Power Lunch - Power Lunch 8/31/26

Episode Date: August 31, 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.

A good month for your money. Going out with a bit of a whimper. Welcome to Power Lunch, everybody with Brian Kelly is back today. As you just saw her in the previous program, the Dow is at about 300 points. Brent crude oil back above 90, the 30-year bond topping 5.5% and a quarter percent. All this as President Trump threatens new Iran strikes and strikes a big deal with Venezuela for oil. Your entire setup is ahead. And forget the home field advantage. This year, it's overseas markets stealing the show. From Asia to emerging economies, international stocks are beating Wall Street at its own game, with several markets topping U.S. returns.

David Harrow, the co-CIO of international equities at Oakmark, he joins us live to break down where the value still is and where he's putting money to work. That is coming up. We've been range-bound for August, but even still the major averages are on track for decent gains this month as we move on to September. The NASS, except 3.6 percent, S&P making some new highs. but September, historically, a week month for stocks. In fact, since 2006, it's higher just 45% of the time. Its average performance is down 0.6%. Both are the worst stats for any month of the year.

Thank you to Ryan Dietrich for that. We also have the odds of a Fed rate hike at the September meeting ticking up. On the other hand, we're coming off a blowout earnings season for big tech that showed the AI story is still very much intact, and companies are starting to report tariff refunds. So which signals should you lead? should lead you, should you bet on right now. Let's ask UBS Global Welfmanagement, Head of Equities, David Lefkowitz.

It's great to see you here. Thank you for having me. So, I mean, we're sailing, we're using the sailing metaphor, sailing through five months straight for the Dow moving higher. Now September comes. And look at the market today. I mean, it's giving you some sense. Look at the momentum trade and how difficult that's been the past couple of months.

So what's your advice here? Yeah, our advice is we think the bull market's intact. I think the drivers that have been, repelling equities have been, first and foremost, the strong earnings season, which you guys mentioned. And, you know, everything that we're tracking says we're going to continue to see very good earnings growth. Not only do you have the AI infrastructure story, you now have a cyclical improvement in manufacturing, in industrials, in financials. So those earnings are coming through at a faster clip. And the consumer, yes, bifurcated, K-shaped, whatever you want to call it, but still resilient because the labor market is still

pretty healthy. Job losses are not very high. So we think earnings growth is still going to be the story. But as you point out, Kelly, yeah, the Fed is now a little bit more uncertain, a little bit more in play. Could that be some choppiness as we go into that Fed decision period? For sure. September 16th, I think we'll be in D.C. That's a live meeting, is it? I mean, the Fed could raise rates. Sure. Does that kill the stock market rally? Or is the stock market already pricing in a 50% chance of a rate hike, so won't care if we get one. So when I think about what the Fed's impact is on the markets, I think the question is, is what the Fed does?

Is it going to reduce our expectation for earnings growth or economic growth? I think one rate hike, two rate hikes, I don't think you're going to see much of a change in how most investors and most analysts are thinking about earnings growth going forward. Certainly, I don't think we would be taking down our estimates in terms of earnings growth. So, and to your point, Brian, yes, the bond market already is there, right? So I don't know if you're necessarily going to see incremental headwinds from, say,

the tenure going up if the Fed were to hike. So I think calibration hikes, I think that's manageable. Could be some choppiness. If we're talking about really moving into restrictiveness, tightening the screws, that's a different story. Let's put it this way. What would be on the shopping list? And I know sometimes that it depends.

It depends on who's selling off and why. But broadly speaking, if you think the rally is still going to be intact, earnings are still going to be strong into next year, and we get a 4, 5, 6, 7% correction. What would you be buying? Look, I think you want to buy the earnings growth, right? I mean, we know that's always the fuel for stocks in terms of stock movement. So where do we see the earnings growth?

I mean, we still see it in tech, the AI complex. I think you need to be a little bit careful about your exposure there. And we have a list of stocks related to AI. that we currently like. You still like them? You like them in the next year? Yeah. I think, look, I think we're going to see certainly CAPX growth this year super strong, almost a double, right?

$900 billion of CAPEX. I think next year we're going to have at least 30% growth. And Nvidia just told us, right, that their earnings are going to be even much higher than everybody was thinking. So I think you're still going to see that very nice earnings growth into next year. But I also think it's broader. It's not just the memory stocks in those types of names. I think there's definitely room for some of the laggards that have been, that have even within tech. And then also on the industrial side, I think there's a lot of interesting stories.

