Power Lunch - Power Lunch: 12/30/25

Episode Date: December 30, 2025

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.

It is the second to last trading day of the year. I am Brian Kelly is off this week. The markets, they're holding steady. Investors like you, preparing to close the books on another strong run for stocks after another year of double-digit gains. The focus now turning to profit-taking, positioning, and yes, the future of the Fed. And that is where we start. We got breaking news from the Federal Reserve, Steve Leesman in D.C. Brian, thank you very much. Ministers to the December meeting showed the rate cut. that the Fed, the 25 base point rate cut, was maybe a closer call that it appeared from the vote, which was nine in favor of the cut, two dissenting against it, and one for a 50 basis point cut. The minutes show that a few of those who voted for the cut said they could have supported no change at all,

and some wanted to wait for more data. Remember, the government was still getting data from the closed government period there. Inflation risk was seen tilted to the upside, labor market risk to the downside. and what you're going to hear now is a debate between those two sides who care. Some care more about inflation, others more about employment. Those supporting the cuts that it was in line with forecast for future lower inflation. Now, the committee did appear to agree on the need for future cuts. The debate was about the timing of future cuts.

Most judge further rate cuts appropriate if inflation declined over time as expected. Some, however, wanted to wait, want to keep rates unchanged, quote, for some time to assess the impact of recent cuts they had already done. Others argued a move to a more neutral policy would help forestall what they were concerned about, a, quote, major deterioration in labor market conditions to forestall that. Many saw a low probability that tariffs would lead to persistent inflation. That concern about tariffs was diminishing there. Several were concerned, however, that higher inflation would become entrenched.

If it feels like I'm going back and forth, it's because that's the way the minutes read. Many expected tariff inflation to wane, but debated when. by how much. Some saw persistent price pressures, however, unrelated to tariffs. The majority of participants noted that inflation is above target for some time and had not moved closer, and some were concerned that the Fed, the idea of the Fed not being at target would become entrenched, and the commitment to the 2% target would be undermined by that. The labor market was seen continuing to soften, but stabilizing next year with appropriate policy. Now, this is a couple interesting facts that are we keep talking about on CNBC. When you read the minutes, you see that the Fed

itself is seeing this case-shaped economy with strong spending by higher-income households, while lower-income households are making, quote, adjustments for inflation. And a number were hopeful that higher productivity, possibly reflecting AI, could boost growth without inflation, however, also dampened job creation. So, Brian, I wish that could be more concise about how the committee felt, but the committee's fieldings were literally all over the place, Brian. Yeah, you and I've been doing this for a long time. Steve, normally to your point, I think it's pretty concise and clear. Here's how we feel.

It does feel the last few months, and with these minutes in particular, that there, we know there's dissents. I mean, there's been dissension, literally dissents, but it does feel like it's just a little more loose or a little harder to understand. What am I looking for here? I think you're hitting it right on. Right on the nail right on the head there, Brian. Let's layer in a couple things here.

One, we have the government shut down. You had the cut off essentially of official data, the data the federal lies upon. I think that's a backdrop for this whole debate that's probably very important on both sides. You also have this idea that you have these tariffs of uncertain inflation effects that are going to come through. You did have the alternative data showing a weakening in the job market. So I guess, Brian, you remember that? phrase, I forget, who thought it up? I thought maybe I did. But if you're not confused, you're not paying attention. Well, the Fed is paying attention to all of this. And I think

collectively they're confused, but some are going to side more on the idea of, hey, we need to really worry about the job market. And others are saying, you know what, for five years we've been above target. We need to get this inflation problem under control. And there's going to be people that go after the Fed for being confused. I will actually be a little more gentile. It's near the end of the year. I can be nice, right? Why not? And it's that it is a confusing. time with tariffs and inflation and AI. We don't know what exactly is going to happen. And I actually don't blame the Fed. I would rather have them say, we're not quite sure versus be like we're darn sure and then have it be darn wrong. You know what, Brian, you're saying this makes me think of

one of the things that you do as a hobby, which is to drive race cars, if I'm not mistaken. If you're driving a race car, you need to think about where the race car is going to be in three seconds from now because you're traveling at whatever, 200 miles an hour. If you're driving an oil tanker, you don't have to make those decisions earlier because it turns later, but the future is well in front of you if you're going much slower. And I think the situation right now is some on the Fed say, hey, what? Let's take our time. We've cut 175. Let's chill out. Take a look at where things are going. And there's a bunch of other folks that say, you know what? We have weak jobs in front of us now, and we're going to take a flyer, by the way, on where the car is going to be, which is higher productivity because of AI and lower inflation because tariffs are not going to come through.

