Power Lunch - Jensen Huang on Capitol Hill; Dow leads averages 12/3/25

Episode Date: December 3, 2025

Nvidia CEO Jensen Huang takes questions from reporters on Capitol Hill. Niles Investment Management's Dan Niles reacts and gives his thoughts on the greater AI trade. And what is Netflix's sports strategy? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

You're listening to Power Launch in progress. ...in favor of ensuring that the United States has the best technology and that the United States leads technology around the world. So how do you make sure the U.S. does have the best technology then? If not with the controls and some of the stuff that's gone with DNA, how do you really make sure that the U.S. is the one delivering and that other countries aren't stealing our information? The fact of the matter is the industry has done that naturally all by itself.

We work very closely with American technology companies, of course, the Microsofts, the AWS, the Google's, you know, X-A-I, meta, all of these companies are American technology companies that we work very closely with. And so it's very natural for us to design and to launch our latest generation, our most advanced technology, with American companies first. About those blackwell chips, are you currently speaking with the customer or anyone else in the administration about getting those blackwell chips exported to China currently? No.

Have an 800 from the White House. Are you speaking to the White House on 8? We're talking to the White House all the time about export controls and what's the best way to ensure that we have national security and that we can have technology. Are you meeting with President Trump today? Sorry. Who else are you meeting with today? Are you meeting with the President? I just met the President. You just met with President Trump?

Yes. And what were you discussed? Was there any agreement that came out of that meeting? We talked in general about export controls and I wish the happy holidays. One more on export controls. Do you think that China should have the same access to the same types of chips made in the U.S. as the United States does? I've said repeatedly that we support export control, that we should ensure that American companies have the best and the most and first. Does that mean they have inferior chips in China, though?

No. It just means that we have the first and the best at all times. However, we need to be able to compete around the world. The one thing we can't do is we can't degrade chips that we sell to China. They won't accept that. There's a reason why they wouldn't accept that. And so we should offer the most competitive chips we can to the Chinese market. Would they accept $8,200? Do you think they would?

We don't know. You said the DNA was unwise. Senator Ricketts has a different bill that would codify the current export controls into law and not allow it to go up. Do you think that's also unwise? The current situation ensures that China and the United States agree on one thing,

that no American AI chips can go to China. And I think that that's the worst case condition and is deeply... Sir, moments of the moment. After the President, are you expecting any more announcers on Africa? Thank you, thank you. Emily?

Emily, in front of the camera. All right, that was Jensen Wong, the CEO of NVIDIA. You saw Emily Wilkins there getting in a position to kind of wrap up what we just heard. Jensen Wong, the CEO of Nvidia, arguably one of if not the most powerful people in AI in the world speaking on Capitol Hill. Reporters asking questions about chip sales to China, national security, and more. Welcome everybody to Power Lunch. I'm Brian Sullivan, Kelly made her way in as well from the exchange. You can see a live exchange between.

Jensen Wong and others. I know we've got Emily Wilkins sort of getting into position right now in the bowels of Capitol Hill. We also have a big story potentially around Microsoft, a big report this morning suggesting they may be pulling back on some of their AI sales targets, but we did our own reporting and Microsoft pushing back on that report saying, no, maybe not true. Steve Kovac did that. He's going to be here in just a moment. You could see Microsoft stock down just about 2%. Overall, though, the markets in general, they are shrugging off any weaker job data that we had from the ADP private sector report. We'll get more insight into the economy as well. Stocks are up for the seventh day in the last eight. Pretty nice little run, just off-record highs as well.

And David Steinberg, the CEO of Zeta Global, will join us with their newest monthly Zeta Economic Index. We colloquially call it the Zeta data. Welcome, everybody. A lot going on. Kelly Evans, I just saw you on the 1 o'clock show. Interesting transition. I think you're right to point out. We have stocks at new highs for the session right now for 457 points on the Dow. So the early anxiety that we had about whatever's going on with the demand picture on some of these AI products is definitely being left a little bit by the wayside.

That said, Microsoft shares are still under a little bit of pressure. I know Steve Kovac has been digging into this to kind of bring us a little bit more of what the story looks like as we head into these afternoon hours. Yeah, we'll get to Steve in just a minute, but right now we've got to go back down to Washington, D.C., with Emily Wilkins, in literally a hallway underneath Capitol Hill, where Emily, we saw you and others kind of doorstepping industry term. Jensen Wong of Invidia, a lot of questions about chip sales to China and national security. What were some of the takeaways? So, Brian, I think some of the big takeaways, first of all, Jensen Huang's doing the rounds today in D.C., he said he did meet with President Trump to talk about export controls. We understand he also met with Speaker of the House. Mike Johnson is now, of course, meeting with Senate Republicans.

