Power Lunch - Power Lunch 1/5/26

Episode Date: January 5, 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.

Austed Venezuelan dictator Nicholas Maduro just arraigned on drug trafficking charges in a Manhattan federal court. And many oil stocks are now surging. Welcome to Power Lunch, everybody alongside Kelly. I am Brian, the geopolitical landscape up end of this weekend after Maduro was captured by elite American military while trying to hide in a safe house. Oil and oil services stocks higher. But will the Venezuelan oil dream really happen? Or is this a multi-year or multi-decade development?

We have more reporting on that. And China condemning the capture of Nicholas Maduro, saying the U.S. violated international law. Noted China critic and investor Kyle Bass will join us with his insight on what this means for those global power dynamics. Plus the impact to your money, the Dow, hitting a record high to start off the year. We're up 825 points right now. Chevron, by the way, a big piece of that.

So how should you be positioned? Lizanne Saunders, chief investment strategist, St. Schwab will lay out her playbook. Yeah, she is in the house as well as Dan Briette, former energy secretary under the first Trump administration, also in the house with us. And he will join us later on this hour. But first, let's start with the latest from downtown Manhattan. Contessa Brewer is outside the federal courthouse with the very latest for us. Contessa.

Hi there, Kelly. Yeah, Nicholas Maduro's initial court appearance is over. He pled not guilty to the four charges against him relating to drug, trafficking and weapons. And we just got in the courtroom sketches. Maduro's wife, Celia, also appearing here. You can see here Nicholas Maduro with the headphones on, listening to the interpreter bandages covering Celia her forehead. Apparently had bruises on her face and her attorney says she also suffered significant rib injuries that require some medical attention. What we've heard is that Nicholas Maduro went into the courtroom.

and said that he is a prisoner of war and that he should not have been kidnapped from his Caracas safe room. There was also drama in the courtroom when a former political prisoner rose up, pointed a finger at Maduro, and said, you will pay. He says that what he wants is for the operations

to be quickly wrapped up in the Maduro regime to be moved out, said this to MS colleagues here. and says that when the President Trump wraps up these operations that Venezuelans will return. So outside the courthouse, there have been similar confrontations unfolding here between the demonstrators who support President Trump and the military action in Venezuela and those who disagree. Judge Alvin Hellerstein did not handle questions of bail today, but he did authorize a visit from Venezuela's consulate and medical attention for both Nicholas and Sillia Maduro. Barry Pollock, who represented Julian Assange in the WikiLeaks Affair, is representing President

Maduro, and former DOJ attorney Mark Donnelly is representing Mrs. Maduro. The next court hearing scheduled for March 17th. And again, what we're seeing here is just a situation where there are a lot of parties invested in the outcome here. They were hoping to see Nicholas Maduro leaving the courtroom, but he left the same way he came in by the back entrance and is now heading. back to Brooklyn where he will be held in detention. Kelly, Brian? Yeah, a lot of people there, obviously, a lot of media presence. Contestable, we are glad you are there. Thank you very much.

All right. So let's kick off the coverage this hour by hitting many of the big oil and energy stocks that are moving right now. There are really four groups of stocks on the move. Three higher, one lower. Here they are. First, the big oil major, Chevron, remember, the only American oil company currently operating in Venezuela, ExxonMobil, ConocoPhillips. They're on the move. seen really is the only other two energy companies with the size and scale large enough to enter a challenging Venezuelan environment. To be clear, my reporting as I've been reporting all day, says that right now, none of those companies, Chevron's already there, Exxon, Conoco, and some others, no plans to enter the country anytime soon, hard stop. Now, the big winners in the stock market, the oil services companies, SLB, Halliburton, Baker Hughes, and steel tube maker Tanaris, all higher. Remember, if us or European oil companies eventually go or go back into Venezuela, those are the companies that would help rebuild the broken down infrastructure.

