Power Lunch - Shorter Holiday Shopping Season, Sticky Inflation & The Fed 12/10/24

Episode Date: December 10, 2024

CNBC’s Tyler Mathisen and Kelly Evans 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.

Welcome to Power Lunch alongside Courtney Reagan. I am John Fort, and stocks are about flat this hour. Not much movement in the major averages, but we are seeing some big swings in individual names. Alphabet is up about 5% having its best days since April. Oracle down big after its earnings. Does that make now the time to buy? We've only got two more weeks until Christmas. Steve Leasman is standing by with the latest read on retail for us. Plus, we'll talk to the CEO of a major mall operator too. And it's the story everybody's talking about. Ivy lead, educated man in his 20s is the prime suspect in the murder of a health care executive. What does it say about the reputation of corporate America that so many people online, while rejecting his actions, at least understand his anger? But let's begin with retail, because, as Courtney mentioned, we are getting down to crunch time for the holiday season. And this year, the holiday season itself is crunched because Thanksgiving was so late. That's having somewhat of an impact on the numbers, our Steve Leesman, has our latest NRF.

retail monitor. Steve? Yeah, John, too late to be counted. I'll go through that in just a second, but the CNBC National Retail Federation Retail Monitor showing weak month-to-month gains in November that could still mean solid consumer spending because of the calendar. Using real credit card data from Affinity Solutions, the monitor shows sales rising just 0.2% month-on-month, taking out autos and gas down from a big 0-7 rise in October. The big October number suggested an early and strong start to the holiday shopping season, as you suggested.

But year-over-year gains were a healthier 2.4% in November compared to 4-1 in October. We see the same pattern if you look there at core retail, which takes out restaurants too. So why does that tell us that it might be strong? Well, Thanksgiving fell on the latest possible day this year. That's the 28th, pushing half of the Black Friday weekend into December. Last year, all four days from Black Friday through Cyber Monday, they were in November. So November ended up doing not too badly, even when missing two big shopping days. Let's look at the breakdown year-over-year non-store retailers, digital sales up 21.5% year-over-year

restaurants and bars did well. But clothing and accessories and general merchandise also doing OK, up 4% and 2%. It was electronic and appliances, at least in November comparison, year-over-year, and sporting goods and hobbies that both looked like they took it on the chin down more than 7%. But overall, seven of our 12 categories were up year over year. This holiday season comes, by the way, with lower gas prices. That was down 6% in our gas station data, along with some deflation in goods prices overall. So consumers have more discretionary spending in their pockets.

That could have helped November. And maybe we'll see, Courtney, December as well. Yeah, Steve, I mean, we've talked about this before, you and I, about how. How do account for some of these retailers trying to pull forward some of these early holiday sales into October? And maybe it started with Amazon's prime day event that's now become somewhat annual and all these retailers sort of doing the early Black Friday sales. I mean, what is the data tell you that you've seen from Affinity about October and November talking about the cadence of the calendar? I mean, our consumers just bulking up when we're having these sales, whether they fall in November, like you said,

which didn't happen this year so much, or December or October? Well, I mean, all we know is that the October numbers were pretty decent. You know, Jan Niffin wrote us at, well, we note this morning. He said, it starts earlier and earlier. It's like starts with back-to-school shopping in September, which he was saying he's only exaggerating a little bit, you know. I don't know. These days, it feels like I see Halloween stuff in the stores in August, and I see Thanksgiving stuff in September, and Christmas is now starting in October. One other interesting fact, Courtney, can you fill in the blank for me?

what was the year we saw the strong crazy January, where it spilled over. It was like a crazy January year when it looked like they didn't shop in December, but they shopped in January. You know, we want consumers to follow the calendar so that we can count the beans. But when they don't follow the calendar,

it's hard to count the beans. I know. And there's quirks, of course, January can become a clearance month, so you can move things faster, but usually a lower margin. And those gift cards, by the way, you don't even get to count those until they're cashed in

because it's an accounting rule. So that's also kind of tricky, too, to count that as a true holiday number. Not to mention the weather, too, right? Yeah. The weather can also have an influence on whether people say, if they feel that cold, they feel like they need that sweater, they go out and they buy the sweater, and your clothing does well. If it's not there, well, then you might have a pop in January when they're discounting all those sweaters. No, it's absolutely true. I just realized my son doesn't have a coat that fit him like last week because he just hasn't needed it until now.

