Power Lunch - President Trump meets with Ukraine leader Zelenskyy 10/17/25

Episode Date: October 17, 2025

President Trump takes questions from reporters during meeting with Ukraine's Zelenskyy. Wells Fargo's Sam Margolin joins to give his outlook on the energy industry.  And how concerned should investors be about credit risks in regional banks? It's all here on Power Lunch. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And on that note, you will go down as the peacemaker, no doubt, and you will resolve this war. Well, you know, we resolved eight others. It's funny how people say that. If you get this one, every time I do one, they forget about that one. I solved eight wars. Go to Rwanda and the Congo, talk about India and Pakistan, look at Thailand, look at all of the wars that we solve. And every time I solve one, they say, if you solve the next one, you're going to get the Nobel Prize. I didn't get a Nobel Prize.

Somebody got it who's a very nice woman, very nice. I don't know who she is, but she was very generous. So I don't care about all that stuff. I just care about saving lives. But this will be number nine. But every time I solve one, they said, sir, if you solve one more, you're going to be known as a peacekeeper. So to the best of my knowledge, we've never had a president that solved one war. not one war. Bush started war. A lot of them start wars, but they don't solve the wars. They don't

settle them. And especially when they're not, when they have nothing to do with us. I sell almost, I guess, just about all of these wars had nothing to do with us. But I saved tens of millions of lives. The prime minister of Pakistan said, I saved millions of lives in interceding on Pakistan and you look at Pakistan and India as an example. That would have been a bad one. Two Duke nations, right? So I say this. This is pretty much the last one, although I do understand that Pakistan attacked or there is an attack going on with Afghanistan. That's an easy one for me to solve if I have to solve it. In the meantime, I have to run the USA, but I love solving wars. You know why? I like stopping people from being killed, and I've saved millions and millions

of lives, and I think we're going to have success with this war. Let me tell you, Mr. President Zelensky, this is your third time over here. And by the way, you look excellent. Thank you, sir. Thank you for you, by the way. This is your third time here. How different sitting across the president is this time versus the two previous times here at the White House? And how confident are you hearing this accessory of solving these prior wars that he can get this war solved?

First of all about suit. The same suit because the same president is very simple. The next president will have another suit. Yes. About our relations with President Trump, I think we have important dialogues. And I think we begin to understand each other, yes. And I know that President is briefed very well about situation in the battlefield, and he knows a lot what's going on in the battlefield in Ukraine, and I think it really helps.

When you know a lot of things, a lot of details about one or another war, it helps a lot. But we are still in war. And I hope we will be able to manage. It's important. are not meeting their commitment. You pointed out Spain. They said that it's impossible. No, Spain has not come through.

No, Spain has not been loyal to NATO. Spain has been the only one. Everyone went up to, as you know, I mean, you were 2% and they all went up to 5%. But Spain disagreed with that. I think Spain should be reprimanded for that. I think it's very bad that they did that. But that's up to them.

up to NATO in Spain? On your options? They cannot be expelled from NATO. Can they or not? They cannot, according to the tree. But they also claim that they are protected by the European Union umbrella for trade. Well, the other people, many of the other countries are in the European Union too. They're not complaining, right?

President. Mr. President, that's interesting. Mr. President. Yeah, please, go ahead. Thank you, Mr. President. Do you think you can carry the momentum from the Middle East deal over to this deal? I do. How does that move the needle?

Yeah, I do. I think we carry a lot of momentum, a lot of credibility. Getting Middle East done was very important. Nobody thought it could be done. That was one nobody thought could be done, and we got it done. And a lot of that was the big hit that we put on Iran with respect to the nuclear. They took, that was an unbelievable military maneuver, the B-2s, and many other planes. involved, by the way, but the B-2s.

Yeah, I think nobody expected that to happen, and you know, we had 59 countries involved, and these were countries very diverse. You had Arab, Muslim, Jewish, you had every kind of, you had every country, Christian, you had every

country, and many countries involved, and we got that done, and we got it done pretty swiftly after we set the table properly. We had to set the table properly. This should be one that we get done. And I think the table is set properly here now. And it'll be a great honor. It'll be a great honor to get it done. And the Ukrainian people are great and the Russian people are

great. And obviously they have much in common, as we understand. They have a lot in common. So it'll be a great honor to get it done. On Venezuela, there are survivors from your latest boat strike. What happens to those survivors? Well, I'll ask Marco to discuss that, possibly. Yeah, it's well known. There's an ongoing narco-terrorist operation in the United States has been conducting. As far as details of any recent strikes,

we're not prepared here to announce all those details, but you'll get that information here very shortly. And how are there survivors when these are meant to be lethal attacks? Yeah, again, I mean, we're undertaking these operations against narco-terrorists. That's what these are. These are terrorists. Let's be clear.

