Power Lunch - S&P 500 heads for best week since November as rates fall 1/17/25

Episode Date: January 17, 2025

Stocks are climbing today, as Wall Street looks to close its first weekly gain of the new year. We’ll tell you all you need to know. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hey, welcome to Power Lunch alongside Kelly Heavens, and you'll see you in a moment. And you just saw, I'm Brian Sullivan. All right, it is higher today. But is Apple still worth your money? We're going to look at the good and the not so good on one of the world's most owned stocks. Plus, the Supreme Court calling midnight on TikTok saying a ban can go forward, but will TikTok get a presidential pardon of its own? Or will the app really go away? Plus, would you pay $100,000 for a Jeep?

How about $90,000 for a Chevy Tahoe or an infinity? Kelly, we know you won't, but we're going to look at some of the most insane new car prices coming up. That was very eye-opening for me. So far, I can't wait to show everybody. Brian, thanks. Let's take a quick look at stocks, which are steadily marching higher with the NASDAQ up 1.7%. A strong end to a good week. 2.5% gain for the NASDAQ since Monday, 4% nearly for the Dow.

percent for the S&P 500. Clearing the way for that was the sharp drop in yields we've seen since earlier this week, starting with those inflation numbers. The 10-year yield just this week going from 4.8 to 4.6 percent and just holding there and nicely treading water for us right now. All right, we have got a lot more to do. We'll see you on the desk, Kelly, but let's start with Apple. No doubt, one of the world's most important companies, maybe the most in company in the world, and it's also one of the most important stocks. Now, Apple is higher right now, but it's been a pretty lousy start to the year with Apple losing about 300 billion in market value just this year. Put that in context, Apple's market cap loss alone just this year.

By what is it, January 16th, that market cap loss would be one of the 30 biggest companies in America. But your first guest today says, don't panic. He remains optimistic on Apple. I meet Dariani, Senior, managing director at Evercore, ISI. He just added Apple to his tactical outperform list. We've got a $250 price target on it at Evercore ISI. And he believes that some of the fears are overdone.

I've done enough talking. I've overdone my talking. I mean, I will let you talk for yourself. What is the one thing you think or two things that investors have been getting wrong about Apple to start the year? Yeah. Listen, I think the biggest thing that's been weighing on Apple right now is this one of on what's happening in China from a demand perspective, right? And if Apple is starting to lose its advantages in China that they've had, and do they get caught in the crosshairs with the political

tensions, right? So, say, China demand has been the big worry. The other one probably has been that the rule out of Apple intelligence has been slower than expected, and perhaps you haven't seen the killer app here, right? So I think those are things that are worrying folks right now. You know, what I think that misses is all the goodness that's happening in Apple, right? So while China, I will concede is weaker than expected, but that's a broad smartphone statement, not an Apple statement. Emerging markets have stunned really well. And Apple is speaking of a fair bit of share in places like India and Brazil and Indonesia.

They don't account for a lot today. The growth rates are very strong. So that's going well. I would argue services is doing very well for them. Apps are doing well. And then bearables, Apple Watch, Airports are doing well. So I think there's a lot of offsets that perhaps are getting under index while we're over-fixating on the China worries.

Yeah, well, you know, listen, our good friend and colleague, Christina Partsenevilus, was flagging yesterday how some of the numbers out of TSM and semiconductor companies, they're scaring people about Apple because they're the companies that make the stuff that goes into the iPhone. And so because those numbers aren't maybe as great as people hoped that it's scaring people about Apple, is that the right way to think about it? You know, conceptually, that makes sense. The part I think that always misses in these analysis is, you know, Apple pre-bills a lot of things ahead of time, right? And suddenly if you're Apple and you realize there's demand for AI chips and everything else, you may have pre-built the inventory, pre-bought the inventory a lot more ahead of time versus not.

So I think there's an element of this that doesn't get captured, which is how much of the product is an inventory or already pre-bought, right? So that's one part you got to consider. You know, the other part of it says in China specifically, There's been a set of incentives rolled out for consumers right now. As long as you buy a phone that's less than 6,000 Chinese won, a lot of Apple products will qualify for that, by the way. You get some incentives.

