Power Lunch - S&P 500 and Nasdaq rise as Nvidia leads chip stocks higher 01/06/25

Episode Date: January 6, 2025

The S&P 500 is climbing alongside the Nasdaq today, as Wall Street rebounds from a losing week, with chip makers leading the way. We’ll cover all of the market angles for you. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch, Your Money, Powering up again. It is part of a nice turnaround for the end of year selloff. We'll tell you what could happen today that has not happened in more than 20 years. I don't even know what it is, but I do know that we're well off the highs. So while you're all excited, Brian, about how we're doing. And the NASDAQ is good, but look at the Dow. We're barely positive. You've got to watch those yields.

The NASDAQ is leading with chip stocks leading the way today. Foxcon had strong earnings could be a sign of continued strong. demand. Again, elsewhere, a little bit more muted. But Nvidia is rising and getting close to that all-time high ahead of Jensen Wong's CES keynote tonight. It's neck and neck with Apple. It's just behind to the 4-T market cap race. And he's out. Canadian Prime Minister Justin Trudeau quitting as head of his party as the global reckoning over elections continues. Right, or people would say the effect of Trump's election continues. Whether or not it's a linear effect, it's clear that the The relationship between the U.S. Canada and Mexico is going to be one of the most contentious things of the next company.

I know. And they're blaming. We're going to get to more on Trudeau, by the way. They're going to blame everything on Trump and tariffs. Let's be clear. Justin Trudeau has been in trouble for a long time. Well, once, was it Freeland, right, who stepped down last one? Christia Freeland stepped by. Luckily, I've got a Canadian cousin. He fills me in on Canadian politics. All right, we're going to hit all of that and more over the hour. But let us start with a fight over tariffs. This fight, though, not on Capitol Hill, but kind of in the media. Trump denying a Washington Post report that he will scale back his planned tariff policy. Now, the Post saying that Trump's tariffs will only apply to certain things. If true, that would seem to be a scaling down of his campaign plans, but Trump, being Trump, hitting back, saying reports are simply not true.

Let's try to figure out all of this, what's going on. here. And what does it possibly mean for the markets and your money with us? Wendy Cutler, who has worked on trade deals for nearly 30 years as the Office of U.S. Trade Representative, currently a VP at the Asia Society Institute. Wendy, Trump's denial the report, notwithstanding, how do you see tariffs right now? Where are they going to start? And where do you think they will end up? Well, I wish I could answer that definitively, but I think we're definitely going to see tariffs. And there's clearly an internal discussion in Trump's team about the application and the scope of tariffs, with Trump wanting a broad application, a broad scope, and some of his advisors recognizing that that can end up hurting the U.S.

more than our trading partners. Yeah, listen, the post-reporting one thing, Trump saying on his. social media platform, it's simply not true. Again, without stepping into the quagmire that is the media fight that really is kind of the Trump show, is there a place, Wendy, where you and your team believe that tariffs are the sweet spot? In other words, is there a number at which, yeah, you punish cheap importers and you bring jobs back to America, but you don't punish so much U.S. consumers who ultimately may be

forced to pay those higher costs? Look, there is a time in place for tariffs, and in fact, we have trade laws which allow the imposition of tariffs, but those are based on objective long-term investigations to make sure that our trading partners, for examples, are not pursuing fair trading practices. With respect to your question, the lower the tariff, the better. There's not really a sweet spot, and it varies product-to-product, because remember, a lot of products already have tariffs on them, and Trump's tariffs would be additive. And so they are just going to jack up costs not only for U.S. consumers, but for U.S. businesses that rely on inputs, materials, minerals, machinery from outside sources. Wendy, do you think there needs to be a kind of global

rebalancing away from the, as Russell Napier and the other, the non-system system of the past 30 years, which was basically once China started devaluating? I mean, do we need to move into, are we moving into a different era? And are tariffs a plank of that? We absolutely are. And I believe that there should be some rebalancing. But there's ways to rebalance. And I would recommend a strategy where we work with other countries towards rebalancing versus just telling them, guess what? As of tomorrow, your imports are going to face a 20 percent duty, a 20 percent levy. That's not consultation. That's not cooperation. Right.