But as far as the details of any recent operations, when we are prepared to announce those, we will, as the president has consistently done. So you may get something on that later today. Let me ask you, that was in a submarine, right? We attacked a submarine, and that was a drug-carrying submarine built specifically for the transportation

of massive amounts of drugs, just so you understand. This was not an innocent group of people. I don't know too many people that have submarines. And that was an attack on a drug-carrying, loaded-up submarine. Yeah. On Putin, is it your belief, as Mr. Zelensky said yesterday, that the threat of Tomahawks and costs, as Secretary has put it,

is that bringing him to the table, the fact that it's kind of a carrot and... I don't know what's bringing him to him to him. I think he wants to make a deal. That's all. I can't tell you what's bringing him. Sure, the threat of that is good, but the threat of that is always there. Tomahawks are very dangerous weapons. They're incredible weapons.

If you like warfare, it's one of the most accurate. You know, we used, we hit 30 tomahawks in Iran after the B-2s did their damage. We sort of gave it a little capper with 30 tomahawks from a submarine, quite far away, actually. But they're an amazing weapon. They're a very powerful weapon, but they're a very dangerous weapon. And it could mean big escalation. It could mean a lot of bad things can happen. Tomahawks are a big deal.

But one thing I have to say, we want tomahawks also. We don't want to be giving away things that we need to protect our country. We have a very strong country right now. We have a strong military. We have the greatest military in the world. We have the greatest weapons in the world. I want to get this war over. Okay?

I have a question Putin-Trump tunnel to connect Russia and Alaska? Are you interested? I just heard about it. A tunnel from Russia to Alaska. I just heard about that one. That's an interesting one who have to think about that. I hadn't heard that. We just did a nice road in Alaska.

It's going to get us to a lot of minerals, and we have a piece of it, a good piece of the ownership because of the fact we made it possible. But this came up yesterday, a tunnel from Russia to Alaska. That's an interesting. What do you think of that, Mr. President?

Do you have any ideas? How do you like that idea? I'm not happy with this. I don't think you're going to like it. I don't think he liked it. I don't think he liked it. President Trump, do you think that Vladimir Putin? Do you think that Putin?

Your gut instinct. Well, we had a senator that wanted, remember from Hawaii? She wanted a tunnel from the mainland to Hawaii, and she said, well, we can't do that, so we're going to build a railroad to Hawaii. Do you remember? She's a current sitting senator, She wants a railroad to go to Hawaii, right?

You know who that is, right? She's another beautiful. You have a real. Yeah, please. Do you concern that maybe the Russian president is trying to buy himself more time? Yeah, I am, but you know, I've been played all my life by the best of him. And I came out really well, so it's possible. A little time.

It's all right. But I think that I'm pretty good at this stuff. I think that he wants to make a deal. I made eight of them. I'm going to make a ninth. I think he wants to make a deal. Well, I think that he should have won the war in a week. Yeah, I do think.

And if we didn't give the anti-tank missiles, as you know, the javelins they call them, they got stuck in the mud. They would have been in Kiev very quickly. They were heading to Kiev. You know, in war, you have a lot of luck, too. You know, people, weather has won war, and the cold and the heat, and all things take place in war. But that was a very interesting moment when the tank started rolling, and some brilliant general said, let's go through the mud instead of going down the highway, right?

So they got a little bit lucky. But, you know, where they really got lucky? I gave javelins. That wasn't given by Barack Hussein Obama. He gave them sheets. You know, there's a statement. Obama gave them sheets, and I gave them the javelins. And the javelins are a devastating weapon.

And that wasn't given by Obama. That was given by, because at the time it was Obama, that was given by me. So it was like one of those things. And you had hundreds of them, hundreds of them. They're a devastating weapon. We have a lot of devastating weapons. I'd rather not use them.

But that was a big moment. You know, when the tanks, when the tanks got stuck, they got stuck. And call it luck or call it talent. I'm not sure what you'd call it. But it was a big moment in time. Do you think Democrats would give you credit? Do you think Democrats would give credit when you finally end this war like they did with the war in the Middle East? I think right now the Democrats are really damaged, mentally damaged.

They want to take $1.5 trillion with the war. the T, trillion dollars in give it to people that invaded our country. They came into our country illegally from prisons, from mental institutions, gang members. They want to give them health care and take it away from our citizens. We're not going to do that. $1.5 trillion. They want to destroy our health care system. We're not going to all let that happen.

Well, I wouldn't say that. some interesting things are happening around the world. I'll say that. Mr. President has been reported that Maduro offered everything in his country, all the natural resources. He even recorded a message to you in English recently, offering mediation. What should we do to stop that? He has offered everything. He's offered everything. You're right? You know why? Because he doesn't want to fuck around with the United States. Thank you, everybody.