And notably, these incentives are both for foreign Apple and local products. So I think Apple could get a little benefit from there as well as it's going to the next few quarters. I mean, can you talk a little bit about China and what you think is priced in right now as the news flow out of there continues to get worse in terms of how well Apple might be selling? You know, I think, listen, if Apple can get on a call, you know, the worry everyone has is they're losing share dramatically to Huawei right now, and they're giving up their position, not just the broader smartphone market, but also the premium smartphone market specifically, I would say, right? And so the worry is, like, could we start to see sizable declines over here, you know, 10%

kind of plus declines outside of from the China markets that Apple is involved in, right? That's a worry. I would say I think they're unlikely going to see that kind of decline, and I think whatever decline they do see, they'll see something, low single legit. that will get negated by the very strong near triple digit growth Apple is seeing in a small but very fast-faring emerging market for them right now. That may be the case. Just curious, also, we just heard from Tony Sakanagi. He says it's certainly a buy-around 220, a top pick for the year.

And he thinks they'll do $9 of earnings this year on like a 32 multiple. How does that compare with your expectations? You know, I think to the extent you have a decent iPhone cycle, services. as well variables as well. I think gross margin can keep improving. You know, I do think and maybe I'll put a range of a range on it doesn't say like $9 to $10 of owning spot is very much in the zone for Apple to achieve. And if you believe Apple will end and should trade like the consumer staple asset, which is what we think it is, you know, on a 30 multiple, you can see the stock in a bullish scenario work its way to, it's a high 200.

Right. I think eventually that's where the stock could go. And I was like even I can do that math, you know, 30 times 10 or whatever. And I can get there. But again, I, I, I can get there. But I do have to pay attention to the way that it's trading, which is even with those possibilities in the backdrop, you know, it was tough yesterday, slid throughout the session, kind of a similar look today. Yeah, listen, I think it's China worries,

and I would imagine that once Apple gets on and hopefully calms, folks down and tells you, you know, things are not melting as fast as everyone's afraid about all their offsets to it for that most part. That would hopefully write the ship and get us moving the right direction. All right, Amit, thanks for joining us. Appreciate it.

I meet Dari Yanani with Evercore. Sicking with Apple, let's take a deeper dive. Look at what the charts might be saying about whether today's bounce back can hold. And again, it's about a quarter percent bounce back. So it's trying. Jessica Inskip is director of research at stockbrokers.com. Jessica, it's great to see you. And do tell. What do you see? Yeah, so I see that we actually have that psychological line of resistance is what I like to call it. Apple, I want to look at the weekly chart, have a bigger view. You know, I like to look at the trading cycles, which is 13, 26 and 40 weekly moving averages. It represents one, two, and three quarters worth of prices.

That's the way that we look at the market is quarterly, and we're certainly going into earning season right now. What I'm seeing is we are actually finding resistance right at the 26 weekly moving average around 231. That is a very key level of resistance that I need to become support. There's still a series of higher lows, which is very important to have a direction

of upwards momentum, but this psychological aspect, as in it's, there's so much price found here around the 231 and all other indicators are pointing to this, that it's psychological where if you own the security at that price, you may be opt to sell. Therefore, selling pressure may come in or supply. So it's important to overcome that. And then we could perhaps see a high to 237, then followed by the highs, the all-time highs and the newer highs from there. So from the weekly view, it's just a very key level. You know, I want to be clear to, Jessica, it's not just Apple. You may have heard about this Mag 7 we talk so much about. Microsoft hasn't been doing well as well. Some of the other

Mag 7 outside of Tesla not doing well either. Do you think investor, the investor appetite for these once insatiable stocks may be waning? No, I do not actually. I think a lot of the market is still looking rather narrow. There was a really great chart that actually shared on Mad Money last week where we looked at the Magnificent Seven in comparison to the tenure. And there was just a nasty sell-off with the Mag 7 when it went. The tenure went over 4.75. We saw that happen again. Earning season kicks back in and it's very, it almost dominoes fall in a line. It overcomes from there, even if yields are held high. So I think it's earnings that are going to come in. And remember, when we were talking about Mac 7 last year, we excluded Tesla from the equation or from the