Some refiners are also on the move higher because a company like Valero or Phillips 66 would be able to process more Venezuelan oil. That oil is largely what they call heavy or heavy sour, meaning it is thick. It can be more difficult and expensive to refine those stocks on the move. But that Venezuelan oil is similar to some Canadian. oil in the tar sands, heavy, sour, which is why some big Canadian oil companies, those stocks, look at that. They're down 5% right now because any increased Venezuelan output seen as a competitor to Canadian oil, Suncor, Canadian natural, and imperial are all lower. And I want to be crystal, crystal clear. Industry sources I spoke with over the week and said that any

additional American oil entry into Venezuela is not planned. right now. And if it does happen, if it could take a long time, because at this point, it isn't clear who is running the country. It is not safe. It is not stable. So let's start there. Halima Croft, Global Head of Commodity Strategy, RBC Capital Markets. She's been talking about the likelihood that Maduro has been replaced on this very show with Kelly and I. Obviously, you've been correct. You're a former CIA analyst, so you sort of get the big picture. What happens now? I think it's a long road back for Venezuela. And as you just said, we don't really know who's in charge, who is going to be running Venezuela.

Venezuela has many of the human development indicators of a post-conflict situation. It has millions of weapons in circulation, criminal gangs running many of the core parts of the economy with the military. So the question is, who is going to lead the turnaround effort for Venezuela? We are not having Machado apparently coming back to take over. We don't know what's happening with Gonzalez, who apparently won the election with 70%. He's in Spain. It looks like we're working with vice president or former vice president, you know, Delci Rodriguez. Is she going to be the architect of the transformation of Venezuela?

That is a really challenging, I think, hurdle to get over, given her role in the previous regime. So how many barrels? Oh, gosh. Let's bring it. Let's bring it to the barrel counting. Let's bring it to the barrels. You know, we saw oil initially actually sell off on this. Right. The U.S. is going to be flooded with barrels of oil.

Like a light switch. We're going to turn this around. 99 cent gasoline, exactly. Now it's going, wait a minute, to exactly the point you were both just making. When are these barrels really coming? Well, I am really old. And I remember my previous life in Washington when I was right out as college, we had the Venezuelan oil strike, 2002, 2003.

Hugo Chavez fired 20,000 Petavisa employees after that strike and essentially said, I am taking over the national oil company, which had been one of the best run national oil companies because it is a center of opposition to me, and I'm going to use it as a piggy bank for the Boulevard Revolution. And so we saw Venezuela go from producing over 3 million barrels to basically now treading water around 800,000. In a perfect scenario where we can stabilize. a security situation there, do full sanctions relief, start repairing the infrastructure,

sure, you can probably get a couple hundred thousand low-hanging fruit in 12 to 18 months. But this idea that you were going to get this sort of million barrel increase quickly is just it's a pipe dream. I have a bridge to sell you. But people really are banking on this because they believe, they talk about the reserves, I saw your previous reporting on this, they believe that this is some type of oil Eldorado. But if it's not, they want to know, well, then why are we? Not, I mean, then why did we do it or why are we there? In other words, does this, we don't have to get into a whole thing about it,

but does this answer the question of why we're there? And if what you're saying is, there's not an oil El Dorado at the end waiting from this intervention. Well, not a quick one. I mean, this is basically, if everything breaks right, you can be talking about, you know, a recovery in the 2030s. I was talking to one company that basically said, if everything breaks well, sure. We're talking about, you know, mid-2030s's story, but he also reminded me of what happened in Libya, where we thought Libya was going to be an easy turnaround post-Keddafi. And so the question is, what's our template for a rapid recovery of an oil sector that has suffered decades of decline in mismanagement?

Because go back to your previous life, too, before we see capital markets, this is not just an oil. Oil is the easy villain here, right? There are people no blood for oil. I get, nobody wants blood for oil, nobody wants war for oil. The president's also mentioned drugs, but let's be clear, under Maduro and previously Chavez, Venezuela, the people are fantastic, the leadership has been trash, they are an arms dealer, they are a drugs dealer, it's not my opinion, right? This is, this is well known. They're also, what, the petro-Caribe, sort of hegemony of the dollar for Cuba and China, Russia, and even Iranian influence in the region. You do this to blunt that.

