and the importance of smooth air traffic in the New York area. That's it. It's choreographed. It goes throughout the country. I mean, frankly, Newark is the earthquake epicenter. And anything that happens there, the tsunami wave just can ripple through the country. And that's what the leadership of Secretary

Duffy has taken on as he wants to maintain, mitigate this as much as possible, while this decades into making underinvestment, lack of modern equipment and understaffing of air traffic controllers, he doesn't want that to wave into the rest of the country. And we're seeing that already. So this move to reduce the rivals, I think you said, oh, you think it's bad now, wait to you see what's going to happen. The actual answer is wait to see what's going to happen because it's going to be much more reliable. It's simple math. They're reducing the amount of departures and arrivals into Newark. Yes, on a commercial basis, that's tough to deal with, just for pricing and then for airlines as well. But this is the right move at the right time.

And the next step is to get our elected officials to actually fund this. President Trump has unleashed Secretary Duffy to get this stuff fixed, not just write eloquent pros about it. And we stand with our airline CEOs who just put out a letter today saying, you've got to fund this like a business, upfront money so we can take the investment on, not one piece at a time. Unleash the government bureaucracy and get to looking at this running this like a business because it's the business of America. And are you referring, Captain, to the funding of the new air traffic control system that the president jokes, you almost won't need pilots anymore. It's going to be so good. Can you talk about whether it's the technology piece of this that's at issue or is it the

staffing piece, right? Because if it's a staffing problem and there just aren't enough people, technology is great, but it sounds like we just need more people who are trained at this and can do it as well. Well, you need it all. Just as a pilot, I need to have a good airplane. I need to have a good crew. And I'll do respect to the president, you're going to have pilots up there and you're going to have two solidly trained pilots at a minimum keeping things safe when the system does go down, even when it's modern. So the bottom line is it's all of those pieces. It didn't just take one thing to go wrong to have this basically infrastructure collapse. took a lot of bad planning over the many years. So it's the metal. It's the people, the staffing that you just mentioned. And it's all of it together. So this is all happening at the same time. The good news is we have leadership nestled in action. And they know how important this is speaking to your audience.

And again, I'm headed to New York after this interview to go to Wolf Research Conference where the airlines will be there. And Scott Group, the cell side analysts, will talk about this. This is about making sure that the 5% GDP that the airlines produce, $1.5 trillion, isn't muddled by this mismanagement. Literally just watched my wife land at Philadelphia Airport. Normally we go in and out of Newark, but I said to her, I just, I don't know if I trust Newark, not safety-wise, but just I've had a lot of huge delays recently. She literally just landed at Philly. Is this a win? I mean, this is, you're an American Airlines guy.

kind of red meat, I guess. But is this a win for all the other airlines besides United? Because United has a 71% market share at Newark. It's got to be bad for them. You know the numbers, Brian. That's exactly what I was just looking at. You know what? It's a win when the air traffic system's reliable. It bleeds into the entire system. And yes, American flies in and outer at a smaller number. But the bottom line is this isn't just about one airline. This is reinstilling confidence in reliability. And thank you. It will be safe. It is safe. We keep it that way as pilots. But I get it.

I'm looking at LaGuardia, no delays. Newark's got about an hour delay. We can't have this island of unreliable operation going on, no matter what airline you work for. If it happens to one of us, it happens to all of us, and that's the way we approach it. I guess it's good news for ITG. If you own the concessions at Newark Airport,

people are going to be sitting there drinking for a lot longer. Dennis Taser of the Allied Pilots Association, thank you, I think. And also to take the edge off. Yeah, and then to get on the plane intoxicated, because that usually ends up. Let's just keep it sober and safe, all right? Please. Yeah, and calm. Captain, thank you.

They appreciate it. Let's get to Pippa Stevens now for the CNBC News Update. Pippa? Hey, Callie. A judge ruled today the Trump administration violated a court order when it deported migrants to a third country today, meaning a country other than their own. He also ordered the migrants remain in custody of U.S. authorities. The administration said before today's hearing that it deported eight people convicted of crimes but didn't say where. The flight has been linked to South Sudan.

