Power Lunch - Opportunities in Fixed Income, Financial Planning for Athletes 6/26/25

Episode Date: June 26, 2025

CNBC’s Brian Sullivan and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. ���Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Markets and your money riding high again. Welcome to Power Lunch, everybody, alongside Kelly. I'm Brian Sullivan, the S&P 500, back on the March, edging closer to yet another record high. The White House again, walking back to tariff deadline and data stocks making another leg up all. As reports surface, Trump may be ready to find a new Fed chair already, Kelly. The plot thickens, and Big Tech is back in the driver's seat, taking the NASDAQ 100 along for the ride, powering toward another fresh high today, lifted by outsized gains in the mega caps and renewed enthusiasm around AI. Chip stocks like Nvidia doing heavy lifting as investors bet on earning strength and future growth.

In fact, our NASDAQ reporter, Christina Part Senevolous, is all over these trades for us today. I mean, we've talked about this. The comeback from the lows has been shocking. 60% for some of these names, more even. Look at Micron. I mean, I know it might be down a little bit today. The reason it's down is because the stock was up 51% into yesterday's close. There was, expectations were quite high.

But to your point, you just have this reinvigoration into the AI trade. NASDAQ 100 hitting a record close, the NASDAQ composite, very close to that high again. And so what is happening? Why are we, why, you know, the sell in May, that notion's completely gone, right? There's a few. I think we need to sell the sell in May. It needs to go away. Yeah.

It hasn't worked the last few years. Not just that, but we're having the best May June period since 1995 or something. And there's certain names of the. volume is just incredible even today. You have AMD trading at 90% volume, a super micro micron in that mix, N phase, which is not really within the tech things of space, but it just falls. Coinbase. Yeah, Coinbase is an excellent example. If you, there's many reasons. You have the Genius Act, the legislation that, you know, potentially could, you know, be signed by President Trump was passed by the Senate, Bitcoin climbing higher. So those are part of the reasons why the SEC lawsuit

dismissal gone. So that's helping Coinbase. But overall, why are you seeing, tech being reinvigorated. You have the fact that CAPX, the fear of a CAPEX peak is gone. Why? Because we were able to digest from a lot of the hypers, Google, Microsoft meta, etc., that they're going to continue spending into 2026. So that is giving us insight into next year, as well as the comments from a lot of sovereign AI nations that are going to be spending UAE on building out their AI infrastructure. And that helps names like InVIDIA, which is why there's been this, you know, back, a trade back into the AI play. And you can even show it with the IGV, which represents software.

There's been this rotation just within the last month out of software back into the chips names, which is the category that I follow quite closely. But in other words, you'd say there's a real there there, right? There's two types of kind of route. The one could be all of us shaking our heads and going, this just makes no sense. It's divorced from fundamentals. It's just all the money. Exactly.

And then the other is to say, no, there's kind of fundamental reasons why these stocks are re-rating right in front of our eyes, you know? Well, for one, in terms of InVidia, the bottleneck with the supply chain, specifically with Blackwell is easing. So that's helping a lot of names, like let's say Super Micro, get their product out because they're not, no longer waiting for the chips. That means that they can actually recognize that revenue when it comes to their earnings. And so that is a great boost for many of these server names. But overall, I don't know past two years from now. We are seeing into 20. But two years is probably fine.

It doesn't matter because the markets right now are just pricing in just the next couple months and the next quarter. What is that telling us that there is demand and that AI buildout is continuing, which is why chips everything. I'm going to be an old man, and I'm going to yell at the cloud. Now, the cloud used to be a cloud. Now, I mean, like, the internet. You're going to make a chips joke, too? Well, because I was at the NASDAQ from 1999 to 2001. Okay.

So I saw the boom, and I saw the bust, and there are parts of this boom. I don't know which parts, but there are parts of this boom that they may not be 1999 again, but they rhyme. And there's parts that worry me. Is there anybody out there at all that you're talking to or covering or reading or anything, Christina, that is suggesting

just be careful. Just watch out. Not all these companies are going to win and be around. There's a board behind me at the NASDAQ at 99 with a lot of names worth a lot of billions

that went away. I think about that a lot now with like the quantum names, right? The stuff we're just at the very beginning versus some of the more established businesses you're talking about. Especially because more of the larger companies are going to be investing in the quantum names. Invidia has only just begun entering that space in terms of investing, you know, has a small minority stake.

But to your point, think of the large language models. Would you not say that they're commoditized to a certain extent? The consumer-facing stuff. Sure. They lift a lot of our stuff, by the way. I had somebody quote, somebody sent me an AI answer recently, which was quoting me back to me. Literally the AI model took our something I tweeted. Yes, but.