And he did basically say that he is in support of export controls, but he thinks to a large degree that industry has already made sure that the high-level, high-tech chips are able to stay in the U.S. He talked a little bit, kind of pushing back against what we've heard from some of the China Hawks who really want to see stricter limits on what U.S. chips are going to China and other countries. He also did speak a bit about state AI. There's been that debate whether there should be a federal standard to preempt state laws. And Wong said, yes, there should.

He thinks that that's sort of the better way to go about doing that very much in line, of course, with what the AI industry is saying. And of course, this comes at a time where Congress really is in a debate between a lot of the China Hawks, as well as others. It's trying to figure out exactly what the line should be when it comes to semiconductors. Guys? All right, Emily, Wookens in Washington, D.C., Emily, thank you very much. We got Dan Niles of Niles Investment Management with us. as well. And Dan, thank you for joining us. We're going to talk about Microsoft and Steve Kovac in just a minute based on, this was going to be, by the way, the Microsoft stuff

are top of the show, as we call it, our lead in industry parlance. But when you got Jensen Wong making off-the-cuff comments to Emily Wilkins on Capitol Hill, we got a lead with that. Anything that you may have heard from Wong or anything recently that you have heard from him and Nvidia that changes your thesis on the AI game? no i mean well thanks for coming so i think our interview's done no um yeah no there's nothing that he's saying that he hasn't said in the past and quite honestly what he has to say right now if they get the license to ship to china obviously that's going to be very good for them but that doesn't get you away from the biggest thing that ball streets wrestling with with regards

to a i do you believe let me let me back it sorry dan let me back that up for a second, then I want to hear your thoughts. Do you believe, and we have seen Jensen Wong, I was only half joking with the team this morning, Kelly, when I said, who's running NVIDIA because Jensen Wong is on Capitol Hill or in China, he's flying all over the world. Do you believe that this charm offensive, particularly with the man in the White House, Donald J. Trump, is designed to obviously help NVIDIA, but realistically open that door to more advanced chip sales to China? Well, obviously, right?

That's the reason to do this. I think the bigger thing that potentially opens the door to China is the fact that China is making lots of advances on AI without any of our chips, right? Because Huawei is shipping ascend chips. You've got DeepSeek, which is continuing to put out models that are very, very good for open source. And in certain sectors, like energy or open source models, China's actually, actually ahead of the U.S. Now, we have the best hardware in the world. We have the best private

AI in the world. But I think when you step back and you say, look, they're making advances with or without us. Why don't we at least try to get them to use our chips so that we at least have some control over this? I think that's the right, that is the right policy going forward because much like you can think of foundry, right? The U.S. used to lead with Intel in foundries. Now who's the leader? It's TSM by far. And so you're going to see technology migrate, regardless of what you're trying to do to restrict that. We've already seen that with AI. Yeah.

I'm curious, Dan, as you kind of, we were talking to this last hour, is it possible that the rising AI tide lifts all boats? I mean, do you have any concerns about Microsoft versus Open AI and Nvidia versus Google and all of the stuff? I mean, or are you investing as a group, or do you get to the point at which you look for any opportunities to shore it or do anything like that? I've been saying this for months, Kelly, which is the market has up until about a month ago assumed that every company won in AI. And if you look back at history, and I've said this multiple times, that's not the way it works with, let's take the internet, for example, right? You had a great internet bubble coming out of that.

How many winners have you really had in e-commerce? One, Amazon. What about in search? Well, you don't hear about Netscape or Yahoo or AOL. anymore. It's Google. What about in social? How many winners do you have there? It's really only meta. Up until about a month ago, it was assumed everybody's going to win. But that's probably not going to be the case. You'll probably have Google win in consumer AI for the simple reason that they've got more training data with nine products with over a billion users each that they can

train on. And they've already got the whole vertical stack from ASICs. They don't need Nvidia chips as much as others, all the way through to monetizing it through search, all the way through to products with their pixel phones in the Android ecosystem. They're probably going to win there, not Open AI. So anybody's exposed to Open AI? I don't think, and I've said this multiple times over months, I don't think Open AI can meet that 1.4 trillion infrastructure spend that they have out there because they're not going to win in consumer AI. And then on the corporate side, right, you've got Microsoft, which obviously, you know, most corporations have office.

I'm guessing you guys do as well. And so they can sell you products through that. But they've already got the installed base, I think, is the lingo. Microsoft already has us. Google already has us. Meta probably already has us through Facebook. and Open AI is coming at it. They're a newer company.