President Trump confronted South African President Cyril Ramam Fosu today in the Oval Office, claiming his government failed to address the killing of white farmers. Trump ordered staffers to dim the lights and play clips that purportedly showed support for targeting the group. Ramufosa said the remarks did not represent his administration's policies. And the Army said today it has no plans to recognize the President's birthday when it holds a celebration for its 250th anniversary on June 14th in the nation's capital. The President turns 79 on the same day. The parade is expected to include 6,600 soldiers, 50 military aircraft, and 150 vehicles, and is expected to cost between $25 million. Kelly, back to you. Pippa, thank you very much.

Still ahead, Target lowering its guidance after. After posting its second earnings miss in the past three quarters, the shares are now down nearly 40% in the past year. Stacey Widlitz joins us for a read on Target and what's happening across the retail sector next. CryptoWatch is sponsored by crypto.com. Crypto.com is America's premier crypto platform. Welcome back. Another earnings miss for Target, as the company also cut its full year sales outlook.

The shares are down 4% today. and they're 64% below their 2021 record high. On the earnings call, CEO Brian Cornell blamed economic conditions for the weak performance, for performance, I should say, in direct contrast to what Amazon CEO Andy Jassy is seeing, saying in the last hour that tariffs haven't dented consumer spending. So what are the other factors at play? Let's ask our next guest. Joining us now is Stacey Whitlett, president of SW Retail Advisors.

Stacey, I mean, do they need to think about new leadership at some point? or is Brian Cornell sort of able to blame, you know, other factors for their underperformance? Well, Kelly, as you said, I don't know that it's legitimate to blame rolling back DEI and the environment. When you saw TJX with their results, traffic up, Home Depot confirmed, lows confirmed, you know, Walmart comps up 4 and a half percent versus target down 4 percent, I don't know that that's legitimate. And I think, you know, the best way to look at it is they said they've, out of the 35 merchandise categories, less than half of them, they're maintaining or growing market share. So that tells you this is an internal problem, not a completely external problem. Others, if I wanted to paint a more sympathetic picture, what it would say in their defense,

okay, look, they're more discretionary by nature. So at a time when inflation's up or uncertainty is high and consumers are going to go to those, you know, consumables like at Walmart, Target has a different mix. It's going to be a little bit harder to draw people in. Would you buy that argument? I mean, yes, it's obviously tougher for them versus a Walmart. They have less exposure to food. But at the same time, TJS called out home performing very well, apparel performing very well.

So those are the two categories that Target called out is not performing well. So again, it's the have and have nots. And we see that across the board in retail. It's Adidas killing it versus Nike, you know, down high single digits. So it's very much, I think, execution and losing share. And by the way, Kelly, you know, Coles is just pushing share out their front door. Target should be gaining that share. They are their competitor.

They're typically located across the street. They've got traffic drivers. Coles doesn't. They got the wrong problem, Stacey. The CEO just got fired for shacking up with the CEO of his competitor. It was the love. But her romance and aisle, too. And by the way, there's nothing wrong with that.

But, like, you can't hide it. He just got fired for it. It's on the cover of the Washington. But she said target should have been a beneficiary. I mean, is right. They're often located right next to each other. But I'm saying Coles is not like the innocent victim in this story. It's not like a romance triangle, right?

But, Brian, you think about it. Coles, this has been a 70 years ago. I've had a sell on Coal since 2019. I mean, the sheriff has been marching down since then. So this has nothing to do with somebody's personal romance. This has to do with execution and the fact that, I don't know if you've been into a Coles lately, but it kind of feels like shopping in 1984. So, you know, that share should be going to Target, but yet it is not. It's going to TGX. It's going to Walmart. It's going

other places. So how does the CEO of Target? Nice guy. Appreciate him coming on. How does he still have a job? You know what? Brian is the person that turned. Brian Cornell, not me. Brinnell, not Brian Sullivan, is the one that actually turned this company in around years ago and he's done a great job. But right now, it's about soul searching. You know, there was a leadership change today with their strategy and growth officer. So, you know, there is change going on internally

and, you know, to be determined if he's the right one to lead it forward, but he's done it before. So, you know, we need to breathe some life back into this retailer. And I noted that we noted earlier, the market cap is down significantly. I think it's, you know, 40 and change billion, which is remarkable. So we should also keep that in mind.