Thank you. Thank you. He does not outside of the board. Thank you guys. Thanks guys. Let's go. Start moving. Thank you guys.

He does not want to blank around with the United States. The closing words, President Trump at the White House holding a meeting with Ukrainian president, Volodymyr Zelensky. Markets are starting to move a little bit higher heading into the close. Now, while the bulk of this news conference was around Ukraine and Russia, Trump did make some comments that could impact stocks, particularly around a meeting with China's president, Xi Jinping. China saying or Trump saying, quote, they'd like to meet, we want to meet, referring to Xi and the China trade delegation. Treasury Secretary Scott Besson then chiming in that he is likely to be in Malaysia next week to prepare for a possible meeting the week after. Kind of confirms what Trump said earlier today when he said he did hope to meet President Xi in South Korea, quote, in a few weeks.

a meeting with Trump and she, and a de-escalation of any trade fight or tariffs is what your stock and bond markets care about. Welcome to Power Lunch, everybody. I am Brian Sullivan. Kelly is off. The markets right now look like this. We are seeing a little bit of strength into the close. The S&P 500 up four-tenths of 1%. The NASDAQ now up four-tenths of 1%. We're basically flatlined much of the day. Some of the other indexes. You can see the Russell 2000 are indeed lower. we are seeing a move up for stocks in the bond market. The 10-year yield at battle of 4% holding steady right now, the 10-year yield at exactly 4%. Listen, if you're trying to buy a house, you want to borrow money. The direction of that interest rate is going to control large part of how much you're going to have to pay. Bitcoin and some of the crypto complex continues to be weak. Remember, on October 7th or August 17th, Bitcoin hit $127,000.

We're now $21,000 and change roughly below that. Bitcoin and ether both lower. Bitcoin's at 106.3. Ether is at 3,814. All right. We are going to have much more on the markets and your money throughout this truncated hour. But joining us now quickly by phone.

Michael O'Hanlon, he is Director of Foreign Policy Research at Brookings. Michael, aside from the F-bomb there at the end of that press conference, what were your takeaways? You know, I think it's fine. President Trump has the right framework, the right mental model for how to think about what he's trying to do. I still think the odds are against him. You know, I think that threatening Tomahawk missile transfers to Ukraine pushes in the right direction, but in the absence of a more concerted economic strategy for pressure,

I still think that Putin's likely to wait Trump out. Trump seems aware of that possibility. He was asked directly if he thought he was being played and Putin was playing for time and he acknowledged that possibility, but also expressed confidence in his own ability to sort of sniff that out and respond accordingly. So I think his overall framework for approaching the war is the best it's ever been and generally speaking pretty good, but I still think the odds are long with getting any kind of near term ceasefire. Talking about specific weapons, quantity, quality, whatever it might be, this is normally fairly secret. stuff, my take, and tell me if you agree or not, Michael, is that clearly these types of press conferences, they know the Russians are watching and listening. They are negotiating in public because they are trying to effectively affect an outcome, I think, with Vladimir Putin. Yeah, absolutely. I think that's a very crisp and cogent way to put it. And Trump would

prefer not to transfer the Tomahawks. He realizes there are dangers of escalation from the Russian side, maybe even against NATO territory, if that happens. But he's also, not willing to be cowed by that kind of an implied Russian threat. And he's willing to do a deal and call off the Tomahawks. So again, I think it would be more effective to also combine the military threat with greater economic pressure. But we'll see maybe that comes later. Like what? What would you do? What economic pressure can we apply? There are at least three big categories. One of them is another aid package, another U.S. assistance package for Ukraine that shows that we're really committed to this.

A second is to coordinate the listings of illicit ships that the United States and Europe and others are trying to prevent from trading in Russian oil so they can avoid the oil price cap. And the third is to develop a more concerted international sanctions campaign. We don't do much trading with Russia, but of course other countries do. And I think it's time to talk to not just India, but also China, about a strategy whereby they would consider reducing their economic interaction. And you threaten secondary sanctions if you don't get that kind of help.

But first you try to develop the strategy. So those are the different pieces. Not all of them have to happen at the exact same minute, and they can happen. They can be phased in. But I think President Trump is a little too fixated on just the Tomahawks, plus his personal rapport with Putin. I don't think that's going to be enough. The Russia oil price cap is the price of oil is currently pretty much at the price cap.