And I think that is the important thing to think about. Go back to President Trump's national security strategy outlined in December where they talked about the importance of U.S. hegemony in the Western Hemisphere. And Venezuela had become an outpost of Chinese and Russian influence in our hemisphere. So it is consistent with the Trump National Security doctrine to want to have regime change in Venezuela. and if you oil as the means to achieve that end. But the other thing you mentioned is Cuba. And is there sort of a domino theory at play for some of the principal advocates of this exercise,

saying if you take out the Venezuelan regime and you brought the Petro-Caribbean initiative, all the assistance they were providing to Cuba? Is this a way of essentially hurting the Cuban regime? Are you facilitating a transfer, power eventually in Cuba by taking out a key ally in Venezuela. Well, also Venezuela, and oil is used to run their electric grid, which is largely based on 50 and 60-year-old diesel engine technology.

So you cut off the oil and then the people get angry. When people don't have electricity, they get angry. Right. So is Venezuela a means to achieving the larger prize, which is transformation in Cuba, for some of the advocates of this regime change exercise? Yeah. And so we sit back here, up now 2%. It's kind of moved throughout the trading day on WTI crude. Still, obviously, the chevrons of the world, the refiners of the world, those stocks are trading up sharply.

Yes. And I mean, but I guess that's because they view this as even if those barrels aren't imminent, there's still a business model. And if you are Exxon, is your operation in Guyana now safer because of what has happened in Venezuela? Do we essentially have to write off now the threats that Venezuela had made against Guyana? Yeah, remember, great point. Venezuela effectively threatened to take those oil assets back. And Petrobras and Brazil, similar, no threats made against them, but they're now at 4 million barrels a day. If you make the region safer, you make investment safer.

But I can tell you this. It's my reporting, folks. There's no oil company in America outside a Chevron, which is already there. That is any plans anytime soon. I talked to all of them this weekend. They're not going in because they don't even know who the leader of Venezuela is going to be. They don't know who's in charge. And the fact that you have factions in this Venezuelan government saying we will arrest you for collaborating with the effort to pull Maduro out of the country,

that is not encouraging when we want to think about, like, is this a U.S. aligned regime right now? Delsi Rodriguez, seemingly is, but what about the Venezuela military writ large? Yeah, no, that's been the most unanswered aspect of this right now is kind of where is that leadership void. How is that going to be filled? Helima, thanks.

Thank you. As always appreciated, Halima Croft. We're at record highs in the markets for the day. In the meantime, with the Dow up 779, and over 49,000, notably. After this, Charles Schwab's Lizanne Saunders will join us. We'll get her playbook for the year. And her thoughts, stay too. There is a whole lot of green on your screens today

with the Dow hitting a fresh intraday record high over 49,000 for the first, I think the first time. Stocks are pretty much unrattled by the events in Venezuela. It's boosting the energy sector, as you can see there, with names like SLB up 11%. The defense names as well, those are at 52-week highs, all-time highs, really, for a lot of them on this idea that they'll get a boost from the interventions and the financials continue to fly. Goldman, Morgan, J.P. Morgan, all up big and hitting all-time highs. That's boosting the Dow as well today. So what does this say for the setup for 2026? Let's ask Liz Ann Sonder. She's the chief investment strategist at Charles Schwab here with us.

Hi. Unsett. It's great to see you. So much to discuss. I mean, the Venezuela situation is such a mega-geoproprone. political one. The market today is telling you it's way more focused on the AI trade and the memory pricing data out of Korea. What are you focused on? Well, there's a long history of geopolitical events, and unless they turn into truly protracted military events that have a lasting impact through the energy channels, it doesn't tend to have much of an impact on market. So to not see any kind of knee-jerk reaction was not a surprise. Does anyone need to go out in a limb, though, and say, you know, energy's down to three percent of the S&P 500. It's time for it to make a big move higher. Or do you, I mean, do you even spend any time thinking about that when

you're putting together? No, I, you know, I think we have the energy sector as a kind of a neutral or market performance. So I think it's probably too late to be significantly underweight this sector. We weren't considering putting it to an outperform simply because of Venezuela. You know, we've got the economics problem associated with where oil prices are and probably the lack of clamoring on the part of even some of the major producers to go in there because of the economics. And we're massively oversupplied globally. So that's going to be interesting to see whether the sort of fruits of that labor are going to be applied here in any meaningful fashion and in the short term. Well, you've got many Democrats, some of whom, by the way, who called for Maduro's removal are now angry that Trump has. Maduro remove, whatever.