We're covering Walmart and Costco and anybody else that Target might be losing share to those other players. Is there anything else, Stacey, that you draw from the raft of reporters today, at the home furnishing stocks, like you said, actually doing pretty well. We're just kind of starting to work through retail earnings season. And we started off with this note from Walmart about raising prices, but it sounds like for now spending is holding an okay. It's holding an okay. and I think you're seeing retailers like Home Depot say, hey, we're going to hold price and we're going to try to gain share. And Lowe's is going to follow along. TjX said the same thing. We're going to hold price. If somebody else moves price, we'll probably follow them. You know, Walmart came out and said they're going to change price and raise. And in some cases, like everybody, every year, you do. You have traffic drivers that you lower price and you have other things where you can make up the difference. So, but as of now, in terms of promotions that I'm seeing across, the board, things are pretty lean. So I just think that, you know, having this blame game for

particular names like VF Corp or Target or Coles is, it's about the companies and the brands, not essentially about the environment. Or shopping like it's 1984. And I'm assuming you're not referring to the Fantastic Orwell book. Stacey. Thank you. Good to see you guys. All right. Your next guest says you need to buy this very high-flying mystery. stock. It's already up around 70% on the year. Do you know the name? Well, email or text, Kelly, let us know what you think. We're back with the name right after this. Welcome back. It's time now for three stock lunch. And we asked our trader for three names she's bullish on and would be buying right now. Good timing and a tough market tape this afternoon. Joining us to reveal them is Ava Ados, the CEO and

chief investment strategist at ER shares. Ava, two of these three were Paul Meeks' same recommendations last So that totally caught my attention. The first one is the only one that wasn't, and it's Tesla. And I'm very interested that you're recommending this today. The shares are lower, but it has staged a massive comeback. It's a 50% over the past month. Why does this one catch your eye? So it's actually one of our big weights in our EXOVR-UTF,

and we use the VC model when we invest in companies. So it's primarily driven by the founder, Elon Musk, who we believe is, if not the greatest entrepreneur of all time among them. And so our number one, and XOVIR is very heavy in Elon Musk's companies, because our number one weight is SpaceX, which is still private, but we managed to make it our number one way, because that's going to be the greatest growth engine when it comes to Elon Musk's companies. Then we have Tesla too, and we are still buyers of it, because it's not just a Nevy company. It's a fascinating story of many different complex components coming together, because now you have

the EV, you have autonomous vehicles, which is becoming a reality. I was in San Francisco last week, and it is a reality now. And you also have the Airbnb model because in the future, potentially, Tesla owners will be able to rent out their vehicle when they don't use it. So all these things together, it's really hard for any competitor to compete with Tesla in the future, we believe. All right. So all those interview of Musk making the rounds yesterday, we heard a lot from whom about it. and, you know, the reason, as you say, to buy the share. So let's move on to App Loven, which is also sort over the past month, up more than 60% since mid-April. Why does this one jump out to you?

This is such an interesting story to watch a year today. We actually have it. It's one of our top weights again. We've been supporters of it for two years. But this year specifically was so interesting to watch because there were a couple of short reports. Some of them were anonymous. and we believe that there was an incentive for the short-year-old to make a short-seller gain. But then after that, the short interest has now dropped by 20%.

Now, this is a fascinating company in terms of how it's growing. The revenue growth is very, very strong. It's 42% compared to 17% for the rest of the category, and their EB margin is seven times its peers. The most important statistic, that's the net income growth, that's now 220% compared to 90% for the rest of the category. So it's very rarely do we see a company grow like this one. Yep.