But even going back to the, look, we talk about cooperation with China. This is the same country as the Wall Street Journal just detailed. They're inside our phone systems. They're inside our ports. They're inside key Western infrastructure that might be involved if there were attack on Taiwan. It's like, I think we all realize at this point, we're not, this has been a sort of low-grade trade war since 2018, including throughout the Biden administration. Look, when it comes to China, we're clearly on a much more solid basis to impose.

higher tariffs. We have a Section 301 investigation that was concluded, allowed Trump to put tariffs in, and in fact, he can use that statute to impose more tariffs. My comments were more in rebalancing with other countries, our allies and partners like Korea and Canada and Mexico and Europe, like the notion that we're going to be hitting them with high tariffs and then seeking their cooperation on other issues, it just doesn't seem to make sense to me. Right. And we'll see if it goes in that direction, or again, if there's an element of truth, these reports at least, that it could end up being those that are more essential and less broad-based or universal. Wendy, for now, thanks.

We appreciate it today, Wendy Cutler. Let's talk about the impact of tariffs on currencies. One of the biggest places we see a fallout. Dollar was down 1% earlier, but is pairing those losses and is still at high levels. The President-elect denied reports this planned tariffs would be scaled back. Kathy, Lien is managing director of FX Strategy at BK Asset Management. Kathy, the gazillion dollar question is, when is the dollar going to stop strength? I think, you know, it's going to come in the form of weaker U.S. data.

I mean, that's really been the singular support for the greenback because we've got, you know, stronger data, basically reducing the chances of any meaningful interest rate cuts from the Federal Reserve this year. Only 50 basis points is what the dot plot is telegraphing. So until we get some consistently weak data, maybe in non-farm payrolls, maybe in ISM services this week, I think that the dollar uptrend will remain in place. But anything that could cast doubt on the outperformance of this economy will pose trouble for the greenback. No, I think that's a fair point. But right now, it seems like what's happening is we're seeing global currency adjustments based on anticipation of tariffs as well, don't you think?

Yes, certainly. I mean, today, the Greenback, like you said, in the stock market, moved or raced to some of the prior moves on the back of the denial from the Washington Post article by Trump. So the tariffs is a big deal. We saw, you know, back in Trump's term, we saw it in November of last year, how these tariffs headlines can really impact the markets. And we saw a good example of that today as well. And that's a taste to come of the volatility that will come from not only the tariffs themselves, but every single piece of a headline that hits the news on whether he's going to back off,

whether he's going to press forward on the FX market. So I'm just trying to think through this for a second, Kathy, ever since his election, the dollar has just rocketed, right? if his team, and I've read some of the work the new NEC guy and others, if they're concerned that the dollar is too strong and then it's only gotten stronger since he was elected, in part because of whatever these planned tariffs are, then what can be done to actually lower it? Or is it, you know what I mean? Like, what do you do then?

What other policy is shorty? No one wants a weaker economy. Right. I think at the end of the day, it really boils down to how much pressure there is on this tariff issue. And what I mean by that is, is he going to have, you know, kind of very consolidated tariffs on certain sectors or will it be those blanket tariffs that he says? And I think depending upon, you know, how widespread it is, that's going to have a direct impact

in the dollar. Also, as he starts his term, what's his primary focus in the beginning? Will it be taxes, tax cuts and due regulation? Or will it be tariffs and trade wars? Where is the quick wins that he's going to be looking for? And where he places those quick wins is going to determine whether that's going to be near-term positive or negative for the dollar, but the tariffs is front and center or it's going to be tax cuts in deregulation. Right, indeed.

Kathy, real pleasure to get you on. Thank you very much. All right, we've got a long way to go. And after the break, something just happened to Boeing that has not happened in five years, but that is ahead. Welcome back to Power Lunch. Bullish call from Barclays this morning on a name they haven't been positive on since 2019. The firm upgrading Boeing to overweight, raising their price target, not by much, but to 210 from 190. Joining us now, the man behind the call, Barclays Aerospace and Defense analyst David Strauss. David, it's great to have you. Listen, the share price now versus this company has a lot to make up.

Why do you think that now is the year they can start to do that? Sure, thanks for having me. You know, the turnaround, to be fair, the turnaround has a long way to go. But Boeing has made significant progress in some of the things that we were looking for. First of all, they went out and raised $24 billion in equity capital. The balance sheet now is in much better shape than it had been. We had long thought that Boeing would need to raise equity. So the balance sheet's no longer a headwind.