It's a bit of a debate about what kind of vehicle you're driving, sir. Well, I love it, and I appreciate it, which was 200 miles an hour, 200 kilometers an hour maybe, and I would add this, Steve will let you go. The super tanker not only moves slower, but it leaves a lot bigger wake and can do a lot more damage. Steve Leasman, NBC, thank you very much. All right, so let's find out if that news, that information, that data is moving the bond market because Rick Santelli joining us down with the bond report, and Rick, if I go back and look at 10-year yields, there have been ups and downs, right? There have been drops and tariff flows, but we're kind of back to where we were three years ago.

Yeah, you know, the market doesn't see all the anxiety that the headlines of all the wire services see because it's all steeped in politics. really doesn't care about politics, whether the president's going to fire the chairman still or, you know, inflation's becoming entrenched. You know what? None of this makes any sense to me. Inflation has been entrenched for a long time. We're 100 basis points away from our 2% goal. We're basically at 3%. If you look at the EU today, Spain's harmonized CPI came out. 3%. That's kind of where everyone is around the globe in the big economies. So I don't. I don't know what the big news here is. If you look at a two-year note yield over the last four sessions,

it's trending lower. It had a little bit of a pop right before the minutes came out. I call that the nervous trade. People that were long looking for a dovish, possible set of minutes decided to cover. And the minute the minutes were out, were right back exactly as you pointed out to where we were. Because here's what the market's looking at.

The Fed could talk about entranced inflation. They cut in September. They cut in October. They cut in December. And what were they saying? Entronch inflation, liberation day inflation, tariff inflation. But the reality is the market's looking through this. It sees some growth and some question marks. So it's pricing in the first rate cut for next year as things stand now around June. And all that can change quite quickly. And if you look at a two year yesterday, it closed at the lowest yield closed since 1022. Two months pretty much to the day. And now let's look at what's. going on with two's 30s. And why do I pick the two's 30s spread? The longest and the shortest parts on the curve because this really underscores what the two years been doing. The Fed could talk about inflation. But right after the October meeting, look what that spread did. It's steepen. And why did it steepen? Mostly because twos keep on the soft side and 30s are in their own little world to the upside. And finally, here's what the big news of today everyone's talking

about is the big move of late of the Chinese currency on Shorewan versus the dollar. The dollar as it sits now is at the lowest level, under seven in two and a half years. Sully, back to you. Rick Santelli, bringing the heat, bringing the passion. As always, love it, my friend. Thank you very much. All right, so that's down. Let's turn now to your macro money because the year is winding down.

And we'd like to highlight right now a sector that has really been on a tear the last couple of months. And no, it is not technology. It is health care. It is up more than 11% and is pacing for its best quarter since the final three months of 2022. It all raises kind of the question. Are we finally getting this long-awaited market rotation that a lot of investors, a lot of guests on this network have been saying is right around the corner, but for years. Because let's face it, we really haven't.

You're looking at the yearly performance of the regular S&P, which is market cap weighted, and the RS&P, which is the equal weighted ETF. You can see, the market cap-weighted S&P 500 has beaten the equal-weighted one every year. And look at this total over the last three years. The S&P has more than doubled the gains of the equal-weighted S&P 500. What does all these numbers mean? It means that super cap, mega-cap, giant cap technology has literally been running the show and running your money.

Is that going to change? Joining us not to help us figure out that answer, Susquehanna's co-head of derivative strategy, Chris Murphy, just a tiny little question to start this segment, Chris, which is, is the entire stock market of the last three years? Over? Hey, Brian.

You know, I think technology is still going to have its day. But when we're looking at the options side of things, you know, blue-chip names like Nike, Disney, Starbucks. They've been major underperformers. Part of the reason for those stats that you just showed. So when we're tracking some of the more interesting first half of 2026 option trades, we're seeing a lot of, you know, willing to buy further weakness in Disney or Starbucks via put sales or looking for the stock to finally start to rebound and rally and outperform when we see call spreads in Nike. And even in the most defensive of sectors in the Staples, we're seeing early 2026 call spread buyers. Now, they're not

necessarily saying, you know, we're sure that the equal weight is going to bounce back. What they're saying is, you know, given the underperformance over the last, you know, year, six months, et cetera. We like the risk reward to these option plays in case the rest of the market does finally catch up to tech. Yeah, and that's a huge if. And we've seen Chris some headfakes where you've had these moments where the AI stocks go down. Other things come back. People come on this network. They say, this is it. And then the AI stocks come back. It is a kind of like the Fed minutes at the top of the show. Do you find it to be a bit of a not confusing time, but it's not clear how things are going to play out, to me at least.

