Power Lunch - Power Lunch 10/9/26

Episode Date: October 9, 2026

CNBC’s Kelly Evans and Brian Sullivan 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.

Stock's working to wrap up the week on a high note. Welcome to Power Lunch, everybody. I am Brian. Kelly is off today. The markets right now, they are higher across the board. The Dow up about 400 points. Investors looking past, at least for today, a week of rising rates, new volatility around energy and renewed attacks by Iran.

Oil marginally lower today, but Brent crude still above 100 bucks a barrel. We'll talk about that in refiners. Plus, we are going to get a read on high-end housing with corporate and real estate. broker, Noble Black, elevated mortgage rates, limited inventory, redefining luxury, and I think we're just going to show you some awesome homes that we all wish that we could afford. By the way, the power demand story, only getting more powerful. And Genaac CEO Aaron Jockfeld is here on energy storage, grid resilience, and the infrastructure required to support data centers, industrial growth, and a more electrified economy. And with energy earnings, expected to grow more than

100% in the third quarter. Paul Sankey of Sanky Research joins us on where the profit leverage and opportunity right now for you may lie. All right, hi, everybody. We have got a big hour ahead, but let us begin with eight letters that generate a lot of passion on all sides. E-L-O-N-M-U-S-K. Elon Musk. Some people love them. Others, not so much. But there's no question about Musk's impact on business and money and the markets. From Tesla to SpaceX and Starlink, his market is everywhere. For example, look at the value of these automakers. Now, Tesla has a market cap of $1.5 trillion.

That, my friends, is worth more than all the other major automakers combined. It's also 10 times more than GM and Ford combined. So that's just on land. Musk also powering the skies. SpaceX, when public can raise $75 billion. By far, the biggest IPO on this or maybe any other world. That company is now valued at $2.2 trillion. And Musk doesn't think it is stopping anytime soon.

In fact, he wrote on his own X, which he also owns last night, this will sound super crazy. But I see a path to SpaceX being worth orders of magnitude more than the current Earth economy. And now SpaceX and its Starlink unit, they are coming for connectivity. Look at what is happening right now, AT&T, Verizon, T-Mobile, having their worst days in more than a year or longer on news that Starlink is buying bandwidth that will likely put it in direct competition with the cell phone companies. Let's talk about more on this story with Craig Moffat. Moffett Nathanson. Craig, I hope I set it up because I want to give an example of how much Musk and his teams disrupt everything

they get into, cars, rockets, and now is he going to do the same with cell phones and connectivity? You set it up brilliantly, Brian. In a word, count me as a no. Look, I'm a huge admirer of what Elon Musk has done and the quality of the engineering at SpaceX. It's really an extraordinary company. But the challenge here is not a an engineering challenge. It's a physics challenge. And we see it as really, really difficult to think that in any reasonable time frame, Elon Musk is going to be able to build a telecom network that is sufficiently, it is a sufficient quality that customers are going to switch from the big three and be happy having made the switch. Yeah, I mean, the news today is not going to about,

I don't know, $500 plus million dollars off each of these companies. So more than a billion in damage being done to what you say, Craig, is a physics problem. Why? Why physics? Well, so there's a whole series of steps to this. I think Kelly, last time you had me on called it that I did a little too much math. But the challenge is the physics, remember physics class of signals degraded with the square of the distance. It doesn't matter how good the engineering is. They still degrade with the square of the distance. So if you're talking about, think about a satellite as sort of a tower up in space, a 220 mile away tower instead of a one mile away tower, like in a typical rural area, generates about 148,000th as much power as a local antenna does. So you can try to

solve that on the downlink by, with a really powerful downlink beam. And they've got solar arrays for for the power level on the satellite. But you run into real challenges when you try to do uplink from a cell phone that can only do a couple hundred kilowatts out of your hands. Those those challenges are real physics challenges. And it's going to be very tough for them other than simply trying to replicate Verizon or AT&T's networks, which would take decades. So, okay, so going back to that, they have spent decades. building these out. So in your view, Craig, is the market overreacting with these sales? Yes. Yes. And in fact, we're a little surprised about the reaction, in part because we thought

everyone knew this deal was coming. You know, we wrote that we expected SpaceX to buy Grain's spectrum in July. We wrote it again in August. And I don't think we were, had some magical crystal ball. It seemed highly likely that SpaceX was going to buy this. Most of our institutional clients expected them to buy this spectrum. And so the announcement last night that they were buying the spectrum didn't come as all that much of a surprise. And therefore, we didn't expect all that much of a reaction in the stocks. I'm frankly shocked that the size of the reaction in the stock says that the market was really caught off guard by something that we thought was sort of obvious in some ways. Because what's interesting is we're looking at, you know, 7 to 12 percent declines in the telcos.

We're looking at SpaceX on our screens right now. Craig, it's up a little bit, 7, 10s of 1%. I know it's a much bigger company, so that move is kind of dollar value equivalent to the others. But my point is, the market is not ascribing that much value add on the SpaceX side. Well, Brian, it's not a great business, right? I mean, you know, Verizon, AT&T, and T-Mobile is a little different. But Verizon AT&T trade roughly where they were 30 years ago. So it's not like the telecom business is a business that generates outsized, returns above the cost of capital.