Thank you very much, Steve. Appreciate that. Well, let's talk more about the holiday shopping season with someone who has a great read on the consumer. Connor Flynn is the CEO of Kimco Realty, which owns and operates over 560 shopping centers in the U.S. Kimco's top tenants include TJX. That's the parent of Marshall's T.J. Max and Home goods, Home Depot, Ross Stores, and Kroger, just to name a few. Connor, it's great to hear and have you here with us. Steve, of course, went through some of the data that we get from Affinity Solutions ahead of the U.S. retail sales.

Obviously, online continues to be strong. But retailers are always telling us that consumers are, using the stores and online together. They're ordering online and they're picking up in stores. For people that live in around the city, I think some people have a hard time believing that's true because we're so dependent on delivery. Are you seeing the true integration of stores and online at your shopping centers? Absolutely. No doubt about it. It's what we call Omni Channel is really sort of here to stay. And I think that's what's winning the day for the consumer because it's all about value and convenience. And so what we've seen is sort of the onset of buy online,

pick up in store, you know, curbside pickup, all the things that consumers were using through COVID and then post-COVID. And now what retailers are showcasing is actually, not only does it benefit bringing them to the store, but buy online return in stores actually benefiting some impulse buys as well once you come into the store. Absolutely. That's the model of the future. It looks like every single tenant, including Amazon with their Whole Food stores, are you, when you walk into the store, you actually see a lot of the click and collect items in the front of the store, and it continues to evolve the merchandising mix of the shopping center. That also reminds me to give you a jump ball here.

I know it's not listed in one of your top ten tenants, but do you have coal stores in your tenant mix because they also accept Amazon returns and are hoping to capitalize on exactly that point? We do. Coals is sort of a hybrid tenant. So Kimco owns primarily gross-ranking shopping centers in first-ring suburbs of major metropolitan markets. Coals is in malls as well as shopping centers.

And so we do have some coals. They're less than 1% of our total rents, but they're trying to evolve their stores. to offer their consumer more. You saw them what they did with beauty, integrating Sephora into their store base. So you'll see more of that as my anticipation as a store within a store.

Because they have some of the larger size square footage boxes, you'll probably see them evolve into incorporating more of sort of what drives traffic. And Sephora, obviously, is a phenomenal tenant to do that. How are holidays different since COVID? And you touched on it a little bit with Omni Channel, but especially with this consumer behavior of shifting shopping patterns earlier,

which has been so crucial so far this season. It's really amazing to think. So what we focus on is traffic, right? Because that's usually where consumers really gravitate towards where they're spending their time. So our traffic was up year over a year, even during Black Friday. And so what we find is that the consumer is really focused on understanding where they can find the best value in a convenience type of environment.

So what we try and do is capture that shopper that's either driving to work, driving to school, you know, and so that daily commute. And what we offer is really essential goods and services. So it's typically the grocery anchored shop. And what we try and do is have merchandising mix like a T.J. Max, like your daily goods and services. A lot of medical uses are coming into the shopping center. It's amazing to think that the all-time low vacancy rate, all-time low in the United States history, is right now. Retail has not had any new supply in 13 years.

And so the demand supply balance right now in retail is phenomenal. And you're starting to see more investors start to peel the onion back and get. getting more, I would say, capital curious on shopping centers specifically. So how are the retailers pulling them in, though? Is it through email? Is it through location awareness? It's everything. I mean, if you think about the e-commerce benefit is typically you give them all of your

information without a second thought, right? You load up where you live, where you work, and you click submit, and then all of a sudden you become a loyal customer. Well, brick and more to retailers now have that online presence. They have all their consumer data. And what they try and do is, I'm sure your email is filled with, because mine is, figuring out what the consumer really gravitates towards offering them coupons, trying to get them to come into the store. And even sometimes they offer pickup discounts,

because when you're using your own car, your own time, your own gas, that margin continues to be enhanced when you pick it up in the store. And we're all impulse buyers. You know, as soon as we walk in the store, we're usually buying something else. If I can sort of wrap up two of your thoughts there, you're talking about how traffic was up in your locations on Black Friday year-over-year, which is not what we saw from a lot of sort of the traffic aggregators, the sensormatics, retail necks, passed by. So what was the difference for you, number one? And number two, is that traffic leading to higher or lower conversion with the idea that

people are doing a lot of pre-shopping on their phones? So I think a lot of it has to do with what Kimco offers the consumer. So if you think about market share, and if you look at the old school department store and just the market caps of those old school department stores that are typically mall anchors, and then look at the shopping center anchors, what Kimco owns, Target, Walmart, you know, the grocery stores that are driving traffic every day, that's really what's capturing sort of the customer because it's a quick trip. You know, it's an easy, convenient run from your school or from where you work.