Yeah. No, I mean, it's an exciting time. We like to look at probabilities. You know, we know nothing is certain. So we're going to look at the payout of a call spread. For example, in the XLP call spread that I mentioned, you know, do we think XLP's 100% to get back to its 2025 high in 2006? You know, we have, no, of course not. Nothing's 100%. You know, there's, you know, do we like buying a 25% chance of that happening? We do. So I think the uncertainty, the, you know, rotating in and out of sectors, trying to pick winners, that all lines up really well for defined risk option strategies. Yeah. And what are you seeing or not seeing in option spreads, Chris, that could give you, because we're looking at a VIX at 14 and a half. It's

effectively showing, I don't want to say no risk in the market, but very low. The VIX is actually just a measurement of options activity, not straight fear. What are you or not seeing in the options market that's any kind of a crystal ball or T leaves or insert metaphor here for next year? Well, well, first of all, yeah, the VIX is pretty low. That's because every sector is moving in different direction. But the low S&P volatility is pulling down volatility everywhere. So, you know, one interesting, you know, kind of observation would be we're seeing a clear increase in tail hedges in defensive sectors, almost the opposite of what we were just talking about, if the defensive sectors finally actually catch up. But you're talking about utilities, health care, staples,

etc. We know that midterm election years, we historically do often see at least one or two big sell-offs. Those tail puts in those defensive, typically low-val sectors, are pretty cheap. It's once again, you know, not a play on staples are definitely going to sell off, but it's a play on these options are very cheap on the downside tail. If markets sell off, correlations, the volatility of a low-val product like the Staples is going to move up a lot more than the volatility of something that already has a high volatility level, like a single stock or some kind of high flyer. So that's kind of one way to, you know, read through the tea leaves. Do you care who the Fed chair is? Or at Susque, Hanna, you guys, to your point, you're into whatever

happens, you're going to have the optionality, literally and figuratively, for any outcome. Yeah, I mean, you could look at betting markets and you can see big swings. It's a 46% on Kalshi. Yeah, well, but, you know, when that moved a week or two ago, dramatically back and forth, the market didn't really seem to react very much. And just, you know, the earlier comments about not too hot, not too cold, a lot of mixed signals, you know, that's, you know, kind of business as usual for the market. So long as it's not too extreme in one direction, things, you know, can continue to change.

chug along. Chris Murphy is Susquehanna. Chris, we always value your and your team's insight. Must read on the street. Have a great new year, Chris. Thank you. Thank you, too. All right. We are just getting started coming up on Power Check. We're going to get a fun managers. Three best ideas for the new year ahead. Oh, speaking of ahead, we have a robot that is coming on the show. It is Robo Store. It's going to be a, it's going to dance. It may try to, that's, that's a live look at the robot. And it's here. And it's cool. And it's up in a few minutes. All right, welcome back. Let's get a portfolio power check. Your first guest says that next year will be the year of diversification. And to prove it, he has three ideas for

it, the new year. Jay Peters, his fund manager at New Edge Wealth. And he joins us now on set. Jay, thanks for coming in. We know it's like near the end of the year. It's New Jersey. So we appreciate it. All right. Thanks for having me, Brian. Let's start here. Stock number one, that is Gilead Sciences. Biotex, by the way, have been pretty red hot, up 30% on the year. Not doing great today, but what about Gilead attracts you? You know, the healthcare sector's been through a tough couple of years, and this has certainly been a bright spot. Gilead's a highly innovative pharma company known for focus on high value, you know, deeply R&D intensive drugs, and they've certainly had a lot of success in their core

HIV pipeline. And, you know, this is a company with two dozen drugs in market. 50 drugs in their pipeline, 11 of which are focused on oncology. And we think that might provide some interesting upside in the coming years. But at the end of the day, Gilead is just a stable grower, a company with a 2.8% dividend yield, trading at a reasonable 15 times earnings. And it's a very profitable biotech firm, about 35% free cash flow margins.