So if you're thinking about for SpaceX, so I want to get into this business exactly why. It's not like it's been a particularly profitable business. So why does SpaceX want to get into it now? Well, what's the value add for them then? Well, look, you can imagine that there are alternative uses for mobility. And Elon Musk has spoken eloquently about how he thinks that this will be important for every robot is going to be connected to wireless networks. And every Tesla vehicle and autonomous vehicles is going to be connected to wireless networks. And satellite will play a role in all of that.

And so there are things beyond trying to provide service for your cell phone that he's clearly thinking about. The challenge is right now the money in the industry comes from providing service to your cell phone. phone. And in any kind of network-based business, leveraging the physical asset and making sure that it's being healthfully utilized is really the key to your economics, right? So you serve the market that you have to serve first and make sure that there's sufficient revenue on it. But if you or I got a service from SpaceX, and I would submit not just in the next two years, but in the next seven, eight, nine years. It's simply not going to be competitive with the networks that have been augmented now for 30 years by Verizon AT&T and Team Mobile. Remember, years ago when we got our first cell phones,

we were growing up in a world at the same time as the carriers were. And so if you didn't have access in a remote location, well, that was okay because it was pretty cool to have a cell phone at all. And remember when we first got Wi-Fi on flights. It was pretty cool to have Wi-Fi at all. It didn't matter that it didn't work all that well. Expectations are a lot higher now. And if you have a service, think about when you get a, if you're not a telecom analyst, you probably don't.

But as a telecom analyst, I've been getting emails for 30 Super Bowls from all three carriers about at this year's Super Bowl in Las Vegas or wherever it is. here's all the things we did to augment the network to support the fact that there's going to be more people in Las Vegas for the game and blah, blah, blah, blah, blah. 30 years of that has an accumulated weight in network performance that is incredibly hard to think you're just going to step in and replicate. All the convention centers and hotels and shopping malls and train stations and airports and the filling in the little details that make a network meet the expectations that a customer

has today, even with incredibly deep pockets, it's just, it takes an exceedingly long time to be able to try to replicate that in a way that's going to satisfy customers. Well, maybe there is a buying opportunity with these names because T-Mobile's down 12.5%. Craig Moffat, always appreciate your insight. I'm not going to lie, I didn't fully understand all the physics and engineering, but we have you on because you're smarter than we are. So, Craig, we appreciate it. Thank you very much. It's great to talk to you by the way. I tried to explain to my kids that used to have to pay to make a phone call. And it was expensive.

Anyway, now let's pivot to another place. Starlink is shaking things up. The airplanes. People like me are actively looking at flights that may actually have Starlink. In fact, there's now actually a website or maybe websites devoted to just that. So is it so important that people choose to fly particular flights based on the type of connectivity they could provide? I can tell you right now, I have made that decision in the last few months. Tom Fitzgerald joining us now. He's an airline's analyst. at TD Cowan. Some of those airlines, he covers you Starlink, but of course, not all, including the one that may have or may not have just reported earnings today. Tom, we'll get to all

that stuff. But on the Starlink side, are you seeing this in the numbers, or is this just a couple of high-frequency travelers like myself who want Starlink on the planes? Next year is going to be the proof point for that, Brian. Right now, a lot of the airlines are still installing Starlink. But by about May, of 2027, United will have Starlink on over 1,000 mainline aircraft. They already have it on all the regional fleet. Southwest is going to have it on a significant amount of its fleet by the end of this year. Americans announce that they're going to be doing it on all of their Boeing aircraft, in addition to the previously announced all Airbus fleet. So I think as we go through next year,

especially autumn, 27, for the road warriors, the corporate travelers in the jump ball markets, like New York, Chicago, Los Angeles. I think that, will be a test case. Yeah, and I know me and probably you, some of my colleagues, we have it on flights. You can look it up or try to look it up and then you're like, yeah, I want to get on that flight if I can. Even if there's a way to easily find this out, Tom, is it going to show up an airline earnings? Is it going to matter ever enough? You just heard Craig Moffat talk about how the cell phone business isn't particularly a great business. Will it actually matter to the airlines from a revenue or earnings perspective? there's a few things to keep in mind i mean the big everyone else i think if you're in a market

where all the carriers have starlink then it becomes a commodity product again i think in an area one of the debates is and we've just kind of seen this in some of the tit for tat with with elon and and delta over the last couple weeks but um the airline's not going with starlink if they don't have any issues going with amazon if there's no delays with the blue origin as they build out that network of satellites and you know also don't sleep on the viacide and prove next year, it's not lower with orbiting Wi-Fi by any means, but there's going to be a pretty meaningful step up in the quality on Delta's domestic Wi-Fi next year. So I think as long as there's no bumps in the road and we don't have the Amazon Leo getting pushed out to the right,

I think it's more noise than anything concerning, especially if you're someone in a market like in Atlanta, like a Minneapolis, Detroit, where Delta's really the Fortress Hub carrier there versus, you know, more competitive places like in New York or Chicago. Yeah, Delta CEO, Ed Bastion, I'm sure you heard of the guy. He can out, basically made a comment that airfares will sort of be what the market bears. In other words, people are going to pay what they're going to pay. And if they keep paying what they're paying, that airfares are probably going to stay flat or maybe even go up. I mean, I'm seeing coach tickets, Tom, from Newark to Chicago, you know, a widely traveled route on United for $6,700.