And then what you do is typically you jump into a T.J. Max or Home Goods, you go treasure hunting is what we like to call them. And you find those one-off items that you won't find again. And I think that's what's really resonating. Also, there's more stores opening in grocery store, in grocery anchored centers than there was before. So like a Sephora, for example, used to really just be focused on A malls. Now they're going to, into grocery anchored shopping centers because if you think about it, their customer is shopping Whole Foods. So why wouldn't you want to capture that eyeball that's going by the grocery store more frequently than in, say, maybe a destination trip? Fascinating stuff. Connor Flynn, thank you so much

for joining us here today, the CEO of Kimco. Pleasure. Great to have you. Well, after the break, we will dive into what the state of retail and the consumer means for the economy and markets. First, as we had to break a quick power check. On the positive side of the S&P, Walgreens, higher on reports, the company is in talks for a private equity bio. On the negative side, Oracle falling on weaker than expected sales. More on that name later in three-stock lunch. That's your power check. We'll be right back. Welcome back to power lunch. Markets are flat in a choppy session as investors await fresh inflation data out tomorrow morning could influence the Fed's interest rate move next week. Consumer prices, CPI expected to rise slightly to 2.7% from 2.6 in

October, according to consensus forecast, showing inflation remains sticky as it's near the Fed's target of 2%. Markets are still pricing in a 25 basis point cut, though. But as economic growth remains solid, partly thanks to a strong consumer, our next guest says there probably will be fewer rate cuts than the markets anticipate. Joining us now for more is Joanne Feeney, partner and portfolio manager at Advisors Capital Management. Joanne, great to have you.

Maybe you can clear this. I'm confused. You can clear this up for me. What happened? We went through this scare period where it seemed like the working class consumer was getting stretched

by higher housing costs, a heavy debt load, and that wealthier consumers would have to carry things through the rest of the year. But right now, doesn't it seem like everybody's a bit stronger? Yeah, John.

The consumer has been remarkably strong, counter to some people's expectations. And the reason for that largely is because they've gotten jobs. They've gotten jobs and wages have been rising, and so they have more to spend. Now, to your point, the lower end of the income distribution is still struggling with the cumulative effect of all that inflation we had. They are being extremely budget conscious. And so, you know, we see companies like Dollar General, for example, suffering. They just don't have room to get any cheaper, while companies like T.J. Max are beneficiaries as some folks in the middle part of the income distribution try to find some bargains. Joanne, so to that point, you know, and you said that Dollar General was one of the names where you're seeing some pressure. And the CEO, of course, on the conference call was talking about how they're seeing slowing sales patterns towards the end of the month when perhaps consumers are running out of money until those paychecks or other forms of payment come in at the beginning of the month. So I guess what I'm wondering is when we keep getting these reads on inflation, yes, the rate of inflation is getting lower. But I'm still stuck on the point that prices are still elevated, right?

Like, you still know if you're a consumer that has a limited amount of income that you're paying 20% more than you were in 2019. So how do you really sort of grease those wheels again to get them spending without large price cuts, frankly? Yeah, no, Courtney, you can't get blood out of a stone. And they have suffered. A lot of folks, particularly, you know, paycheck-to-paycheck folks, really have had to trim what they put in their basket to bring home. But that doesn't tell the aggregate story. Clearly, there are, again, more people employed, higher wages, even though you've had that cumulative effect of inflation.

But it really means that to select places to invest in the consumer space, one has to be really careful because some stores are simply going to face those real budget-constrained consumers, while others are going to benefit from it. So, yeah, the cumulative effect has been devastating for some households, but that doesn't mean that the aggregate story is a negative one. In fact, it's been surprisingly robust. So, Joanne, you like Amazon as one of your retail picks. I'm wondering at this point, what's special about Amazon in this omni-channel environment? We're just talking to Kimco's CEO, talking about how, you know, having the physical presence lower some of those costs.

Has Amazon just built such a moat with its unique logistics network that it can manage all of those different issues and still do what investors expect? Yeah, John, you know, it logistics certainly help Amazon a lot, but also just the scale they have in buying. You know, not only internally sourced stuff, the more Amazon brands, but the third-party relationships that they've built up gives them a real cost advantage. And they also have those, you know, those subscription fees that help bring in more income on that. So, you know, for a consumer, the convenience is unbeatable. But other companies, traditional brick and mortar, are also playing the online game. And they're using that storefront to help sell more online, like a William Sonoma, for example.