So I think when you're thinking about the rotation and ways to diversify away from AI, there's certainly some high-quality farmer names out there like Gilead. Yeah, I mean, listen, health care is going to be here for a long time. And this company's been around for a long time as well. as has our next company. In fact, I think this company, Mueller Industries, is over 100 years old. They're based sort of outside Nashville. They do stuff that we don't talk about a lot, HVAC, pipe fittings, things like this.

Not a name I can recall talking about. What is it about Mueller industries that attracts you? Yeah, so thinking about diversification, not only across sectors, but in terms of capitalization. Mueller's a $13 billion market cap company, really a global leader. in the manufacturing and distribution of copper pipes and fittings. So, yes, it is a storied company. He's been around for about 150 years. I cut them short.

I said only 100. Sorry, Miller. But, you know, it may be a straightforward business, but they are vertically integrated. So, you know, that obviously drives a lot of profitability, pricing power, and it allows them to manage their quality control. And, you know, historically, this is a business that's been highly correlated to construction activity and housing starts. It's like a data center play a little bit, though.

If they do HVAC, that's a huge part of the data center business. Yeah, like a lot of companies in recent years, you know, data center demand has certainly become a big part of their business. And, you know, so I think in the near term, you have that data center story supporting some of the underlying growth. But, you know, if we do get a better economic environment next year, lower interest rates, maybe a little bit of activity in the housing market, their core business could start to reaccelerate.

And the last piece of the puzzle is copper prices. So, you know, we've talked about how tight that market is. And I think, you know, you've had a lot of supply disruption this year. Demand continues to be robust. And ultimately for a company, Lake Mueller, because they're able to manage their input costs, they do pass on a lot of price increases to end market consumers. They're benefiting from higher profit prices. Speaking of power, your third pick and final pick, one that I know well,

this is one of the biggest power producers in the United States. They do all kinds of stuff. They do a lot of coal to the NRG kind of does everything. Stocks rocketed, though, this year. Jay up 70%. You still see more upside, but how? We do. So, yeah, it definitely had a great first half of the year. It's been kind of sideways here in the last six months. When we look at the AI infrastructure theme, the power generation story continues to be one of the biggest bottlenecks. If data center power consumption is expected

at 3x over the next five years, there clearly isn't enough power supply in this crunch. It's why we're seeing higher electricity prices, why we saw another record PJM auction a few weeks ago. By the way, thank you for bringing that up. We're the only show, I think, in America that talked about it, this show, because it's such a huge deal. And NRG is a big seller into the Mid-Atlantic energy grid. So I'm really glad you mentioned that. I mean, that's why some of these independent producers, we think, are great well-positioned businesses, is the fact that prices continue to rise and demand continues to be robust. And NRG, you know, a company that is one of the largest independent producers, about 25 gigawatts of generation capacity.

A lot of that is, is focused on natural gas, which is a more efficient, cost-effective form generation, we think that's going to be key to supplying data centers and the grid going forward. And ultimately, a high-quality business trades around 19 times earnings, you know, double-digit revenue and EBITDA growth and positive free cash flow generation. So a lot to like from a fundamental thing. NRG, Gilead Sciences and Mueller, I can't even, all I can think about is Bueller, Mueller, Mueller Industries, short change have been 100 years old. Jay, Bay Peters, a new edge wealth, Jay, thank you. Have a great day to happy New Year. Happy New Year. Be well. All right, coming up soft bank, completing a $40 billion investment into Open AI. Is that going to provide some

comfort for those doubting the AI story? Christina Partsenevilus is up with that and more. Plus, robots. This is Coyd. That's our office less than an hour ago. Coit is here. Coyd and I, we're pals now, and you're going to see them coming up. All right, welcome and welcome back. The holidays, they seem to have been good to one Samuel Altman, sources tell CNBC some good news. Japan investment firm SoftBank has completed its $40 billion investment commitment to Open AI. Why is this news? Well, this could help with any rising fear that some of the multi-billion dollar AI financial commitments aren't going to happen. This one reportedly did. Mackenzie Sagalos joining us now and has more. Back.