Europe lowered that recently to the mid-46 range, trying to apply more pressure. I want to go to your second point because a couple years ago, I think we were the first or one of the first to report. so-called ghost fleet of Russian ships actually named some of the ships that were being bought. I got that from a source, Michael. These ships are, we call them a ghost fleet because some of them are uninsured or they're insured by Russia. They're kind of going around the world with their transponders off. What could we do to some of these ships, which are largely old and, frankly, probably fairly

dangerous to be on the water in the first place? What could we do that would economically impact Russia? Well, as my colleague Ben Harris and Robin Brooks have documented, if you can get more of these ships onto the international sanctions list, and we coordinate that list with our European allies, you get to the point where those ships can no longer obtain insurance, and therefore they're, you know, not really able to sail any longer, do business with countries like India and China that would expect that kind of preparation. And so it's not going to be in either or where you shut it down entirely, and congratulations

to you for tracking the issue for so long because it's going to be an incremental ongoing process. But right now there are some sanctions on certain ships that we choose to penalize or ostracize. Europeans have a different list by coordinating and making sure that both the list are as comprehensive as possible. We prevent Russia from evading the price cap. And, you know, that's especially important when perhaps the price cap number, as you say, goes down further. Yeah, and Ryan, Ukraine is hitting interior Russian oil refineries, oil infrastructure.

infrastructure, forcing Russia to sell more oil on the global markets rather than use it. That could actually bring the price of oil down because they're now selling and exporting more oil. Gas, though, is a bigger deal for Russia as well. Is there anything else that we could and should be doing that would reduce the cash hoard that Putin has less than he used to, but you have to argue he is still making a lot of money off of commodities? Well, yeah, you try to bring the U.S.-China relationship into this as well, especially if you're going to have a Xi-Puton meeting, or a Xi-Trump meeting,

and you try to say to the Chinese, listen, we thought there was going to be enough economic pressure on Russia from the original effort, but clearly there was not, and we're going to have to ask you politely at first, to start putting more economic pressure on Russia ourselves, including in gas imports, because if you don't, the war is going to continue,

Putin has enough money to keep waging this war indefinitely, and we're going to penalize you with American secondary sanctions. You can't have a big trade deal with the United States and Trump, China, unless you bring the Russia angle in. That's what I would prefer to see President Trump do. I don't know if he's going to be willing. Well said, Michael Handelan, we're glad you're here. Valuable insight analysis.

Michael, thank you very much. Thank you kindly. All right, you're very welcome. All right, let's get now out of the markets and your money. And as we noted at the top of the show, the market's actually gaining a little bit of steam. The S&P is up about one half of one percent. So we look a lot better than we did a couple of hours ago. But let's not just focus on the day-to-day.

Let's welcome in Ed Yardini. He is president and founder of Yardini Research. Ed, you can comment on what you heard for the president, or we can just move on to the markets. I know from a market perspective, you think both gold and the S&P 500 can each hit 10,000 by the end of the decade. I'm not a math-wiz, but that's only about four years and what two and a half months from now. Right. Why so bullish? Well, look, on the stock side, the economy has proven to be remarkably resilient.

we've seen three years now where we've had the most widely anticipated recession of all times that just didn't happen. And notwithstanding all the shocks that the economy dealt with and continued to grow, I think the economy is going to remain resilient. I think we may continue to have these rolling recessions that affect different sectors at different times. But the overall economy, I think, may very well continue to grow through the end of the decade, which I, by the way, call a roaring,

2020's because so far so good, it has been roaring. I look for earnings to get down up to over $450 a share by the end of the decade and apply a 22 multiple and you get to something close to 10,000. Gold and stocks have a very interesting relationship. In a short-term basis, they're inversely related, but on a longer-term basis, their trends have been nearly identical. And I think gold is increasingly viewed as the safe diversifying asset that you want to have in a portfolio. It's definitely a risk off asset, whereas Bitcoin is proving it to be more of a risk on asset. Yeah, Bitcoin's made a lot of people a lot of money, but it is down about 21,000 right now from its highs. So you've got to be willing to hodel, as they say, hold on for dear life and kind of

ride that train, while gold just kind of quietly continues to make new highs almost every single day. It's been remarkable to watch. And by the way, silver too. Correct. Well, I think there is a lot of wealth on the global basis. And I think a lot of that wealth wants to be diversified. Stock prices have soared around the world. We've had a global bull market. It hasn't been just the United States. People have a lot of wealth tied up in the markets now. And they want to diversify. And gold has kind of been sitting there for a while. But clearly, gold is also a very good edge against geopolitical risk. Maybe gold's down today and just some profit taking.

Maybe it's because Trump is talking about getting together with Putin and Z. But central banks, I think, are going to continue to buy gold. I think Chinese investors who lost a lot of money in the property market in China and have got the whipsod in the stock market there, I think they're buyers of gold. And I think Europeans are buying gold. You know, it's kind of like Bitcoin. There's no interest, there's no dividends, there's no earnings. So you can almost imagine whatever you want to imagine that it goes to.