And then second of all, expectations, you know, that the company gets said as well as, you know, consensus expectations, we thought in terms of the recovery, particularly around free cash flow, were just way too aggressive for a number of years. And the new CEO, Kelly Urbord, when he came in on his first call, he dramatically brought down expectations for cash flow next year. So we think, you know, the trajectory that everyone's looking for now is a lot more realistic. Like we said, the balance sheets in a much fair spot. But there's no doubt there's a long way to go here.

This might seem like a strange thing that I get fixated on. But evidently, they were supposed to do a new Air Force one during Trump's first administration. and the plane won't be delivered till the end of a second one. Now I understand it's a special situation. There's a lot of... But sometimes I think it's emblematic of kind of the morass that Boeing has become.

So, you know, the share price being indicative of some of those larger challenges, do you think they're able to really start tackling like the entire, I don't know what you call it, corporate culture at this point? Well, we think a important step in that direction was hiring an outsider. So the new CEO, Kali Arfborg,

came from the outside. He was CEO of Rockwell Collins, a big supplier in the Boeing. So we think, you know, we had long thought it was imperative to bring someone in the, from the outside to be able to, you know, to change the culture, which is very important here. And, you know, as you highlight, they've had missteps not only on the commercial side, but on the defense side of the business as well. And they have a number of programs, including Air Force One, that they're going to have to work their way through. And like, like I said, you know, this is far from a complete turnaround. We're still in the early days. But we think the setup from here is pretty straightforward. Most importantly, they need to produce and deliver more max airplanes. That's mission number one. If they can do that, we think this becomes a bit of a momentum story. There's decent upside. You know, keep in mind the stock is less than half of its all-time peak high. You know, the bulk case is pretty easy on Boeing, which is that Tina, there is no alternative.

There's basically Airbus and Boeing for large jets. You've got Ember Air, you've got Bombardier, got China coming into it, but those are smaller mid-sized jets. Larger jets, you buy one of those two, that's kind of it. The bear case a little bit harder, David, do you feel like Boeing has fixed what many view as a management culture that has gone wrong? Is that fixed with Kelly Ortberg? Yeah, so you're right.

In terms of highlighting the demand environment, you know, the global airlines need 15,600 airplanes a year. And right now between Airbus and Boeing, they're only able to lower like 800. So both Airbus and Boeing have five-year plus out backlog. So that's the positive part. On the cultural side, no. I mean, it's still early days there. It's going to take a while. It's not something you can't get into the kind of mess that Boeing has gotten into and turn that around quickly.

And like I said, I didn't think that that would happen with someone, you know, leading the company that was an internal person. I thought we needed someone. The company needed someone from the outside and they now have that person. And, you know, he's, you know, four or five months into the jobs. So it's going to take a while, I think, finally settling the machine strike was a step in the right direction. But, yeah, there's a long ways to go, no doubt. Well, you know, again, David Calhoun, the former CEO, and again, somebody I know, by the way, came from Nielsen.

originally. Stephen Molenkoff, who is the chair of the board, came from Qualcomm. They know each other, as I know them, from the same university. Is Kelly Orpberg the person to come in and kind of kick butt, if you know what I mean? I mean, basically say to the culture in Seattle and in South Carolina where they're building jets, we can't have crashes. We can't have doors blowing off. There's still questions about what happened, you know, in certain videos that we see with certain jets. And my my question is, David, if you're buying a lot of Boeing's, have those problems, those questions, but answered enough where you feel comfortable to see an airline saying, you know what, I'm going to put a $100 million order in with Boeing because I feel comfortable that management has

taken enough steps to make sure everything is safe. Recent things that we've heard out of some of the airlines, some of their biggest buyers, whether it be Ryanair or Southwest in particular, they've, They've said very positive things or that Boeing is moving in the right direction when it comes to, you know, oversight and production. So we have that. You know, I would say the airlines have also, to a certain extent, voted with, you know, with their feet and with their orders. Boeing's order, you know, order market share has been very good. I mean, some of this is partially because Airbus is sold out way into the future.

sure, but we haven't really seen a significant market share shift airbus relative to Boeing over the last couple of years. Boeing is more than held its own. Now, we don't know on, you know, what kind of pricing Boeing has gotten on those orders, but in terms of just market share, and, you know, I think that's probably as good of an indication as we can get in terms of what the airlines are thinking, it's been pretty good. And when you also look at lease rates on Boeing aircraft relative to Airbus, they're in a pretty similar spot. So, you know, I think things moving in the right direction again very slowly. I'm not making the call that this is a turnaround that's over and dumb with. We're early days into Mr. Orupor taking over, but I think he's doing,

you know, so far he's doing the right things. Look, it's a great American company that we need to succeed. And let's hope that some of the stuff that you said, David, does indeed come true. David Strauss, Barclays upgrade on Boeing first time in more than five years. I hated to be so tough, Kelly, but what I was trying to suggest is, listen, we make fun of French cars, right? Pujo, Renault, Citton. We kind of, it's kind of a thing. The French are kicking our ass. Yes.