And sent it back to this guy as me. It was the weirdest thing. I should get paid for that. Against the Anthropic just this week, which was basically these authors coming and saying, you're stealing our work. And they won. They won that ruling. I think your point about quantum as well taken.

Listen, there's names. I'm going to say names that you guys may not even know. Commerce 1, Ariba, ICG, CMG. These names mean nothing to a lot of people, but they mean a lot to a lot of other people that are older like me. I'm just saying with these quantum names, be careful, right? Not all of them. Of course not all of them.

But when I see stocks come out of nowhere to be worth $100, billion dollars in a year? Precisely, you wonder, you know, what's going to happen. Many of those companies that you're thinking of, the valuations, for example, Corey, the argument can be made that they can only move forward once they get contracts, right? And they can build out their data centers. And once people have built out their data centers... Where's the growth? Yeah, but then they can say, oh, they can revamp it every six years. The technology is still, the amortization rate of those chips is still valuable, even if it, you know, six years from now. So there's arguments for both cases that at one point we're going to hit a wall.

There's going to be a digestion period. But then, just like you had Deirdre in the last hour, talking about the next leg or inferencing and how it could drive a lot of this... Or if it doesn't, if that suddenly does hit a road. Isn't CoreWeave reportedly in talks to buy another core scientific? That stocks up 28%. Yeah, so that's not the first time that Corrieve has done that.

So this is the Wall Street Journal reporting it. CoreWeave told me that they're not commenting, but think CoreWeave, what they do is they rent out GPUs as a service. They have been partnering with Core Scientific for quite some time. They provide the digital infrastructure, Bitcoin, Cryptall, that even if it's, you don't need to know that it's very, very similar. And so it just makes sense that they would possibly join forces. Last time, though, Core Scientific didn't like the offer. Perhaps this time around would be a little bit different.

That's why you're seeing more of a negative reaction in CoreWeep. But I would say for CoreWeave, the sentiment has really changed where they're saying that they may see an annual revenue rate of $5 billion this year, specifically tied to the cloud, is incredible. And then if you think about Nvidia entering that space too, to your point, Brian, the market has to narrow in at one point, right? And if Nvidia is going to start playing in the cloud, what does that mean for the AWS is, the Google out there, the meta's out there? So everybody's dabbling in each other's turf. So there's got to be consolidation at one point. Listen, we're at the part of the story where you get in a taxi or an Uber outside of the NASDAQ and the driver wants to talk to me about Nvidia,

that's, I'm sorry to be a little bit jumpy, but that makes me a little bit jumpy. Not the driver talking. Look, it was a tell. But the stock focus. But then the stock is an all-time high right now. There's nothing new. Nothing has been.

Will it split again? What's going to happen? 1996, Serge Millman was on the cover of Fortune magazine with a computer saying the kids that are destroying Wall Street. Now that Serge is probably watching, high surge. He's like my age now, right? But nothing's new. It's like Jesse Livermore in 1930s.

I don't know. Nothing's new. Well, the neoclouds are new. That's a whole new avenue. The quantum is new. There's maybe you could say the data center providers, the power infrastructure companies, that's a new avenue for you to invest in. We're not doing supersonic air travel anymore.

We did in 1969. Well, there was a reason for that, right? Yes. Well, that's fair point. Nothing to fear, but fear itself. And Christina Ports in Elvis. Christina, thank you. Thank you.

Let's dig more down to the market and money story. Because, well, big tech, as you just heard elegantly, is at a record. The S&P 500 is this close. I'm doing like a thing with my fingers that implies close to making new highs. We could hit that number today. We are less than 0.2% from the level. 6,147 is the number to watch if you are keeping score at home. The climb for a few reasons. You just heard the White House say the July 9th tariff deadline is, quote, not important. Maybe that means tariffs are pushed back again. Who knows? You also have earnings remaining strong. the AI investment story remaining hot, and maybe the Fed's starting to cut interest rates soon.

Oh, by the way, speaking of the Fed, the Wall Street Journal also reporting that Trump may already be on the hunt for Jerome Powell's replacement before Powell is even out the door. Powell's term does not end until the May of next year, but candidates for the job, according to the journal, are Kevin Warsh, you've got Kevin Hassett, you've got Scott Bessent, David Malpass, Chris Waller, and maybe more. David Zervos, who knows. Powell is notoriously butted heads with Trump over rates, and such a move could render him, Powell, irrelevant. But your next guest says a power struggle at the Fed could actually boost stocks. Joining us now is the aforementioned David Zervos,

who is mysteriously taking the chair of Christina Partsenevelas. That was quick. It's amazing how that happens in television. Two Greeks, though, I think, right? It's worth one Greek for another. That's fantastic. No judgment. You're both equally great.

