Power Lunch - Soft Landing Likely?, The Struggle For Work/Life Balance 8/15/24

Episode Date: August 15, 2024

Wall Street is breathing a sigh of relief, as the consumer continues to prop up the economy. Is the “soft landing” scenario becoming more likely? We’ll discuss. Plus, is it possible for CEOs and folks at the highest levels of corporations to really unplug from work in 2024? We’ll debate. 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, everybody, alongside Sima Modi. Welcome, Seema. Good to have you with us. I'm Tyler Mathis. And Wall Street, breathing a side of relief today as the consumer continues to prop up the U.S. economy. Consumer spending jumping in July. Retail sales up a full percent. Walmart's results also not as bad as feared not at all. And that seems to be giving hope for a soft landing scenario.

Plus, the CEO of Starbucks talked about work-life balance and spending time with family after 6 p.m. But now he's a former CEO. In 2024, can you really unplug from work, especially at the highest levels of big corporations? We'll discuss. But first, the check on market that stocks are rattling across the board, the Dow Jones Industrial, near the highs of the day, above 40,000. The NASDAQ hire over 2% Tesla and Amazon are the standouts. And despite some recent turmoil, the Dow and S&P 500 are only 2% away from their all-time highs. And we begin today with the strength of the consumer is evidenced by those retail sales and Walmart.

Mark's earnings numbers. Melissa Repco is here with the details on Walmart. Melissa. Walmart and other shares of retailers including Target, Best Buy and Macy's, are rallying today after Walmart's quarterly results defied fears of a slowdown. The Big Box retailer raised its forecast to reflect a strong first half of the year after beating on the top and bottom line. Same store sales in the U.S. rose 4.2 percent, and e-commerce sales jumped 22 percent in the U.S. and 21 percent globally. Walmart is seen as a bellwet. for the U.S. economy because it's the nation's largest retailer and grocer. Chief Financial Officer John David Rainey told me that Walmart has not seen a change in shopping trends.

He said every month of the quarter was relatively consistent. He said consumers remained choiceful, discerning, and value seeking, but he added, we don't see any additional fraying of consumer health. For the first time in 11 quarters, Walmart's sales of general merchandise items outside of the grocery department turns slightly positive. Still, he said, the company decided against raising expectations for the back half of the year, saying it wanted to be a little bit guarded since dynamics like the election and conflict in the Middle East could hurt consumer sentiment. But in terms of pricing, inflation was flat in the quarter at Walmart, Rainey said. All of Walmart's sales came from unit growth, not higher prices.

So they're actually selling more stuff and notably selling more stuff outside of the grocery aisle for the first time in a long time. Yes, exactly. And that could be a positive indication for Walmart or it could be a positive indication for everyone. That's why investors are rallying today. But that will be put to the test because soon we'll hear from Target, Macy's, etc., some of those stocks that are rallying in relief here.

It's important to note that John David Rainey, Walmart's CFO, actually took some of the credit. He said, you know, while that may mean that, well, people may interpret that to mean that people have a little bit more left in their wallet after paying for everyday essentials, he said, you know, Walmart's made a lot of street investment here. They've grown their marketplace, their third-party marketplace,

and that means it has a lot more stuff to choose from. And that could also be why it's seeing growth in areas like home and fashion that people didn't historically find a lot of assortment at Walmart before. But yet CEO Doug McMillan did say their customer is still weaker overall. So how do they maintain this level of growth? That's a good question. One way they're doing that is drawing consumers at different income levels. And so they've been drawing in more high-income levels. In fact, high-income which is over $100,000 is how they define it in annual income, are actually the fastest growing part that's adding to their market share.

So that's been one way they've been doing that, and they're attracting them in a variety of ways, of course, with price, but again, with that mix of assortment and with things like faster delivery. Good sign. I'm Melissa. Thank you very much, Melissa Rapco. Thanks. Walmart, certainly adding to the positive momentum of today's market rally, the three major averages now trading above the lows from two weeks ago

as strong retail sales numbers and solid jobless claims data is calming those fears of a recession. Our next guest expects the markets to move sideways from here as weaker data challenges the soft landing scenario. How should you position your portfolio? Let's bring in Michael Cantoritz, chief investment strategist at Piper Sandler. Michael, welcome.