I only bring that up, not because it's the political show, but because it's a midterm election this year. And I believe Lizanne Saunders' own data shows that in the midterm election year of a four-year cycle, which is this year, markets are subject to wider swings, probably in part because people are jumpy and they don't know which way Congress is going to turn. Yeah, so it's of the four years of an election cycle. using calendar year terms. And any time I mention this, I hear people say,

you should do it from election day to election day or inauguration day to inauguration day. That's not really the point. It's just... You've been on Twitter? Yes, I'm on Twitter. I'm on Twitter. It has the lowest win rate of the four years.

And you do have some common thread of sort of the violently flat pattern. So bigger swings around a... violently flat. That said, that's a great term. We bucked this stuff all the time. You know, the pre-midterm year, the post-election year, which was 2025, did not fall in line with historical averages. So it's a historical average for that year? I don't know what the percentage changes. Yeah, positive. But we were well ahead of that, given what markets did. I mean, we've done so well for so long here. I don't know if any of the traditional patterns apply, right? Or if you just have to say squarely focus,

on something like the AI trade or the fact that interest rates are falling, which we don't talk enough about. Speaking of the AI trade, it's been a bit of a tale of two markets. You can talk about the market and then focus on cap-weighted indexes like the S&P 500. The fuller story is tunneled under the surface of the indexes. Even since the April 8th closing low, you had bare market level maximum drawdowns at the average member level. So there's a lot more churn and rotation under the surface, which you didn't pick up if you were just focused on cap-weighted returns. I think 2026 might be a bit more of a shift where there's less of a sort of unifocus on these cohorts like The Magnificent 7 and a broadening out in terms of where opportunities lie and where investors are looking for opportunities.

And I think that's an interest rate story. I mean, or let's put it this way, the unwind of the COVID problems, high interest rates, high inflation, all of that, that we're continuing to unwind. I mean, why are the financials continuing to do so well? That plus deregulation and so forth? I think it's an outside of Mag 7 earnings story as well. Now, if you look at the Mag 7 and then you compare it to the other 493, and you can you can break it into other cohorts. You can look at the 10 largest. You can just look at the tech sector or the comp services sector. You've got a de-seller. pace of earnings growth relative to the rest of the market having an accelerating pace of earnings growth. Now, in snapshot terms, those cohorts, the Mag 7 tech, still have a higher growth rate, but it's the direction of travel that matters. I've been fond of saying for my 40 years doing this, better or worse, often matters more than good or bad. And I think that's sometimes what's missing in the analysis is just that snapshot of, yes, but it's still stronger earnings growth for cohorts like that. I think even within tech, and comp services, which in the aggregate probably will still do well, I think there'll be more dispersion and more opportunities. Are the higher tax returns going to help out the smaller cap stocks? Higher tax refunds, I should say. Yeah, you know, I think that that is a support for the retail trader flow, which has been looking for opportunities down the cap spectrum. That said,

where you've had significant outperformance over the past year within an index like the Russell 2000 is in the lower quality on profitable segment, which is how. about 2x, the return of the profitable segment. I think you want to fade the unprofitable and lean into the profitable. What's the fun in that? Where's the upside on that? You know, it's the fundamentals. Not the fun.