Thanks for joining us. David. Why would a fight at the Fed be good for stocks? I don't think there's a fight. I think there's a storyline developing that over the next year, and you mentioned Jay's term ending in April, May of next year, you've got Governor Coogler leaving in January. That gives the president two seats in all likelihood. He's got two already in Chris Waller and Mickey Bowman. So four out of seven board members are Trump appointees. And the market is taking note of that. The market recognizes that's a majority.

And they're all somewhat sympathetic to his agenda. Are they going to be dovish? We had a big debate about this last hour. Like, number one is to see appoint someone more dovish. Number two, if so, May is coming up pretty quick. So regardless of when this announcement is made, it's coming up quick and should arguably be factored into the market. Number three, the only reason not to appoint someone who would be blatantly

dovish is if the long end goes up on that as a result. I'm curious what you think about it. Well, I thought unusually Steve Leesman made a very good point because I haven't agreed a lot with Steve lately. But he did make a- He always makes great point. He made a great point with you in your segment earlier where he said that effectively these are going to be folks that probably believe in the pro-growth agenda more. They believe that the tariffs aren't going to be some sort of huge detriment. They're going to look at the D-Regs story. They're going to look at a lot of the pieces and parts of the Trump economic agenda.

And they're probably going to have different dots, different forms. forecast. They're going to have a little bit more of that 90s flare that Brian was talking about, where we have the ICGEs and the CMGs. You remember those stocks? Of course I do. I was listening to you. We also high productivity. High productivity. You know, productivity, miracle, all that fun stuff. And it's a year slow rolling market crash. They take a little more risk, right? They take, like Alan Green spent in the 90s took a lot of risk. People said, you're crazy keeping rates this low. Turned out he wasn't crazy. So they're going to be, I wouldn't call them dovish. I'm going to say their economic forecasts, their outlooks are going to be more conducive to taking risks with lower rates.

All due respect to Jay Powell, I know he's a friend of yours. You're close to him. You know him personally. And I think he's done a, you know, a serviceable job. Again, like your point with Steve Leaves, but I don't agree with everything Powell's done, but it doesn't matter. At what point does the market stop listening to Jay Powell and start focusing on whoever is next? Because at some point, maybe it's Now, nine months, to Kelly's point, it's not that far off. Sued in Fed terms, yeah. Right? It's very soon.

And a big part of policy is forward guidance. I mean, this has been a huge part. Look, I think one thing that we've seen with President Trump, and if you've watched him outside of the financial markets, wherever he's operating, if he doesn't like you and he can't get rid of you, the one thing he does is try to make you irrelevant. And I think that's more or less what's happening here. So, and by the way, I really watched that last press conference closely.

And I think the market is getting to the point where they're looking at Jay's relevance and going, eh, you just, you tried to be hawkish and nothing happened. It kind of felt that way, too. They really did. I think Powell, who's obviously a very smart man, seemed to recognize that. That he's lost a little bit of the punch. Well, I think part of your job is going to be, when you talk to clients, they're going to ask you. David, who do you think is next and what is that person going to do?

Well, that's going to happen. But again, you put five names up there. They're all great names. They're all great names. And by the way, the market movement on any of the, those would be fantastic nominees for that job. And I don't think the market would be that different. I don't see the market reacting to anything that these various people are saying, as if it were coming from a Fed share right now, right?

Like, if we got to the point where they were kind of really starting to price the cent, okay, whatever comes out of Hassett's mouth, whatever Warsh rights, whatever, I don't feel like we're there yet. Well, look, to be, to be fair, I'm not sure they are out there doing that yet. So there hasn't been an active program, Kelly, yet, of saying, okay, let's question why are we at four and a quarter? I don't think we're acting as if, you know. Waller and Bowman are both kind of in the position where they have to comment, and they're making moves.

They both made little moves to the double side. Yeah, exactly. Can we bring that graphic back up? Because Polly Market actually is Chris Waller ahead at 22%, but everybody's kind of close. Just the betting market, have fun with it, whatever. Is there anybody on that list that we showed Bessent, Waller, Warsh, Hassett, whatever, that's better for stocks? I guess, you know, look, at the margin, probably you could make some arguments. But again, I think the main story is that all of these candidates are strong candidates.