Yes, data center build out, but also the names that are benefiting from the short cycle improvement. So we still think it's a broad market and really driven by earnings growth. What's the biggest market risk? I think the two risks are that at some point if we overbuild data center. I mean, that to me is like the 64. If they get built, there's a lot of political pushback and surveys show a lot of people don't want them. Yeah, no, that's a great point, Brian. The other thing, though, is that I think there's a lot of double counting of those gigawatts

that are trying to be stood up in the pipeline. In other words, you can get some of these cancellations and deferrals or moratorium and things like that. And I still think there'll be plenty of capacity being brought online that the KAPX numbers that the hyperskarets are talking about will be fulfilled. Why, the phrase double counting catches my ear. Sure. Explain that. Well, I think it's just prudent risk management, right? You don't know if your data

center is going to get through the regulatory zoning process, right? So you start two? Yeah, you could. And not say, but we're talking about very early stage pipeline stuff. You're not putting a lot of capital on the ground when we're talking, you know, all the capital investment comes, or the huge percentage of it comes after you get those approvals. But where do you think that the double counting is coming from? If you just tally up what the utilities are saying in terms of how many gigawatts are in their pipeline, that is different than what the hyperscaleos are articulating.

So that's where some of the double can. Sorry to jump in. Sit tight. Not done yet, but we do have a news alert on Amazon with Kate Rooney. Kate. Hey, Brian. So Amazon shares are lower on this report from the Wall Street Journal. Journal now reporting that the FTC is preparing to sue Amazon. They're accusing the e-commerce giant of what they describe as secretly manipulating its ad auctions to basically drive up prices for businesses. The lawsuit is expected Monday. According to the journal, they're talking about more than 20 states. Attorneys General alleging that Amazon quietly raised some of the minimum prices that sellers had to pay. to advertise on the platform. They go on to say that it was inserting sort of this soft reserve into ad auctions that Amazon was controlling the bid behind the scenes. And that overall, bottom line here, it was raising prices for businesses that sell on Amazon. The implication for the stock here, guys, this is a fast-growing business when you look at Amazon. It's been part of the bullcase.

They've got this rising digital ad platform. They're trying to compete more with Google and meta. And they brought it about $68 billion in ad revenue. last year, FTC has also sued Amazon for other issues. So it adds to the government crackdown of some of the big tech influence here in digital advertising. Shares, you can see, down almost 3% on this headline. Back over to you. All right. Kate, Rune. Kate, thank you very much. Individual story there, David, I know you're not here to talk about individual stocks. But to the point on the data centers, there's a lot of public pushback on big, big tech right now. I think that goes to your point about a market risk.

Like, if things just start getting whacked, well, we don't want the data center, so we're not going to build it. And the capital spending comes down and it kind of is this trickled down effect in a negative way. That would seem to be a fairly large risk. Yeah. Again, I'm going to sound like a broken record. But if we had to change our cap X assumptions and therefore the earnings numbers for the beneficiaries of that capital spending because of the pushback on data centers, that would be a different story. But what I'm saying is I think there's so many data center projects in the pipeline that the industry can lose some percent that don't get

through that gauntlet and the numbers will still be achievable. That's good to know, because that might be the way it's going when we see these high-profile cancellations to think that's not necessarily something that's going to affect the earnings. Yeah, exactly. I really do think, yeah, you can add up the numbers. The utility companies are saying, you know, add up a certain number of how many gigawatts they have in their, in their backlog. If there's, it's a lot more than what we're hearing the hyperscalers are talking about adding. Let's put it. That's the best way I can put it. A lot of people, they have a relative standing in line effectively. David Levkowitz of UBS Global Health Management, David. A pleasure.

Thank you. Thank you very much. Also, folks, keep an eye on the 10-year bond yield. It is ticking back up toward 5%. Rick Santelli. Joining us down. on Ricka, in your secret life, I think you might be a technician, a market chartist as well. I mean, when you see that chart, you've said 5%. It looks like the chart to me, my untrained eye, is looking like we might be headed there. Yeah, it's pretty hard to refute that. Let's take a look at the short-term charts just to see exactly which part of the curve is the antagonist and protagonist today with regard to higher yields.