They cited this early on in the pandemic, that their storefronts were being used as sort of, you know, have a look around, see what you like, touch and feel the merchandise, and then people would go home and they know the quality they're going to get. So I think the brick and mortars also are taking advantage of delivering convenience to the consumer. And those that do it well, like William Sonoma, really are benefiting also. Joanne, before we go, if we can sort of zoom back out to where we introduced you, you don't agree with where the market is pricing in, the amount of rate cuts that we will or won't see. What are your expectations and why? Yeah, I think it's more likely than not that we're going to see fewer rate cuts next year than the market is expecting. And so there's obviously a lot of uncertainty.

We do expect to cut next week. But next year, there are just so many variables that have yet to become. clear, in particular tariffs and labor supply. If immigration is significantly curtailed, that's going to put upward pressure in a lot of industries like agriculture, construction, travel and leisure. And that kind of impetus to higher inflation will require a response from the Fed. And then, of course, on the tariff front, you know, maybe these conversations that we're hearing about are being used as a negotiating tactic. But if we see any kind of significant tariff increase, that's passed directly to consumers. Not only is that a short-term

increase in inflation, which again could curtail the Fed's desires to cut rates to help the labor market. But it's also going to constrain consumer budgets even more going back to what else we talked about. Yeah, exactly. So many moving parts there to try to figure out navigate, but thank you for helping us try to get there, Joanne Feeney. Well, up next, sticking with the consumer space, we'll take a look at one directed consumer play benefiting from a recent FDA decision. Market Navigator is coming up next. Welcome back to Power Lunch. Just give you a quick check on the markets here with about 90 minutes plus left to go. Pretty flat session, but underneath there is some chop, as we talked about at the top of the show, NASDAQ, just slightly positive while the

down the S&P-Fi funder are down a hair. Online Health Teleportal, Hymns and Hers, has been on a tear up more than 250% this year. The company swung to profitability in 2024. And my next guest likes the stock, but says it's facing some negative headwinds, particularly in the space of weight loss drugs. So joining me now is Todd Gordon. He's founder of Inside Edge Capital. He He says there's more than meets the eye when it comes to this company. Todd, tell us what do you like first about hymns and hers? Hey, Courtney, I think that the first thing I like, which is kind of counterintuitive as a trader, is there's three main headwinds facing this company. Yet, as you said, it's at all-time highs. You know, the three things at the top, we can go anywhere you like on this is there's a lot of confusion at the FDA with the two biggest competitors, Novo Nordisk and Lily in terms of their GLP ones and their strong. shortage status. I've looked up and down this and it's hard to make kind of make headway through

the FDA. But as of now, Novo's GLP 1 is still on the shortest list, which makes the compounders like him's still able to be found over the counter. And just heads up, it's only about 70, 10% of their revenue. The other thing, Amazon's moving in should be a headwind, and then maybe the incoming administration is not viewed to be friendly towards disease with the health kick. So with all that, the stock really seems to be acting well. Okay, so some undercurrents, but you still like what you see there. What's the trade on this one then? Yeah, I hold it, Courtney. It's been volatile. You know, 25 was the big breakout level. I have a 1% allocation. I'd like to see this thing move back up to new highs to add my other 1% on to get up to 2%. As you said, the company swung into profitability this year.

you know as I said there's only about 7, 8% of their revenues coming from the GLP ones. There's whole other lines. It's a huge total addressable market. You know, just because Amazon's coming into the space doesn't mean they're going to be run out. Look at Spotify, for example. That's a company that took on the Biggs and won. So I like this company longer term, huge total, total addressable market. Fair enough.

We'll check back with you and see how this is going. Todd Gordon. Thank you for being with us. Well, ahead on Power Lunch over the past year, we've seen consumer discontent with corporate America on the rise, whether it's over. Social issues or simply over price inflation. But now the assassination of United Healthcare CEO is bringing that frustration to the forefront, where you'd expect to find sympathy for the victim of the shooting. Instead, you're seeing some online empathizing with the shooter. We'll discuss this complex issue when Power Lunch returns.