Our derrier. Fortunately, they make some of the planes here, so we can benefit a little bit. Yes, on airplanes. They're kicking our derrier's. Tush. Sorry about that. Oh, dairy air, of course. And we need to fix it.

Indeed. This is one of two companies in the world that does something. And that's the problem. When there's not a lot of competition, there's less pressure on you to fix it in the moment. At least now they know they've got to fix it. All right. On deck. And we're cursing. Why big tech is suddenly throwing big bucks at the incoming Whitehouse. All right, welcome back. We've got some big breaking news for you right now. It is cold. It is really cold across much of America. We know that this polar vortex, extreme cold, is blanketing much of not only the Midwest, but the South as well.

tremendously cold weather and concerns around energy and the grid. Now, Kelly, this does not get a lot of attention. We talk about extreme heat, which can be very dangerous. Cold actually kills about seven times more people than heat. I didn't realize that. Not a lot of people do. It doesn't get nearly the attention, but cold far more dangerous because cold tends to kill slowly, not sort of quickly like an extreme heat wave can.

All right. So luckily in America right now, when we look on poweroutage. there it is, we are seeing most grids up and running. There are some people in Virginia and Kentucky and West Virginia. You could see that, Illinois and parts of Missouri, that do not have heat, and hopefully that will come on very soon. But if you do have heat and power across much of the Mid-Atlantic at eastern U.S., it is largely because of fossil fuels. Right now at PGM, which is the grid operator for 13 states around Virginia, Ohio, Pennsylvania, and more. Over 80% of your light and heat is being generated by natural gas, nuclear, and about 25% right now is being generated by coal.

That's my number. Yes. In 2025, dirty old coal is producing 24 megawatts of power, which you could see on the total number is about 20 to 23% of where we are right now. Obviously, coal's rich in that part of the country, but it's still surprising that it's that much. You know, here in New Jersey, 40% is nuclear, 40% of what our electricity comes from. When you drive across the Delaware Memorial Bridge coming into New Jersey from the south, and you look to your far right, you're going to see some steam that comes up. That is a nuclear power plant in the very southern tip of New Jersey. That and the Linden Cogeneration plant, which is right next to Newark Airport, this gigantic beast of a plant,

both sides of the turnpike, that is providing over half the power for the entire state. And I'm not bringing this up to be critical of anything. I'm saying we can hate certain things. You can hate coal. But right now, for 20% of the power grid, coal is literally saving our derrier. I think was the term. Tush. By the way, new in 2025 when we're dealing with these issues is also the usage of the grid by a lot of the large data.

centers. We know Virginia, of course, Northern Virginia is called what are like the heartbeat of the internet where a lot of this is taking place. A lot of those have tried to do different kinds of deals to either get their power directly or not. So there shouldn't be too many issues. But another thing, when we see big storms come to these areas, there's more infrastructure at risk than this. By the way, we're not knocking. Bring that graphic back up, big, beautiful graphic on the wall. Renewables do it about 7.6 megawatts. So that's big. That's a big number. Overall, the demand for power because people are cold and they're cranking their heat. The demand for power has shot up.

And with that, with that, the demand for any kind of power generation, even Kelly's nuclear, is up. There we go. Coming up on Power Lunch, it's still a big week for the market. It's not even a full week of trading yet, if you can believe it, because we have that close on Thursday for former President Carter. The first test of the year for investors is the jobs report come Friday. We'll talk big picture as the Dow tries to hang on to Green after the break. Welcome back to Power Lunch. I'm Sima Modi with your CNBC.