But the reality is there's clearly a global demand for both kinds of assets. You know, you heard President Trump mentioned the possibility of a meeting with President Xi of China saying they want to meet, we want to meet, talking about hopefully there at some point an end to this war. Let's go to the former, Ed, and, you know, listen, neither of us is geopolitical strategist. If we get that meeting and a photo op and the two Trump and she are smiling and there's a favorable de-escalation to trade, is that another leg up to the market? Or has that in your mind already been priced in? Well, I think ever since we had Liberation Day in, what was it, April 2nd, and that was followed by annihilation days. And Trump then postponed the tariffs. there's the markets come to conclude that Trump's going to get this thing resolved one way or another

in a way that's good for the United States. And if it's good for the United States, it's probably going to be good for some of our, for many of our trading partners. But it's still an ongoing situation, ongoing talks. We have yet to hear the Supreme Court rule on whether these tariffs are even constitutional. So that could really start to stir things up. whenever they get around to it. But all in all, I think the president's successes on the international stage are a positive

for everybody and certainly a positive for the stock market. Yeah, we want the U.S. to win. We want the world to win. We want peace to win out. Absolutely. And the markets may have another leg higher. Ed Yardinney, really glad you're here. Appreciate you joining us.

Thank you, Ed. Thank you. All right, take care. All right, the other big market story this week is the move in bond yields. It's pretty interesting. The yield on the 10-year Treasury now sitting exactly. At 4%. Rick Santelli's in Chicago, Rick, let's call this the battle over borrowing costs.

Because where that bond goes, as I just noted, could impact how mortgage rates move, borrowing costs move. What is going to move bonds in days and weeks ahead? Smaller deficits. And I don't think we're going to see them. So I don't think you're going to see a dramatic move under 4% unless some of the funding issues get worse. And that really is the story because many of the relationships that have, ceased to exist recently have reunited. Take a look at a 12-hour chart of Dow futures and two-year note yields most closely associated with the Fed. And I pick Dow futures because of the timing

of when the markets open versus the actual cash. It's open and the chart looks cleaner, but it's shadowboxing stocks. And that's very important because as stocks move down on credit issues, we should see a flight to safety, which is really a flight to safer collateral, like treasuries, and if we move down to twos and tens on a two-day, you can see that the short end of the curve, most closely associated with the Fed and longer date, really are moving quite closely together. Here's a very interesting chart. Remember, Fed Fund futures, when they move up in price, they're pushing in more easy.

When they move down, they're taking out some easing. Well, look at the relationship. As two-year yields move down over nervousness on funding, the Fed Fund futures, rally putting in more easing. As it rectified, they're coming back down a bit. These are all important relationships, but ultimately, I could easily be wrong and we can spend a lot more time under 4%. We'll have to let the market decide. But I think the big fight of 4% is a poster child of what's going on in longer maturities and how they could be more stubborn compared to short maturities. Right now on the week, it feels like we've had a bigger move, but on the week, we're down

about four basis points on twos and tens. Some of amazing, no, sitting right there at 4%. I know it's just the number, but, you know, we're the media. It's an important one. I know it is. And we like nice round numbers, the media as well. Rick Santelli, thank you very much. Have a good weekend.

All right after the break, we're to dive a little deeper into some of the regional banks, including an analyst who says, you got to buy one of these names on the dip, bank on it. And it's next. All right, welcome back. Some fears over bad loans. few regional banks did weigh on the financials this week and raising concerns about loan losses and broader contagion. Now, Zion's bank among the hardest names hit yesterday down about 13% lost a billion in market cap. Now, Baird called the drop, quote, excessive and upgraded Zions

from a neutral to an outperform today saying the panic selling provides a great buying opportunity. Joining us now, the analyst behind that call, David George, covers U.S. banks at Baird. David, why are you confident that the worst, hopefully, or maybe behind Zion's? Well, good afternoon, Brian. I think from my perspective, it's important. Questions like these, I think, require a lot of context. And again, as you said, Zion yesterday lost over a billion dollars in market cap over a $50 million fraud. And we're certainly not here this afternoon to minimize that fraud, but again, in the context of losing a billion dollars in cap.

And keep in mind, Zion has a very consistent. long-term track record of keeping credit costs low. In fact, the average over the last 10 years, Brian, only 12 basis points of losses. That means they're right 99.9% of the time. So to be able to buy the stock, it's just under tangible book value seven and a half times earnings we think is an asymmetric risk reward opportunity to the upside. We think this is a $60 stock in the next year or so. Well, I guess the fear and the word cockroach has been kind of thrown out there. I think it was Jamie Diamond that might have said it. Either way, basically the idea that if there's a couple bad loans from these bankrupt auto parts companies,