Hey, Brian. So SoftBank cutting a $22.5 billion check to Open AI to round out that 40, billion commitment. Now, to break down that math, SoftBank funded 30 billion of the total route. The balance came from a batch of co-investors. The result, SoftBank now owns more than 10% of Open AI and a $260 billion pre-money valuation. The startup nearly doubling in values since then. Arguably, the bigger hurdle was more than a year at the negotiating table with Microsoft, hashing out new commercial terms, equity, and restructuring Open AI into a public Benefit Corporation to qualify for that final tranche of funding from SoftBank. Now, as for where this latest influx of capital is going, some is earmarked for Stargate,

the AI infrastructure joint venture between OpenAI, Oracle, and SoftBank. That is one piece of a much larger buildout. Open AI, of course, is committed more than $1.4 trillion in infrastructure spending over the next several years, striking deals with Infidia, AMD, and Broadcom. Oracle shares up one in change today on that news. And one last point here, Brian. What's especially notable is how SoftBank repositioned its entire portfolio to make this happen. Last month, it liquidated its entire Nvidia state.

We are talking nearly $6 billion with sources telling CNBC that sale would specifically help fund this very investment. And it was only just yesterday that SoftBank agreed to pay $4 billion for Data Center firm Digital Bridge to deepen its infrastructure push. So rather than treating Nvidia as its AI proxy, SoftBank, is putting the bet directly on OpenAI as the company lays the groundwork for an IPO, a very concentrated wager that Sam Altman's shop will be the ultimate winner here. And I'm assuming McKinsey that SoftBank would be the winner because they have big investments. Open AI goes public, market loves it, SoftBank, and its founder, Masayoshi Son, get really, really rich, richer, super rich. Exactly.

$260 billion, 10% plus stake in Open AI. the math really works out in South Bank's favor there. Yeah, it really does. I reached out to him today, by the way. Happy to go and practice my bad Japanese. Thank you very much, McKinsey's Cagallos. Thank you. Don't look at me like that.

Thank you. All right. Staying with technology, China is tightening the screws on some chip makers. According to a new report from Reuters, Beijing is telling semiconductor companies that at least 50% of the equipment used to add new capacity must be made in China. The rule not publicly documented, as is not a lot in China anyway, but Reuters says it is now part of the approval process as Beijing ramps up its push for a self-sufficient chip supply chain.

Christina Partsenevolos, who you might have just heard, saying thank you, and Japanese joins us now. Here's my question, which I cannot say in Japanese. Why do they want, if they want demand 50% of the stuff is made with Chinese made equipment, Why do they want so many NVIDIA chips? If they could do it, why don't they just do it now? They can't do it fully yet. That's the whole point of this. So they say in the future they want this 50%.

So there's a caveat to that rule that Reuters put out. There's going to be special waivers for more advanced manufacturing processes that will still be allowed to bring in, you know, Japanese equipment makers, American equipment makers. So it's not, you know, set in stone. Much like nothing here in the United States is set in zone, too. There's always waivers. There's ways to get around certain things.

But in this case, it's just a way to push out American chipmakers eventually in the near term, in the next few years and so. So that we could potentially hit applied materials, Lamb, KLA, that all roughly get 20 to 30 percent of their revenue from China. You're not seeing that much of a stock reaction at the moment because some are saying this has been an ongoing made-in-China mandate. You know, you're really pushing the self-reliance and building domestically. And we actually, it's not just this story. There's many other points that China is advancing. We even made a wall just to showcase how the push in China, the self-sufficiency has been a mandate for quite some time.

You have the advanced chips that they've really been pushing forward with SMIC. This is a competitor to... Smic. Yeah, it's a competitor to SMIC, to TSMC. And so they're making seven nanometer chips. This is a really very advanced chip. They're even working on even more advanced 5 nanometer. Very recently, just in the last month or so,

This is, according to China, and researchers in a paper they published, they even made progress with lithography machines, which are very, very complex. ASML. That would compete with ASML. So let's go back. Let's back it up. Let's go to the stocks. Okay.

So we're not really talking then about NVIDI. We're talking to your point. More about the applied materials, the AMATs. So we're talking about the companies that make the machinery to make the chips. Correct. At this moment, they're putting a 50% mandate that that machinery needs to be made domestically. They can do that for a lot of things, but one of the problems they can't is those lithography machines. When you use light to etch designs onto small or circuits onto wafers, it's very, very complex.