Hey, good afternoon. It seems like we have some positive data. Not only retail sales, but jobless claims came in at a one-month low. So two weeks ago, we were talking about a potential recession. But that scenario seems to be changing. What do you make of it? Yeah, well, I think, you know, we have to almost think about the growth. The market's clearly now trading on economic activity and growth data.

So let's remember the last two years when the markets were really trading on inflation data. And every other CPI print, we'd get volatility in the market and narrative shift, you know, going from the Fed's going to be cutting six times at the beginning of the year to the Fed possibly hiking was the narrative in April. And now we're pricing in another, you know, several cuts this year into next year. And so let's just keep that in the back of our mind as the data now continue to be volatile and create this back and forth between the narrative. Now we'll look to the next jobs report, right? That's the next piece of data we have before the Fed makes this decision on whether to cut rates in September. How do you think that could influence

what we hear from Jerome Powell then? Yeah, the next jobs report obviously is going to be really focused on. You know, there's potential that we don't see things continue to rise at the same pace in terms of the unemployment rate. But we're going to be looking for clues well before that. We'll get a handful of jobs-related data between now and the next jobs report between consumer sentiment data, job openings, small business hiring, et cetera. So the data we're focused on are obviously in the employment data, but also the housing data. If you think about the economy as a train, housing is the locomotive, the front of the train, and employment is the caboose, the back of the train. So if we're,

if we're expecting the economy to really pick up here, we'd want to see the housing data really start to improve something we often see at the beginning at a soft landing, of a soft landing, as soon as interest rates decline. And if we look at mortgage rates, they peaked back in late April. And today we just got the home builder confidence, the NHB Index, and that hit the lowest for the level this year. We've seen a big pickup and refi activity. but no pickup in purchase activities, which again is really the driver of the cycle. So I think the picture is still very mixed. And that's going to continue to lead.

We're going to get some good data. We're going to get some bad data. And I think market reactions are going to be pretty extreme, as we've seen for the last two or three weeks. Michael, a lot of folks lately have started to talk once again about dividend paying stocks. I'm curious what you think lower interest rates will mean for the appeal, the attraction of the dividend payers. and there are good boy and good girl dividend payers and less good dividend payers.

How do you separate the one from the other? Yeah, we have a model we call the ability to pay model or ability to sustain those dividends. You want to be careful late cycle, especially when stocks start getting hit under earnings pressure, looking at a dividend yield as being attractive when indeed it's really a reflection of the fundamentals deteriorating rather than a company that has a good dividend yield that is a function of actually improving free cash flow yield. So we want to be focusing not only on the dividend yield, but also the sustainability of that.

We've seen some pretty large dividend cuts this year, Intel being one of the biggest and most recently. And so we want to combine dividend yield with free cash flow yield to make sure that companies that are paying dividends will continue to do so, and we're not looking at high yields as a value trap. What about a big tech right now because of NASDAQ outperforming here? Yeah, you know, there was a huge scare in the momentum trade, you know, which was still the best performing strategy this year.

Took it took it the hardest last couple weeks when we saw the market sell off, but has also rebounded the sharpest. And I think that goes back to largely a lot of these higher momentum stocks still continue to have better earnings. And we put that in the context of the great rotation trade, which, you know, I think is really over. I know today small caps are getting a bump because we got some good data. But when you look at the relative earnings of large caps to small caps, it is still a straight line up. And without broad improvement in earnings coming from, you know, the average stock or the smaller stock, I think we're going to continue to see big tech, high quality, faster growth companies outperform from here. Okay.

Yeah, also looking at the Russell 2000 on Pace 1st, Best Day in nearly a month. Michael, thanks. Michael Cantorwitz. Thank you. Our bond yields rallying alongside stocks today, the tenure getting back above 3.9%. For all the details, let's go to Rick Santelli in Chicago. Hi, Rick. Hi, Tyler.