that there might be more bad loans just sitting out there like a cockroach. You see one or two. You probably have 20. Sorry for people that don't like cockroaches. You get the point. Doesn't sound like you're worried that this would be a contagion, David. Well, again, we're always focused on credit quality. It is clearly the most meaningful risk facing banks and bank investors broadly. But again, it's really a contextual question. We are at cyclical lows as it relates to credit costs and bad loans. So it is reasonable to expect that bad loans will go up and credit costs will go up. But again, the industry is very well reserved, very well capitalized. And I think it's important for market, particularly. and your viewers to keep in mind, bank loans have only grown at two to two and a half percent

since COVID. So this is not like the 2005 period when we were covering these stocks. And we saw a number of banks growing construction loans 15 to 20 percent. Again, we're talking about 2 percent of growth. So it's not clear to us that there's any meaningful bubbles on bank balance sheets today. I think the fear, again, we're speaking broadly, David, but I maybe, and if you agree, tell me, if you don't, tell me. that the worry is that this kind of came out of nowhere. Is a company first brands that nobody had ever heard of? If they weren't in the auto parts business or tri-color, again, specific companies,

they're bigger than we thought. They've got these loans. Some of these financial institutions got hit for a couple days. And there's just a nervousness out there because this kind of came out of nowhere. Yeah, I think that's fair. I think that's right. These were big numbers, and they were surprises. But again, and this is the kind of thing, Brian, that you see late in an economic cycle,

the incidence of fraud tends to pick up. So it's not particularly surprising to see fraud, but these, to your point, these are big numbers. But again, in the context of the amount of market cap that's been taken out of the sector just this week, we think that it's very excessive. You know, and we know you like Zion's, you upgraded the bank, but I think what you just said at the end is so, so important. I hope everybody listen that at the end of some of these cycles, you get a lot more fraud because everybody's just throwing money at stuff to make money.

We've seen a lot of fraud already across a variety of industries. We'll see where it goes from here. David George, like Zion. Thank you very much, David. Appreciate it. Thank you. Take care. All right, still ahead.

While your next guest says, don't feed the bears, pay them. We'll get his power call on some oil and energy. these stocks to buy now. All right, don't look now. The markets didn't do a whole lot for much of the day, but we're seeing some buyers come in toward the close. I know we got about just over an hour to go, but right now the NASDAQ up six-tenths of one percent. The NASDAQ 100 up a little bit more. Six of the seven, so-called magnificent seven are higher. Only Microsoft of those seven is down, but hey, there's still time. Mehta, we got time for breaking news right now. Emily Wilkins, with that out of Washington, D.C. Emily.

Hey, Brian. Well, as the shutdown is in its 17th day, the White House is once again looking to ramp up pressure on Democratic senators to get them to vote for a stopgap to reopen the government. And now we can report that the Office of Management and Budget, they've really kind of been at the tip of Trump's budget push. They are announcing that the Army Corps of Engineers no longer has the funding it needs to continue to manage projects. And so they are deprioritizing 11 billion in projects in New York, San Francisco, Boston, as well. well as Baltimore, of course, all of those cities that are in states that have Democratic, Democrats representing them. This is just sort of the latest that we've seen in terms of what the White House is trying to put pressure on Democrats. You've already seen a number of other infrastructure projects, green energy projects, have their funding canceled. And this looks like

there might be more to come still as we are going, as you know, no votes today. So the shutdown is at least going to last until Monday and could work all the way through next week. Brian? Pausing 11 billion in projects, Emily Wilkins. Thank you very much. All right, let's talk energy now because your next guest just launched coverage, some big oil and gas companies for Wells Fargo. The report is titled, Don't Feed the Bears, Pay them Dividends. Sam Margolin covering oil and gas for Wells Fargo. Joining us now. Sam, welcome on the big integrated side. You like Chevron, Exxon, and Marathon Petroleum.

Why are those stocks overweights right now, even as the price of oil goes down almost every day? Hey. Yeah, hey, thanks for having me. You're right. The environment isn't great for the sector. The oil market is, you know, nominally oversupplied. There's risk to the downside asymmetrically, especially in the near term. So when you're in a tape like that, you know, the objective is really to identify stocks that can grow their dividends like the title says, you know, through a variety of different commodity environments. And that's usually driven by, you know, bottom up factors, portfolio factors, more so than market factors. So the work is to, you know, dig into these companies and find the independent catalysts that are driving dividend growth. And, you know, you just highlighted three that we have overweight ratings on. There's a few more within the refining sector as well. And we also took over coverage of natural gas EMPs, which is an exciting space. I feel like you read my mind or maybe read my notes because I want to move on to the refiners. And oil commodity analyst, it's not a stock analyst.