But just very recently, they're saying they're making a lot of progress with that. So then that's a big sign that they have moved forward. And then you think even a more recent story that we didn't really talk about is that you have companies like bite dance, which is the parent of TikTok, said to purchase almost $6 billion of Huawei Ascend chips in 2026. You know, that's a company, a massive Chinese company that is turning to domestic Huawei as opposed to NVIDIA. Well, I think with China, it's fair to say that with a lot of things, like their software, like their social media, like their search engines, they're just going to have their own stuff. We're going to have our own stuff. We'll sell it to the world.

China, which, let's be clear, it's not the Chinese people, it's the government. They want to control a lot of things. Every country wants to do that. The self-sufficiency. Well, there's no Twitter there. There's no Google. There's no Microsoft. I mean, there is office, but a lot of it is pirated.

they do kind of their own thing. Correct. And that's part of the whole Made in China mandate that started about 10 years ago. And they've been, you know, throwing money and subsidizing so much of their chip industry, much like we're trying to do with the Chipsack or the government, what's previously doing with that? Separate and far more important. What did you make of that robot? Coyd.

He's going to be out here very soon. What should I ask? We were all watching upstairs. Well, I don't know. He should just make sure that he can't, you know, hit you or anything like that. Yeah, well, he's low. That was a viral video. He's very low.

If you haven't seen the video, he's very low, the robot. The dancing moves are quick. And there's a lot of, there's a kicking. But what could he do? That's the big question. So what, I don't know, Kareem here thinks that what use does he thinks that the robot would win in a fight with me. I don't know. You just want everybody to hear, to show that you can outpace a row log.

I would just sit on it. I mean, I'm heavy. I would just crush it. I don't know. Sit on it. That's it. Christina Ports and Evelas. That's my final words.

Thank you very much. All right. Let's get now over to Simomodi for a CNBC News Update. Counting down to that robot, Brian. In the meantime, here's the top news we are watching. The Virginia man accused of planting two pipe bombs in D.C. in 2021 is in court this afternoon asking a judge to release him from detention in the lead-up to his criminal trial. Federal prosecutors say Brian Cole placed the explosive devices outside of the Republican and Democratic National headquarters the night before Reuters swarmed the Capitol on January 6th. The government says he would pose a danger if released, but the defense argues he has no criminal history and therefore is no evidence he would flee.

The search for missing Malaysia Airlines Flight 370 was set to resume today. More than a decade after the plane vanished with 239 people on board. The U.S. Marine Robotics Company Ocean Infinity is conducting a seabed search over the next 55 days as part of an agreement with the Malaysian government. And Waymo says it got the green light to start testing in Vegas. The Robotaxy Service says Nevada gave it authorization to offer autonomous services in the city, but with a driver at the wheel. It comes in time for the Consumer Electronics Show, which does begin in Las Vegas next week. We'll be watching. Brian, back to you.

Have you been in a Waymo? Seema Modi. I have been in a Waymo. In fact, in Phoenix, and I loved it. It was also cheaper than Uber. So, anecdotally speaking, I thought it was a really fun and seamless experience. It was a seema, it was not a seamless experience because you were in the car. But yes, you can attach your Spotify.

It's kind of cool. Weird the first time and then better every time. And now in New York City, too. I saw one being tested. Right. A human driver, there's a lot going on in New York, Sima, e-bikes, scooters. It's true, you've got to be careful. People ignoring the lights.

We'll see. Sima Modi, thank you. All right, coming up, we've been talking a lot about the outperformers this year, but your market navigator honing in on the absolute worst performing sector of 2025. We'll find out why. Get some names next. All right, time now for our market navigator segment. Of course, it has not been a stellar year for real estate.

In fact, that's an understatement because it was the weakest sector in terms of percentage growth the entire S&P 500. But your next guest says that relative weakness has made some REITs, attractive candidates, at least to her. And there is one in particular. She has her eye on. That is our friend Katie Stockton founder and managing partner of Fair Lead Strategies. Someone that bailed me out of fast money a couple nights ago as well, Katie. So I do appreciate it. First off, before we get the name, real estate has.