Indeed, what a wild morning we had. At 8.30 Eastern, we saw the data on retail sales better than anticipated, a drop in initial claims, although we had 10 consecutive months and continuing above 1.8 million. So let's look at twos and tens on one chart. Two's overperform to the upside. If you look at where yields were at 8.30 Eastern, we're up 14.5 basis points from that level in twos right now. We're only up 8 in 10s. Now, you heard Seema in the last part of our show talk about how equities have recouped,

everything from jobs, jobs, jobs, August 2nd, Friday's big move. Well, let's look at two-year, most closely associated with the Fed. And you can clearly see on the far left-hand side is where yields were right before that jobs report was released. Look at the right side of the chart today. We've gotten all that ground back. And the reason I picked a two-year is because of the implications for the Fed. Fed and how that theoretically changed everything with respect to what was going to be the

catalyst for the first rate cut. And finally, let's look under the hood of that equity move that was negated on Jobs, Jobs, Jobs Friday. Look at the VIX. Now, that's the VIX starting on the 2nd of August. It climbed to 65, almost 66, and now look where it stands now. 15 and a half is the last price. Basically, that went down every day after that initial shock. Seema, back to you. Rick, thanks for bringing that to us. That's Rick Santelli. Now to the chip sector, SoftBang and Intel had been in discussions to build an AI chip that would rival Nvidia. However, those talks broke down after Intel struggled to meet Masayoshi Sun's requirements, that according to the Financial Times. The Japanese conglomerate is now reportedly talking to Taiwan semiconductor.

Now, remember, Intel is aiming to compete with Taiwan Semi once it's Foundries are up and running here in the U.S. The story underscores the challenges companies face in trying to compete with Nvidia. A bunch of private companies, including Grok and Cerebris, which is going public this fall, are working on rival chips so far. Wall Street doesn't seem to be taking, see these companies taking market share from the company. You can see Nvidia's comeback continuing.

The stock has recouped a lot of its losses. It's up just 17% this week, Tyler, and the company reports earnings on August 28. So SoftBank was looking to collaborate with Intel. not to take over Intel. That's exactly right. Work with Intel hand in hand to be able to produce an AI chip that would compete with Nvidia, but again, it doesn't seem like that is going anywhere as the FT was reporting. They had some troubles working with Intel on that.

All righty. Quick power check as we head to break on the positive side. AST Space Mobile, the shares soaring 40% after revealing an inaugural launch date for its space-based cellular network. investors include Verizon, AT&T, and Google. That's some financial power. The shares are up nearly 400% in 2024. On the negative side, you got Dillards, the department store chain sinking on disappointing second quarter results, including a revenue miss, management highlighting a challenging consumer environment and rising costs on the earnings call. That is your power check. We will be right back. Welcome back to Power Lunch. An American-Russian former ballerina has been sentenced to 12 years in a Russian penal colony. Her crime? High treason.

She reportedly donated $50 to a Ukrainian charity. And while most Americans were happy about the safe return of Wall Street Journal reporter Evan Gerskovich and basketball player Brittany Griner, many were also concerned about the potential hazards of making deals with Vladimir Putin. To make sense of this all, let's bring in Eamon Javers for more. This seems obviously totally unfair. What do you make of it, Avin? Yeah, Seema, look, I mean, this goes to this question of incentives when you do these kinds of trades with Vladimir Putin.

Is the United States government incentivizing the Putin regime to simply snatch up other Americans or dual nationals to hold for the next round of trades? And that is one argument about what happened here. I mean, this seems like a fairly thin pretext of $50 donation to the Ukrainians. Don't know the entire backstory here of what her involvement with Ukraine. might have been what she was doing in Russia. All of those details will come out, I'm sure. But there has been a lot of criticism of the Biden administration about that deal that they made

back on August 1st to trade a whole bunch of people. And there you see some of those people arriving. The guy in the picture there, Seema, in the tan shirt who just hugged Vladimir Putin, who you can now see behind the flowers here in this shot, that's a guy named Vladislav Klucian. He's a guy who might be important for our audience to know about because he operated a massive insider trading scheme on Wall Street that hit American investors or investors in American markets to the tunes of tens of billions of dollars, tens of millions of dollars, I should say, in ill-gotten gains. Kliushin was one of those people who was traded back in that most recent exchange of prisoners

between the United States and Russia. And as it happens, Sima, we have a new podcast called The Crimes of Putin's Trader, which is out on all the major podcast formats today about Vladislav Kliuian. life and times. There you see the QR code there on the lower right hand side of your screen. You can scan and check out that podcast. That conversation continues when you trade people like Vladislav Klieuzhen who did enormous damage to American financial markets. Is that worth it? You know, if you're Evan Gerskovich or his family, you might say yes, but with a hard-nosed strategic look at this, there are some people who say the Biden administration may have traded