He analyzes the commodities. Name's Tom Closos, super smart guy. tweeting out today, and I'm going to kind of summarize it, Sam, that basically you got to go back about four years to find a cheaper national average price for gasoline. But with where oil is now, gasoline effectively should be cheaper. You cover refiners like DELAC, Phillips 66, and Valero, all these stocks have had big years. So if the price of gasoline should theoretically be lower, and you could say whether it is or not, are these companies just, printing money? Well, the environment's better for refiners than it is for crude oil. I'll say that. I'll also say, though, that the refining margin has to go up a lot to make a visible impact

in a retail gasoline price. If a refining margin is call it $12 a barrel or $15 a barrel, it would have to go up $10 or almost double to get a $25 per gallon impact on the gasoline price. What's really driving the retail price is inflation. transportation costs for gasoline are indexed to inflation. So that's actually an outcome of inflation, not a driver of it, interestingly. And then also retail margins at convenience stores are up too. I cover within the major space, particularly BP and Shell, they have large convenience store asset bases, and those businesses are performing really well.

That's where I actually see margins growing faster than refining margins. Yeah, good stuff there. And who knew with all your other talents, Sam? you also covered like gum and lottery sales. It's amazing. Sam Margolin has a few buys out there. Sam, we really appreciate your time. Have a great day. Thank you very much. All right, let's get now to Julia Borson with a C&BC news update.

Thanks, Brian. Well, the U.S. has at least two people in custody who survived a military strike on a boat in the Caribbean on Thursday. That's according to NBC News, citing two U.S. officials. The survivors were reportedly picked up and transferred to a U.S. Navy ship. It's not clear what condition they are in or whose custody they are under. The U.S. has carried out a number of strikes on alleged Venezuelan drug boats in the Caribbean since September. Luigi Mangione's lawyers are making an argument to dismiss his federal indictment or the government's notice to seek the death penalty, claiming the government is using him as a political pawn.

Mangione is facing federal charges stemming from the shooting and killing of the CEO of United Health Care last December in New York City. And British Royal Prince Andrew says he's giving up his Duke of York title after discussions with King Charles. This comes amid intense scrutiny of his relationship with the late sex offender, Jeffrey Epstein. In a statement, he said the continued accusations about him have distracted from the work of his majesty and the royal family, though he still vigorously denies the claims against him. Brian, back over to you. All right, Julie Boorston, thank you very much. All right, coming up after the break, we're going to help make you smarter.

about these markets and what current market structure may be saying about how stocks are trading. That's next. All right, welcome and welcome back. Your next guest has a unique and fascinating view on stocks and trading. He and his firm, Modern I are, look at the structure of the stock market. It's basically looking at specific stock market data to try to understand why stocks trade the way they do. Always have great conversation with Tim Quasso. Let's bring him back in.

He is founder, president and CEO of the president. modern IR. Tim, welcome. So what are you seeing with market structure right now that might give us little clues about how stocks can trade ahead? Well, Brian, it's great to see you. I think, you and I, I think, are the only people left on the planet who care about market structure, aren't we? By the way, that's not a bad thing because it's another way to look at the market, and it has been very accurate. So this is, I like this. And I'm not going to pretend to understand everything you say, but I try. Well, you're the host for a reason, and that's because you succeed.

But so here's what the data are telling us, and not to, you know, not to self-congratulate, but you and I talked, I think it was April 28th. And I observed, not knowing what would happen, that the probability of volatility could return late Q3 or early Q4. And here we are, early Q4, and we have this sudden surge in volatility. volatility. And what does that? How come the market, you know, how come the futures are down 400 points and then the market goes up 400 points? And how come it appears that every time Donald Trump says something, the market moves, and then it doesn't? Is there a rational explanation for all of these things? And I will submit to you, Brian, that there is. And it's

not that we all are constantly reacting to news, no offense, and whatever the president says, but it's because the market is mathematical. And most of the time, it's very predictable. I've mentioned the 1-2-3 rule before. You could look at the market today. 50 to 60 basis points gains across the board. That's half the market's volatility. This is how the market works.

The 1-2-3 rule is 1% is SPY. I'm picking them as an example of the benchmark. 2% is how much the basket of underlying stocks will move. 3% is momentum. And that works until, the gaps narrow. It's the opposite of the VIX. Everybody wants to look at the VIX, but it's a consequence. If you see SPY, the spread narrow to 50 or 60 basis points, look out. And that is what happened in early October. Because that is that coiled spring, effectively, I think. Well, yes, and here's why. Because, you know,

people think the stock market is a reflection of rational thought. Well, it's really not. All you have to do, folks, is go look at the growth fund of America. Largest actively managed fund, its number five or six holding is cash. Why? Because it has redemptions. Look instead at Black Rock. Two hundred and six billion dollars of assets gathered in the quarter. They have tens of billions of dollars to deploy. Most of it goes to large caps. Who prices the large caps? Citadel Susquehanna and Jane Street. I'm picking on the three. But the one makes markets in equities. The other two, ETFs and options. And so long as the spreads are narrow, that works. When they narrow too much, the economics breakdown and somebody quits. And then we have volatility. And the whole market goes

topsy-turvy. And it takes two quarters. That's how long it takes. I don't know why, but it does. Sweep up the residue. All right. So, Tim, you were coming after the media a little bit early. I'm going to come after you in a very nice way, of course. You always like to say you don't, You don't like saying the longest stretch for stock since whatever, but then you also just recently wrote that this is the longest period of a certain measure of market sentiment that you follow since 2018. So when I hear it's the longest stretch in seven years, you've got my interest. What are you talking about?