This is coach. This is like back of the bus, bare-bones stuff. Is there any sign that consumers are finally breaking at some of these fares, or are they just going to keep paying them? If there's any impact from cost pressure on the consumer, it's not happening in air travel. It's still top of wallet for them. I think the experience economy, that secular theme, is still very much intact. Are you surprised by just how strong it's been, Tom? Pleasantly surprised. And I think it's been a good proof point for the industry that maybe they underpriced the product for a long time, especially now with the premium boom and giving people giving people more of a reason to spend more on the plane.

Tom Fitzgerald, looking at Delta, look at it Starlink, looking at United and more. Tom, we really appreciate your views. Have a great weekend. Thank you very much. Thanks for having me. Are you very welcome. All right, still ahead. A wealth expert on how to make higher rates work for you.

And speaking of rates, power broker Noble Black on what these borrowing costs mean for luxury real estate. And right after the break, our exclusive interview with Generac, CEO Aaron Jagfeld, on becoming an under-the-radar AI and data center power player. That is next. All right. From a weather perspective, all eyes are on Hurricane Isayas as it approaches the U.S.

Gulf Coast at Accuethers and Azeleon. The tracking the storm. It's got the very latest on the path and more. Anna. Well, I want to start off looking at the impacts to oil rigs, because I know you focus a lot on business economy. Well, it's good news here because some of these rigs have had to be evacuated and will likely see impacts from East Ayes, but you can see a lot of the rigs are further west of the track that this hurricane is taking.

However, it is a major hurricane. We are going to see major impacts, not just along the coast, but pretty well inland as well. Current look at satellite and the latest stats. A couple things to point out here, really what it means is this storm has sped up since yesterday, going from 10 miles per hour to now moving at 16, so not out of the question to see landfall a little earlier than pretty. previous forecast. We're talking the window between 8 p.m. and 1 a.m. Also not out of the question for this to make landfall as a Category 3 major hurricane. Now, all along, we've been forecasting a strong category 2, so we don't think there's really a big change in the impacts, but

just know, category-wise, it could be a 2, could be a 3. Storm surge is going to be the most dangerous impact by far and the most life-threatening, not just around landfall, which we think happens around Pensacola, Pensacola Beach, but pretty far east as well. Then there's the wind. Hurricane force wind stretch even up towards Birmingham here. So we're looking at widespread power outages and significant rainfall that, as you can see, goes pretty far inland as well. Anna Azelian, we're watching that storm. The first latest last storm that we've had at this time of year in 112 years, Anna,

thank you very much. All right, folks, we've got some breaking news out of Washington, D.C. for that. Let's go right now to Amman Javers. Yeah, Brian, that's right. We might have some movement on the White House press secretary. front. You remember that Caroline Levitt left the White House over the summer. The New York Times is now reporting that the White House has picked Katie Zakaria as the new White House press secretary. She is, according to her LinkedIn, a senior communications advisor for Trump Media and Technology Group.

She's somebody who's appeared on Fox, Newsmax, OAN, the conservative networks, and a former Department of Homeland Security spokesperson. I've been texting with a White House official who goes so far as to say that Katie Zakaria has been offered the job as White House press secretary, not confirming that she's accepted or that it is a done deal yet. But clearly there's some movement behind the scenes on this. The New York Times, as I say, is reporting that she has been picked. I don't think we can confirm all the way there yet, but it does seem as if she's been offered the job at this point, Brian. What have they been doing without one?

Just not holding the briefings or has it been kind of a rotating cast? How are they here? Yeah, they have simply not been holding the briefings. They've been letting the president speak for himself. You know, the president talks to reporters all the time in the Oval Office and departures and such. And so he's kind of been his own spokesperson for this period of months. We have seen, you know, other officials inside the press staff.

There's, of course, a whole staff in what we call upper press and in lower press, which handle, you know, reporter inquiries, that kind of thing. So that's all been kind of ticking along behind the scenes, but there hasn't been that visible figure on the White House podium who kind of is the face of the administration. And so if Katie Zakaria is, ends up selected and accepts this job, she would be that person. And she's a relatively little-known figure in Washington.