too much in that last round. Yeah. Well, first of all, your podcast, congrats. And I've been listening to it, it's incredibly fascinating. Back to this story about the ballerina who's now in jail in Russia, how do you think the recent moves by Ukraine, sort of making inroads into Russia, influenced this decision? Well, I'm not sure you can necessarily say there's a one-to-one linkage there between the Ukrainian invasion into the Kursk area and the decision to pick up a dual national in Russia. But I think that, you know, the more the Putin government, feels under siege and feels they need to have bargaining chips, they're gonna go out and look for those bargaining chips

to snatch up and wait for the next trade, whether that's territory and prisoners with Ukraine, whether that's prisoners with the United States. I mean, in the last round of trading with Russia, the United States agreed to force the release from Germany of a Russian assassin, right, who had killed someone in Berlin, was traded back, and the people that we got as the United States were, you know, journalists, civil society people,

the rest, you know, it looks like two totally different groups of people here. Very interesting. Thank you very much. Amen Javers. Appreciate the time. All right, Warren Buffett, revealing some interesting stakes in Berkshire's latest 13F. Finally, we are going to check the charts for some potential opportunities in the market navigator next. Welcome back to Power Lunch, everybody. In our Market Navigator segment, as we mentioned, the markets are pushing higher today. We've done a lot of volatility hedging ideas lately, but what if there was one stock that could serve your portfolio as both an offensive and a defensive play? Carter, of Worth charting, joins us now. Your idea, Carter, is to buy Berkshire-Hathaway B shares.

How does this sort of go both ways in a portfolio? How? Well, before we look at the charts, one thing we know is, of course, a year to date. It's been quite a happy outcome in the sense of both, yes. and the QQQ, up 15, 16%, and Berkshire up 23. So doing its job both offensively and defensively, less of a drawdown. But let's look at two charts. They're both identical with different annotations that speak to the current situation.

We know from its lows of October of a year ago, it surged from 330 to 430, you see that annotated there. And it's been ranged around the past six months since that February high. but just now we're starting to move out of the range breakout. A second chart, same chart, but just different a way to draw the lines. Whether you want to call this an ascending triumph, people like to name their patterns, it's not about what you call it. It's typically resolved as follows.

After a strong advance, 330 to 430, 30, 30% move, and then a very pronounced consolidation, the standoff is usually resolved in the direction of the preceding advance. And so the breakout here that's under the point. way I think carries quite a bit further. Tyler, final chart that might be informative and instructive. This is a ratio chart, which is to say it's one thing divided by another, and it produces a relative strength line. And so that line is simply Berkshire divided by the S&P. And of course, what you see is that Berkshire's relative performance, the market peak in the dot-com was at a low. No one at Berkshire. They want at Cisco, most valuable company at world.

of course, it was right to do the exact opposite. And then you see the peak in the chart, which was a financial crisis law. Everyone was throwing everything away. And of course, they were hiding in Berkshire. So Berkshire's peak performance to the market actually goes all the way back to the financial crisis. It's never exceeded that relative high. We think ultimately Berkshire will make new relative highs the market, offering both an offensive and defensive trade. So if I'm understanding you correctly here, Carter, we looked in those first couple of of charts at a stock that is breaking higher relative to its fire, right, breaking higher. And in that last chart, what we saw was a stock that does better relative to the S&P in times of

stress. Well, essentially, that's right. It's a defensive trade. But with one, I look at year-to-date, it's outperforming the market. If one likes the cyclicality of Berkshire, which it has, it's obviously tied very much to financials, but it's also a big railroad. It has a lot of consumer brands. We think it, again, because of the cash holding, which is not a technical thing, that's funny metals, because of the person in charge, I think you get both sides of the coin here. All right, Carter, thank you very much.