conversation. And it looks like the same thing may happen for Apple now until we can overcome those key areas of resistance. So I still absolutely believe in the Magnificent 7, the technicals are saying that a narrow rally can still carry the market. Broadening I want to see as well, but I am not counting that out, Brian. And Jessica, I know that Apple is widely held and important for that reason. But in terms of barometers, I am still all right, a little obsessed with NVIDIA. We don't hear as much about it lately. But if you don't mind me putting it on the spot a little bit on that one, because it's so dominant in terms of the earnings momentum and the way that it has that effect you're talking about, where it has to kind of show people, this is what

you're paying for. How do you think that stock has been looking lately? I do like NVIDIA. It is a high beta stock. And I do love to bring the options into the equation when we, the way I'm trying to play that, nonetheless, Invidia, I think is an important part of the equation, but I want to go back to earning season. So when we get into earnings and we're going to see everything related to AI, I feel like it constantly, we're going to see here how much they spend. And then all of the sudden, In video will go up as a result. And then the technical levels just stop at key areas of support and resistance along the way. So I'm looking for that narrative. But if we Go to AI. Everything points back to NVIDIA. I think CES was amazing with his keynote speech because

what I learned is it was beyond chips. When we are looking, even from a technical perspective, we'll look at RSI to see if something is overbought, but from PE ratio perspective, is it more than just chips? And he gave us a whole layer of infrastructure in an infra layer where it's more of an AI ecosystem. And that, to me, says from a fundamentally perspective, that will translate into earnings for Nvidia. And then, of course, the technicals are backing it up. So I'm still very bullish on Nvidia. Good stuff. Love the technical take. And Jessica, do something that we normally don't do. We're going to ask you to stick around during the commercial break. We're actually going to bring you back because we're going to pivot from Apple to TikTok and why

Maybe Jessica's take and others on TikTok could deserve its own presidential pardon. It's a new segment that I think as of today we're calling the power point of view. And it is up next. Welcome back. It's the headline that we, I guess, expected, but one many Americans hoped wouldn't come. The Supreme Court upholding the need to divest TikTok or else it could be banned or go dark. We're going to see exactly what happens. Here to take us through the decision and what comes next.

Our own, Aymann Javvers is in Washington. Amon, explain exactly how this is possibly going to work. Well, Kelly, here's the decision. It's 27 pages. The Supreme Court upheld the law passed by Congress, which would ban TikTok starting Sunday. Here's what they wrote in their decision. They said, there is no doubt that for more than 170 million Americans, TikTok offers a distinctive and expansive outlet for expression, means of engagement, and source of community.

but Congress has determined that divestiture is necessary to address its well-supported national security concerns regarding TikTok's data collection practices and relationship with a foreign adversary. For the foregoing reasons, we conclude that the challenged provisions do not violate petitioner's First Amendment rights. Now, the decision here was unanimous. President Trump has pushed back on enforcing the ban and responded to the decision in a phone call with a CNN reporter earlier today, It's ultimately going to be up to him and, quote, Congress has given me the decision, so I'll be making the decision. Now we'll see what happens, Kelly. The question here is what are the tech companies going to do on Sunday when this deadline hits? Because they're going to have to make a decision whether they keep hosting TikTok, whether TikTok is still available in the app store. Because as of Sunday, according to the law, this app will be banned if it's not in American hands.

It presumably won't be an American hands by then. But both parties have signaled that they don't want that to happen. The Biden administration is saying, hey, hands off. We're not going to enforce the law over the weekend. It's up to the next guy. Of course, Donald Trump to be sworn in at noon on Monday. He has said he'll be making a decision on how to proceed from here. Trump has signaled, as we said, he doesn't want to ban on TikTok either because of the political popularity of himself on the app.

So that leaves a question, which is technically, These tech companies would be violating the law if they continue to support the app. On the other hand, the politicians have said we're not going to enforce the law, and we kind of don't want the app to go away. We're left with a bit of a conundrum. Well, are we? I mean, I guess so. So Congress made a law. It's passed.