Kind of secretive. By the way, Sam Allman, welcome on this program. Anytime, anywhere, whatever. And I get your point. And a lot of people besides you, Dan, have privately talked to me about their concerns around Open AI. And they're handing out gigawatts of electricity

like Oprah's handing out Buick's on a TV show, and it's just not sure that she did it. It's not clear they can do it. I want to go back to Microsoft. Our top story today was going to be, this report from the paid research site, the information that Microsoft had cut its sales growth targets on AI. They spoke to Steve Kovac. They basically said the report's either not true or misleading. They did something else. It didn't seem to be as serious as the headline.

Forget about the report. Microsoft stock fell about 2% on that news. Does that show you or not some of the fragility that may be around this market? market and the AI trade? Well, yeah, absolutely, because let's look at a different stock. Let's look at Oracle, right? Oracle on September 9th reported revenues up or remaining performance obligations of 359%. The stock on September 9th was at $242.42. It then went up 36% the next day. The biggest move in history for any company with the market cap over a half a trillion dollars, it is now 15% below where it was before they announced their earnings. So if this was about, you know, earnings, you wouldn't have that happening in Oracle. The reason is that out of the 455 billion in

RPO announced, 300 billion was from Open AI. And to your point, Brian, who owns the largest percentage of Open AI? Microsoft. They have 27% equity ownership on top of of that they have a revenue share. On top of that, Open AI runs on top of Azure. So that's the real problem. If you don't believe in Open AI longer term, then you have to go, well, how is this going to affect Microsoft in the future? Even though they have a hammer lock, obviously, on all of us that have companies. So that, to your point, speaks on how difficult it is right now because the market's starting to go, you know what, everybody is not. going to win. And so I need to start differentiating between the Google complex of companies and the Open AI complex of companies and go, how many winners are there actually going to be? Maybe there's two or three. It's not going to be 10. And that's why this market feels fragile, because as investors are shorting that out, and that's why Microsoft's almost down 2% still today. And Google, by the way, is almost up 2% today. What's your best idea, Dan?

if I could put it that way in the midst of all this. Cash, but, you know, being broadly diversified, and I've said this for a while, I think is the best thing. Now, if you want to, if you're asking, Kelly, you know, within tech. No, I'm asking, I mean, but go at both, especially at a moment when there's a lot of enthusiasm, actually, about the market into next year that I'm hearing. But so you mentioned Google and tech, though? Yeah, I mean, Google and tech, you can pick Apple because, despite the fact they don't have a particularly great product, it doesn't have AI. Next year,

you're going to have a good product with AI on those systems, and you're going to have a foldable phone where Samsung's had one since I think 2019 or so. And so that's potentially interesting, but I think if you step back from this, the market's been driven by two things for the last three years. It's been easy money, the Fed cutting rates, right? The second one has been AI. Well, easy money he's pretty much gone after December 10th because even if you do get a rate cut, which I think you will, you're probably going to get four dissents. And there's probably no more rate cuts until May when President Trump points in the head of the Federal Reserve. That's, I think, a problem for markets because why did this market rip over the last, you know, several days? It's because when you had John

Williams from the Fed come out and say, hey, I support a rate cut, the markets that Friday went from a 30% probability of a December cut to 70, and now it's near 90. That's why the market's gone up. But you're not going to get any more rate cuts probably for another five months. So you're saying this, because Apple, Apple is up 41% in six months. So you're suggesting, or not suggesting, you're just saying it outright, that this market rally has, is the rate cut rally six to nine months ahead of time? Yeah. And the other thing is that, no, the other part of this is that the AI trade, as we've talked about, right? The market's within 1% of all-time record highs. I think there's almost five stocks now. Tesla's like down 9% from its 52-week high, but are down 10% or so

out of the magnificent 7 from their 52-week highs. And so you're seeing the market broadening to other sectors that you don't have this failure point with one company, and if there's a problem there, the entire sector potentially gets taken down. the market broadened to those other sectors that for the last three years, people have forgotten about because it's been AI 24-7 on, you know, everybody's lips. And now I think you have to start thinking a little bit more. So if you're concerned that December 10th might be the top because that's the last rate cut for five months, you know, other than being broadly diversified, cash is not a bad option. So it's just stuff to think about. And being in these AI trades, as Sam Altman on

Monday said, we're at Code Red. That doesn't necessarily make you feel good that this AI trade is coming back anytime soon, especially after NVIDIA put up a great quarter, great outlook. And the stock went down, I think, you know, 1% last week with the S&P up four, the magnificent and seven up five, and it's obviously struggling again to some degree now with, you know, this Microsoft news. And, yeah, it looks like Nvidia's down a little bit today, too. Dan Niles, Niles Investment Management, one of the best in the biz, also pretty good on TV, because you just rolled with a whole new open and intro and show lead. We appreciate it, Dan. Thank you very much.