Great to see you, my friend. Carter Worth. Likewise, you too. You bet. All right, coming up, work life balance has become more and more valued by American workers, especially in a post-COVID world where they got used to working from home. But can the same rules that apply to employees apply to the C-suite too? We will debate that one when Power Lunch returns. We'll be right back. Welcome back to everybody. Investors cheering the departure of Starbucks CEO, Loxman-Narrishimon,

sending the stock up more than 20% the day of the announcement. But he's getting a lot of support online from people who back his comments. He made back on work-life balance to fortune last year. I'm very disciplined about balance. If there's anything after 6 p.m. and if I'm in town, it's got to be a pretty high bar to keep me away from the family. Anybody who gets a minute of time after that, better be sure that it's important. So can there really be a work-life balance at the highest level of major corporations? I think of those jobs as 24-7 deals or is running a business in this day and age, really a job.

You cannot leave when you walk out the door. joining us to discuss Julie Balki, president and chief career strategist at the Balki group, Steve Adlin, president and CEO of the conference board. He's also a CNBC contributor. Former CEO of Office Depot and AutoZone. Welcome to both of you. Julie, let me start with you. No one's really contending here that Loxman was let go because he opined in favor of work-life balance. It was the numbers that got him. Right. I think generally if CEOs are delivering strong numbers, how they're doing it isn't as much of concern. But what he's getting attention for, obviously, is he's saying, look, I did this job differently. I had work-life balance, work-life integration, and I think he deserves kudos for role-modeling that behavior. The store results, the numbers? That's a completely different story. Steve, how about you? Where do you come down on this? I mean, my guess is that the issues at Starbucks had to do with the operations of the company, the profits, the revenues, China concerns far more than whether Loxman was leaving the office at 6 o'clock.

No, I think that's right. And look, you know, work-life balance is a very important part of the employment proposition today. However, as a C-suite member, you have to be on and you have to be available because you have to be. have obligations to your customers, your employees, and your owners, and you can't just be non-present or non-accessible. He didn't say that, but it is a different kind of a stress on the leaders of an organization. Now, the good news is we have technology today that facilitates that, and you know, you can go watch your child's game, but you really cannot disconnect from what's going on. You have to be available should there be emergencies. This is especially true in retail or other kinds of companies that have seven by 24 operations or global operations where, you know, part of your company is operating all the time. It's accessibility for your constituents.

But Julie, is work culture set at the top? I think there are a lot of CEOs feel like they need to lead by example and that by saying they leave S.XPM to prioritize time with family, that that will set the example for their employees. Yes, it does set an example. And Steve's right. It's not that you shut everything down and become available. It's just that you're very, better at setting priorities and boundaries in your life. Technology has made it possible, but it's also made it harder to unplug and truly focus on the other things in our lives. And look how all of us are tethered to our phones. And so this technology is a blessing and a curse, but what it's really done is it's wiped out any sort of boundary between work and the rest of

your life. And work is part of your life. But I think we have to find ways, to put stakes in the ground and say, I'm also going to be present for my family or my community or any other things that are priorities for us. And, yeah, CEOs, you do have a different type of job. The pressures on you. But I do think also people are looking at you for leadership around what the culture is

and what it's going to be. And so you have to be aware of that as well. Let me turn back to you, Steve, for a quick question about Eric Schmidt of late, of alphabet. He was, of course, the CEO at Google and on the board and chaired that board. He has walked back comments

where he was perceived to be critical of the work-life balance culture, the work-from-home culture at Google, in which he implied that it was the embrace of that that in part caused Google to be behind in the AI race. As I say, he has now walked back those sort of comments. But my question is more broad than that. What do we know?

know about how work at home has affected productivity or performance of the corporation? Well, we've done a lot of work on this at the conference board, and, you know, there are certain jobs, of course, that can't be done remotely, and we're not talking about those. But, you know, we've seemingly talked about either or. You either are remote or you're in the office, and a lot of CEOs have said, we're going to come back to the office 100%. Our view and what our CEOs are telling us is that it's going to be hybrid and a balance probably for the long term. So when you have that situation, then the leadership needs to focus on where what gets done. Okay. So if you're at home and you're trying to socialize, well, nobody's there.