Well, you see a two-year chart. That's a two-day, Friday and today. Mostly sideways haven't traded above Friday's high yields, but Friday's yields did pop. Thank Warsh and the company, of course, in the retreat going on with respect to the 10-year. Look at the difference. Two-day chart, 10-year accelerated Friday as well,

but it is above Friday's high yields. So let's explain this, okay? The high-yield close for a two-year was established all the way back on the 23rd of July. the yield of 4.35%. And basically since then, it's been in a range from about on a closing basis, you know, low 14s up to very close to the 433, 434. But the 10 year has finally caught up. Its most high yield close was the 31st of July, and it's had many attempts, Brian, to try to get to that 4 and 3 quarters on an intraday and or closing basis. Today is that day.

So we haven't seen the north side of 7th, 475. Today we have, the close is going to be key. Should it close there, that would be the highest yield closed since Jan of 25? Let's call it a year and a half. And quickly, figure it out. Year and a half for the U.S. on the 10-year. The EU's gun's hot today as well. 15-year high-year high-yield close.

We're also seeing guns hot in France. 18-year high-year high-heel closed. The U.K., they're not quite. at extremes, they're not quite guns hot, hovering near 18-year highs. And the same could be said for the Japanese, the JGB, Japanese government bond tenure, maturity, hovering at 30-year highs, not quite there yet in the neighborhood. So it's a global phenomenon for good reason, whether it's energy or whether it's just the notion that there's just too much debt being offered. This is the way the market is going to continue to draw investors by sweetening how much

yields that the governments offer. Brian, back to you. All right, Rick Santelli, Rick, thank you very much. All right, folks, we are just getting started here on Power Lunch. And up next, we're going to go global with stock picks from David Harrow. But before that, Iran, Venezuela, oil, and more. Oh, my, with MCC. There's a lot to talk about. Stick around. Oil prices. They are on the rise right now. WTI crude up about 3%. There are really two big stories around oil happening at the same time. First up, the U.S. striking Iran directly for the first time in weeks. Sent com, Central Command, saying that we hit Iranian missile targets on an island off of Hormuz.

Also, President Trump and the interim president of Venezuela announcing the biggest oil deal of all time. The U.S., along with public and private companies, will invest billions of dollars into Venezuela and in return gain majority control over up to 65 billion barrels of possible oil reserves. President Trump saying the oil will go toward refilling these strategic petroleum reserves. But industry insiders say the deal is going to take years to materialize, Venezuela's oil and industry and infrastructures in terrible shape. Back in 1997, Venezuela produced 3.2 million barrels of oil per day. That is down to just over 1 million barrels of oil per day. It is very difficult.

It is very expensive to do business in Venezuela. Don't evening us out live from the G20 finance ministry, meeting in Asheville, North Carolina, is our friend Michelle Cruz Cabrero of MCC Global Enterprises, somebody who's been to Venezuela many times. Michelle, good to have you on. I want to say this. Do you believe this deal will ultimately materialize?

A lot of stuff we don't know. Yeah, there's a lot we don't know, but we have gotten a lot of details leaked to a variety of outlets. And I would say that the spearhead of this deal is the Office of Strategic Capital in the Defense Department, excuse me, in the Department of War and the Pentagon, and they're staffed with

private equity folks. And so private equity folks do deals. And so if there's going to be a deal that's well structured, I think that's a very experienced group of people who will have put it together. Now, I've been to Venezuela recently, and there was a lot of consternation on the ground there amongst

industry participants, amongst lawyers, bankers, et cetera, that even though there was a lot of desire from the U.S. get oil deals going, they hadn't really gotten going yet. And so this may be either one to finally get the pipeline started or to assuage other investors who may have been concerned about a change in eventual government there that may have meant that their contracts were not necessarily going to hold out for the long term. Because I would imagine security, safety,

costs everything, sanctity of contracts. That's all a part of this story, right, Michelle? where basically why would Chevron, why would anybody else, American companies go down there if they were not guaranteed multi-year security, safety, because ConocoPhillips and ExxonMobil already had, according to them, and a judge agreed, they had their assets expropriated illegally by the former regime. And these companies are going to say, but why are we going to go down and spend billions of dollars if there's a risk in a year or two or ten years that our stuff is just taken again? They did have their asset seized, and it's kind of by the current regime that did it, right?