Thanks, Brian. Thanks, Kelly. All right. Coming up, we'll get back on track. What is more important for the markets? Is it rate cuts? Or is it AI? We kind of talk to Dan about it. We've got Scott Croner of City on set. Talk about that and more. Next. Welcome back.

We're either shrugging off the weak data or we're rallying because of it, Brian, and one of these kind of guaranteed lower rates kinds of trades. ADP said we dropped 32K jobs in November. We don't like that. It's the biggest drop since March of 2023. And the Fed decision is a week from today. So how is that setting up things for equities from here? As of now, according to the CMEFED-Watch tool, the odds are 89%.

The Fed will cut a quarter point next week. Zero percent for a half-point cut, but we are asking the question. We are asking the question. Let's see if Scott Croner would be tiptoeing into that camp at all. He's U.S. Equity Strategist at City. It's great to have you here. Great being here. Do we get to the point at which, you know, so we just spoke with Dan Niles, who said,

no, no, no, the lower rates trade is in the books for now. A lot of people disagree, and I wonder if you're one of them. Do you think lower rates are a significant reason into next year why equities could keep rallying or not? So I think if you look at where the 10 years gone over the past 12 trading sessions or 12 days versus where the S&P rally has taken us, they've gone hand in hand, right? So essentially, my view is, and you saw the probabilities on this next Fed rate cut decision, And I think the market's telling you at 25 basis points is coming. A lot of that's just been priced in.

Okay. So from here, you get anything incremental is going to be that traditional year-end sentiment boost. But I think from a fundamental perspective, the market's doing just what it should be doing in terms of how it's responding to the changing Fed expectation. So what do you see for 2026? So I see for 2026. We haven't published our full-year outlook yet.

We've been in print for some time, $6,900 bid-year with a bullcase around that, closer to $7,700. So color us, color us, structurally bullish on U.S. equities from here, okay? But we have to allow that within that, there's going to be a lot of volatility as we see the AI narrative and the broader economic narrative continue to play out, right? This isn't going to be a straightforward path. Fundamentally, though, we think the S&P 500 is in very good shape. Combination of, again, AI tailwinds, but a broadening influence that we've been advocating for several

months now. You've got a pretty big gap between your base case. that we're talking about the end of June. So first half next year, 6,900, base case, bull case, 7,700. That's 800 points on the S&P. That's a lot of percent.

What's the difference between the base case and the bull case, and please don't say, 800 points? How much do you want to pay for, Brian? Okay, so essentially, you're sitting in my seat and you're projecting out, we're at valuations that are near record highs, right? So to sit there and say the valuations

are going to go even higher from here, that begins to take you into that boom bubble risk component, right? We don't want to go there. So what we want to focus on is like this presumption that valuations can hold and maybe even come in as earnings growth comes up, right? But the differentiating point here is that from our perspective, what's happening fundamentally is something that we don't usually see this time of the year. This time of the year, you're usually seeing out-year numbers come down.

Mm-hmm. Okay. This year we're seeing out your numbers go up. For earnings. For earnings. So right now in December, we're seeing better and better earnings projections for 2026. That's correct. Bottoms up or top down? Bottom up. So we tend to look at the world, you know, from a bottom-up build-up perspective, but consensus has now surpassed us. I would have told you three months ago, our 308 number for next year was like the second highest in the street. Wow. We're 310 consensus now. Wow, really? Yeah. So consensus has come. That's earnings per share on the S&P 5. Correct. For 2026. So we're already pricing in a lot of 26 expectation, right? That's been

premised in what our year-end 25 target is. But you see where this goes. As you continue to see this earnings lift, that's how you offset valuation concerns, right? And so essentially where we're going with all of this is, yeah, we think that we're in a pretty good position at this point to hold valuations. We have this earnings driver that, again, there's going to be AI influence with the mag seven or eight whichever of the those two you want to choose but the broadening effect is where you're starting to see the rate impact come in so you look at today's action you see the banks kicking in good news were overweight banks you're seeing the retailers kick in good news

were overweight retailers we've been trying to position our our sector views here to align with where we think fed rate cuts can come in and begin to give you a new angle from which to drive the index okay but yesterday the CFO of Procter & Gamble said, made some concerning comments about the consumers, said kind of consumers a little shaky, whatever the phrasing was, it was not a bullish commentary on the consumer from PNG, pretty doggone important company. So to Kelly's point about earnings, top down, bottoms up, will that earnings growth be spread out across industries or is it really, again, going to be just concentrated in the same freaking 20 companies? It's going to

broaden, okay? And it's going to broaden down a sector path, and it may even broaden down an asset class path. We may be talking about the small midcap part of the market, which is coming off of a two-year earnings recession, actually, potentially driving earnings growth next year that's going to approximate where the SMP is going to go. So you've got a couple of things going on here. You've got, yeah, this mega-cap growth leadership that's been driving the recent earnings revisions. But what's happening from a sector perspective, you're setting things up to where you're going to have nearly every sector in our view contributing positively to earnings growth next year. That's the broadening effect.