news update. President Biden is on his way to New Orleans right now to visit the families and loved ones of the victims in the New Year Day terror attack. 14 people died when a Texas Army veteran who the FBI says was inspired by ISIS rammed a truck into people celebrating the holiday. Louisiana's governor says he will push for the president to issue a disaster declaration during today's visit. Three Israelis were killed and several more were injured in a shooting attack on a car and bus in the Israeli-occupied West Bank today, the attack could complicate a potential peace deal to end the 15-month war between Israel and Hamas in Gaza. Israel Prime Minister Benjamin Netanyahu said today he approved measures to capture the

attackers as well as a series of offensive and defensive actions. Meanwhile, U.S. envoy Amos Hochstein said today that Israel has begun withdrawing its forces from a southern Lebanon border town. He said the withdrawals will continue until the IDF is fully out of the country. country amid its fragile ceasefire, the IDF has yet to comment. Brian, I'll send it back to you. Sima Modi. Thank you very much, Seema. All right, so here's an RBI for you.

According to Carson Group, if the S&P 500 pops more than 1% today, it'd be the first time that we have begun the year with three straight days of 1% gains or more since 2003. A 22-year phenomenon, if it happens, if it happens. Kelly. It's looking a little harder now. I know. And what is RBI? Random but interesting.

Ah, I thought it was a baseball analogy. Well, it is. I stole it from not only that, but also the Reserve Bank of India. That's right. Them too. They have hash. They have at RBI or something on Twitter. Either way, while this may be random but interesting, does it actually matter to the markets and your money going forward? Or is it just a nice stat? Jack Ablin is founding partner and CIO of Crescent Capital. Jack, listen, we had a terrible end of the year. Everyone's like, well, the market's going to go down.

We're going to lose January. Now we're going up. People say, well, the market goes up. We're going to win January. These are nice stats. They're a little fodder for TV. But do they actually matter to the overall direction of the market? No, probably not.

You know, week to week, even month to month, is pretty much random. Although I will say, and really what I wanted to point out in my note was that the market right now is fixated on this period between election day and inauguration day. So everyone is focused on policy and the potential for policy to impact markets. What we find is that once inauguration day is over and we look out to the rest of the year, it's really back to business as usual. So perfect example. Trump's inner circle said they may be scaling back on some of the tariffs.

Of course, we started to see the dollar decline, some of other reactions. some other reaction to that, that type of intense scrutiny is pretty much dissipated after January 20. What's going to be the most important thing then? After January 20th, we get through all this stuff. You know, we look ahead in the calendar of May or June, Jack. What are we going to be talking about? What is going to be the next big thing for equities? Is it interest rates or tariffs? Is it something else? I think it's interest rates, Brian. I mean, keeping my. mind that we were able to deliver 20% plus returns last year on, call it, nine or nine or so percent earnings growth. So clearly multiples expanded. And high multiples need low interest rates.

And interest rates, unfortunately, are going in the wrong direction. So in order for us to maintain these levels, we're going to need to see earnings go up, and they will for most of the S&P, but we're also going to need to see interest rates, whether they're the 10-year rate or the overnight rate come down. And we're just don't see too many prospects of that right now. I agree with you, Jack. I mean, I think a lot of the markets looking at 462, maybe we can show the 30-year also and thinking, all right, we've kind of moved past the initial digestion phase, and we're supposed to kind of maybe be consolidating this move,

not continuing to see things kind of break out to the upside. Yeah, I would tend to agree, but there is this, you know, I would call it the January effect. Now, usually the January effect affects small-caps stocks, not the mega-caps. But we are seeing the rally sort of that, we'll call it the Santa Claus rally on hold, has now pushed into January. But like I said, after January 20th, I think back to business as usual and everyone's going to want to focus on rates. The remarkable thing about if we dial back to 2016, you know, once the inauguration was over after, you know, Trump's first term, one year hence, what was the best performing equity market? China. China was absolutely hammered between Election Day and inauguration day, and yet it came back and delivered a 42% return. Now, I'm not suggesting necessarily China is going to rally that much. I do think that there could be a cyclical pop. in China, but I think we have to look beyond the kind of the traditional cast to characters

for moves for 2025. Not many people are going to come on after the recent stretch of data and performance and say, Jack, you know, look at China. Yeah, I mean, it's, it's certainly cheap. And I would say, from a cyclical point of view, there's an opportunity. If they get the stimulus and things kind of align right, from a secular standpoint, it's still, you know, in my mind, a basket case. But I do think that there could be a cyclical pop there. You know, we're just waiting for some positive momentum. If we can get it, that could be an opportunity to get in there. Jack Ablin, Crescent Capital. We love always having yawn. And we even sprinkled some of that market data right at the top just to make you think a little

more, Jack. Appreciate it, buddy. All right. Thanks, Brian. Thank you. Let's get a check on those bond markets, as we mentioned, with 10-year yield above 4.6 percent. jobs report is looming. Rick, our guest last hour said something interesting, he said, I don't want the data to be any stronger at this point. It's too strong. Yeah, you know, data is pretty strong, and I do think that one of the big issues for