Delci Rodriguez, the leader of Venezuela, has turned over a new leaf and has gone into a partnership with Donald Trump, but there's certainly a lot of reason to be concerned about whether or not there would be sanctity of contracts in the future. But if you're getting involved in the U.S. government or the U.S. government is going to have a big piece of control, it's going to be much harder for them to fight back. It would be much harder to see something from the U.S. government, right? so that's going to ease a lot of concerns. Kind of the similar question, Michelle, it's Kelly here, is, you know,

if this is a White House deal, what happens if the party in the White House changes? Yeah, that's an interesting question. So, like I mentioned, this is staffed, this is being done by private equity folks. I'm going to assume that if and when we finally see all the details and the paperwork, that that's been considered. You know, there have been times when they've talked about putting

board members, you know, government board, members on the boards of some of these companies, and then they decided to pull back from that for that exact reason, Kelly. What if you have a change in government? What if you have a leader who wants to stop oil production because they're concerned about climate change? Right.

So it's a valid question. We have to wait and see what the final contract looks like. I would say the other thing they're also very concerned about is making sure that we're less reliant on the Middle East. When you talk about the kinetic action that's happening once again in Iran, This is about securing yet more reserves in the Western Hemisphere and very close to the country. Bingo. And I think when you look at the Trump worldview about what we're doing, think about oil and natural gas, Michelle,

obviously a lot of focus on Iran right now. Some of these pipelines that they're talking about rebuilding, the investments that may go through Iraq and Syria and Turkey to kind of blunt the impact of Iran's power over the Strait of Hormuz, but it's also natural gas. I mean, since the Nord Stream pipeline was blown up, U.S. companies like Chenier and Venture Global and some private companies, they've been shipping more natural gas, kind of saving Europe's tail, for lack of a better term. And I think this worldview is the United States is going to be the energy, the safe and secure energy superstore to the world. 100%. I mean, this is more part of the revival of the Monroe Doctrine, right? Which everybody now calls the Don Roe Doctrine for Donald Trump. But it's about securing the Western Hemisphere and energy supplies within the Western Hemisphere, for sure.

I was just in Argentina for an investor conference with the Council of the Americas. There is an oil boom happening there and gas as well for the first time in that country's history. That's another secure supply of oil that's coming to market. We cover all the time, or CNBC covers all the time, what's happening in Guyana as well. So it's a super, super interesting time within energy because we are now seeing this huge shift away from the Middle East. Don't get me wrong. We still rely on that oil, but not near to the degree. 10 years' time, it's not going to be nearly as important.

Michelle Cruz-Cabura down in Asheville, North Carolina for G20. Michelle, we really appreciate your time. Thank you very much. Pleasure to be there. All right. By the way, there's another huge story happening right now. that may impact Californians and investors. Look at that.

Shares of two California-based utilities, PG&E and Edison International, they are collapsing right now, each losing just about a fifth of their value is because California's legislature is ready to vote on a new bill that could make utilities liable for wildfire claims. Now, outgoing Governor Gavin Newsom tried to insert a provision into that bill that would have largely shielded the utilities from fire damages. But that was rejected.

And now the market is reacting to worries that California utilities like PG&E and Edison International. Edison, by the way, is the parent company of the largest Los Angeles utility. And to a lesser extent, Semper Energy could face billions or tens of billions of dollars in wildfire damage claims. Remember, PG&E filed for bankruptcy seven years ago, in part because of over 10 billion in fire damage awards. By the way, if you want to learn more about this topic, two years ago, I did a mini documentary on wildfires and liability. You can watch it by taking a picture of that QR code on your screen, Kelly. Edison International is the parent company of Southern California Edison. Stock's down 23% today.

Would any of this be retroactive or this would just apply going forward? I don't know. But in either case, obviously, that is either going to require huge cap-x from them to make, I mean, be nice, to make sure this doesn't happen. But the potential risks out there of this happening once again, understandably would put, you know, tons of their market value at risk. Well, here's the problem.

You want to spend the capital spending. Most of these wildfires are accelerated by a lot of dry timber, a lot of brush and trees and dead trees. Costs a lot of money to clear that out. But nobody wants their rates raised on their electric utility. So the utilities are, and I'm not defending the utilities by any means, but they're like, well, we can't raise rates. Some cases they're not allowed to.