Welcome back to Power Lunch. Apple planning to include new features for the Apple Watch, according to Bloomberg. Steve Kovac has those details for us. Steve. Hey there, John, and take a look at shares of Global Star, the satellite company that Apple's partnered with in the past. They're up about 14 and a half percent right now on this Bloomberg report that Apple plans to add the satellite texting features that are already on some of the more recent iPhones to the Apple Watch Ultra. That's the high-end version of the Apple Watch that costs at least 700 bucks. That means if you're stuck somewhere without cell service, you would be able to use your Apple Watch to text people. This is the SOS feature that we've become used to using on the iPhone since the iPhone 14. I will also note that Apple has a big stake in this company.

They took a 20% equity stake in Global Star just last month with a commitment to invest $1.5 billion in the company to keep this partnership going. you see shares up now better than 15% John. Thank you very much, Steve. We will continue to watch this, and that's an interesting pop there on that stock. Let's get over to take a hard turn and talk about the latest in the murder of United Health Care CEO, Brian Thompson. We're learning more about the suspect today. Bertha Coombs has the latest details for us. Bertha, what do we know now?

Well, Courtney, 26-year-old Luigi Manjoni, who has been charged in the case speaking out outside the Blair County Courthouse in Pennsylvania this afternoon, where he faces an extradition hearing. look to move him to New York, where he now faces murder charges in that fatal shooting of United Health CEO, Brian Thompson. Spotting the cameras as he was taken out of the sheriff's van, he shouted out at reporters present. It might be a little hard to make it out, but he said it is completely unjust out of touch, and it's an insult to the intelligence of the American people and their lived experience.

NYPD Commissioner Jessica Tisch says among the evidence investigators are looking at is a manifesto which lashes out at corporate America and the health care industry. He had a three-page document with him, according to senior law enforcement officials, when he was arrested. It reads in part, I do apologize for any strive or traumas, but it had to be done. Frankly, these parasites simply had it coming. He criticized the broader health care industry in the U.S., large corporations, and specifically United Healthcare. Now, police have not discussed whether the writing specifically targeted UHC CEO Brian Thompson. This continues to be what one police official calls, quote, a very polarized case.

The deputy chief of the Al-Tuna police says that there have been threats made against the officers who arrested Manjone yesterday at an area of McDonald's and against the department as well. Back over to you. All right, Bertha, thank you. Well, members of the public have been vocalizing their. issues with the U.S. health care system in the aftermath of the CEO killing. Some going as far as to criticize the McDonald's employee for alerting the police of the alleged killers' whereabouts, joining us to help analyze what this means about public sentiment toward corporate America is Wharton School Professor of Marketing, Americus Reed.

America's good to see you. Does this say something about corporate America, or is this really about health care and an issue that people have some strong feelings about? That's great to be with you, John. I appreciate the opportunity. I think it's a little bit of both. I think that to a certain extent, we are seeing sort of the fed up everyday man, everyday woman, everyday person that is looking at corporate greed and having an understanding now in the sort of year of social media that, you know, there's a corporate entity out there that is putting potentially profits over health and things like that. So we're seeing that as a sort of a general context. I think we're also kind of seeing this idea more specifically, a around consumers sort of taking it up to sort of say, hey, you know, we don't want to be the victim in these narratives around PR crises that happen to companies that are making lots of money. And so these CEOs can become sort of the villain that represents all of this corporate greed. And so consumers now have something to rage against.

So we're seeing more and more of this stuff in terms of the wake-up call more generally in corporate America, John. But I think specifically in the healthcare space, because it's quite well documented as to claim denials and other sorts of things that consumers look at and they say to themselves, I don't understand what's going on here. Why are we being treated this way while corporate individuals who are in the C-suite are making millions of dollars? But at the same time, there seem to be some companies that people just love. And the CEOs, founders as well, I mean, Elon Musk is riding very high right now on the success of his products, technology, vision, And so there's a bit of a bifurcation here, now.

Yeah, I love that point, John. The bifurcation comes with respect to something that I think is important that you're pointing to, and that's the idea of authenticity. So people look at Elon Musk and they say love him or hate him. He speaks his mind. He doesn't care what critics think. He's going to say what he believes. And he's perceived, at least, as being this very authentic individual.