Kevin's an amazing guy. Scott has done an incredible job. David did a great job. Chris Waller's done a fantastic job. And Kevin Hassett's been there for. from the beginning, you know, Council Economic Advisors, NEC. I think Kevin's a little more fiscal than monetary, in my opinion, but he's just a talented economist.

They're all going to do, I think, what we would expect of them. So there's not a kind of left field out-of-the-box candidate that's coming in here and you're going, oh, my God, that's someone that could do something a little nutty. What's the quickest way to get rates down if you said, take the president's goal at face value and just said, how do you get the long end down quickly? Or I guess, Benke Chata, the other day asked him. He said fiscal consolidation. But no, I don't think anyone's really saying, yeah, cut rates by a lot.

Maybe that would, though. I don't know. So your worry about the long end is right. I mean, we've cut 100 and the long end didn't move that much. So I think, you know, Secretary Besson has put a lot more into the treasury side of the equation, rather than the Fed side of the equation, and thinking about how to manage that. He's talked about kind of controlling the long end through buybacks when it got a little bit out of control during the April move. So maybe there's changes in issuance or changing the demand structure.

So maybe we need to change the supply structure. I think there are a lot of nuances in how you can do that. Again, I think your goal is going to also be to think about the interplay between the balance sheet and the rate structure. We have two levers in monetary policy. We've still got this balance sheet that, as you know, I've argued for a couple years with you, Kelly, has been very stimulative. and it's come down a lot as a percentage of GDP, but you know, you can play balance sheet rates quite a lot. I would say buying mortgage bonds is more stimulative than lowering rates.

Well, here's a thought for you, Brian. If you got to choose stimulus, sorry, we need to wrap up, but if you need to choose stimulus, do you use lower rates or do you use an expanded balance sheet? I would say the expanded balance sheet is much more beneficial to financial institutions than Main Street. And so is there a Main Street, Wall Street tradeoff here that you can start to think about, especially with interest on reserves and other things?

I think there's a lot of ways to play the game, is what I would say. And I think you've got some pretty amazing candidates that are, I think, going to carry pretty optimistic views into the job of the Fed, and they may be carrying them a little bit earlier in a shadowing exercise. Maybe we should put David Zervos on that. Oh, yeah. We'll see. The market moves.

Always living on the edge. Efaristo. Paracalo. Thank you, David Zervos of Jeffreys, second most famous Greek person on the network today. Now to the bond report, Senate Republicans are racing the clock trying to meet President Trump's demand that they pass his domestic agenda bill by July 4th as they work to resolve major sticking points inside the GOP. But with an expected $1 to $2 trillion added to the deficit over the next decade, maybe that'll spark concern in the bond market. Investors have been fleeing long-term bonds at the fastest rate since the high-term. of the pandemic as America soaring debt load tarnishes the appeal of one of the world's most

important markets. The U.S. 10-year treasury yield, not big on the move today, but keep in mind, it's had a big move a couple months ago and has been kind of waiting to see everything, Kelly, that we just talked about. Exactly. How that plays out. 425 is what they're pricing in right now. We're going to take a quick break before we go. We are watching the S&P 500, just five points away from a record close. A few more from the intraday record high. And here's what's on the menu rest of the hour, including Nike. Plus, how do you invest in uncertain times? We've got a financial planner who works with million-dollar athletes and a wind power project in New York at risk. Stay with us.

All right, welcome back to Power Lunch. It is money most of us will never even dream about. But a number of lives are changing forever at the NBA draft. Athletes and hopefully their families suddenly getting very, very rich. Most of these early ground players are going to get massive contracts worth millions of dollars, endorsements, whatever. But did you know it's not just pro athletes that can get huge paychecks every year? Many people get inheritances. They win lawsuits or even win the lottery. And maybe those checks aren't millions of dollars every time, but it is still a good question. What do you do when you suddenly get a check out of the blue? We call that a good problem. Let's talk about it with Mark Doman. He is helping professional

athletes manage and invest their money. He just had a client get drafted, by the way, in the first round of the NBA last night. He's got a pair of first rounders in the NBA from a year ago, and Mark is on set with us. He is a managing director at Creative Planning, which is itself interesting because I don't think of creative planning and Peter and all the great team that you guys have as financial planners being in the sports world, but there's a huge connection between getting a big check and managing that money correctly. You could screw it up. Easily. Not you, but other people. Hopefully not me. No, I mean, the main message I would tell anybody, whether they're an NFL or NBA draft pick or a lottery winner,

or someone who comes into a windfall they're just not familiar with, is that you have to save it until you actually understand it. And that's where guys like me come in, right? Because if you're someone who works a traditional job and all of a sudden a million dollars or $10 million or even more lands in your bank account and you don't grasp how long it will last, it will go just as quickly as it came. So you had a first rounder selected last night. We're not going to name names here because you've got to let the ink dry in the contract. But I'm presuming this young man will get some giant checks coming up soon. What is going to be your advice to him and the others that are, you know, 20 years old, 19, 22, whatever age they are getting a gigantic paycheck.