So you have to help people prioritize the work that can be done as an individual contributor one-on-one, you know, by yourself at home. And then when you get into the office, don't try to do that kind because you get interrupted, but plan for the work that requires collaboration, learning, innovation, brainstorming, all of those socialization things. And so it requires that leaders deliberately change where work is done and how it's done and schedule it and model that. Yeah, there's ways to make it better and more efficient, Julie. I just think to also the cooling jobs market, we had two big technology firms announce reductions

to their workforce. Cisco last night saying it's going to eliminate about 6,000 jobs. That follows 4,000 jobs they eliminated earlier this year. And then Intel laying off 15,000 workers. How do you think that changes the work-life balance conversation? Does it give employers more negotiation power? It does. I mean, the pendulum swings slightly toward employers in these times. But when I look back at 2008, the last big recession, it really parable. people in terms of changing jobs. They held on to jobs they hated just because they were afraid of being unemployed. But what's different now, 16 plus years later, is that we have a lot of younger workers in the workforce. And technology has also given us a lot of other side hustle, side employment

options. And so where it would have paralyzed us in fear 15, 20 years ago, it now, it's not doing so. So you talk to younger people, they're like, okay, if I get laid off, I'll find something else to do. So it's never going back to where we are going to swing with the, you know, with the amount of layoffs. Layoffs up, everybody stays. Layoffs down, everybody goes. I think it's always going to be some mix of that. And the younger generations are creating a work world that those of us who are older just don't understand. And so there's real push and pull on the side of employers saying everybody back. And the younger workers are saying, no, thanks. And so the carrot and the stick that they've always used is not working.

Employers especially, I think, have to find a new playbook. Steve, do you agree? Well, yeah. I mean, you have to build the case for employees that it's better for them to be in the office. I mean, particularly people who are earlier in their careers, where all mentoring happens, all socialization happens, all socialization happens, all teaching, all informal, all demonstration of leadership happens in a social setting, you know, call it the office. And it's not that you have to be there 100% of the time. It's not that you have to

be there till midnight every night. It's just that there needs to be a balance of what kind of work happens where. And younger people need to understand the benefits of being together in the workplace. Well, it's an important discussion to be had. Work-life balance. Also trying to understand how you balance productivity too in the workplace. Julie, thank you, Julie and Steve, see you next time. Let's now get over to Julia Borsten for a CNBC News Update. Hi, Julia. Hi, Seema.

Federal prosecutors say five people have been charged in connection with Matthew Perry's death, including two doctors and the actor's personal assistant. They are accused of forming a criminal network that distributed the ketamine that led to the Friends stars fatal overdose last October. Prosecutors say they took advantage of Perry's well-documented addiction issues to make money. Sweden confirmed today that the country has one case of the more contagious M-Pox virus that is currently circulating in Africa. It is the first known infection of the strain outside of the continent. And it comes one day after the World Health Organization declared an outbreak, a global public health emergency.

And striking Hollywood video game actors picketed today outside of the Disney Character Voices studio in Burbank, the roughly 2,600 Union members have been on a work stoppage since July 23rd. They are demanding the studios commit to protecting their jobs from artificial intelligence. A spokesperson for the video game producers says the companies are negotiating in good faith. Tyler, back over to you. Julia, thank you very much. And coming up, nuclear power is back in the spotlight as power demand grows across America and the world. Pippa Stevens is in Georgia where some big energy plans are underway.

Hi, Pippa. Hey, Tyler, I'm at Plant Vogel, where the first newly built U.S. reactors in 30 years. years are now online. This plant is now the largest source of clean energy in the country. I got an inside look at the plan and we'll have all the details coming up next. Nuclear energy at a turning point, seeing momentum as power demand jumps from electrification and data centers. But the industry's traditionally steep price tag may make it difficult to achieve the U.S. goal to triple nuclear power by 2050. Pippa Stevens in Wainsborough, Georgia, where the first U.S. reactors built in years are now operations.

PIPA. Hey, Schema, well, it is really hard to get a sense of just how big this operation is. Each of these cooling towers are 600 feet tall. In the background, you see the newly built reactors three and four each weighing more than the Statue of Liberty. Nuclear energy is about 20 percent of our electric grid and the industry is getting another look. But one challenge has always been staying on time and on budget.