And so this is pretty powerful, particularly when you think about where we are with the Fed cycle and the path lower presumably here for rates. You know, let's put some gates around where we think the inflation discussion has taken us. But all told, again, you're talking to the guy that's essentially a structural bull on this because where we haven't even gotten yet, but maybe you have with your holiday shopping and Rufus, Where we haven't gotten yet is, okay, we're talking about AI enablers and creators, okay? That's the MAG7, the Meg8, mega-cap growth cohort. We think next year we've got to get much more idiosyncratic on that cohort of stocks,

but importantly, the discussion begins to switch to AI users. So now you've got every other company in the marketplace that's now embracing AI technologies, and as a C-suite, you better have an AI strategy. If you don't, you've got investors looking cross-eyed at you. So essentially, what happens from here is that we think this productivity play really begins to broaden out, supports the fundamental underpinnings, and that's when you can begin to talk about Bull versus base cases, Brian. Man, I love innovation, don't you? Isn't it just wonderful?

It's so innovative. Great time to be alive. Thank you, Scott. Really appreciate it. Great pleasure. Thank you. Scott Crohn. All right.

Well, today's weaker than expected ADP jobs data did impact Treasury yields. That report raising some concerns about health the labor market and maybe the health of the American economy. Rick Sanchez, joining us now with more on the bond report where I suspect you will reference Japan, Rick. Oh, absolutely. We'll leave the best to the end. Yes, ADP, look at a bar chart of one year.

Definitely some deterioration. Is it anybody's first choice when the day's all coming in on time? Probably not. But anecdotally, it seems to fit that the labor market is weakening, Just how much? It's kind of hard to tell. Look at a 12-hour chart of tens. You can clearly see the weak data took its toll early.

But then yields turned up briefly. Why? Well, our last guest mentioned it, and I use this chart a lot. Let's put the S&P futures on top of 10-year. And what you'll notice is that as the S&Ps started to rumble higher, it definitely dragged rates along with it. That's happened about 1020 Eastern, But then it lost steam and it separated again.

So you could actually say that the equities pulled rates up, but then the lingering weakness in that jobs data took its toll and it ultimately is now, as you see three basis points, deterioration across all maturities. And finally, this is a chart going back 18 years of Japanese tenure. Another fresh high yield close. Kelly, back to you. And significant one for the global markets, Rick, thanks.

Our market navigator agrees. with Michael Burry, who slammed Tesla for being ridiculously overvalued. We'll talk about, you will not believe, frankly, how he's playing the stock. We'll talk about that next. With Tesla's market cap now nearing $1.5 trillion, some people are questioning whether the company is overvalued, and Michael Burry is among them. the big short investor writing in a weekend blog post that the company is, quote, ridiculously overvalued. Our next guest has some thoughts on that as well, and he says Tesla faces some serious challenges

heading into the new year. Let's bring in Tony Zhang. He's the chief strategist at Options Play. I guess I wouldn't say you're shorting this in Options Parliance, Tony. But what are you doing exactly for this trade? Yeah, well, I am taking a bearish position here. And I think the recent rally here to that double top around that 470 level, Now that we've seen that the stock has pulled back a little bit, we're starting to see some

underperformance relative to the S&P 500. I think the timing on this looks quite strong here to take some bearish exposure. As you said, you know, the stock is ridiculously overvalued, but I think we could argue that for pretty much any time over the last few years that the stock has remained ridiculously overvalued. So I think that itself alone is not necessarily a good reason to take a bearish exposure in this particular stock, but you have to look at the timing on this. And I think the stock starting to underperform here is starting to show some cracks here alongside with the fundamentals, really starting to slip here this year with Tesla.