What are they, what's the first thing they should do? I tell them, I say, you just left college. Or not. Maybe high school. Yeah. I mean, a lot of guys are coming from other programs and they're getting drafted when they're 17, 18, 19 years old. And the headline I tell them is if you're living better than people your age, if you're living a lot better, you've already won. The moment you start comparing yourself to the other guys in the locker room, I mean, you walk into the parking lot at one of these MBA facilities.

It's a car show, right? You see guys that have cars that are four, $500,000. And you as a 19-year-old thing, I'm going to be the smart one. I'm only going to spend $250,000 on a car. Correct. And I'm thinking about that as down payment money for their first home, right? or helping out their family with their home in a meaningful way. Because the whole point of this is that as much excitement and certainty you think you have is a first-round pick in a pro sport, the crazy part is in the NBA. Only 50% of first-round picks end up getting a second contract with that team.

Oh, it's my husband and I's favorite exercise. Now, this might sound a little macabre. But you go back and you look at the first-round picks in the NFL, and any draft NBA NFL over the years, you'd be surprised how many people would go, well, whatever happened to that guy? Never heard of him. Oh, yeah, he got injured. What are they doing now?

It's like I would love to write a book about that, right? And it's a reality check for most people of what they can expect. I also could talk your ear off about NIL and everything that's. I don't want to take a. No, he can talk about it. Oh, yes. No, we've talked about it. I'm just, this is your hobby?

It just. We should spend more time talking. I mean, this is very much in my wheelhouse. This is what I've been doing for the last 20 years. And I know you've got to help these kids. Look, it's great for some of the athletes and now the sort of college level who are getting these huge windfalls. But what's happening to college sports broadly? I don't understand how sustainable these ecosystems are going to be going forward.

It's really unclear, but I can tell you right now, this morning I was on the phone with a family of a player that's heading off to college who is already being offered NIL money before he sets foot on campus. He's still in high school. Like millions? Major six figures, I can tell you. Major six figures, I can tell you. And how old is this kid? 17. Yeah.

And so there's a lot of state by state rules regarding NIL, whether or not players could get paid at that age. And so it is wild. Can a 17-year-old even accept a check? Not really. That's the challenge because then all of a sudden it's imputed income to the parents, right? Whoever is, you know, in charge there at age of a lot. All of those things. And so what we're doing at creative planning, which I think is also a very important point for anyone who comes into sudden wealth, aside from just understanding it and saving it, is having the financial service providers talking to each other. The financial advisors should be talking to the estate planning attorney. That should also be talking to the CPA.

And if those people aren't talking to each other, there's massive inefficiencies that you, you don't have another bite at that apple unless you have another major payday, which is exceedingly rare. Yeah. It's fat. Mark, we really need to do more. Sometime this summer, a whole thing about the NIL world. Oh, yeah. But a bull market, certainly for sports, you know, financial planners, now that it's extended to all these other athletes and all these other.

It was pretty upsetting when, you know, we're about to have a new player join us, and we realize that my marriage to my wife is older than him. Wow. Right? Yeah. And so it's a wild scenario where I'm trying to. trying to give people advice who were born in 2008. Right, exactly. They don't remember the Great Recession.

You know what? Let's do the show. We'll do that show when you come back. Sounds good. Let's do it from Virginia Tech, Southwest and Virginia. Yeah, absolutely. We can't do it from W&L. No.

But you were a college athlete. I don't think they would have offered me the three-bys. Not the program, not, but the Hokies. Yeah, we should. We could do it. Go down in the Berg. Yeah. I would love to do it.

You know. Mark, thank you. My pleasure. Appreciate it today. Mark Doman, creative financial planning. All right, by the way, speaking of sports and money, tune in to our CNBC sport video cast. I had a chance to sit down for a long interview.

It was great with the NASCAR commissioner, the first ever commissioner of NASCAR. Steve Phelp, just scan the QR code. Visit cnbc.com slash sport. Steve Phelps, great conversation, 20-some minutes. Kelly, it really enjoyed it. Boys just went to Pocono last weekend, actually.

Do you have to check out? They did. Yeah, brought me some kettle corn. Up next, the stock markets return to strength. Where does that leave bonds? and can yields keep up with big tech's growth. We'll explore and market navigator next. Crypto watch is sponsored by crypto.com.