It's regulated. But at the same time, they need to spend all this money to clear the brush. And with the shares down the way they are and with little other recourse for them to turn, to if this were the case. We'll see how that affects their wherewithal in that state. U.S. markets have performed well this year, but don't forget to look abroad. The Vanguard International Stock ETF

is outperforming the S&P 500 and our next guest looks at the global markets for a living. He's brought some picks with him and we'll reveal them after the break. I want to follow up on the breaking news that Kate Rooney brought you a few moments ago. The Wall Street Journal exclusive story that the

FTC and 20 states are going to sue Amazon over legendary. manipulating ad prices on its platform. I can tell you right now that I'm confirming that story. A source familiar with the situation tells me that the details of the story are accurate. Reuters also reporting that the FTC is filing a lawsuit in a federal court. So the FTC and 20 states going after Amazon over allegedly deceptive ad practices or manipulating ad prices on its retail platform, we can confirm that story. Amazon stock, by the way, is down about 3.2%. All right, the overall S&P 500 has had a strong year, but stocks overseas are doing

even better. The emerging markets index outpacing the S&P 500 by about 10 percentage points this year. And if that holds, it would be the second year in a row that emerging markets have outperformed the S&P that has not happened since all the way back in 20. 2010. Joining us now is David Harrow, co-CIO of international equities at Harris Oakmark, a man who is not aged at all, David, since 2010. It's good to see you back on the air. Good to have you on. Thanks for coming on. To what do you ascribe this? No, I've aged. Brian. Go ahead. Say something nice. Yeah, Brian, I'm just saying I've aged, as you know. I mean, especially 40 years doing this. You go through one. little market crisis to the next over those 40 years. And each one takes a little bit out of you. Well, it may have, but it hasn't taken anything out of your stock picking ability. And some of these international companies have done very, very well, even though the United States has the strongest

GDP growth of a major economy in the world. Connect those dots for us, David. Well, one of the misnomer's is that by buying foreign companies, you are necessarily just buying their economy. For instance, if you buy Louis Vuitton, you're not buying France, you're buying the globe, you're buying emerging markets, and you're buying the rising wealth in the United States. So this is a misnomer, a market imperfection that we as long-term value investors could take advantage of these, what I would call as a market imperfection. So along with currency movements, you know, many of these businesses are very competitive, unique to oversteenact. sees domiciles, and it's a good way to get access to areas which you normally couldn't get

by buying strictly the S&P 500 or U.S. companies. We are looking at 22% up for the EEM this year, David. So where in particular are you focused? A lot of this trade had become about AI, the Korea aspect of it, but not just them, others too. Are you kind of pivoting around that, leaning into that? How are you dealing with that? Well, it's funny. What happens when the market begins to narrow, the market structure becomes a very narrow place,

meaning the weight of money goes into very small select areas. Two things happen when this occurs. Number one, the targets of those select investments become overbought, just by the fact that the weight of money is going into very, very few equities. Effect number two is where that money is coming from becomes oversole. and it gives opportunity for investors such as ourselves, the long-term time horizon, to take advantage of this. Value to us means the quality you get for the price you pay. And normally kind of growthier names are a bit expensive for us. But because the structure of the market has narrowed so much, many of these, what I would call old growth names, good high, single-digit, low-double-digit growers, like a compass from the UK, as an example, are now value stocks. Because money is flood out of them because they are not directly involved in the AI.

And thereupon is the opportunity. And one of the biggest banks in the world, one of the biggest banks in Europe, B&P Perrybog, gets almost no attention here. It is a stock that is on your radar. You're giving this attention. How come? Well, because this is a company that is extremely high-quality financial institution by any metric. If you look at the profitability, their book share per value growth, is going up over almost 7 or 8% over 10 or 15 years. It just keeps marching up, marching up, marching up.