Stunk, do you like the whole group, or is it really just that one name we're about to talk about? You know, the whole group in a way, if you're interested in turnarounds, then we can certainly find a lot of those in the REIT sector, although they don't all look the same, of course. If you look at Well Tower as one example, tickers W-E-L, that's been a big winner within the REIT sector. It's like the biggest component of the sector right now, but the sector as a whole is only about 2% of the S&P 500 in terms of market cap. it's pretty wild when you get this very small sector. It's been underperforming. And in a way, it's intriguing. If you think that the leadership of the market, so technology or even a

well tower type of chart, is more likely to correct, which is what we think, then you might start sniffing around among these turnaround plays. And one of those is really not a turnaround, I guess, Avalon Bay. Avalon Bay, it feels like when you live on the East Coast that they're putting up apartment complex is pretty much everywhere, at least in New Jersey. It's a name you like. You're known, of course, for looking more at the technicals. What does the chart on AVB look like? Yeah, I see them around too, but we've seen it also from the stock, a cyclical downtrend, despite the activity. So that downtrend finally is showing signs of downs at exhaustion on a long-term basis, and then also intermediate term momentum's improving. If you go way, way back and zoom out on

Avalon Bay's chart on a monthly bar. There's an oversold condition per the monthly stochastics, and that's being enhanced by the demarc indicators. Demarc indicators have been pretty good in inflection indicators for Avalon Bay historically. So that's intriguing from a long-term perspective after the cyclical down move. But then also you add on that improved relative performance that improved weekly MACD showing better momentum, this really just the past month or so. And now we have a minor breakout above some former resistance, which was right around 183. And, you know, collectively, it does suggest that we could see a much better year for Avalon Bay. And many of its peers have a similar setup at Mid-America, which is MAA,

Essex Properties, which is ESS. We have a lot of names that we could highlight to that end. Really cool stuff there. Avalon Bay, well off where it was just about a year ago. Katie Stockton, always appreciate your time. you very much. I'm trying to stay, I'm trying to stay focused, folks, but it's hard, not just because I'm insane, but because I have a robot standing. This is Coid. Hi, Coid. Robo Stores Coid. Coid is going to be our guest on the show right after this break. Maybe Coid likes Avalon Bay. We're back right after this. Elon Musk might have made humanoid robots, part of the tech zeitgeist with his Optimus robot. Going on the record is saying that Optimus will

eventually make up 80% of Tesla's entire value. A lot of bulls buy into that. But Tesla's yet to sell its first robot and currently isn't at the forefront of commercializing the technology. This, though, I don't want to call it Unitry G1. That's Coy. Its name is got a name. His name is Coyd. And you might have seen Coyd dancing or even kicking on social media, open AI. NVIDIA and Amazon. They're all experimenting with COID's capabilities. He can do a lot. He's handsome. He waves. As there are some of the top research universities like

Harvard, Yale, Carnegie Mellon. Joining us now on set is Teddy Haggerty is the CEO of RoboStore the largest global seller of Unitary Robots. And Teddy, you're a nice guy. Let's have a conversation. Welcome, by the way.

What can Koi do now and in two years, what will Coyd be doing for us or to us? So that's the number one question we get. What can the robot do? How can we put robots into our home? How can we deploy them? Every day we get tons of inquiries from consumers, companies, B2B everywhere, of like, what can a robot do?

He's going on like a whole tear right now. Now he's talking three minutes. So you spoke to you two. It's all good. It's my fault. I spoke into the thing. But yes, what will he do? So I always tell people you could, you could kind of dream whatever you want a robot to do,

but we're in like a big prototyping phase. Yeah. So we're in this like stage one of understanding what are the dreams, what are the realities, and what is it that we really want robots to do? Do we want robots to become our new housekeeper? Do we want them to help manufacturing? Do we want them replace jobs? So like a COID can be programmed to do almost anything.

When it comes to being a receptionist, we can machine learn, reinforce, and Coyd to actually go and start picking up stuff and doing tasks that are mundane. So the robotics, the robotics error right now is in like a big research and development stage. I don't want to discount Coyd or his abilities. You know what I mean? I don't want to, I don't want to, I believe in Coyd. I'm a believer that he can do a lot. But it does sound like right now when we talk about robots, it is a lot of just doing the stuff we don't want to do, right?

That's a lot of it. Stack the firewood, Coyd. What we find is a lot of people actually come to us and say, how can we deploy robotics in our company where our customers can see a robot in the company? So instead of it being in the back and going to pick up boxes and do these mundane tasks, robot stuff, robot stuff, right? They actually want to say, how can I have it as like a receptionist? How can I do it to do this hospitality task? How can I have the customers see that we're basically embracing robotics? How much is COID cost?