So what's the trade? Yeah, so I'm looking at going out to the January expiration, and I'm looking at using a put debit spread because options on Tesla right now are incredibly inexpensive. So I think you can buy some downside protection for cheap by using a put spread. So I'm going out to that January expiration, I'm looking at that January expiration. I'm looking at buying a 425, 370 put spread. Earlier today, you can pay a little under $17.50 for that debit spread right now with the stock rallying nearly 4% on today's price action. I think you could probably pick it up for even a little bit under $17. This way you could basically have a nearly three to one risk or reward ratio if we see a little bit of volatility ahead for the overall

markets between now and that January expiration. And we see a bit of a pull. back here for Tesla. All right. I'll be thinking about you. If that price action moves to the downside, Tony, thanks for joining us today. Appreciate it. Tony Zang. Brian? All right, Kelly, thank you. coming up. We're going to name names on a little talked about stock that one analyst says could be a hidden AI play that's staring you right in the face. Stick around. All right, it is time, as you can see for the graphic, time for a power play. And let's talk AI and power, because KeyBank Capital Market says this company may be one of the biggest AI power plays we don't talk enough about. That company, Texas Pacific Land, ticker, TPL.

An analyst Tim Resvin says this company, which dates all the way back to 1888, maybe a modern-day powerhouse around energy. Let's bring Tim in. Tim, welcome. You've got a $1,050 price target on TPL. It's about 17% upside from here. What makes Texas Pacific land so attractive? What we like about Texas Pacific land is really there's a lot of ways to win in the Permian basin.

When you think of the Permian, Brian, you think of oil. But Texas Pacific land, we've used. use the tongue-in-cheek reference. They're like a mob boss in West Texas. They've almost 900,000 surface acres. They've aquifer water that can be used for drilling and fracking. You can dispose of water on their land. You can run pipelines and infrastructure through their properties. So almost everything of scale that happens tends to touch their acreage. And that would include potentially power generation or data centers. So there's a lot of ways to win. And the most exciting thing for us, looking forward in the Permian, is not oil. It's had to deal with the produced water

for 24 million barrels a day and had to deal with the increasing skew of natural gas from the production stream. So how much of this story then, Tim, has been told already versus the expectation that all this great land they're sitting on with water, by the way, will ultimately, but may not play out? It's hard to really quantify value for fallow acreage today that may be implemented, you know, with infrastructure tomorrow. If you look at a long-term price chart, TPL hit 1,700 about a year ago. It got added to the S&P 500. There was an enormous amount of retail, momentum-driven investing into the stock. And we believe as that trade has played out, we believe the stock has settled here and we think there's significant upside. So the real

debate around the stock has had a value that vast acreage footprint, which doesn't drive revenue today. But there's a lot of ways we think it can drive revenue out into 2030 and beyond. All right. Well, we're going to leave it there. I think you're reporting. called them the original landman. You make Billy Bob Thornton and Taylor Sheridan happy. Tim Resvin, Key Bay Capital Markets, managing director of oil and gas equity research, Tim. Thank you.

Thank you. And let's get over to Mackenzie Sagalos now for the news update. McKenzie. Hey, Kelly. A new watchdog report says Defense Secretary Pete Hegeseth risked compromising sensitive military information when he used the messaging app signal earlier this year to share highly sensitive attack plans.

That's according to CNN, which cites force. sources familiar with the report. The Inspector General's office also said Heggseth could have endangered American troops and mission objectives. A White House official called yesterday's talks between U.S. envoy Steve Whitkoff and Russian President Vladimir Putin, quote, thorough and productive. The official says Whitkoff and President Trump's son-in-law, Jared Kushner, briefed the president after the meeting. The Kremlin said the two sides did not reach an agreement during the five hours of talks. And my pillow CEO and Trump ally Mike Lindell filed paperwork to run for the governor of Minnesota.

He will compete against Democratic incumbent and former vice presidential candidate Tim Walls, who is running for a third term. Several other Republicans have also jumped in the race to oppose him. Brian, back to you. All right, McKenzie Segalos. Thank you very much.

All right, coming up, Let the Games begin. Netflix, suiting up for Christmas Day NFL action. It's a calculated play for ad dollars, but will it work? Alex Sherman is here to break it all down. Welcome back. Netflix is one of the biggest laggards in the S&P today, believe it or not, it's down 5%.

No real catalyst other than maybe this ongoing Warner Brothers bidding war, but it does come as Netflix is diving deeper into live sports. They have the rights to the MLB, boxing, WWE, and the NFL. of course. Just a short time ago, they released this promo of their Christmas games, which had huge viewership, drove a lot of sign-ups last year. Also, they're going to broadcast two divisional clashes, the Cowboys v. Commanders and the Lions Vikings. Netflix is pouring money into live sports as they search for new ways to boost ad revenue, add subscribers. But top execs say they're still not sold on buying full packages of live sports rights. But is it only a matter of time before they change their mind? Let's ask Alex Sherman.