2025 is going to be how much slowing, if any, we see in the labor market, how we quantify that, and also realize that it isn't necessarily the linchpin in Fed policy. Now, today we had an auction. We had 58 billion, three years,

notes tomorrow will be 39 billion tens on Wednesday 22 billion 30s. And the reason I bring this up is the first leg was kind of iffy. We saw the three-year tail a bit. And as you look at the chart, you can see around one eastern, the right side of that yields moved up. But pretty much that was the capstone. Yields were volatile, but that really seemed to seal the deal as all rates now from the five-year upper, higher on the day, prices lower on the day. 30-year bonds. You know, we've talked about the double top. It's on a closing basis right around the 481, 482. Intraday, we violated that.

If it closes above it, it doesn't mean it's a moonshot, but it certainly means some of the resistance many were focusing on for more consolidation interest rates, especially long-dated, might be vaporizing. Finally, that 2's 10 spread has been on fire. It's trading 35 and a half basis points today. That's the widest in 32 months. And finally, the dollar index,

between Trump and the Washington Posts, have been a lot of back and forth about the state of terror. which nobody truly knows at this point, but there's a lot of volatility you see there. Dollar Index has managed to pop back above 108. We want to continue to watch it. It is by far the currency of choice for 2024. Many believe that will continue in 2025. Back to you.

That's what we were talking about with Kathy Lean. Just keeps going higher. Rick, thanks. Steel ahead, work smarter, not harder. We'll highlight how AI is helping to make recycling easier and more efficient. Power lunch is back at a moment. Welcome back. One of the toughest parts about recycling is all the sorting, the paper, plastics, aluminum. Where does it go? It's confusing for the consumer. Imagine it on an industrial scale. Now new technology and AI are trying to make it easier. Diane Oleg has the details in her continuing series on climate startups. Diana? Well, Kelly, we're talking about recycling scrap metal here and not just making it easier, but keeping it domestic.

Traditionally, the majority of scrap is shipped overseas and hand-sorted or melted down into lower-quality materials with limited uses. Now, if you can sort it better, you can maintain its value better and reduce energy and emissions all at the same time. In Markle, Indiana, thousands of tons of shredded aluminum are getting sorted into different allys, that is, different types and grades of the metal, all using new technology from a local startup called Sortera. Things that are at end of life like our cars, washing machines and so forth, what happens is they get shredded and then all of that mixed material now is no longer valuable. Nobody can use it. We sort it so that all those pieces then can be reused and can be put back to

better use. Put back into domestic industries like automotive, construction and aerospace. Sortera buys the scrap, sorts it using a proprietary technology, and then, and sells it back to companies like Novellas, which can then melt it using just 5% of the energy needed to make new aluminum. What Sortera did is use existing sensors with some really powerful AI software, and together makes a special technology

that allows us to sort the materials at high volume and at low cost. Sortera is starting with aluminum at its Indiana plant, but plans to expand to other scrap metals. And the technology, is modular, so in the future it can be put anywhere the metal is. They brought 21st century technology to a industry that is literally as old as metal, which is a pretty amazing thing to do. They're also the first to figure out how to scale it.

In addition to RA Capital, Sortera is backed by Breakthrough Energy Ventures, Assembly Ventures, and Macquarie Capital. Total funding is just under $74 million. And Sortera claims its process uses very little energy, doesn't use water, causes no emissions, and doesn't put anything into the landfill. Now, while half of the shredded U.S. aluminum is shipped to Asia, Sortera is the only U.S. company that has the technology to sort it for the highest quality reuse. That is, take the aluminum from the hood of a car and put it back into the hood of a car. Back to you. I always hear that the issue with recycling now is there's kind of nowhere for the stuff to go. But I guess this gets around that, trying to put it just back into the supply chain. Yeah, and it's surprisingly difficult to do that because you have to sort it out into its original form.