Paul Meeks was pounding the table on it as well, which is amazing for a 47 PE. Anyway, Robin Hood is the final one here. And that was our mystery chart before the break. A lot of people guessed Corweave, but it's actually hood. It's a good job to IWC. The stack has been an outperformer of 74% year-to-date. and you think, even though we're trading your all-time highs, still time to own it? Yes, and especially because of the acquisition last week, they acquired Wanderfai.

And this is the Canadian crypto play. And I think this will not only help them expand to the Canadian market, but also diversify the crypto offerings. And this is a good play, especially with this administration, which is very much benefiting crypto. But we also like it from a fundamental point of view. The revenues doubled in the last two years, and they actually went from losing half a billion dollars to now making $1.3 billion, which we like, we like when a company turns the corner. And also the revenue growth is 60%. And their earnings growth is even higher, 65%. So the net income margin is four times its peers. It's a great company on a fundamental basis, but we also believe in it because of the crypto play. And we believe in this administration, this is going to be a good. long-term hold. All right. In a more constructive mood today, or at least on these names, Ava, thanks so much. We appreciate it. Ava Ato's. Of course, you can recap any three stock

let you want. Just scan that QR code. Coming up after the break, United Health stock down 5%. A big newspaper investigation has that stock selling off. We'll tell you the news on United Health. Next. Well, I've got to mention another rough day for United Health and its investors. That stock right down, down 5%. It's on a potentially damning report in the Guardian news paper of England, alleging that UNH, United Health, secretly paid bonuses to nursing homes to cut transfers of patients to hospitals. If it's true, it would have saved money for United Health. The Guardian says the report is based on thousands of confidential, corporate, and patient records, and interviews of more than 20 current and former United Health and nursing

home workers. United Health, though, for its part, Kelly, strongly pushing back against the story, writing, quote, the U.S. Department of Justice investigated these allegations, interviewed witnesses, thousands of documents that demonstrated the significant factual inaccuracies in the allegations. Again, United Health saying in a statement, after reviewing all the evidence during its multi-year investigation, the Department of Justice declined to pursue the matter. So UNH saying no, but the article's out there, and we're just reporting the stock move and the fact the article exists. Absolutely. Also, we know from interactive brokers a lot of retail investors bought the dip on UNH last week. There's a lot of new money in the stock. A lot of people hoping that sell off was

overdone. But as you and I know from following these news cycles, now we're going to start to see more of the trickle out of any and everything that could possibly have been going on there business-wise. We saw that again with the reports in the journal last week about criminal fraud and so forth. There's a significant headline risk on the stock. Yeah. Headline risk to the upside, too, by the way. Of course. Absolutely. And meantime, speaking of risks to the market, take a look at what's been going on with Treasury bond yields today. So at one note, they were on the rise coming into the afternoon. Let's not, you know, make no mistake about that. We already had the 30-year above 5%. That picked up steam after the 20-year auction at 1 p.m. went poorly.

The 20-year yield's not on there. It's not that liquid, but it spiked up to about 5-11 after that auction. Rick had given it a C-minus. And we immediately saw the market take a leg lower. There's the 20-year intraday. You can see the move there. Now it's nearly 512. Now the tens and 30s, which are much more impactful, that's where we also saw upward pressure. Tens hit for 60s, Brian. And even though a lot of people on Capitol Hill will say, look, there's no Congress people watching this that closely. Fine. It doesn't have the same impact. But when it starts to cause stocks to sell off. The Liz Trust moment. We don't even have to go there. By the way, that's a former Prime Minister of England who made a comment about a budget that caused the bond

market to go crazy and she ended up basically losing her job as Prime Minister because of it. I just described Liz Trust moment in 12 seconds. Well done. And you know, I would go back to TARP as well. And that's where you're seeing analogies to. Major piece of legislation having a big market impact. The world according to TARP. Thanks for watching, Carole Lunch, everybody. Closing bell starts right now.