I mean, Alex, it does seem like they're starting with a little bit of of a nibble and might go whole hog at some point. And this is Netflix's MO. I was just thinking as I walked from my desk over to this set, how many times Netflix has changed its mind on major business plans? They originally said they would not do original programming, and then they did. I remember they had a campaign that Love is sharing a password, and then they started cracking down on password sharing.

Now you can see the stock today. Investors don't really like it. They're bidding on Warner Brothers Discuss. They've always been against theatrical. Well, if they buy Warner Bros. Discovery, they're going to be putting movies in theaters. And on the sports front, they said for a long time, oh, by the way, advertising, too, said, we won't get into advertising. Now they have a huge ad tier. On the sports front, they had consistently, Netflix executives said, we don't really see a lane into live sports.

That has morphed. They're very much into live sports. You talked about the Christmas games. They're going to have the Women's World Cup in 2013. They have, if you count WWE as sports, I guess that's sports entertainment. but they now have a consistent weekly package of WWE games. They're into Major League Baseball now. They're going to have the home run derby starting next year.

They're in sports. But to your point, the question is, will they ever own a big package of game? You know, 50, 60, 70 games on Netflix? I don't think so unless things change. For one, those rights are tied up for years. So I feel pretty safe. Okay. Here's what's going to happen.

Okay, here's what's going to happen. We're going to be sitting at Christmas and someone's going to say, because you don't want to talk to your family. You want to put on the football game, right? Well, you don't have Netflix, so you can't watch the game. So what are you going to do? You're going to subscribe to Netflix so you can sit on the couch and watch the game and not talk to your family because it's going to win.

It's going to win. Of course, well, first of all, 300 million people or so have Netflix already. So it's not that many people. In the world or in the world, you know, it's so 70, 80 million in the United States. There's 8 billion people in the world. That's still a lot of run with. I hear yes. But I do feel like, look, there's a reason that Netflix's strategy is an event-based strategy.

So they just hired this woman, L. Duncan, who's going to be the face of Netflix sports. It's the first sports-focused broadcaster that Netflix has hired. She's going to be sort of the front door to the variety of Netflix live events. And I don't know, there's what, 20 or 30 of them maybe so far. That include wrestling? That will grow. I don't think it includes wrestling yet, although that is a live event. But maybe for certain wrestling events, I could see that, although their major events are actually not on Netflix.

They're on ESPN or will be starting in the January 1st of 2026. So confused. But they do have other non-sports live events that perhaps you will be sort of the front door to, like, you know, the Love is Blind reunion. Like those reality shows are kind of sporty. Like, you know, they're competitions, they're live. What is love is? You know the show, Kelly? It's a dating show, right?

It's a dating. You don't know what Love is Blind? Oh, you're missing out, Brian. I'm shocked. And we don't need to go down the love is blind rabbit hole quite yet. But the idea that Netflix does not want big packages of games, but just these little events,

to your point, where you sign up for the service and then maybe you stick around, that has been the sports strategy. And I do think for the next few years, at least, it will continue to be the sports strategy for Netflix. So quickly, 5% down today,

you think that's because investors are panicking a little bit about them buying the studio business. Yeah, I mean, Netflix has never done any M&A of significance. They don't really need Warner Bros. Discovery, but it would be a very offensive move on their end to buy this thing. I'm imagining the concern is how much are they really going to pay for this? Because they're going to be in a bidding war. We already know that Comcast and Paramount have submitted bids. Paramount is backed by the Ellison family, very deep-pocketed. Paramount kicked off this

wholesale auction by sending a hostile offer to Warner Brothers Discovery. So you know they want this. So I'm guessing that today's pushback. And they can still go hostile even if Warner Bros. Discovery went, quote, they can. Netflix. Paramount can go right to the shareholders of Warner Bros. Discovery and say, no, no, no, no, come with our offer. Here's why it's better. And then you wonder, would the regulators get involved? Is Netflix getting a little, a little big? They're getting a little big in in the streaming world. So we have no idea if that would be a regulator, if that would ring alarm bells with regulators yet or not. A lot of people are weighing in. Some say yes, some say no. Some say Paramount has their own issues, particularly internationally, even though

the Ellison family is close with the Trump administration or Donald Trump specifically. So yeah, everyone's kind of pointing at each other in terms of the regulatory thing here as they all jockey for position to try to buy this asset, which I think we will know in the next two weeks or so. And Paramount's down almost 7% today. And Comcast is green. We've got to go. But maybe that tells you that the price number is going up. Thank you, Alex. Thank you.