And so poorly. Lizanne, thanks very much. Great to see you. Lizanne Saunders. Let's get to the Treasury markets with yields lower this hour. The benchmark 10-year yield pulling back towards the low end of the session. In fact, a little bit of a flight to safety trade, a teenyy bit of one. dictators digesting geopolitical defense in Venezuela. The retreat and yields today also reflects a

little bit of a bid, as you can see there, for safer assets, yeah, in the wake of everything that's been going on geopolitically. All right, we've got a long way to go here on Power Lunch and coming up. He said it was likely going to happen. And it did. Power player Kyle Bass will join us. We'll talk more about Maduro's capture, what it means for Venezuela, China, the region, and a lot more. Stick around. Oil buyers. The two countries have maintained close ties since the Chavez era. In fact, there are images of Maduro hosting a Chinese government envoy in Caracas hours before U.S. forces captured him.

And how does it all impact relations between the U.S. and China? It'll make more Beijing more or less likely to move on Taiwan. Let's ask someone who follows China closely. Kyle Bass is founder and CEO of Hayman Capital Management. Kyle, it's good to see you again. you know, some have made the point that Venezuela was giving China these barrels of oil and repayment for loans. So from China's point of view, if we're taking those barrels now, they're going to feel like they've been wronged. Well, I don't know where to start with such a false

equivalency. It's a pleasure to be here. But look, you have a scenario in which this wasn't about oil. Yes, China has certainly extended belt and road loans to Venezuela. China runs the Venezuelan rare earth business. They run their minds. They run the extraction. They run the global sale. When you think about what this attack or, you know, what the extraction and arrest of Maduro was really about. It was about China, Russia, and Iran working together with Venezuela in multiple disciplines under the strongest bilateral partnerships that each of those countries extend to another sovereign. And what you've got now is China looking at what just happened, the precision with which U.S. forces pulled off this arrest on a military base in Venezuela,

protected by Chinese stealth radar, protected by Russian surface-to-air missiles, and Iran was building or has been building drones that can reach Florida from Venezuela, and they're building them on a Venezuelan air base. So I think when you look at all of those things together, Kelly, This isn't about China and oil. This is about having the three greatest sworn enemies of the United States running fully operationalized activities in a country 1500 miles from Florida. Yeah, and I think this is where the president

probably could have done a better job, Kyle. Obviously, oil was brought up, so the whole sort of no war for oil theme, it's a very easy villain. Venezuela certainly does have oil, as we've talked about, as I've reported. No American company is going to be down there anytime soon Chevron currently does operate. So what would then be the best case scenario for the

Venezuelan people? It's amazing. A lot of people are criticizing our government and the president for this action, but the Venezuelan people haven't been asked. My guess is they're sick of being poor, they're sick of being tired, and they're sick of being sick because they lack medicine. What is the best outcome for Venezuela vis-a-vis the West as well? Yeah, I think it's important to just look at Venezuela as recently as the 1970s. I mean, richest country in South America. Yeah. They have the highest living standards of any country in South America. One of the richest countries in the world in 1970, having about $7,500 GDP per capita. At that time, that was two times German GDP per capita. That was

four times Japan. It was 12 times China in the 1970s. That was pretty recently. It only took two regimes of Chavez and Maduro to wreck it. The GDP per capita now is in the bottom 20% of countries worldwide. It's about $3,000 a person. It's a laughing stock of the world. So the best possible outcome is Maduro and his socialist communist government are gone and they get a duly elected leader in place and they embrace the capitalism of the West. I mean, that would be the greatest thing that could ever happen to Venezuela. Look at the Venezuelans all over America and in the streets of Venezuela today. They are all celebrating this arrest.

Yeah, I don't want to say Chile is a perfect example because Chile certainly has its problems, as does any country, by the way, but their post-Pinochet reforms, they gave everybody some money, basically for the private sector. And Chile now is probably one of the most successful economic experiments of the Southern Hemisphere.

That said, that said, what's the next leg? Is it Cuba? And how much of this, Kyle, do you believe, was truly a message to the leaders of Iran who are, as we speak, pretty violently putting down any pro-democracy, pro-speech, or pro-economic protests in their country? Yeah, if you look at Iran, you look at the Iranian currency, it's completely hyperinflated. The bazaars are now closed in Tehran, which are the core, the heart of the Iranian economy, and the people are now pushing back. The Iranian government is using live fire, using real bullets to suppress the protesters. It feels to me like you see a regime change actually happening in Iran, right? Once the Ayatollah and the Mullahs are gone, the good people of Iran.