What does it tell you? Right. I hate the word since, right? You're like, it's the longest time since. Well, who cares? Well, so what I shared with you is what we could call the volatility. of volatility in SPY. And what happened October 10th is really the sixth largest in the modern data sets history. And if you look at the way that the market behaves, the narrowness of spread,

this is a very long, we have one of the longest stretches where the market was neither hot nor cold. It didn't hit what we call a six in demand, nor did it get to a four where we hit a market entry and it's been that way for the longest time since 2018. Now maybe it means nothing. Of course, 2018 was a bare market year. I don't know what's going to happen. But certainly when it happens at options expirations, which is occurring right now, it gets my attention because all of those things have to be reset. And when there is high volatility and a long period where we haven't had a reset, there is a higher probability that we have trouble. And really, Monday, could be important.

Why? Why Monday? Because the whole new series for options that tracks the market will reset. And the options market is larger than the underlying equity market. Zero days to expiration options alone are $1.2 trillion notional value daily. The whole stock market is about $800 or $900 billion daily. So these things matter. And when you have double the volatility all of the sudden.

in a week and all those instruments have to be reset. Do not be fooled by what happens right now today. Could be the opposite or worse Monday. Wednesday are VIX expirations. I will not breathe till about Thursday or Friday. Well, try to. Listen, try to breathe, okay? And I got to bring this show back to Chicago

because options are kind of running the show and Chicago is the capital of options. And so in some ways, maybe that's, you know, that's where all the action is. Tim Kost, love the insight, Very different point of view. Always valued. Tim, have a great weekend.

Try to breathe. Namaste. You too. We'll do. Thank you, Brian. All right. Folks, it is time now for your stock of the week. Every week we kind of pick out a name, good or bad, that just kind of highlights that we think you should be highlighted too.

And this week, it's Kenview, all right? The Consumer Healthcare Company that was spun out of Johnson and Johnson a few years ago. It has had one of the worst weeks of any stock in the S&P 500. it was actually the worst before the market opened today. The stock has recovered now. It's up about 9 or almost 10% after a double-digit sell-off yesterday. Now, some of that, a large part of it, was likely due to a lawsuit against both Kenview and Johnson and Johnson in the United Kingdom over baby powder, the so-called talc lawsuits.

Remember, it has been a rough go for Kenview the last couple of weeks. In September, Health and Human Services Secretary, RFK, June. and President Trump announced that the FDA will issue a physician notice to start the process of a label change for acetamenefin, which is one of the primary active drugs in Tylenol, which is owned by, you guessed it, Kenview. That stock got hit then. It is not fully recovered, and you kind of layer on some of those talc lawsuits as well, which the company, J&J, by the way, says it will fight vigorously. but those things in the Kenview now down 27% year to date,

so much for kind of a slower growth, quote, boring spinoff of Johnson and Johnson. We'll be right back. To be honest, it was kind of a sleepy Friday until about an hour and a half ago, the president and Ukrainian president, Volodymyr Zelensky, with a press conference, as the president tends to do, is kind of wide-ranging. But he did make some positive comments about looking forward to a meeting hopefully with the president of China.

Those comments and just maybe market momentum. We just talked about it with market structure, sending stocks higher. The markets were almost perfectly flat. They were down earlier today. Most of the sort of the late morning, middle of the day. They were effectively unchanged. But we're going to go into the weekend, pending the final hour of trading, of course. With little momentum, the Dow Industrial is up over 300 points, about 7 tenths of 1%.

Small cap still kind of lagging, as they tend to have done. But overall, markets not looking too bad. Markets can't go up or down if the Mag 7 don't send a move in that direction. And six to the seven are higher right now. Tesla, Apple, Nvidia, and meta-platforms. They're all on the upside. The only stock that is down, I said Microsoft earlier that was wrong. I don't get everything right.

Amazon, down about 6 tenths of 1%. And, of course, the story of the week, from a stock market perspective, sort of these critical mineral rare earth names. They are lower right now all across the board down about 5%. But they have been red hot. Speaking of red hot, we're done. It's going to be a hot final hour trading with Scott in the closing bell gang. So I'm going to send it over to them right now.