If you contrast that with other CEOs that may not have a lot of airtime in terms of of presenting themselves as a public face, you can see where this dissonance can come from because those CEOs that aren't prepared to sort of be in the spotlight to put their own personal brands out there as part of the company brands can suffer this kind of thing where they're not seen as often digging. Instead, they're seen as more greedy individuals that are in the back office making profits and money over the careful lives of individuals and the safety of consumers. America, you make an interesting point about social media perhaps being some of the fuel behind this. But I'm wondering, too, if it's not also the political division that we've been

living with in this country for a number of years now and to have leaders that also, like Elon Musk, decide to speak their mind, love them or hate them, sort of potentially open up the door to behavior that before was not deemed socially acceptable. Do you believe that that is also the case? And if so, if you are corporate America, a health care or other company, what do you do about it? That's a great point, Courtney. I think that it is indeed the case. We're seeing it in the literature in the sense that there's more of an openness to come out and say sorts of things, even if they're provocative, even if they're potentially

macabre to sort of criticize and go after corporate America. And there is this additional context that you point to, Courtney, that has to do with sort of the rule of law and what is the role that laws and enforcement play with respect to individuals and street justice that might be going on with respect to some of these issues. I think your second point, Courtney, is super important because I think it's a moment where companies can rise to the level to deal with this crisis, to save themselves, hey, this is an opportunity to go out there and rebrand what it is that we do to validate the concerns of what consumers are saying in terms of their reaction to this entire event and come out

and show a plan of action to sort of control our own narrative so that we can get out front if we are a company like United Health and sort of discuss all these issues and begin to sort of recraft what it is that we do so consumers aren't walking around with all of this kind of latent pent up anger. I know that obviously United Healthcare took the action of taking down some of their executive photos, perhaps worried that this was not an isolated incident. Do you think that there are other, I don't want to call them simple measures, but things that maybe companies should be doing until they can really get their hands on what's going on and what's going on and what what the sentiment is really happening and bubbling below the surface of some of this consumer,

you know, I don't even know what word. Upset is not the right word. Yeah, it's a great point, Courtney. Listen, consumer vigilanteism, the street justice. I mean, that's what we're talking about here. And it's kind of amazing to watch the sympathy that is being given to the individual who allegedly committed this heinous act. And so I think your point's a great point, Courtney, which is to say that companies have to sort of walk that fine line of keeping their employees

say, but there's also an opportunity to sort of also come out and make sure that they're getting ahead of the story and explain to people. Here's what's actually going on that may be different from what you perceive us as a sort of the villain in this story. And so there's an opportunity to tell that that narrative that can perhaps, you know, turn the table just a little bit. Let me just make one more additional point, Courtney. That's this idea. We have to be very careful with social media because in social media, what gets shared in social media are the negative things, the macab things, the very provocative sorts of things. So oftentimes when there's outrage in social media, it's amplified because there's so much of disproportionate extreme reactions

that happen in social media that don't necessarily represent the broad swath of typical views that folks in this country might have. That's a very good point. I think there's been a lot of instances of that in much less serious circumstances. But I'm thinking of Bud Light and Target with sort of other social media amplifications when they made decisions that perhaps angered a small group of people, but it seemed much larger because of the implication on social media. America's Reid from the Wharton School. Thank you very much for joining us on this very sensitive issue. Really appreciate it.

Thanks very much, Courtney and John. Let's get over to Julia Borsden. She has a C&BC news update for us. Hi, Courtney. New York Attorney General Letitia James rejected President-elect Donald Trump's request to walk away from his $486 million civil fraud judgment. Trump's attorney asked James's office last month to voluntarily dismiss the case, arguing it could interfere with his duties as president. James's office said presidents do not have immunity from civil lawsuits arising from unofficial conduct. Attorneys for former Abercrombie CEO Mike Jeffries made a motion today for a competency hearing.

The reason behind the request was not discussed. But the judge set several deadlines for filings. Jeffries faces sex trafficking charges over allegations he offered young men, and fake modeling opportunities in order to sleep with them. The Bitcoin streamroller may have finally come up against an obstacle it can't move. Microsoft shareholders. The company's investors rejected a plan from billionaire Bitcoin investor Michael Saylor to use some of its massive cash pile to buy Bitcoin.

His proposal failed to garner majority support after Microsoft recommended. shareholders rejected. Courtney, back over to you. Julia, thank you very much. Well, one quick programming note. and Pippa Stevens will be live from the Western world's largest uranium mine going nearly 1,500 feet below ground to learn how this element is mined and extracted to meet demand amid the nuclear renaissance. That's live all day tomorrow only on CNBC. It's going to be fascinating.