So this would be a big step up for her. And, of course, a big pivot for the White House. Certainly will be some breaking news there out of D.C. by Amon Javvers. Amen, we appreciate it. Thank you. All right. back now sort of to weather and power and more, and we'll call this part of our power insider franchise. Hurricane East Ayes, posing another risk, of course, power outages. Energy demand has

been growing, not just at your house, but also for data centers. The power always has to be on. Helping companies do that is Generac. And the CEO Aaron Jagfeld, the CEO of Generac, joining us now for a lot, listen, for the house, Erin, welcome, by the way. It's great to have it, right? Where we are in New Jersey now, it's almost a must-house. to have because we've had so many massive storms in the last 15 years, but it's super critical for data centers, for refineries. The powers can't go out. How are you, how are you guys helping? Yeah, thanks for having me out, Brian. You're spot on. I mean, it's not just New Jersey, by the way. There are vast swaths of the U.S. where power quality is an issue. And it's not only an issue

for homeowners, which has been our core business for a long time, but it's a growing issue for businesses, right? And for, you know, government agencies, I mean, everything from wastewater treatment, critical infrastructure, you know, telecommunications, all the way through to manufacturing plants. And as you indicated now, you know, data centers obviously are a huge, you know, both for us, a direct play, right, in terms of being able to supply backup product for these types of campuses, but then also the indirect implications of the amount of power that data centers use. And actually, that potentially contributing to power quality issues that may influence other parts of our business.

And, you know, I don't know if in the previous hour, you're busy kind of running a company, Aaron. So we had an analyst on Dibble Gassaya, Piper Sandler, who loves your company, loves the stock, by the way, talked about the total addressable market. I know you got earnings soon, so we're not going to get into specific earning stuff. But some people, she thought, might be underestimating the size and length of your addressable market. Longer term, how big is the market for Generac? Yeah, it's a great question. And, you know, Dimple just picked up coverage, I think, this week.

so welcome her to our cadre of analysts to cover the company. But, you know, I think you're right. I think a lot of people have undersized the market, including us. I mean, we did our Capital Markets Day, our Investor Day, in New York in March. And, you know, we kind of sized the global market for data centers for backup power at $14 to $17 billion. I think, you know, in retrospect, as we look at it in just the speed and the breadth of the scale up here of the buildout, you know, we probably undershot it by a factor of two, maybe even three times. the U.S. market alone is probably closer to $15 to $20 billion, the way we're looking at it more recently. And even for us, we indicated at that Capital Markets Day that by 2028, we thought we would do a billion dollars of sales for data centers in 28.

Right now, right now we're looking at maybe $2 billion next year in 2027. So this is moving a lot faster than we certainly thought. And I think it's going to be a lot bigger. And I think maybe to just cover that off, it's going to last a lot longer. Everybody we've talked to here in this industry, the hypers, the co-locators who are building out, they say, look, this buildout is massive. And in terms of just the length of time is going to take, the physical amount of time it's going to take to do construction to build out this data center need is going to take, you know, it could be five to ten years. Yeah.

And the idea, and Dipple and I were talking about this off-camera that the spend on power and where companies might spend with you is actually kind of, of a small percentage of the data center. So it's not a barrier to entries. And it answers this, Aaron, is it a must have? Like, if I'm building a data center tomorrow, do I have to have your power systems on the building? Or is it just like, I want to, but I don't have to. Yeah. I'm going to sit here and tell you, yes, they have to have our systems because that's, you know, I just want to have I realized what I'm asking what a dumb question it was. I'm like, of course you're going to say, yes. But I mean, like engineering-wise. Engineering-wise, 100% of data center installations need to have a backup strategy.

Now, there are different technologies to cover that, but the most prevalent technology is, you know, the backup power kind of generators that we manufacture, right? It's got a diesel engine, you know, this is a turning a set of copper winding. We're not making power really much differently than, you know, when power was first being made 120 years ago. But at the end of the day, if you're running a data center, if you own an operated data center, The problem is if you have even, you know, a minute of downtime in that data center, you're on the hook. Oftentimes, you know, you have service level agreements that you've got with your customers that guarantee uptime.

And there are actual penalties, financial penalties, to not providing that uptime. And so, you know, the lost economics of not having power is one thing, but the penalties are another. You put all that together and Dipple's right. I mean, the actual spend on these products is relatively small in the grand scheme of what it costs to set up a data center. But it's enormous to us, right? It's a huge thing for our business. Yeah, and you know what? I appreciate, Aaron, about you was that you didn't make me feel dumb for asking what was probably a dumb question, but you asked.

So I appreciate it. I don't know. There are no dumb question. Do people need your product? Mr. CEO, yes, they do. Do me a favor. Go to cops right there in Brookfield. Get a frozen customer tonight for us all in Wisconsin.

And best luck to everybody in your territories. Aaron Jackfield, thank you very much. Appreciate that. All right, coming up. Bond yields, borrowing costs, their client. after a volatile week for bonds. A money manager is here on set to tell you how to make these higher rates work for you. Any investor freak out over the end of the AI trade after that OpenAI revenue report yesterday. Looks like it might have been short-lived. The NASDAQ is up more than half a percent today.