And that involves all kinds of different processes. Again, this is the first time that they're able to do this domestically. So you weed out all of the other, you know, having to ship it overseas, using that kind of energy, bringing it back, getting them out. The costs are just in calculus. It seems weird to use more energy than you save by theoretically recycling. And that's what we've been doing, Diana. Well, not in this. That's what I'm saying, is they're using less energy and they're not using any water.

Yes, not in this. That's the reason we had you on. It was a, dare we call it a clean start? Dare we do, let's. It's using Diana's name. You see the graphic. Dian Oleg, thank you very much. Do appreciate it.

All right, still ahead. Putting the full court press on. We're going to highlight the latest tech giants trying to sprinkle a little cash around the White House. house. That's coming up. Welcome back to Power Lunch and take a look at some of the strongest stocks in the market today. It's the chip names. Not only InVIDE, which could close at an all-time high today, we're also seeing the likes of Micron up 11 percent, AMD lamb up as well. And we're getting some news on the AMD front. Christina Parts in Nevelas this year with those details.

Christina. Well, it's CES right now and AMD's press are still ongoing. And AIPCs are really just the trend in this season. First, you had Qualcomm earlier this morning launching their AIPC. and now you've got AMD joining the mix. AMD's next AIPC would be called the Risen AIMX processor. It's an AI chip for portable devices like laptops. A&D saying there's going to be over 150 computer designs available with OEMs. Those are original equipment manufacturers like Lenova, for example. Outpacing what Qualcomm said earlier today, they have 100 design,

so there's a lot of competition going back and forth between companies. I am seeing online some questioning about the lack of CEO presence from Lisa Sue but we have to keep in mind this event and this speech was already planned to have the SVP of client business present, so it shouldn't be a big surprise to a lot of investors. But let's get back to the AMD news. They're announcing also their first ever commercial expansion with Dell. So that means bringing the AMD, there's a lot of names here, the Ryzen AI Processor, just think of it as an AI chip, to Dell's commercial PC portfolio.

So this is a new partnership for them. Lastly, AMD unveiling new gaming desktop processors. We even took a jab at Intel on stage saying that AMD's gaming chips is 20% faster than Intel's quote, best. And you can see Intel shares actually today, one of the few that are in the red down about 3% when the entire sector seems to be climbing higher. Invidia is also expected to release some information on gaming chips later this evening. That name we know is coming ever closer to hitting, becoming the most valuable company.

Very, very soon, shares are up 4%. It's AMD, 2 p.m. You didn't really see too much of a stock reaction after these three announcements from them. Anything Christina Jensen Wong tonight kicking off the CES conference in Vegas? Anything that we're expecting any early word on maybe what Jensen Wong may say? Well, there's been a lot of leaks about their gaming processors. That's what they first started in. And a lot of gamers get their hands on these leaks.

So that's number one. Number two would be any update on the Blackwell production. We know that just last earnings in November, Nvidia did say that they are shipping more of these black whales than originally anticipated, but they didn't actually provide us with the number. So maybe we'll get some type of financial update. And then Rubin, which is the next iteration of these GPUs. Think of it like a family.

That's supposed to come out in 2026. There's some rumors. Maybe it'll come out earlier. And then last but not least, this is another rumor that Nvidia may launch an AI CPU, so specifically for computers. They focus on GPUs. This would be brand new, but that could wait until Computex. There is, they're definitely heading in that world, too, to compete directly with AMD,

to compete directly with Intel as well. So lots to go over, but those are the four main points for Nvidia. Christina, thanks very much today. We appreciate Christina. Parts the Nevelas is going to be a busy week on the tech front. Yes, because as we mentioned, the tech world is focused on the Consumer Electronics, Showdown on the CES, but there's actually another big event looming, which also has caught the attention of many tech CEOs. And that is the inauguration of one president, Donald J. Trump.

Never heard of him. Never heard of him. Steve Cobach, joining us now with more on big techs. Is this fair to say, Steve, a cozying up relationship? Coaching. Some would say painting fealty, dancing. But look, the latest for those courting Trump ahead of this inauguration day, it's Microsoft and Apple. CEO, Tim Cook, each offering different things, and it might not be the end of what they have to offer

the incoming president. On Friday, Axios reporting, Cook is donating $1 million personally to Trump's inauguration. This, of course, comes ahead of Trump's promised China tariffs. I know there's some questions about that today, which Apple needs to dodge like they did in the first term. Also on Friday, Microsoft President Brad Smith promised the company would spend at least $40 billion on artificial intelligence development here in the United States. for its fiscal year ending in June. That's mostly for AI data centers. That includes buying Nvidia chips,

not necessarily going out there and hiring a bunch of people. Smith also mentioned Trump nine times in his blog post and included praise for the former president's 2019 executive order on artificial intelligence. So let's talk about what's its sake for each of these two names.