The dividend yield is mid to high single digits at most of this period. And the price to earnings ratio is just 7, 8, 9%. And when you look at a normal return on equity, probably closer to 14 or 15%. A bank like this in the U.S. would go for two, two and a half times book. So again, because most of its operations are in Europe. It's domiciled in France. People overlook it. But if anything, here's a good way to catch great yield. Meanwhile, still growing their income and dividend stream by over 6, 7, 8% a year. By the way, at the same time, shareholders aren't just rewarded with the dividend yield. They often have, and they currently do have ongoing stock buybacks. So the number of share shrinks, earnings per share, almost equal goes up.

and offer an extremely well-run and well-diversified European financial institution. David, great to check in with you today. Really appreciate your time. Thanks for having me. Good seeing you, Brian. You're welcome back anytime, my friend. He does great charity work, by the way, in Chicago. Doesn't get enough attention for that.

There's a lot of really good charity work. That's awesome. With schools. Great to hear. Coming up, is it time for you to bank some profits? Our next guest says big winners in the KBE are due for a pullback. And now is the time to save. sell. He joins us next with those names. Welcome back. The financials just hit a record

intraday high last week, but it may be time to ring the register. Our next guest says the technicals are flashing caution, and his call is to sell three big banks. J.C. O'Hara is the chief market technician at Roth. J.C., it's great to have you here on set. Welcome. Thank you. You know, it's hard to make these sell calls because the market generally goes up, but this is a seasonally difficult time of the year. So with that in mind, who do you think is looking a little but, you know, what's the technical term for it? Shaky, wobbly, under pressure. Yes.

You're right. This is a seasonally week period of the year. But I think if you zoom out, I mean, we're approaching September, which means we're awfully close to October 12th, which is the four-year anniversary of this bull market. So when you look at how banks trade during the course of a bull run, banks are a great barometer, early innings of a bull market. As the bull market matures, we're not calling for the end of the bull market. but we're calling for a maturing bull market to continue.

Banks provide less of a signal and less of a way to actually play the bull market. They become a value trap. And speaking of value, banks are trading at the highest book value in nearly 20 years. At the same time where tech stocks have pulled back to a market multiple. So valuation work combined with wobbly technicals, you know, presents a pretty strong case to take profits, sell, and move the capital to other areas of the market outside of large, at money centers. So let's get more specific. Time to take profit. All these banks are going to be so mad at you, Bank of America, all the others. How broad could this call be? Or is it very specific

to just a couple of these names? I think it's very specific, right? If you take a, if you zoom out and you look at what other financials are doing, specifically capital markets, capital market stocks are on fire, right? Four trillion dollars in debt occurrence, debt occurrence and equity this year, 70% increase year over year from last year. Capital markets is where you want to be. So we want to get out of the large conglomerates, money centers, and move to capital markets. That's where the momentum's going.

So you're not, because a lot of people come on and talk about that, about how the financial is the way to play the AI trade and look at the debt issuance. And you're saying, yes, yes, yes, and yes, that's all fine. It's more the Bank of America's, the city. What is Chase on the list, too? Yes, it is. Even though they have exposure to those, obviously, those businesses,

but you're talking about those broad kind of mainline or whatever you'd call them. And still pay attention to them. I think there'll be a great bellwether for the economy, held to the consumer. But that's not the way to actually play that view in the stock market at this time. Year 4 of a bull market. I think that trades over. U.S. Bank Corp is also on the list.

Talk more about year four dynamics. What else does that, what are you seeing or what does that tell you? Year 4 dynamics, you basically want to continue to stick with leadership, right? I think there's an urge sometimes a temptation to gravitate towards defense. Of course. We hear it all the time. That's the worst thing you could do in your four of a bull market. You want to stick with what is working.

And what actually has caught our attention and is flashing some pretty strong buy signals is health care, right? But health care is defensive. So you just said you can't be defensive. Exactly. When you look back at the last six bull markets, there are episodes that last anywhere from 12 to 15 months where health care outperforms the other sectors. Healthcare has been the strongest sector of the last three months. So we believe that the relative trend change is favoring health care now. And I think now it's time to take advantage because the length of this trade is not that long.

So banks buy blood thinners. That's right. Biotex. What does it mean for tech, though, broadly? So you said stick with the leadership. And yet the momentum names have been kind of flatlining for the past couple of months while soft. What does stick with the leadership mean? Stick with what has been working, right?