Make sure to tune in, but don't turn the channel yet because we're coming right back to. Tonight, CNBC's Cities of Success returns highlighting Salt Lake City's remarkable rise in tech, finance, real estate and sports. Billionaire Ryan Smith, owner of Utah Jazz, just purchased the NHL's newest franchise, bringing it to Utah. The move highlights how sports are driving Salt Lake's economic boom. Carl Cantinias spoke with Ryan and his wife and co-owner Ashley about their vision for the city's sports future. In just four short years, one Utah power couple single-handedly transformed Salt Lake into a major American sports hub. Billionaire Ryan Smith and his wife Ashley purchased the Utah Jazz for 1.6 billion.

billion dollars in 2020. And now in a historic move, they brought the NHL to Salt Lake for the first time, chelling out another $1.2 billion. We want to bring a Stanley Cup to Utah, obviously. The duo's big bet on sports is paying off with the valuation of the Utah Jazz skyrocketing in just a few years. This is basketball HQ. Ryan, who made his fortune as the founder of Qualtricks, a man. A man massive Utah-based tech company is now on a mission to reimagine Salt Lakes downtown with plans for a jaw-dropping $3 billion entertainment and sports district. Nearly a billion of that covered by taxpayers. It's a huge opportunity.

As economic development goes, pro sports is kind of like the welcome map to that front door. It's the largest anchor tenant that you could ever have. Malls are struggling right now. Anchor tenants are pulling out. There's not an anchor tenant like sports. It can make a whole city. If we go plop a sports team in a vacant lot somewhere where they've never, it will thrive. This is why it's so important that it stays in the capital city downtown because that

will constantly keep that going. It'll always have hope. Thinking about your motivations, one might think, oh, well, they're looking at what's happening with team valuations or this is a, you know, an investment play, but it feels like it's more about Utah. Is it not? For sure. It actually is just an awesome.

awesome vehicle for helping our state to grow so that the future of our state is in a good spot. This state is different and it's special. Be sure to catch cities of success. Salt Lake City tonight at 10 p.m. Eastern time right here, of course, on CNBC. Well, shares of Walgreens' boots up nearly 20% on talks it could be sold to a private equity firm. Our David Faber has been reporting on the story. He joins us now. David, what are you hearing? Yeah, you know, John, it's funny. It's one of those where I was reporting on it a few weeks back after having originally heard of Sycamore's interest in exploring a Walgreens leverage buyout, essentially, for lack of a better term. But it wasn't clear to me that they had really engaged in a serious way with Walgreens.

And so I did not report said interest. The journal, of course, reported on talks, and that's got the stock up. Important to point out, heavily shorted. And as you guys well know, Courtney Capala's retail. I mean, this has been nothing but down for a long time, given the struggles on the retail front, not to mention some not particularly good acquisitions when it came to the health sort of care side, Village MD, for example, and the like from Walgreens Boots. Obviously, the alliance itself or the company itself created from that alliance between

and the acquisition of boots a number of years back. A few things for investors to keep in mind here. Sycamore has a history of doing retail deals, but this would be by far the largest. they'd ever contemplated. In fact, if you go to their website, they've raised $10 billion in capital total as a firm. Well, this deal at, let's call it, it was an $8 billion market cap. You throw a premium on that. You've got $8 billion in debt. You're talking about a far, far larger equity than they have ever done. And my understanding was they would need to go outside their own fund, obviously, and raise additional funds, significant ones from other investors to get anything like this

actually done. something else you would need is the roll in of Stefano Pascina. He's a roughly 17% owner here, remember, was the chairman, was the CEO for some period of time. My understanding, again, is that Sycamore had an expectation if they were to pursue this, that Mr. Pesina would roll in. But it's not clear to me, in fact, that that is going to be the case. So, again, something at least for the market to consider. And in addition to the size of the deal, and Pasina's need to be a participant. There is also the concern about opioid liability.