Crypto.com is America's premier crypto platform. Welcome back with stocks racing towards record highs and just a few points away on the S&P. Got some investors a little worried that we could be heading back into a period of volatility, whether it's the summer later on this year, and they're looking for a safer place to put their money. My next guest says she likes fixed income, calls the income part of that, the hero for 2025.

Joining us now is Joanne Bianco, the senior investment strategist at bond blocks. Joanne, it's great to see you. Sing us, you know, a lullaby about corporate credit here and why you think, is it both investment and high yield that you think are worth a look? Yeah, I think that we're still back to being the cool kids in fixed income in this current environment. You know, we still have elevated uncertainty and higher interest rates. And so there's opportunities for investors to earn attractive returns with a lot less volatility than you see in equities. And, yes, we have good conditions for the corporate credit markets. It's a good environment in terms of, you know, it's a resilient economy, your solid credit fundamentals, high yields, as I've talked about.

You know, so there's a lot of reasons why credit is still strong in this environment. What can I get, if I go into high yield, am I getting, you know, 7, 8, 9, 10 percent? What about investment grade? Is it attractive enough? Because I have to imagine we've seen some of the prices, you know, rally back just alongside the stock market. Is the yield worth it? The yield is worth it. You know, the primary determinant of returns in corporate bonds is the income.

And so we're seeing, you know, in the mid-5% range for triple B corporates. So that looks great. Over 6% for double B-rated corporates and over, you know, 7% for high yields in general. So definitely all still attractive at current levels. We've got to go. And aside from your own fine products, how would you recommend investors? Is this ETF exposure or something more, you know, specific? Well, you know, with our, we have a huge lineup of ETA.

27 ETFs across a wide variety of areas and fixed income. And so, you know, we enable investors to make precision investments in corporates or in high yield or in private credit with our ETFs. Yeah. And that's increasingly been the way that they play them. So perhaps an opportunity to do that now. Joanne, thanks very much. Appreciate it today.

All right. All right. Up next, breaking the barrier, Nike, holding a special event. sponsoring a runner trying to break a world record today. But is that enough to help Nike stock? Welcome back. It's been a rough go for Nike with the shares down nearly 25% since the new CEO. Former intern Elliott Hill took over last October. But the stock is trading slightly higher, 2.5% into its fourth quarter earnings report after the bell today. Analysts think sales will still drop about 15% year on year. It's based on some foot traffic data from Placer AI.

At store visits have been dropping for eight straight months year over year. year. The only real question here is whether the bottom could be in with firms like Jeffries and Bernstein starting to suggest that. Let's bring in Stacey Whitlitz, who might not suggest that. She's the president of SW retail advisors. Still negative on Nike. By the way, they're doing the race right now, but she didn't get the four minutes, Stacey, 406, which is still a new world record. You know what? Like anywhere between like four and eight, like well done. Four and ten at this point. So you've also been doing some channel checks, some tracking of everything going on. You know, it would be so great to see Elliott

Hill come and be able to turn this company around, but why do you think that's still an uphill battle? Yeah, I mean, Elliot's obviously inherited a very tough situation, and he gets it. You certainly have to reduce the classics, which he's doing, the dunks. You've got to clear the channel. That's going to take some time, and we're going to see that in the earnings hit today. We're going to see revenues down, double digits. We're going to see big margin hits from the clearance. And, you know, we're going to see newness flow in, new colors, new styles, which is great. But I think right now what we're seeing is a much higher percentage of apparel on discount. And we're really seeing the bivocation between Adidas and Nike increase. I mean,

Adidas was up 17 percent. Nike's going to be down 15. So I still think it's a long road ahead. And the other thing is that they're changing the dynamics of the marketplace. They're reducing discounts, and they're going to take the inventory from the channel and put it in factory. So, alert, holiday shopping, be in Nike factory. What do they do to fix? What could they say in earnings you think that would get the market excited and maybe kind of point towards brighter times? Yeah, I think, you know, we need to hear more about the new running styles and the kind

of traction they're gaining. Also, it would be great to hear that the channel is really starting to clear, perhaps a little quicker than we thought. Certainly, the new CEO is working on re-engaging with the wholesale channel, which Nike really kind of turned its back on for a while, and now they realize we need them. They're our partner here. I think the other thing to think about is that as there's more, there is more full price selling and less discounting, particularly in e-commerce, will the customer be willing to pay full price enough to offset the reduction? intentionally in those classics we're talking about.