The hyperscaler, some other AI sensitive names, they're all getting about yesterday. Everybody was, yeah, I guess freaked out about that $20 billion revenue change on Open AI that Kate Rooney talked about. Well, today, it's one day later. And guess what? Those names are back up. You've also got a lot of AI semiconductor names ahead. But guess what also is up lately? Borrowing costs, interest rates. Joining us now is Nomura Asset Management International Head of U.S. wealth. Melissa Hutchison, Melissa, welcome. Good to have you on the set. Great to be here. Thank you. Fantastic. So how do we make rates, bonds work for us now? Well, it's a huge, almost generational opportunity and income right now. So when you think about kind of what's happened in the market, we are at multi-decade yield highs right now. And we actually see this. It can cause volatility. And we've seen a lot of that in the headlines recently about where the tenure is, where it's going, where it can go from here. We both know it can go up, it can also go down. But what we do know is that we are at really good opportunities to think about how can you actually put some of your money to work. And we see real opportunity both in the high yield corporate market, but also high yield muni bonds where you have to think about the taxable equivalent yield and what that can mean for you.

When I hear generational opportunity, you've got my large years are automatically perked up. Yep. Why is this a generational opportunity? Well, think about the last time, the 10 year, we're at these levels, right? So you're at a point post the GFC where many people who have been investing in the market since then have not really seen this opportunity to lock in income. You haven't really seen the diversified portfolio always play out in the way that it should. You've seen equities take a huge part of the upside, which is great, and people have made a lot of money. But as you think about where does the market go from here, and there can still be opportunity.

on the upside on the equity front. But also, how do you take some risk off the table? How do you diversify? And having that opportunity in bonds can be really important. So take high yield munis, for example, taxable equivalent yields. You live in New York. You live in New Jersey. You're paying taxes wherever you live.

When you get to... Some more than others. Some definitely... You're originally from New Jersey. That is true. Nowhere to hide. There's nowhere to hide. There's nowhere to hide.

Maybe in Munis, though. Maybe we can hide in munis. You can hide immunies if you're trying to look for yields that will get you to around 9.5% right now. So, reminder, that's, you know, the yield that a taxable bond would have to pay to get that same after-tax income. And having that level at 9.5% or around there can be really attractive to investors. You know, and I was saying, is there a point where people are going to start buying bonds because they're worried about, you know, stocks and the yields? But actually, they're selling bonds. I mean, yields go up because bonds get sold.

So they got to keep offering more coupon yield until you get to a point where people are willing to buy it. So who is selling bonds? Like, who are the sellers here? And then who should be buying some of this debt? Take advantage of that opportunity you just talked about. There's a lot of supply and demand dynamics happening in the market right now, which is causing some of the volatility that you're seeing on the bond side. So you have, obviously, the war in Iran, which knows.

had predicted and does have some uncertainty around what's going on in the market from, in particular, an energy perspective. You have hyperscalers putting more volume out into the market. We obviously have the debt here in the U.S. So there's a lot of different supply and demand factors that are happening, not just here, but across the globe. You've seen some of the, what's happening in Europe recently from a debt perspective. So people start to get nervous. And you've also seen people actually continue to invest in the equity market. And so money is still going into some of that AI trade where, again, if you're investing with intent around innovation on the equity side, that can be good.

Should we buy banks? I'm looking, there's a giant wall, Melissa, behind you, over your shoulder here. I don't see the, yeah, look at all the giant wall of all the earnings that are coming out next week. Well, there's a lot of earnings. A lot of earnings, a lot of financial earnings, but these companies have largely been sold off into higher rates. Is that an opportunity? Higher rates can be very good for the financial sector in terms of... Investors haven't act like that, though. They've been selling stuff. Well, investors are, I think, acting off of uncertainty in general.

And so you're seeing some of that traditional going back to the AI trade is what keeps coming back into the market, even though you see volatility in particular this week in that. As we go into this earnings season, we do think that there is still opportunity in the broadening of the market. and being just conscious of how diversified you are and taking potential advantage of opportunities in other sectors in areas like financials,

also health care, which can be beneficiaries on the other side of the AI trade. But again, the income piece is also really important. So remember, don't kind of time the market. You can't fight the trend in particular on some of the equity upside. But just be thoughtful about, you know, for high-yield corporates, for example,

if you're maybe a little bit nervous about the equity market, can you take a little bit of that exposure, take it to high-yield corporates, which tend to have an equity-like return with a little bit lower volatility? I love it. Melissa Hutchison telling us how to take advantage of the higher rates. It's been a big theme and a big story.

Thank you. It's pleasure to meet you, by the way. Time now for today's bond report. Isn't that amazing? We just talk about bonds, and now there's a bond report. There you go. Treasury yields, they're not moving a whole lot today. back sort of five and a quarter percent. And obviously we've talked a lot about it.

At what point is the yield on treasuries, maybe just too good to pass up. People selling bonds, yields go up. But for some investors, we might be there. Bank of America's Michael Hartnett. He's out with a chart showing that weekly treasury inflows at their highest level since April of 2025. So really a year and a half. And listen to this. According to the CIO of Pimco, and he did an interview with the Financial Times, the jump and borrowing costs may not be over. A 6% tenure yield very much still on the table, according to Dan Iveson, who runs Pimco, is that a sharp jump and a 10 year yield is, quote, feasible. All right, still ahead. We'll get a gut check on housing with a 30-year fixed mortgage rate, sitting at about 7.5%. Power, real estate broker, Noble Black, is here. We'll talk about

opportunities in real estate. Next. All right, the markets are up across the board. The bull market of this stock market is entering year four. Next week is the four-year, quote, birthday of the bull market. But rates have also gone up a lot lately. And that, of course, impacts mortgage rates and thus real estate. So let's have a little bit of fun, though, and dream. Why can't we dream, right?