Can I buy COID now? Yeah, so a G1 starts around $20,000 and Coyd's about $70,000. But Coyd has a lot of extras on them. And the one thing about the Unitary products is it kind of like this open source product. We can modify it. So Coyd's very modified. So he has different camera systems from Intel. He's actually running an Apple-based computer system and pair with an Nvidia chip.

So we have like a bunch of different add-ons that we manufacture. We 3D print and program to build on top of robotics to get you where you want to go in your box journey. So then I could buy Coyd and then customize, not necessarily Coyd, but you know, one of Coyd's cousins, right? Docks? Well, I was going to ask. So if you have dogs, as I do, sometimes

they've got to go out of 5 in the morning. You could program a Coyd, be like open the door at 5am, something like that. So for some tasks, the quadruped series with that platform, which is the robot dog, it's actually better. Because I don't want a robot dog. I want a real dog. I want a robot to take

care of my real dog. We put an arm on the robot dog. Okay. We'll start taking care of your dog, doing it that way. Rechargeable board in your house. There's all these modifications and add-ons that you can put on to your robot to really give it the solution that you want. And we're getting to that stage where it's going to be a consumer package. Okay, Harvard, Carnegie Mellon, MIT, Yale.

You should have Virginia check up there, but that's another issue. What are these schools doing with the Unitary Robot? So we got involved in robotics late 2021. We were trying to figure out a way we can build a curriculum paired with the heart. because there's no real platform for people to learn about how to program and develop on robots. So a lot of the colleges are now adapt, K through 12 in colleges and universities, they're adapting robotics and they need a hardware and they also need a platform such as a curriculum that we actually build, we call it Robo University, where we supplied them with the baseline of how to program

on top of robots. There was a video going around of him kicking some dude where the sun doesn't shine. Will he kick? Like, how do, is he programmed to fight or how does that work? Yeah, so those are like machine learned, reinforced learned. They're trained. Trained movements. So you could actually.

Could he like move now? Yeah. I'm safely behind the desk. He's doing some stuff with his hands. Okay. Hand gestures that are programmed to basically be listening to us while we speak and be sort of human-like. This is not a segment you want to have on the radio, by the way. This is a segment.

If you're on the radio listening, go back to CNBC.com when you arrive wherever you're going and watch this segment because this robot is really, really cool. What's the biggest hurdle, Teddy, for like the next level of robotics? When they can really do a lot more stuff, what's the biggest problem right now? A lot of what Kuwait is capable of doing is built into a faraway data center. So there's a lot of data that needs to be ping. Sort of like when you go on your phone and type in a prompt to chat, GPT, there's a lag. There's a lag. But when you're working with robotics and you need to ping the API, which is basically telling open AI to interface.

with the robot. The lag right now is one of the biggest issues. So we're not doing a lot of the processing on board the robot. That's why it has a computer on his back too. We're actually doing it over the air. That's what I asked it a question, him, her, a question. And it took a couple seconds for it to respond because it has to think. Well, that latency is a big issue. But that will, that will be, when do you foresee that being surpassed? When will that be gone? It's getting better every month. So we also- Moore's laws and effect here. Like, the rapid development on robots. is like nothing I've ever seen.

Like the G1 platform, when we launched it in January at CES with Unitary, it was a real time when you could start buying the robot. Yeah. We only started really shipping in March. And we've come so far in the last year. Still human remote controlled for now. A lot of it. We do tele-operation.

We have different solutions based on what you're trying to achieve. So that's like the number one question we ask. So when will the robot work the remote control to work the other robot? We're not far away. Not far away. I think at the speed. Do you worry at all? Skynet type stuff?

Like, is it, like, I've seen X Machina. It's not going to, like, I don't want to fall in love with it and then have it murder me. We're working around security issues to be able to host, like, a private data center that's just meant for our robots for that security part. I feel like Coy and I are going to be friends here. So, Coy, thanks for coming in. Really appreciate it. Teddy Haggerty and your whole team at Robo Store, thank you very much. It's just amazing.

Awesome. We're seeing the future happen right now. It's like the first car in 1899. All right, coming up a list of some of the favorite stocks from Citigroup. Right now, how do you follow that up? But we will next. The consensus does seem to be that the robot would indeed beat me up. All right, silver is up 8% rebounding more than what it lost yesterday.

We'll talk about it more tonight. Fast money, 5 p.m. I'll be there. Will you? Let's hope you are. Thanks for watching, Power Lunch.