And certainly if there aren't discounts out there, you know, does that give the customer a little less likelihood to get out there and shop? Yeah, we mentioned this a moment ago, but they have faith Kipiagan out there in Paris trying to break this four-minute mile mark for women, right? That obviously has never been done before. And she did it in 406. I don't know if we have pictures of it, but they're also doing it as a way to show off this 3D-printed sports bra, I guess. 3D printing reminds me a lot of cool things from 10 years ago, but whatever.

I mean, more importantly, as people focus on this in product, which was the original thing that put under armor on the map and the original thing that got Nike several times on the map and all the rest of it, Stacey, could this at least help them relaunch, re-grab people's attention, kind of have a new merchandise line that gets people excited again? Yes, and I think part of the strategy here is to re-engage with women, right? Because women are largely ignored until we're largely ignored until Lulu and Allo and everybody else came along. So the idea is to be out there and be spending to say to women, hey, we're looking out for you. We're making product for you. So these

events are absolutely important to them. Certainly, you know, we heard about the Skims collaboration or brand and that has been delayed. So as we think about new product and new innovation, you know, it doesn't actually inspire so much confidence when you say, okay, there's a product delay here. That will certainly help reinvigorate apparel and again, reach out to women. But once again, we have a little glitch here. All right. Stacey, we'll see what they say tonight. We appreciate you joining us today. Good to see, Kelly. Stacey Whitless of SW retail. All right, let's get over to Kate Rogers for a CNBC news update. Hi, Brian. White House Press Secretary Caroline Leavitt said this afternoon that the Trump administration

has no imminent plans for refilling the Strategic Petroleum Reserve. It's currently at its lowest level since the 1980s after President Biden began tapping the stockpile at the start of the Russia-Ukraine war. House Oversight Committee Chair James Comer has subpoenaed former Biden aide Anthony Bernal for a deposition. He'd been scheduled to appear today, but Comer's said Bernal's lawyers informed him their client was no longer willing to appear voluntarily. The GOP-led committee is investigating the former president's, alleged cognitive decline while in office. And three days of celebrations appear to be underway

in Venice, Italy, as power players from around the globe arrive for the wedding of Jeff Bezos and Lauren Sanchez. Bill Gates, Oprah Winfrey, several Kardashians among those spotted amid tight security as some have gathered to protest the lavish celebration. A regional governor said this week that the cost of the wedding in all its component parts could be between 45 and 55 million guys back over to you. Nice. Several Kardashians got me. All the Kardashians.

How many are there? There's a canal full. There you go. Kate Rogers, thank you very much. All right, retail in general, struggling this year. Even companies like Procter and Gamble that focus on things like necessities. After the break, though, we're going to take a look at a startup. This is a big one for you, Kelly.

It's a disposable diaper. Call me skeptical, but I'd like to know more. Well, Diane Oleg's got more coming up. Welcome back. Globally, 300,000 disposable diapers, oh, it's so gross just to read about, are sent to landfills or incinerated every minute. Some parents use the old-fashioned cloth kind and kudos to them, but most don't.

I mean, you've got to get someone to come pick them up or clean them yourself. What about biodegradable options? Diana Oleg is looking at one company trying to solve this problem in her continuing series on climate startups, Diana. Well, Kelly, this story, is all for you. It's all about making diapers cleaner, at least environmentally. Diapers are the third largest category in landfills behind food and paper. So how do you solve the problem by starting on the inside? Disposable diapers are a $60 billion business and also one of the biggest

contributors to plastic waste globally. They're slow to decompose and can release harmful contaminants into soil and groundwater. Companies like Charlie Bananas, Kudos, Hero, and a California-based startup called Zymochem are offering new options. 60 to 80% of the diaper is fossil-based plastics, and half of that is this ingredient, SAP or superabsorbent polymer. What we have created is a low-carbon footprint, bio-based and biodegradable version of this superabsorbent polymer.

Zymochem invented this new type of absorbent by using a fermentation process to convert a renewable resource, sugar, from corn, into biodegradable materials. It's actually similar to making beer. We're at a point now where we're very close to being cost parity with fossil-based manufacturing of super absorbance. Zymochem does not make diapers but sells these drop-in absorberants to other companies. Investors like breakout ventures say the company's draw is how easily scalable it is.