This plant is no exception, seven years delayed and more than double the estimated cost. But Southern Company CEO Chris Womack told me a lot of that is because the U.S. had to restart the nuclear supply chain. This country hadn't built a nuclear plant from start to finish in over 30 years. So putting the band back together in terms of supply chain, in terms of the workforce, in terms of the labor resources, there were a lot of things that had to be brought together for the first time in a very, very long time. He added that Unit 4 was cheaper than Unit 3 and took half the time. to construct as things became more efficient. Now I saw the inside of the plant yesterday, including the turbine generator building, which has hot water, cooler water and steam running through miles of

pipes. It is hot and humid in there and is where the electricity is actually produced. And CMA and Tyler, let me tell you, getting inside with stricter than airport security. Incredible story, Pippa, and life shot. How do politics, the upcoming election, how could that change our nation's ability to continue using and growing nuclear power here. So I asked Mr. Womack about that, and he said that the industry has traditionally received bipartisan support. If you look at how long a plant like this takes to come online, remember construction here started in 2009. They have seen multiple different administrations and different parties. And the main thing is that, you know, a project like this of this size, it provides a huge boost

to the community. At the height of construction, there were more than 9,000 workers here at plant Vogel day in and day out. Now there's 1,600 every single day. There's a lot of specialized labor. And so that is always something that the industry has noted to. However, executives say that there has to be more public-private partnerships. There has to be more support. The NRC is very, very involved in all of these plants. And there's been some constraints around permitting, some, you know, flip-flopping and design models and things like that that have traditionally led to these higher expenses. And so while he said that there is support, support no matter who's in office, given the benefits of these projects, the administration and

utility executives and the energy ecosystem broadly have to work together more. Pippa, thank you. That's Pippa Stevens in Georgia. All right, chairs of Ulta Beauty surging after Warren Buffett's Berkshire Hathaway revealed a new stake in it worth more than a quarter billion dollars. We will trade that one and a couple of more in three-stock one. All right, welcome back. Time for today's three-stock lunch here with our trades is Sylvia Jablonsky, the co-founder and CEO of Defiance ETFs. First up, we've got shares of deer

jumping higher today after the company posted a beat for the third quarter despite slowing numbers. Sylvia, are you buying deer or deer repellent? Hi, Tyler. Great to be here with you today. I think I'm on the deer repellent angle of this. Unfortunately, you know, the company, it's great that they beat on top and bottom lines, but I think that, you know, the agricultural business hasn't fully hit a bottom yet. Crop prices are a little bit too low. They're losing sales, revenues. They're losing

money on farm pricing, farm revenues. And if you look at one of their competitors, Caterpillar, it's, you know, kind of grossly outperforming this name. I just don't see a catalyst in the near term. I think until commodity prices start moving the other way, it's going to be tough to see a lot of momentum to the upside on this name. Okay. Next up, we have Ulta Beauty, which is surging double digits. Today, regulatory filing reveal that Warren Buffett's Berkshire Hathaway took a stake in the cosmetics company worth over $250 million during the second quarter. Do you like this name? I almost feel bad saying this because it's such a good day.

It's such a rip, but I think it's a sell on the rip for me, right? I love that Warren Buffett's in there. It's a good company that they generate positive cash flow. You know, 66% of their customers are enthusiasts and they make up 80% of their business. You know, they have a strong brand. But I think it's an oversaturated market. You have Sephora sitting in coals and, you know, just massive global. expansion there. Retail sales this morning told us that consumers are just fine in spending,

but also on kind of non-discretionary. So I don't know what the catalyst is. And if I was in this stock 8% ago, you know, it's actually still down 25% for the year or so. I probably would take my gains and run. But I'll look at it again next year because, you know, free cash flow is always good. Why not? All right. Finally, we got your micro strategy shares are moving higher today as Defiance ETFs launches the first leveraged single stock ETF on my. Micro Strategy in the U.S. Tell us about this new product and your thoughts on micro-s, a single-stock ETF. Yeah, I love this. So it's 1.75, the daily performance of Micro Strategy. And the reason we launch this is twofold. One, it's the perfect cross-section between exposure to AI and exposure

to cryptocurrency and digital assets. Passport performance is not indicative of future results, but if you look at Micro Strategy, the stock versus Bitcoin versus all the Bitcoin ETFs, the double leverage Bitcoin ETFs, it's, it's, you know, up three times that or 10 times that in some cases, including the cryptocurrency itself. So we just thought that, you know, this is a stock that gives you exposure to crypto and it levers up that exposure. And, you know, historically, it's given you performance. So it's a great proxy with the balance sheet that they have in Bitcoin to get that kind of exposure. So this is a 1.75 levered play? That's right. That's right. 1.75 of micro strategy on a daily basis.

daily basis. So if it goes down a buck, I lose a buck 75. You do. And if it goes up a buck, you get $1.75. You get a $1.75. Okay, now we've laid the parameters out there, just because I'm a little slow. I've got to catch up here. Sylvia, thanks so much. We appreciate it. Sylvia Jablonsky, Defiance, E.F's co-founder and C-E-O. Seema. Remember, you can always hear us on our podcast, follow and listen to Power Lunch wherever you go. we will be right back. Nasdaq up 393 points. Well, the market's continuing to rally. Let's give you a quick check as you look at the Dow up 1.3% or more than 500 points back above 40,000.