In its most recent quarter, they did cite a prior year operating loss, reflecting a $6.8 billion pre-tax charge for opioid-related claims. It may be done with, but I think there are some who are concerned. There's continuing litigation that perhaps that does represent as well another gating issue. Sycamore may have hoped in some way that there would be a split, that they could do the try and do the turnaround on the U.S. retail, but that does not appear to be where their heads at it at Walgreens right now. And so, you know, we'll see where this goes,

but certainly did want to add a few of those thoughts, given this has been at least around for a little bit, having heard of at least Sycamore's interest, a number of weeks back, Courtney and John. Well, it sounds like the skepticism that you had that kept you from reporting in the first place. Really valuable context, very valuable for David to bring us insight to us. Thank you. Sycamore. Yeah, usually stops me, but not others and perhaps, you know, again, who knows, right? But you're right. Sikamore does often when they make these

retail deals are usually much smaller specialty players. This is very big, even with the stock price, obviously that has cratered over the last year, last five years, still very big. Great context, as always, David. Thank you. Sure. Turning down to the bond market, which is anticipating tomorrow's CPI data. Let's get to Rick Santelli in Chicago talking to the traders. Rick. You know, tomorrow is going to be a super important day. We all know that PPI follows, but nothing is quite important on the inflationary front. Outside of the PCE numbers embedded in the personal income and spending, the Fed's favorite, next to the line, of course, is CPI.

And the issue with CPI is that after the last Friday job, job, jobs report, it wasn't that bad. So the deterioration of the labor market is a slow one. And the deterioration and sticky inflation is even slug. lower. Just consider what we've done over the last couple and a half months. If you look at the year over year CPI, our last look was 2.6. If you look at core, it was 3.3. You see those two charts? Do either of those charts look like it wants to get down to 2% anytime soon? No. And that therein lies the rub. Because even though we've made great progress with regard to inflation, the real issue is that certain elements may remain sticky and start to move higher

that puts the Fed in a real quandary because rates probably are a little bit too high, but how much lower they can go without having to potentially have a hiccup down the road? That's the real issue. John, back to you. All right, Rick Sandell, thank you. Well, coming up, we will trade some key movers of the day on earnings results. Three-stock lunch is next. Welcome back to Power Lunch.

Time now for three-stock lunch. We are trading some big earnings movers of the day, in here with our trades at Scott Nations, President of Nations indexes. First up, Oracle, sliding about 7 plus percent today after missing estimates on the top and bottom lines for the second fiscal quarter, but the share is still on pace for their best year since 1999, 25 years ago. Scott, what do you do with it? Yeah, Oracle's a sell. As you pointed out, they missed on both the top and bottom line slightly, but it was priced to perfection, so down about 8 percent a day, spent much of the day as the worst performer in the S&P. But it's up 60s.

7% year to date, so it's time to take some profits. Oracle's a second-tier AI name. They're great in the database space, but they were slow to the cloud. That's going to slow them down in AI. And there are better pure AI plays. Both Nvidia and Microsoft are only slightly more expensive on a forward PE basis. Google's cheaper on a forward PE basis. So if you're looking for AI exposure, I would focus on one of those three rather than Oracle.

All right. So Oracle is a cell next up. MongoDB. The shares initially shot up after the company posted a third quarter earnings beat, but have since reversed course and turned lower. Scott, what do you make of this one? Yeah, this one's a hold. They also raised guidance, but there was some surprising news. The CFOCO is leaving. That was a surprise. He's taking about 10 years of experience out the door with him. There are also questions about the company's Atlas Developers platform. The company has not participated in the upside this year, down about 27% year to date. Half of that is coming from today's drubbing.

Right. So it's a whole because you've paid the price, and let's wait and see if we can get some more clarity on the C-suite and the Atlas platform. All right, let's finish off inside. Final name, Toll Brothers, luxury home builder, also lower despite posting a strong fourth quarter beat. Scott, opportunity or no?

Yeah, this is an opportunity. This is a buy, so there's something for everybody today. As you pointed out, they beat on both the top. And the bottom line, 463 versus 433 on each. EPS. They guided higher for next year. They're in the right demographic. That is upscale demographic. So why is the stock down 6%? Concerns about the number of deliveries they're going to be able to make in 2025 versus what they expect in Q1. I mean, they're really going to have to ramp up in the last three quarters of the year. Also, some concerns about margins declining. So it's getting

beaten up a little bit, but it's still cheap. And this is a buying opportunity for Toll Brothers. All right, we'll take that under consideration. Scott Nations, thank you. Court, this is what you call it, tight range as we go into the final hour of trade. Almost bang on flat here. Yeah, the Dow was a little bit green a moment ago, but now it's, you know, just about flat. Yeah, just about flat here. But, you know, they've got some names certainly moving under the tape there, as we were talking about there was Scott Nations and throughout the show. We were talking about a few of them.

Yeah, a lot of names lower, but there are some names higher as well. C3A.I was down and then popped higher again. Well, thank you for watching Power Lunch. I'll see you in an hour in overtime. Closing Bell though starts right now.