Iran's a very highly educated, let's say, country as far as their constituency is concerned. Iran could also be a thriving country if the theocratic dictators were removed. So, you know, whether we do that or whether they cause this problem on their own, I believe that this is already set into motion, Brian. So we're seeing regime change in Iran. We're seeing a potential regime change in Venezuela. And you've also got inflation and sanctions really affecting Putin's Russia today. So we're finally kind of getting somewhere with all of these sanctions now that they're

properly being employed. How are you thinking, Kyle, about the next steps in Venezuela and the, the apparent oddness of the person who should be cooperating with us saying in her first remarks, you know, this never should have happened and I'm not, basically. What do you think is most likely to happen here next? Oh, boy, that, I mean, that's a tough one. Obviously, I'm not an expert in Venice, one in politics. But I do think that, look, you have a scenario where there are a lot of face-saving measures that leadership's going to have to engage in. You have the Nobel Peace Prize winner, Maria Karina Machado, who is potentially set to take over,

or you have the vice president who Trump has said a few things about in the last 24 hours. I think you're going to see the people of Venezuela usher in a new leadership like they elected in 2024, where Maduro basically invalidated the bona fide election results and stayed in place. You have to remember, the United States under Biden didn't recognize, recognize Maduro as a duly elected leader. In fact, Biden had a $25 million reward out for the information on the arrest and conviction of Maduro. And Trump doubled that to $50 million and then arrested him.

And then you have Europe. You have extreme left Europe. You have France. You have Germany. You have Spain. Those leaders, the EU doesn't recognize Maduro as the duly elected president of Venezuela. So what happens next is maybe the world will usher in, help usher in, new leadership that is elected by the people of Venezuela and not the dictators that invalidate elections. All right. Kyle, appreciate you joining us today. Thanks for your reaction.

It's a pleasure. Kyle Bass. Coming up, the former Energy Secretary here with what happens now. We look forward to checking in on these same questions right after this. Venezuela's vice president and oil minister Delci Rodriguez was formally sworn in today as the country's interim president. It comes after President Nicholas Maduro appeared in New York on drug charges after the U.S. removed him from power over the weekend. During the swearing in, Rodriguez called the move illegitimate military aggression. The U.S. announced today it is revising its childhood vaccine schedule to recommend fewer shots. Federal officials say the CDC now recommends flu, mud and choccal disease, and hepatitis shots be given based on shared decision-making

between parents and health care providers. The agency also calls for a single dose of the HPV vaccine instead of two. Officials say insurance providers will continue to cover immunization costs regardless of the category. And newly released CDC data shows 30 states are now considered to have very high levels of flu activity as a new strain of the virus continues to circulate. According to the data in the week, which includes Christmas, there was a 33% increase in people testing positive for the flu and an 8% increase in people visiting a health care provider with flu symptoms. More Power Lunch coming back after this. Welcome back to Power Lunch. I'm Dominic here. Let's bring in Mike Santoli for a conversation about some of the market dynamics at play right now, given all of the catalyst that we've seen just over the.

course of the past 72 hours. Mike, is it surprising at all in your mind, the market action that we've seen despite the geopolitical risks on the rise and the oil markets behaving the way that they are right now? Yeah, not specifically, Dom, in terms of a market-wide response, I wouldn't have expected necessarily the events over the weekend to have cost some kind of broad risk-off type of move in the markets. You know, markets typically are going to take an event like this and try to figure out just precisely what should we be repricing today, if anything. So obviously, implications for the oil markets and energy stocks, that move was at least interesting and somewhat specific and isolated.