If you look, if you study markets and you look at how bull markets mature and evolve, leadership remains. gains leadership. You don't get that drastic change from the worst performing sector automatically becomes the best, right? So you want to stick with tech until proven otherwise. And that could be rotation within tech, right? The software trade out of semis. Or as you said, I said blunt then, or you said biotech? Is that like an IBB? Is that like a group that you think is ready to break out? It is breaking out. As we speak, it is breaking out. And during that 12-month window where health care outperforms during those bull markets, go biotech first half, second half is pharma. And I'll sneak medical devices, they're sneakily

undervalued and they're coming back to life. You're saying we need some medical devices? Yes, we do. It's with a K. It's a bad. It's the lowest form. J.C. O'Hara, chief market technician at Roth. Thank you very much. Thank you. All right, let's get out of Pippa Stevens with a CNBC news update.

Hey, Brian. President Trump reportedly plans to announce deals with nearly a dozen drug makers today to sell their medications for less. That's according to our sister network MS now. Over the past year, the administration Inc. deals with 17 pharmaceutical companies, including Pfizer and Eli Lilly, as part of the president's effort to put America's drug prices on par with cheaper ones abroad. It made a nationwide outbreak of

cyclospora, the Agricultural Department tells Politico Congress cut funding for two key projects, and scientists working on a third have declined to relocate from Maryland to Iowa as part of a department reorganization. According to the CDC, more than 17,000 people have been sickened by cyclospora this summer. And the Metropolitan Museum of Art is canceling its planned exhibit of fashion designer John Galliano after widespread backlash. Galliano made a series of anti-Semitic and racist remarks back in 2010 and 2011 and was later convicted at an anti-Semitism trial in France. The designer and the museum released a joint statement today agreeing with the move. Brian back to you. Pippa Stevens. Thank you very much. All right, public backlash toward data centers. Just keep picking

up and piling up out of Silicon Valley get caught so flat-footed. Wall Street Journal's Tim Higgins digging into just that, and he joins us next. Silicon Valley's playbook over the years has been pretty simple, move fast and disrupt, or some would say break things. They built some of the most valuable companies on earth using this strategy, but will it work for AI as people raise concerns about job displacement, energy use, and more. The president pressing the industry to keep moving ahead today on Truth Social, saying that communities who embrace data centers and AI infrastructure will see lower taxes and more jobs, writing in part, let data rain. Our next guest wrote about this over the weekend in a piece titled, How Big Tech Blinded

Itself to the Grassroots AI Revolt. Tim Higgins is a business columnist at the Wall Street Journal. Tim, it's good to see you. What does the revolt look like and how serious is it? Well, it's messy, right? very rarely in modern times have we seen such a topic that has bipartisan disagreement over. You've got Republicans and Democrats saying, hey, wait a second, I don't necessarily know if I want this in my backyard. I don't necessarily know if I'm on board with this future that you are telling me is going to be so great.

And that is complicated and challenging for an industry to push back at because the complaints, the concerns are all different. And it's not as simple as just dumping a lobbying message or dumping some campaign money into it. You've got both sides of the aisle now very concerned at the local grassroots level coming and pushing back against this. Yeah, I just read the stat 71% of Republican voters were sort of concerned about or against data centers. So what's the option then to move more slowly to play up the benefits? What should the industry have done up to this point? You know, it's interesting. If you go back the last generation of Silicon Valley, the tech coming out of the valley, in a lot of ways sold itself.

Everybody got very excited for the iPhone. You could see the benefits of Facebook early on. And those companies, you think about Google, you think about some of the other companies that came out, were very sophisticated at not just public relations, but also grassroots lobbying. They were out in the states. They're out in the federal government. And what we've seen in the last few years, really essentially with the rise of this kind of current excitement around AI, is also a Silicon Valley that's looking more inward,

the idea of going direct to the consumer, going direct to stakeholders via social media, X in particular, a frustration among tech and tech leaders that mainstream media, government, in particular, regulators just don't understand and are getting in the way of innovation. And if they can just push forward that the technology, will show the benefits and people who kind of embrace that. And that it perhaps worked in an echo chamber, lots of debates on X among many different parties

about the future of AI and all these things. But obviously, it didn't carry the mainstream, the grassroots. It wasn't a conversation that people in small towns across America. Tim, you know, listen, we love X. We love X, but the majority of, because it's a media thing. The majority of Americans are not on X. and if they are, maybe they pop in it out. They're not an X.