People challenged it. TikTok challenged it. Supreme Court punted and basically said it's up to Congress and we support their decision. Now it's up to everybody else. So I guess, Amon, and I'm old. The law stands, right? Yeah, I guess I'm just an old. I'm going to yell at a cloud right now, which why don't, why doesn't

TikTok just move the servers to the United States? I know some are here, but why don't they just move everything? If the concern is China, then get rid of that concern, because if they don't do that, it's hard for old people like me to not just see that there's something nefarious going on, otherwise just move the freaking thing that's causing the problem. Yeah. Look, the issue is ownership, right? And Xi Jinping presumably wants to have control over this app.

He does now, under Chinese law, have control over BightDance, and BightDance has control over Tick-Tock. So, you know, if you're the Chinese government in Beijing, you don't want to give that up. You might want to go eyeball to the U.S. and say, okay, shut it down. Okay, I agree with you, my man. And, Kelly, I'm going to ask you.

Yeah. I don't know. I've been to China a couple times. You've been to China, Kelly? Amen, I'm assuming you've been to China. I've been there a couple times, yeah. Then anybody that's watching or listening knows that a lot of the apps that we make are illegal in China. There's no Twitter in China.

They have no problem banning U.S. stuff. Something Bill Gates years ago said like 95% of Windows installs were fraudulent and pirated. Fine. They don't want to move the app. Then we can do what we want with it. I guess that's my confusion. It's not like we're trying to shut down a bastion of free speech. Right.

And that's what the law says. The law says if it's not owned by Americans, it's a hostile foreign power, it can't operate here. You know, basically, period. Now, the problem is there's politics associated with that. 170 million Americans use this app. They love it. They watch it for hours in a day. If you've got teenagers, you know that this thing is highly addictive and enormously popular.

The concern is that it's a way to collect data on individual Americans, on Americans as a group. Anybody who's young now who might grow up and become influential or powerful in the United States, States in the future. They're going to have enormous amounts of data on that individual person. They're also going to have the ability, the concern is, to manipulate American popular opinion on all sorts of issues by just putting their finger on the algorithm and suggesting we're going to have a little bit more content that says this about Taiwan, a little bit more content that says that about the Democrats or the Republicans inside the United States. No evidence that they've put their thumb on the scale that way so far in the United States, but it is technically, legally

possible in China. That's the concern with this app. The problem is that all those voters in the United States love the app and no party in the United States clearly wants to be the party responsible for shutting it down. So what do you do? Yeah, I think it's going to get really interesting in the next couple of days. Amen, appreciate it for now. Thanks very much. Amen Javors. Let's stay on the story. Talk about the people using TikTok all the time. Millions of Americans earning a little extra pocket money by posting as a side hustle. That's what your previous guest does as well. Jessica Inskip is back with us with a personal point of view on this issue. Jessica, I'm glad we can talk about this because, as you say, I mean, the other day we

spoke with someone who's made, you know, two, three million dollars a day on the platform. A lot of people are just able to be successful on it. Can't really take that success necessarily somewhere else, able to make some income on it as well. How many followers do you have? I have 111,000. So I'm considered one of the smaller big creators, I guess, medium size. Yeah, so what is going through your mind as you're watching this, you know, all take place? Well, so what concerns me and what I don't think is talked about is the way that TikTok is structured. There is the creator economy that we have to be cognizant of. So we're looking at e-commerce.

We're looking at small businesses and the impact that that has. We've got numbers associated with that. And honestly, it's a small amount of GDP. So maybe not too much of a concern. But if we take where ad dollars are spent and how it's, actually utilized. I think that will give some perspective. So in TikTok, for example, in the creator community, you only need 10,000 followers because of the algorithm and the way that it pushes content out, you get paid on video views. And for some people, an extra $2 to $300 a month

is supplemental income for groceries. So that really could help buoyance the economy, but it's very difficult to quantify. So that's the real risk there. But, go ahead, Kelly. I was only going to ask, and I want to hear the rest of your thought, but about rival platforms like Instagram. I mean, we follow each other on Instagram and so forth. I mean, they exist. Why are they not as good? Well, the algorithm isn't as good. So the TikTok, what it does is it understands your habits, but it also understands that your habits change and that it also finds people who are very similar to you.

And it creates the sense of community. It's a little bit quicker. And there's this organization aspect that goes to it. Instagram just doesn't have that same feel. It doesn't have the same appeal. And I really do think it's the way that that creator program is structured. So when you are entered into this creator reward program, this is the way TikTok dictates the type of content that it wants on its platform.