Noble Black of Corcoran is here. Brought some listings in New York City. These are places I will, I mean, I guess if I win the Powerball, Maybe I'll buy some of it. These are spectacular places. I'm going to say something noble. You heard me say when you sat down. I think New York City is the hottest real estate market in the United States.

Maybe it's the hottest real estate market in the world. How hot is New York right now in a good way? In a great way. I mean, it's definitely hot. We're holding up incredibly well. There is so much wealth out there and people still want to have a place in Manhattan. We've been on before talking about the Piedoteer tax, talking about a lot of the stuff that a lot of us disagree

with some of the stuff that certain politicians are doing, people still want to be here. There's still nothing that competes with New York, and people want to have a place here, whether it's for shopping, whether it's for culture, their businesses, and there's not nearly enough supply right now. So you've got a lot of demand chasing the few properties that are well-priced where people want them to be. And the piettaire tax, which, by the way, if you're not following this, you don't live in New York City, is a tax proposal. It's all I'm going to call it right now where basically, over a certain value, you get an additional tax because there's not enough money. They have to just keep collecting. It's a war on.

We all know what's going on. But that aside, politics aside, is there, it's tied up in courts, is there a chance that doesn't happen? I think there's a big chance. Yeah. And I think that's a lot of what, so far there's not been a big effect in terms of the buyers. And I think a lot of them are betting that there's not going to be any real implementation of this. It's being challenged both in the way that they gave notice, which was all about the headlines, as you alluded to. This was more about kind of, you know, capturing some headlines and kind of a class warfare argument, I think. But it's also being challenged on constitutional grounds. It's never been done. It was not researched well. It was certainly implemented horribly. So a lot of people are thinking,

hey, if they ever do this, it's not actually not going to come into a five. By way, putting out a publicly available Excel spreadsheet with people's names and sortable is not, you don't just put out like a hit list. Like here's the rich people, go after them when a lot of people on that were not rich. Anyway, how much are your clients talking about this? Or are they just annoyed by it, but they're going to buy a place no matter what? Most are annoyed by it, and they're going to buy a place still. I don't want to say, no matter what, I do think that there's a marginal level at which, you know, they just will choose not to. Right now, the levels are not high enough to make most of them not want to buy.

We're with a big buyer this morning. You know, that's big price point, going to be a total pieter, and, you know, he's annoyed by it, but he's going to go forward with it. I have had buyers that have paused their search. I've had sellers that have listed because they're annoyed by what's going on, and I feel like it's unwelcoming. For the most part, people are annoyed but still proceeding. And we talk a lot about higher rates and mortgage rates. Folks, I want to be clear. We're talking about the high end of the market here. So these are people that have wealth already. And while seven and a half percent, a lot of your buyers, I'm sure, are all cash. But I'm thinking to myself, okay, you know what, if I've got a bunch of money in the market, the market's returned to like 20 percent on average every year for the last five years or whatever the number is, that's more than seven and a half percent. And maybe I'm willing to borrow a seven and a half percent to keep the cash so I can keep that cash in the market. Yeah, I mean, all I can say is it's not stopping them yet, right? And real estate is something that they live in, they enjoy. We're seeing, particularly with our wealthy clients, they're buying more and more larger homes. So it used to be the case that our wealthiest clients may have two, three or four properties. Now that's five, six, seven, eight, right? If they're spending time somewhere, they want something, it may be a branded residence. It may be something here, here, here. The higher interest rates, they're still proceeding.

You may not want to answer this question, Noble. How long have you been doing this? 22 years. Okay, no, that's good. So you've seen market cycles and you've seen stock market, because you're kind of a stock market guy, because I've got to imagine there is a, tell me if there's not, say it, that there's a correlation between the stock market and high-end real estate. There is, obviously, when people are making money,

they want to spend money. At the same time, if the stock market is not doing so well, a lot of them feel like, okay, I can take money out of that and put it into real estate. So, you know, more than anything, particularly when we're talking about the wealthy, they will buy regardless of the market, as long as the sentiment in general is good. They have the money, right? They just want to make sure

that everything kind of feels good. Is it all about the West Village right now? I mean, is it all. West Village is hot. I was actually down there this morning and looking at a building that's made a lot of headlines, and it is crazy hot.

There's so little inventory and there are so many people that want to be there. But it's not just that. Upper East Side's doing incredibly well in pockets. The city in general, depending on where you are and the product that people want,

it's great. But I just got to say this, and you'll know this a couple of people. La Bombaigneur is still cash only. Okay. It's the last diner. Well, I'm sure you don't have to wait in line. Not in LeBomboneeer. That's where you get the scrambled eggs. That's good soak up the wine food the next day.