Being able to build and grow with biology allows us to unlock a circular economy and a supply chain that is no longer petro-derived. In addition to breakout ventures, ZymoChem is backed by Toyota Ventures, GS Futures, KDT Ventures, Cavallo Ventures, and Lulu Lemon. Total VC funding to date, $35 million. And Zymo Chem's bio-based materials can be used not only in baby and adult diapers,

but also in other hygiene products and in bio-based nylon. And that's why Lulu Lemon is an investor. They recently announced a collaboration to expand Lulu's use of this in some of their leggings, which were traditionally made with petroleum. So forgive me, Diana. Okay, biodegradable means what exactly? You throw them out and what happened, or you don't throw them out?

Well, you throw them out, but they just, they biodegrade, which means they become soil again. It's much like composting, so it's not just plastic that'll sit there forever and ever and ever. So do you put them, do you still throw them in the trash? And then they just, in the landfill, they biodegrade. Well, else are you going to throw it out the window? I'm like, do you compost them? Like, I don't understand. You could.

You could. Oh, gosh. Okay. Because there's other material in the diaper. There is other material in it. Which could be good for the soil, Kelly. You and Eric should try this. Things would grow out of it if you're not careful.

What things? So, Diana, then it doesn't really matter what the brand name is on the diaper. If they get this technology right, then any diaper could in the future be made of such material as long as it's on part. And that's the goal is to scale this to the point that it would be in all diapers so that the inside of those diapers would be biodegradable. You get rid of all this petroleum-based plastic, which not only stays in landfills, but as you know can be burned up,

ends up in the atmosphere, and also in the oceans. Okay. Let's go for adult diapers too, Diana? Not just babies. Like, you know, we come and go wearing diapers. You know, I said it was all for Kelly. Yeah, we'll keep you.

I said this is all her segment because I don't, I'm not involved. She's deeply involved in this process. Two involved. Diana, thanks. All right. By the way, great. There's a People magazine feature on you. No, it's for all of the same. There's like seven of us who are going to be out of maternity leave in a month or so. So very cool. Thank you for the write-up. Yeah, it's kind of a fun feature. It's a good product tie-in with People magazine and the diapers. Anyway, earlier this week,

we discussed New York's push for nuclear power as AI demand builds. But after the break, we'll take a look at another big energy project. This one with wind, and it's back on. That's next. All right, some big news in New York. Wind power is back. After many projects along the East Coast have been killed or put on hold, a big project off the Long Island coast is going ahead. And much of the advance work is happening right here in the New York area.

Pippa Stevens in Brooklyn with a look at a project that is, unlike many others, Pippa, it is getting off the ground. That's right, Brian. So I'm here at the South Brooklyn Marine Terminal, which is being redeveloped for equity. to service its offshore wind project, Empire Wind One, 54 turbines about 15 to 30 miles off the coast of Long Island from Jones Beach. And there are a lot of eyes on this project to showcase that offshore wind can work, that it can be delivered on time and on budget. Now, the industry has traditionally suffered from very over budget costs as well as supply chain snarls.

And there are parallels here with other large energy infrastructure projects like nuclear, where if you're one of the early developers, your costs are going to be that much higher. And so companies like Equinor, Dominion with Seavow down in Virginia, as well as Orsted with South Fork Wind, also off the coast of Long Island, are trying to show the industry that this can work. Now, Equinoor is receiving a lot of support here, both at the city, the state, and the federal level,

with the hopes being that the cost curve for offshore wind will ultimately come down. Right now it is more expensive than other forms of power generation. But the hope is that once projects like this, one, Empire Wind One, get off the ground, future projects can benefit. So you see there is a lot of activity here as Equinor developed entirely new supply chains. Brian, you know what it takes to get one of these things off the ground. Specialized vessels, specialized cranes.

The list goes on, this is not easy. And I also know that when you're in the field, there's a 100% chance of dump truck with a loud beep is going to go on right behind you. It's like they plan, they wait for the live TV, and they're like, back the truck, up. Pippa Stevens, I know you can't hear us, but thank you very much. Big project there. Yeah. Maybe a lot of jobs. See what happens. Power lunch. We'll be right back. All right, the dump truck was in the shots. We didn't get to talk to Pippa about Equipa about Equino. That is the stock behind that project, EQNR, Kelly, and watch it because if this project, quote, does work or is

successful. I thought it was canceled. Well, there's a lot that have been canceled and put back on hold. There's some talk about nuclear deals in New York, but that's right now, it's going forward, and investors have to watch it as well. Yeah, they're jamming it all in before those subsidies go away. Actually, a little bit of like a hidden stimulus there. Speaking of which, broader market right now, trying for some all-time highs today, we're just eight points away from the closing high on the S&P right now, which was 61.44. There's still time in the day, by the way.

Trading day. Could be good or bad. We're going to find out, but we're done. Thanks for watching. Closing bell starts right now.