It will pay you and say, I will pay you more if you make a minute long plus videos that are quality as in an educational as well as your camera quality. And it will prioritize those. So it actually tells the creators what they want them to create to have, and that's the way it dictates content on the platform. And that makes such a difference. I get it. And I'm active on Twitter or X. I've tried to go to Blue Sky and threads a little harder to gain traction there.

And if TikTok ends up sticking around, Jessica, maybe I'll go. I'm not a hater of TikTok or anything like this. But maybe their algorithm is so good because they're tracking everything. If you looked at their privacy policy and anybody can go to it right now, I think Joe Rogan did a piece on this as well. well, they basically not just follow what you do on the app. They basically track anything you do on a computer. Like, any logins you have, like, it seems to me that maybe the algorithm is so good, they know everything about you because they know everything about you.

If you know what I'm saying, why don't they just move that to the United States and eliminate the China threat altogether or move it to some other country that Congress finds amenable, I guess. I don't understand why we've come to this, like, shut it down. or keep it where it is, unless it's just China and our Congress, both being obstinate. Yeah, I certainly do agree with you.

I think it's interesting the way that everything is unfolded. The algorithm has to be unmatched because of the behavioral science behind it. And I am confident that meta has equal as amount of data. It's just not prioritizing the same type of algorithm. But, I mean, from my personal perspective, the fact that the CEO said he's going to attend the inauguration is almost a very non-direct way of saying,

I'm going to work with this next administration because I'm attending the inauguration that's happening. So if it divest or whatever happens, it is just a gesture to show that a deal, perhaps. I tend to agree with you. I think it's a tell. I think President Trump, you heard Amon just say it. President Trump says it's up to me.

And when the CEO is coming, I think we're going to find out the TikTok has been there. I just want to make sure, not me, but Congress clearly wants to make sure that some of these China fears are allayed. Yeah, absolutely. And I think it's just underpenned the creator economy aspect, though. And think about what we've been talking about overall from a map review of the market. We're trying soft landing scenario is what we've been saying. And we gerate constantly on that. The gig economy was born in 2009. It was coined by a wall. Street Journalist. And that was because after the great financial crisis, people were looking to supplement income. Then we had Uber that came out, all of these other technology that met

that need. YouTube then created the creator economy, and then it was spearheaded by TikTok. And because TikTok pays out so much through their creator fund, I think that since it's not in the way that we traditionally look at economic data, that it almost will feel like a mass lay off if that is turned off. Because think about millions of Americans, because you don't have to have a big following, you can get a couple hundred dollars a month if a lot of people have that and that's what's supplementing their income or creating that resilient consumer that is perhaps not necessarily the boomer case, but the younger generation. That could have a big impact, Brian. Agreed. Jessica, we'll leave it there for now. Thanks. I like the firsthand perspective as well.

Jessica and Skip joining us. You do wonder how can TikTok pay out so much? What do you mean how? Like to Jessica's point, they pay out a lot more in this creator economy than some of the other companies. How? Well, it's an enticement for people to be on the platform. Do they need to do the enticement? I don't know.

Maybe not. But for a lot of people, that's a big reason why. Do you know how hard it is to create a TikTok video? Oh, my gosh. It is agonizing. You're on the end and you're just like, and you're trying to match up the music. And then you'll post it at the end. It'll go, oh, no, no, the music is flagged.

You have to take a. down and start it and you want to scream. So maybe they know you throw a couple hundred bucks at people and it encourages them to stay on. Or they're getting so much money from the personal information. Oh, sure. If that's what's happening, for sure. That may well have something to do with it. And the other platforms are not nearly as lucrative, as we know. Coming up, the market won't know how to handle Trump's plans about dealmaking until he gets into office. But it's not stopping firms from taking their shot anyway, with some bankers saying they've never seen a deal pipeline this jam-packed. More on that after the break.