Anyway, we won't talk about that. Noble Black for the Corcoran Group. Noble, it's a pleasure to have you on. As always, thank you very much. All right, let's get over to Frank Holland with a CNBC News update. Good afternoon, Brian. Vice President J.D. Van said today he's not sure the execution of a former Army psychiatrist to kill 13 people in a shooting at Fort Hood will actually be live streamed. Defense Secretary Pete Hegseth suggested yesterday that his death by firing squad would be public.

Fans said if that does happen, he will not be watching. A federal judge in Manhattan ordered ICE to not remove a Dominican man who was shot yesterday while in a vehicle with his five-year-old from the U.S. The judge ordered immigration officials to keep him in New York or New Jersey. Another judge will hear an emergency petition from his attorney within the hour seeking his release from ICE custody. And the U.S. Geological Survey says a major 7.6 magnitude earthquake struck off Panama today. There were no immediate reports of damage, but the U.S. tsunami warning system says tsunami waves are possible along that country's coast and could also affect its neighbors, including Colombia, Mexico, and Hawaii within the next few hours. More power lunch coming up

right after the break. Refiner stocks, they've been running hot all year, all month, all this week, and again today. In fact, today, four refining company stocks hitting more new records. Marathon Petroleum, Phillips 66, Valero, and H.F. Sinclair, all at new records and all up between 120 and 170% this year. And with refining margins booming as demand for things like diesel and Jetfield sore, is Paul Sanky. See more upside ahead. Let's ask him. He's here. Paul is the president of Sanky Research. More upside ahead, Paul? I think into the results, yeah, but as you know, results are coming up right now. So we're definitely riding Valero into the print. From there, it's tricky because, as you know,

this is a structural issue. So it's not something that's going to go away quickly in terms of global diesel tightness in terms of the advantage these companies have in terms of cheap natural gas. And I think generally people are waking up, Brian, to the oil sector is something that generates a lot of free cash flow and high cash return to shareholders. In contrast, we could say to some other sectors. So I think we do, yeah, we do. I mean, having said that, you know, my price style on Valero was 150 when it was 80, and now we're at 4.50. So it's unprecedented levels of valuation at this time. Is it really kind of the, almost the perfect storm through no fault of their own for the Valeros and the Phillips 66s and the H.F. Sinclair's? I think it's the government's fault. I mean, you can see that

in California, what they've done to the refining system has created their own problems. And the fact is, you know, in COVID, nobody helped these guys. Nobody helped them at all. And now you tell us, run around and say, why don't you have more refineries? Why don't you spend more money? And it's, you know, it's a natural cycle. It's like, well, no, you know, you didn't invest when you needed to. And now you've got a problem. So I think, yeah, it's going to last unfortunately. And of course, it's now driving interest rates, not the crude price, but the price of diesel. And that's what we face is the biggest challenge in the market today. It's amazing. I was actually six years old. And Paul, and I'm old. And I was six years old when the last major refinery was built in the United States.

It's truly shocking, but governments don't like to be told that they made a mistake. What they do like to do is go after companies that make too much profit. Is there kind of a headline risk sitting here, Paul, where you know, you get somebody, even the White House, right, talking about diesel bans, that people go after this group? Well, I mean, this is all into the midterms, right? So it's in the next three weeks that we've got to sort this out if you really want to try and sort it out. And so the diesel export man is too late. And I think they've decided it is a terrible idea because it's a terrible idea.

year, you know, the whole way we got, the US oil and gas industry has done an incredible job for this country. We were importing 10 million barrels a day when we had the global financial crisis in 08. Today, we're exporting that level. And if you think about what that's done for the US and for the dollar, you wouldn't be interfering with these companies at all. So I think the good news is that they're doing some silly stuff like mucking around with taxes and red diesel. But the big one, which would be to do what China has done and do what Russia has done, which to me is un-American and ban the export of a product into the free market, seems like we've avoided it.

And that was the biggest external political threat in my view. Well, Paul, sit tight for one second because speaking of politics, we're going to go back to Amon Jabbers in Washington, D.C. With some more breaking news, Amon. Brian, we've got an significant announcement here from President Trump, who says he's just been on the phone with President Vladimir Putin of Russia, and he's agreed to a diesel deal with the Russian president. Here's what President Trump says.

I have just concluded a highly successful discussion with President Vladimir Putin of Russia, wherein it was agreed that Russia will immediately supply over 300,000 tons of diesel fuel to the American and global marketplace, another 500,000 tons during the month of November, and 1 million tons immediately thereafter. Additionally, based on the condition of their diesel refineries, Russia will then deliver within a short period of time 3 million tons of diesel fuel, The president goes on to say between our total control of the Strait of Hormuz and this great announcement on Russian energy, diesel prices for Americans,