The NASDAQ outperforming up more than 2%. Amazon, Nvidia, Tesla, among the biggest drivers of those NASDAQ gains, as you see there, up in each case, 4% or better. President Biden speaking earlier, discussing efforts to lower drug prices, including allowing Medicare to negotiate prices. Angelica Peebles looking into that story for us. Angelica. Yeah, Tyler, today is a big day because this is the first time that Medicare has the ability to negotiate drug prices directly. Now, there are 10 drugs in this initial batch, things like Elyquist, which is a blood thinner cancer drug in Bruvica, an anti-inflammatory

medicine, Enbrel, and that's just to name a few. And the Biden administration is saying that this program will save Medicare $6 billion and save patients $1.5 billion. in 2026 when these prices go into effect. Now, you're hearing a lot from the administration about these steep discounts that they're getting from the manufacturers upwards of 30 percent, even in the range of 80 percent. But it's really important to know that they're calculating these numbers off the list price, which nobody really pays. And it's hard to know what the true savings are here because the current prices are

already discounted and those are secret. And the Biden administration says that overall these new prices will result in about 22 percent less than the current net prices. And that's not as bad as some investors had feared. And you're seeing that reflected today in pharma stocks, which are basically flat. Some of them are even up, like Bristol-Myers Squibb. Guys. Thank you. Thank you. We only have about three minutes left in trade. Several stories that you need to know. Let's get right into it. Starbucks revealing incoming CEO and Chairman Brian Nichols' compensation plan in a new filing. He will receive $10 million in cash, $75 million in equity awards when he takes the reins on support.

September 9th, the equity compensation will vest over time. And for leaving Chipotle, he'll receive a separate $10 million cash bonus, $75 million in equity, which also vests over a three to four year period. Wow, it's got a good to be Brian. He can afford a venty, whatever he'd like, pretty much every day, maybe even twice a day. Any size. Any size he wants. All right, shares of Cisco on pace for their best day since March of 2020 after revealing it is cutting 7% of its work force globally. also reported better than expected fourth quarter results. The company, beginning a restructuring plan that will result in a billion pre-tax charges and allow it to invest in key growth areas like AI. It is Cisco's second round of layoffs this year, but the stock, as we mentioned, they're having its best day in years up nearly 7%. I was on the earnings call.

CEO Chuck Robbins really talked about how this is not so much a reduction. It's a reallocation towards the markets that are growing like AI and cloud. So clearly any tech company now really is trying to figure out what role they're playing in this. And how do we stamp it with AI? Exactly. Bill Ackman's Pershing Square revealing a new stake in Nike, the firm disclosing it owned more than 3 million shares worth roughly 229 million million as of the end of June. It's not the first time Ackman's owned Nike. Back in 2018, CNBC reported Pershing Square made a $100 million profit taking Nike shares over, trading Nike shares over a six-month period.

Nike has been laboring quite a bit lately. see it was about 120, if I'm remembering, as recently as last fall now in the 80s. We'll see whether they've got the sauce to get it back. There's competition on holdings as well. So, yes, it's stealing with a lot. And there are a lot more sneaker makers out there fighting for share and doing very nicely. All right, Amazon, one of seven other companies looking at expanding drone use in the UK. The key is this test would let the drones fly out of the visual line of sight of the drone operator. Restriction the FAA in the U.S. has as well. Key part of the test will be whether the drones can detect and avoid other flying objects,

including, of course, airplanes or maybe cups of Guinness. This was Jeff Bezos' pet project to get drones with packages. It's been a 10-year project. We're still not seeing them out there in mainstream use. Seemed great to have you with us. Thanks for having. Appreciate it. Thanks for watching Power Lunch, everybody. Closing bell begins right now.