There's nothing that the media loves talking about more than the media. And look at Paramount. Now, the stock is up 2%. But in this day and age, being up 2% is like being up 50% for a media company. The Wall Street Journal reporting that Paramount has discussed settling a lawsuit filed by President-elect Trump over a CBS News interview with Vice President Harris. Could be assigned the company is trying to improve relations with the incoming administration, as it tries to get approval for its planned merger with Skydance president,

not happy about what he viewed as being grilled by 60 minutes and then not the case with a different interview. I see. Well, there you go. We'll watch it for any further movement or action. We've also been talking recently about a trickle of deals starting to happen. But don't just take our word for it. As the big banks have reported earnings this week, we've heard that same thing from many executives. Leslie Picker joins us now with more. Leslie?

Hey, Gall, yeah, Morgan Stanley's Ted Pick saying their M&A pipeline is the strongest it's been in five to ten years and maybe even longer. Goldman Sachs's David Solomon saying he's seen a, quote, meaningful pickup in dialogue and inquiry. And J.P. Morgan, CFO, Jeremy Barnum, saying he's optimistic about the pipeline. Wells Fargo, it's Charlie Sharp, saying the M&A opportunity remains significant. Investment banking, once again, showing massive gains in fourth quarter reports, the last few years have been well below historical averages. The big overarching question now on Wall Street is whether that true inflection point is in store in 2025, or if these prospective deals we're hearing about never find their way out of the pipeline. Executives and analysts

tout changes in the macro picture that bolster the case for a big upswing. There's the prospect for deregulation under the new Trump administration, a relatively stable financing environment, and pent up private equity funds that need to be spent. Wells Fargo analyst Mike Mayo saying that these factors may contribute to record capital markets revenue in 2025. Guys? Yeah, looking into this as well, Leslie trying to figure out what we should be bracing for. Hearing some chatter about watch the banks.

Also watch a lot of just mid-sized companies in general. It's just the start of this boom. And maybe it's not until next year, even the year after that we start seeing the real highly leveraged blockbuster deals. once people get a feel for the incoming regulatory regime as well? Yeah, I mean, the way these things usually work is there are certain deals that take place where people kind of dip their toes in the water and see how the market reacts, see what the buyer stock does, see what the seller stock does.

And then it kind of creates more of a ripple effect for some of their peers. Sometimes, you know, that's the way we start to see at the beginning of a cycle. Other times, like we saw in 2020, 2021, it was just this massive onslaught. There are some deals, though, that don't necessarily make sense if yields are higher for longer as well, because even though financing has stabilized and the credit markets remain wide open, they are still more expensive than they were a few years ago. And so people still have that psychology in the back of their minds. And that plays a role in the price that they're willing to pay for assets, the price that they're willing to sell assets. Yeah, great point. Leslie, thanks. Appreciate it. Leslie Picker staying on that beat for us. and Brian.

Well, on deck, you've seen the posts, maybe you've seen them on TikTok, and some of the outrage over them. Wealthier families asking for private firefighters to battle the blazes in LA, but the truth may be a lot different than the headlines. We're going to hear for the founder of one such private firefighting force. Next. If you have a child or a dependent under 17, you may qualify for the child. tax credit. You could get a benefit of up to $2,000 per child if your income is under $400,000 for married couples and $200,000 for other filers. Those with higher incomes may get a partial credit. For CNBC, I'm Sharon Epperson.

Welcome back to Power Lunch. I'm Bertha Coombs with your CNBC News Update. Russia and Iran are teaming up in the face of mounting Western sanctions. Vladimir Putin and Iranian President Moschli Rezisqqq. signed a broad cooperation pact today, calling it a, quote, comprehensive strategic partnership treaty, covering everything from trade and military ties to science, education, and culture. The Treasury Department proposed two new rules today to change labeling on wine, distilled spirits, and malt beverages. They would require the listing on alcohol content and nutritional information per serving, along with a warning about potential allergens.