and indeed the world will be coming down in record numbers and fast. Lower prices for Americans, especially our great farmers, ranchers, and truckers is by greatest priority. So the president here suggesting that he has cut a deal with Vladimir Putin of Russia to increase Russian diesel exports into the global marketplace, including Brian, to the United States. He says specifically here that the 300,000 tons of diesel fuel will be exported to the American and global marketplace. Now, of course, the United States has put sanctions on Russian energy as punishment for Russia's invasion of Ukraine. And as recently as last month, passed the Lindsey Graham sanctions bill imposing additional sanctions on Russia. So what I'd

like to understand, and we just haven't had time since the president has posted this, is exactly what the president's contemplating here with regard to U.S. sanctions. Is he lifting U.S. sanctions on Russia for this sector of energy, or is this some other arrangement that the president has come to? We're going to have to get a lot more detail on how this is going to work, Brian. But clearly, you know, Russian energy has been sanctioned since the beginning of the Ukrainian war. That's been a key part of geopolitical tension and geopolitical strain since the Ukraine invasion. since the Ukraine invasion.

And now the president's saying he's cut a deal with Vladimir Putin for the export of Russian diesel ahead of the U.S. midterm elections. I did not have this on my Friday bingo card. And this is a hell of a breaking news story. And I'm glad that we just happen to watch us sit tight as if you can.

Paul Sankey is still with us. Nobody had better to have on right now is the news is crossing. We don't normally talk about fuel in terms of tons. So I'm trying to do the math, 300,000 tons. I think that's about 2 million barrels of diesel or roughly, how do we do the math on the tons? You're going to use 7.45 barrels per ton. So a million barrels would be 7.45 million barrels.

So that U.S. consumes 4 million barrels a day. So arguably it's two days. I think what we really, you don't want my reaction. It's not a lot, then. This would be, but you got to admit, Paul, even if the numbers aren't massive, this is a hell of a headline. I mean, it's all a bit of a mess, quite frankly, but the main question is what does Mr. Zelensky say about this? You know, because the Russian, it hasn't really been about Russian sanctions. It's been about destroyed Russian refineries. And as you know, in the past when President Trump has called on President Zelensky not to continue bombing Russian refineries, he's ignored it. He has, however, not affected the Kazakhstan crude exports.

He's backed off that at the request we heard of J.D. Vance. So, you know, the question really is more about the security situation in Russia. than the sanctions. And by the way, there's a huge thing coming here anyway, which is sanctions by Europe on Russian LNG, which is 15 million tons of lost supply for Europe by December, by January the 1st. So, yeah, no, this will bring down prices immediately just simply because it's marginal barrels at the margin. But the actual structural impact here is de minimis. Amen? Yeah, Brian, we just have a note from Treasury. So the president is suspending U.S. sanctions on Russian energy, at least for this purpose.

The Treasury Department saying today at President Trump's discretion, the Office of Foreign Assets Control, OFAC, is immediately issuing a temporary general license to allow the supply of Russian diesel to the global market. So that is a confirmation of the issue that we were just talking about, Brian. Is the president suspending sanctions on Russia? The answer to that is yes. He's doing that ahead of the midterm elections in order to try to bring down gas prices. ahead of those elections, as he says, for American farmers, truckers, etc.

So he wants American voters to feel that he has taken action on an issue that they clearly have top of mind heading into the voting booth. And he's done it by cutting a deal with Vladimir Putin to end U.S. sanctions, at least in a temporary way here. This is described as a temporary general license. So we don't have a timeframe on exactly how long this will be in place. but reversing American sanctions on Russian energy and cutting this deal with Vladimir Putin.

And this is all, your discussion of, you know, Ukraine obviously is relevant, right? Because the Ukrainians have been targeting Russian energy production as part of their campaign to drive Russia out of Ukraine and to force Russia to its knees economically to inflict economic pain. Now here's the president who is, I guess, you know, sort of nominally allied with Vladimir Zelensky in the war between Ukraine and Russia, now cutting a deal with Vladimir Putin

to export the same energy that Zelensky has been targeting with his drone strikes and other military activities. So it's an incredible geopolitical reversal or kind of turning the sock inside out. I'm not sure the analogy that you'd want to look at, but clearly the president felt a need to take drastic action ahead of the midterm elections here

and has done so by cutting this deal in reverse. It is remarkable. I'm sorry to jump in guys. We have about 50 seconds up to the show, Paul. Is this going to matter to the earnings that the refining stocks have all turned down a little bit? Now everyone's just kind of reacting and figured it out. Will it matter to earnings? No, the earnings are in the book. But for the future, I just don't see any of this, including the whole Moose security situation as being long-term sustainable beyond the midterms. It's just, you know, we need much more peace. And this is not about peace. This is just about allowing extra exports.

Yeah, and about, and aiming quickly, about 50% of Russian, energy assets have been targeted. I'm not even sure Russia has the fuel. Yeah, I mean, it's a good question of what kind of production capacity they have after those Ukrainian attacks. But clearly, Vladimir Putin said something that Donald Trump today that the President Trump liked and agreed to. So that's what we know is of right now. Well, hell of a headline for 3 o'clock Eastern time on a Friday. But Paul Sanky and Amon Javers, glad that you're here. Amin Javis bringing us the news. That's it for us on Power Lunch. Closing, but we'll have more. Next.