The rest of the market seems to me it's been just kind of released from its kind of year-end, tight, rotational sort of profit-taking trend that it was in for a little while. And we're seeing it run through two channels. One is this economically sensitive stocks that have outperformed for a couple of months are getting another bid. So we have banks, we have industrials, people expecting this reacceleration of the economy in the first quarter. And it seems like that trade is being executed with fresh money as the year begins. The other piece of it is some of the more speculative kind of favorites of last year. I'm looking at the EV helicopter stocks, the quantum stocks, Robin Hood shares.

So it seems as if there's just a little bit of pent-up risk appetite that is getting released into the markets today. And I guess the final piece of it would be parts of the AI food chain, which have really never gone away. And they've been mostly focused on the chip sector, specifically memory. And that's also benefiting. It's all netting out, I think, to a strong day, value over growth, but one that also is kind of just bringing the S&P 500 up to a level. It has so far acted as a bit of a ceiling since late October. No, it's interesting as well, Mike, if we're looking at the broader markets overall, it's not every single value, so-called value sector, I should say,

that that's participating in equal amounts here. Energy, for short, the forefront, given the headline news and everything else coming out of there. But it's not being distributed equally. We are seeing that massive bid in small-cap stocks, to your point, of that broadening out trade. We are seeing some of that play out in the industrial complex, maybe even ones tied to the broader kind of oil services trade by extension, everything. but it's not playing out in health care, it's not playing out in other parts of the market. So if this is the 2026 opening salvo, so to speak, in a way, what exactly does that tell you about

maybe where the next couple of months could be in terms of investor's sentiment and positioning? I would start by saying I'm a little bit suspect of trying to extrapolate too much of a message out of just today's action just because it does feel as if this is kind of like people going ahead and sort of moving on a year ahead. plan and not reacting to specific, you know, factors, specific headlines. However, I think what's underperforming is things like health care and staples that are defensive. So it is still a more kind of offensive move in the markets. Again, it's mostly cyclical driven. Health care had a great trade at the end of last year, clearly ripe for a little bit of profit taking in a new

tax year. But also, I just feel as if right now the narrative is, we're going to run the economy hot. That seems to be the line that most strategists are going with. Earnings are going to be up 13 or so percent. Nobody's questioning that consensus at this point. And so it feels as if nobody wants to necessarily play defense. Of course, the other part of it is, how do you interpret what's going on with gold and silver? To me, that's not really risk aversion driving those metals prices higher. It's mostly about, you know, it's a kind of a what-if trade.

It's obviously diversifying you away from things like the dollar and equity risk, but it's not so much safe haven. because these things have been momentum plays at this point. Yeah, they're acting like alternatives in many ways and maybe not like alternatives in others as well. Mike Santoli, thank you very much for that. We're going to check in on the market action with you throughout the course of the afternoon, given this momentous day. Now let's turn over to Washington, D.C. in that side of the story

and bring in A.man, what exactly now can you tell us about how things are being framed up within the Beltway with regard to just what's going to happen in the coming days and weeks vis-a-vis Maduro, Venezuela, and the market reaction that we are seeing. Yeah, Don, there's still a lack of clarity about all of that, including what the plan is for the leadership in Venezuela. After a weekend of extraordinary military and diplomatic activity down in Florida, the president returned to the White House last night,

and he has remained behind closed doors through the bulk of the day today. We don't expect him, as of right now, to appear on camera at all today. We do expect that Marco Rubio, Secretary of State, is going to brief members of Congress at about 5.30 this afternoon. And so maybe we'll get some additional details of what the administration's planning is going forward. But a whole range of questions here in terms of what's going to happen with the Venezuelan oil in particular, right? I mean, you've seen our Brian Sullivan's reporting that oil companies are telling him that they do not intend to go into Venezuela. That stands at stark contrast with what the president said over the weekend, which is that, American oil companies will be incentivized to go in to Venezuela.

So one of the questions is, when will the administration begin its communications with the oil companies and what will be the terms of the deal that they lay out there for what could be a very expensive and possibly counterproductive from some of the company's standpoints activity in Venezuela? So all of that remains to be seen. The other big question here, Dom, is what is the administration's end game in the region? The president last night on Air Force One talking about what happens next in Cuba. He said he thinks Cuba is poised to fall. The government there is poised to fall because of the Venezuelan oil importance to the Cuban economy.