For Apple, again, it's tariffs. Those promised tariffs from President-elect Trump of up to 60% on imports from China. Apple, of course, makes pretty much much everything it sells in China and imports here. No comment from Apple. They're not saying if the company is donating as well. Right now, it's just Tim Cook. And of course, you know, there's no real big difference from the CEO of Apple and Apple itself. But still, Trump has also said Cook had dinner with him at Mar-a-Lago before the holidays. Unclear what was spoken about

there. But again, cozing up with that relationship. Microsoft, on the other hand, provides a lot of tech services for the government. And now there are some questions around how seriously it take security that follows a recent breach of State Department emails by Chinese hackers. Since then, Microsoft has said it's going to make security a top priority in product development. And Microsoft, on top of all that, is facing legal challenges related to its stake in OpenEI. That includes the lawsuit from Elon Musk and some federal investigations into antitrust issues there. Not the only notable names in tech, of course, donating to Trump's inauguration. We already heard about OpenAI CEO Sam Altman donating a million dollars to the inauguration,

as are the company's meta and Amazon. Uber is donating $2 million, $1 million from the company itself, and another million from CEO Darikas Rashiari. And then there's Mr. Elon Musk spending $277 million to help Trump get reelected this year, guys. So just a lot of money from tech pouring in. I should also note Robin Hood and some other crypto firms as well. I think it's just one of these things where people go, well, yeah, you know, so all they cozy up to the party in Obama years, it was that, and then it was Trump. it was Biden and now it's back to Trump. And this idea that the companies themselves have to stand for something has kind of given way to just the real politic of, yeah, this is, you want good

relationships with whoever's in office. And it seems obvious to say, but yet it still feels like a departure from a few years ago when it was much more about moral posture. It was more posturing then, and now it's money posturing because the perception here is that Trump is going to be very transactional as he was in his first term. And I always go back to the example when we talk about this to Jeff Bezos. Trump really made his life tough during his first presidency going after him about abusing the allegedly the United States Postal Service, making it difficult for Amazon to win that cloud computing contract with the Pentagon, which, by the way, Amazon eventually tried to sue over and that ended up going nowhere. And now you're

seeing them just go the other way. You know, you're seeing what Bezos is doing with the Washington Post. You're seeing what all these tech leaders are doing, donating. But to be fair, I mean, Joe Biden got a large salary for the University of Pennsylvania. I don't think you ever taught a class. Exactly. I mean, it happens all the time. It does. I think the money to presidents tends to go because money makes the world go around.

But these people weren't donating before. So I think it is, and it's a... Fair enough. It's a recognition from these people. And look where it got Bezos. That guy. I don't know how he eats. Exactly. But it's a recognition from them that this is the way business has to be done in a Trump administration. And they're realizing that they saw what happened the first time.

and now we're seeing it go completely other way. Some people say it's too much, but it's going to work. Yeah. Steve, thanks. Thanks, guys. Steve Kovak. Dow is only up 20 points right now. We're going to keep an eye on it.

And remember, you can always hear us on our podcast. Be sure to listen and follow Power Lunge wherever you go. We'll be right back. We are going to get a final check on the markets before we let you go. And we made a stat at the beginning of the show, which is basically that we're on pace for three, one percent gains in a row. Has it happened in 22 years. Guess what? As soon as I said that, market started to sell off.

The Dow is down negative. The S&P is up, but only up four tenths of one percent. You're welcome, America. I ruined everything. You've got a couple of hours to go and things could turn around. But we know usually by the time we get to hear, we've seen the inflection point in the day. So the Dow is negative, the S&P still up, and the NASDAQ is the real story. And I blame yields, by the way, I blame yields.

I don't think anyone liked it. We had strong services. They all backed up. And this is America. We have to blame something. That's right. It's someone's fault. It can't just be a down day.

Thanks for watching, Power Lunch. We'll see you tomorrow. Closing Bell starts right now.