All right. Coming up, we're going to get more exclusive data about the health or lack of of the American economy with David Steinberg and Zeta Globe. All right, we have got another big read on the consumer today. fueled by proprietary data literally from trillions of consumer signals. We colloquially call it Zeta Data because it is the latest Zeta Global Economic Index.

And that firm just announcing that their platform used in soaring 153% of the past year, powered a ton by what else AI agents. Joining us now as a real man, David Steinberg, CEO of Zeta Global. David, good to have you back on. Congrats on the numbers as well, your public company. So it goes to the stock. Let's get down to the Zeta data, the economic index. It's not great.

Well, you know, listen, it's a tale of two cities. I think we continue to see people are buying what they have to have, but they're not buying what they don't have to have. And we saw discretionary spending continue to be troubled, and we saw non-discretionary spending go up meaningfully. Okay, non-discretionary spending. So stuff, milk, food, eggs. things that people have to buy. Would you say the data on the consumer side, the discretionary side, David, is worrying to you at all or not quite yet, but it's something to watch?

It's something to keep an eye on. What I would say is if you looked at travel and retail, they were up nicely. If you looked at automotive, dining, and entertainment, they were off. Now, listen, we had the government reopening early in the month, which we think might have created a recalibration. caused some pause to spending, it was up nicely. The Zadde Economic Index was up nicely in October, so the fact it was down less than 1% in November is not that concerning. If you look at the five days from Thanksgiving through Cyber Monday, and then of course you have giving Tuesday,

you know, sales were up meaningfully. I think we believe we hit a trillion dollars in sales over that five days, you know, trillion with a T. Brian, almost 4% year over year. That bodes well for the holiday season. So that being the case, would you say that your data is aligning with that of those who see a relatively robust, that's too strong, a decent consumer and economy right now, or a patchier one? No, Kelly, we see a good economy. We see a solid economy. The fact that the Zeta Economic Index went down less than 1% after being up nicely in October. Once again, we don't see that as a major problem. Now, if it continues, that's certainly not good. One really interesting statistic is we see

the labor market. We saw it contract again, and we see that continue to be a challenge. We think that's going to be very meaningful on December 9th and 10th when the Fed are together talking. Yeah, we got the Federal Reserve. I wonder if low weights are going to matter at all. When you look all those trillions of consumer signals, David, that you and your team are looking at. Are there a couple that you might look at a little more closely in the ZEI? Yeah, I mean, listen, what we saw was discretionary spending down by 8%, but we saw new homeowner moves up by 15%. We saw retail nice and up to the right.

So, you know, I think it continues to be sort of the economy is a tail of two cities. people in the top 10% of the, you know, wealthiest people in this country are driving a large percentage of the economy at this point. With the government reopening and those checks now going out to all of those people, I think that will flow into December and we believe we're going to see a step up in December. But, you know, if you look at discretionary versus non-discretionary, I think inflation continues to play here a bit. I don't want to give too much away. we got a little thing right after you, David, on gas prices, but you look at automotive sales. The Trump administration talking about the price of cars, price of cars has gotten, pardon my French, stupid, right?

50 grand for kind of an average car these days. That's showing up in your data. David, you there? Do we lose you? No, I'm back. I think there might have been a little hiccup. If you were saying the price of cars are stupid, we totally agree. You've seen the price of cars hit what we would say as the point of diminishing marginal return. And we saw a meaningful shrinkage at 4% in automotive. You know, I won't talk about gas prices for your next segment. But at least they seem to be moving in the right direction. Yeah.

And the ZEI showing automotive down four, maybe those high prices, scaring people off. David Steinberg, CEO of Zeta Global, David, great stuff. We'll see you on. Thank you. Thank you, Brian. Appreciate you. Thanks. And you know what's amazing to me is how little attention our next piece of news has gotten so far, because you may or may not have seen this yet, but new data from AAA shows that the national average for gas has now dropped below $3 a gallon. This is for the first time since COVID. And if you exclude that, it goes back even further. Prices are still higher along most coastal states, obviously. But if you're in Oklahoma, it's under $250 per gallon. There's no single bigger data point. Brian, we talk about this all the time that the consumer reaction. to than this one. Now, interestingly, the last time their sentiment was really bad,

it was when gasoline prices were really high. We have low gas prices right now, and sentiment still ain't great, but this could be a big helper as we start to go into next year. And as we talked about U.S. oil production at a record high, 18.74 million barrels a day in the XLE right now, on an upmarket day, the XLE, the energy ETF, the best performing sector of the 11 in the market, Kelly. Is it really? Yes, it is. So here we have another winner-take-all situation. are winning the producers are winning and the consumers just so much winning so much winning today and that's how you know we're going to turn lower in and down you know three percent

jinxed it thanks for watch closing bell starts now