Overall, he said that economy could collapse once Venezuelan oil stops pumping into Cuba. What happens to the Cuban economy, to the Cuban nation in the scenario of a government collapse there? And then the other question, of course, is Greenland. The president said last night he wants Greenland. It's strategically important to the United States. Does the president have something specific in mind for Greenland? That we don't know at this hour either, Don. All right.

With all of that, the Dow is powering to a new record high, of course, and amidst everything that's happening. Amon Javvers, thank you very much for that. We'll see you later on. Keep it right here. We've got more power lunch coming up after this commercial bring. Welcome back to Power Lunch with everything that's going on. We're still keeping a close eye on the computer chip sector.

InVIDIA under pressure again ahead of CEO Jensen Huang's keynote speech at CES in Las Vegas. Let's now bring in Christina Parts of Nevelas with more on that story. And Christina, the industry overall saw three straight years of gains ending with last year. What exactly can we expect going forward? Well, you bring up Nvidia in the sell-off today. It's not only Nvidia, AMD's down 1%. But keep in mind just last week, you had a lot. of people buying into this trade. Let's call it the pre-CES trade with expectations that news

will come from their keynote. I'd like to point out, though, the big story, and you mentioned even briefly with Mike Santoli, is memory. The bottlenecks for this AI play, the bottlenecks for so many of these firms going forward is how are they going to get the advanced memory? You had Microon CEO previously say that they're sold out well through 2026. Today, in a news report from the Korean Economic Daily, they reported that competitors, S.K. Hynix, as well as Samsung, are seeking price increases of roughly 60 to 70% for their dynamic memory. And this is going into Q1 versus just last quarter. So that just shows the strength in the pricing power for a lot of these memory makers and why you've seen the bid up

in micron, a competitor as well over the last while. But that does not necessarily bode well for a lot of the original equipment manufacturers like Lenovo, Dell, because they're going to have to pay higher prices for that memory. And I just want to end on two more points. You had a lot of chip equipment makers today moving higher. There was a double upgrade for ASML. There was an upgrade for Intel, Marvell. It seems like the shift for Chiffs is just moving on to equipment names and memory.

And last but not least, for that shift, you're seeing a rotation dom just out of software into chips. So we show the IGV versus the socks just over the last three months. We really started to see that divergence where money is just rotating from one. pocket into the next. Yeah, the Vanek Vector semiconductor ETF hit another record intraday high just in trading so far today. It does, though, raise some questions about the valuation of some of these chip stocks. The momentum that we've seen, that aforementioned ETF I just brought up is up 50 percent over the last 12 months alone. So what exactly are those valuation concerns going to manifest themselves as, and is Nvidia going to be the poster child again for the entire

sector? Oh, well, if anything, Nvidia's performance thus far plays to your point, that the upside is not there for several of these names and the rotation is going into the ones that with the lower valuations. Yes, in videos valuation is, you know, compressed over the last little while, but the stock hasn't really moved that much over the last three months or so

because of that lack of upside. People are seeking alpha and they're turning to other names that maybe were left in the dust, like ASML, like some of the memory cap names, maybe AMAT you'll throw in there. And then there seems to be quite a bit of bullish commentary around Intel because of the foundry business, not necessarily because of the PC business.

So there's some appetite for chips. It just seems to be that it's shifting away from the usual winners towards the likes on your screen, applied materials for one. And of course, a lot of that's going to be driven by some of those spending hints that we're going to see from those massive hypers-type spenders in the big cap tech side of things as well. Christina Parts of Nevelas, thank you very much for the update there. And don't miss, by the way, NVIDIA CEO, Jensen Huang, who's going to be on fast money later on today in a CNBC exceptional.

exclusive interview 5.30 p.m. Eastern time. Thanks very much for watching Power Lunch. Keep it right here because closing bell with Scott Wapner starts right now.