I've talked to people in the Midwest who are like, I'm anti-Data Center because of X, Y, Z, and I'm like, well, that's not really true. That's sort of true-ish. But have you thought about that? I think that the information battle is being won by the politicians who were saying, A, your electric bill is going to go up. It seems to make sense, even though it may not be the case.

B, water use is going to go up, even though, again, it may not be the case because these closed-loop systems. But also, C, I think. think, and I'm guessing here, Tim, there's a lot of backlash against all the money in tech right now. A lot of people have gotten a lot of very rich, very, very rich. And I think there's a lot of frustration with the trillions of dollars around technology. Absolutely. One of the frustrations I hear from tech people is they feel like they have the facts on their side, that if people just knew the facts, they would be excited for this.

And one of the things that really caught them off guard is that, yes, politicians are now getting on board with this idea of being anti-data center, anti-AI. But this really grew up, this bubbled up from the small towns, the town councils, the county commissioners, the people coming and showing up and saying, hey, I'm not happy about this data center that's going up in our community and pushing back against that. And what happens in politics is it's all local. And the concern becomes, hey, if I'm supporting this data center, am I going to get reelected. And that's the big, that's the big risk and the big challenge going into the midterms is this local revolt. And it's not just data centers. We're seeing it with flock cameras,

really the physical manifestation of AI, this uncertainty about the future, it becomes a proxy for bigger concerns such as affordability and just your place in the world. I think it's no small thing that the country music star, Zach Bryan, is out there doing his concert. He's testing a new song that's talking about how the robot is killing the working man. man. This is part of the fabric of culture now, and that's a very dangerous place and very challenging place for Silicon Valley to be fighting. And yet at the same time, we talked to the Democratic governor for candidate for Colorado last hour, and he's not for a moratorium. He just said, you know, maybe they need to go up to the parts of the state where coal is being replaced. So it's not

a blanket thing. Tim, for now, thanks. Really appreciate it. Good to see you today. Tim Higgins with the Wall Street Journal. And today is Tim Cook's final day as Apple CEO. Speaking of big tech, we've got some jaw-dropping stats for you as we look back on his very profitable time as Apple's chief executive. It is the end of an era over at Apple. Tomorrow, Tim Cook hands the reins to his successor, John Ternis, capping 15 years at the helm of one of the world's most valuable companies. And the numbers under his reign, I guess I should say, are pretty staggering. Since taking over his CEO, Apple shares have surged more than 2,000 percent after selling more than 5,000.

billion iPhones. And according to Bank of America, Tim Cook grew Apple's market cap by roughly $32 million every hour during his tenure. A $10,000 investment on Apple when Cook took over would now be worth about $282,000, assuming dividends were reinvested, and Tim Cook has done pretty well himself. According to the Financial Times, his total pay package has reached roughly $880 million. That includes salary, stock awards, and cash incentives. A remarkable run and a tough act to follow. Speaking of big tech, and this is on the opposite side, take a look at Alphabet. Alphabet is on pace for its fourth straight negative month. The last time that Alphabet, the parent company of Google, fell four months in a row, was all the way back in 2015. Interestingly, Alphabet was close to

becoming the world's most valuable company back in May, kind of battling out with the aforementioned DApple and Invidia, but Kelly's shares have fallen 12% since then. First four-day, four-month losing streak in 11 years. That's surprising. It is random but interesting is what it is. All right up next, we're going to speak golf. And a stat about that guy right there, Scotty Sheffler, and now he's above Tiger Woods in one category. I'll tell you what it is coming up.

All right, let's end the show with a real RBI. And today it's all about golf and money because Scotty Schaeffler just added another trophy and a whole lot of cash to his resume. 16-under performance at the par at the tour championship in Atlanta earned him his third PGA tour win and a $10 million paycheck, Kelly. And with that monster payday, Scotty Schaeffler has now made more money in winnings than Tiger Woods. Couple caveats, number one, the money's not inflation adjusted. Number two, I'm sure Tigers made a lot more in endorsements. But on the tour, just winnings, winnings, winnings, Scotty Schaeffler is now number one.

He might be worth more than Live at this point because they are reportedly on pace to file for bankruptcy. This week or so, according to reports, the idea is to slim down to get prepared for sale. They were making offers of pennies on the dollar to some of those players for their payouts that were promised. Maybe Liv is the wrong term. Yeah. Thanks for watching, Power Lunch, everybody.