If implemented, the so-called fact boxes would be similar to labels required on food. And if you didn't have time to sit down and eat a bowl of soup, Progresso says it now has you covered. The company is launching a chicken noodle soup hard candy similar to a cough drop. The soup drops went on sale yesterday, and the company says they're already sold out,

But more will be coming out every Thursday for the rest of the month. Hopefully, Kelly, speaking of food labels, it won't have 680 milligrams per drop like one serving of the soup in terms of sodium. That would be salty. Bertha Banks. Bertha Coombs. Private firefighters have been a lightning rod topic in recent days, as some Southern California residents have been using them. Some before the fires occurred, others to save their houses and properties as the fires broke out. Most notably, the 2022 mayoral candidate Rick Caruso, who had used private firefighters,

according to reports, to save his Pacific Palisades Shopping Center. Joining us now as CEO of All Risk Shield, Joe Torres, who founded his private firefighting company in 2013. Honestly, Joe, in industry, I didn't really know existed, and this has really brought it to the forefront. So welcome to you, and how widespread a practice is this? Where are your clients and so forth? Thank you, Kelly. Thank you for having me. My clientele, pretty much, we cover the state of California.

I have clientele all the way from Southern California, San Diego area, all the way to Sonoma, Napa region. But yeah, we've been doing this for 10, 11 years now. But the main focus, I think, with my company makes us a little different is that we're trying to be as proactive as possible. Our engagement and relationships begin well before anything happens. So there's a lot of proactive measures that were taken beforehand. Right.

So I'm curious about that. I'm also curious about how much it costs reports have been anywhere from maybe $2,500 up to $6,000 a year, which people now probably think, yeah, that would have been money well spent. And how much of the growth of this industry, let's call it, has to do with people who aren't sure what's going to happen with their homeowner's insurance? These are all great questions. There's so many variables that go into this. So engagement with my company really begins with an assessment.

We do an assessment that highlights and prioritizes what's needed for the property specifically. So just being as proactive again as possible with our clients and saying, hey, these are the things that can be done that we should be doing beforehand. And again, those price points for us begin at 2,500. So there's no exclusivity here as far as who can afford our like, specifically my company's services. So I think that's a big, big kind of misconception. Are you stealing resources from public firefighters,

of which I believe you used to be one? I still currently am, and no, we're not stealing any resources. House, why not? Because that's what ever, there's a guy that posted on Twitter. We talk a lot about social media this show about my house about the burn down. I think the house did burn down, unfortunately. And he's a help, help. The guy got bludgeoned.

know what happened to it. You know what I'm talking about. He got destroyed. People like rich guy, who cares, whatever. Dispel some of the negative myths around there, Joe. There are many. Yeah. So let's start with, so the tactics that we employ are, well, first off, the hiring. So my team is made up of retired firefighters. So all these gentlemen, or my team is made up of retired firefighters who have experience and skill set that you cannot buy or purchase. It's invaluable. Secondly, our tactics are bump and go. We prepare and assist the property and then we hand it off to local authorities or those first responders

coming in. Having that, having preparation of property, knowledge of the area is so invaluable, especially when you do a handoff to first responders who are maybe out of the area from other jurisdictions or out of county or even out of state in this instance. of that information is so valuable. And then thirdly, I think there's a, you know, the misconception of use of hydrants. Fire hydrants are for use of AHJ authorities having jurisdictions. So first responders, my companies is not, we're not touching fire hydrants. This is something that's, that is not happening whatsoever. So I think those are three kind of big, big, big value right there. There's also a lot of

insurance companies employ the private firefighting force to be a force multiplier for those boots on the ground. Which makes sense as they're now, I mean, everyone's looking both to cope with these risks and to figure out exactly, you know, who should bear them. Joe, thanks for joining us to explain a little bit about it. Hope to check back in soon. Yeah, thank you, Brian. Thank you, Kelly.

You got it. Joe Torres of All-risk Shield. All right, coming up, we are going to go car shopping. We're going to ask all of you, would you pay a. 90K for a Chevy Tahoe. How about a Jeep grand wagoneer? 100,000? Talk about the big car price inflation story ahead. All right, welcome back. The average price of a new car, a new car is basically as high as it's ever been, just shy of a record set back in 2022 when a chip shortage inflated prices. And of course,

interest rates are a lot higher, so prices are probably a lot at a record. Phila Bow, joining us now with more. Phil, where, so, you know, 10% or 9% on a used car loan? I don't know what it is on a new car because I'll probably never own one. Where are car prices right now? Let me show you in a chart because when you look at this chart, you'll say, holy smokes, it's up how much in the last five years? Well, I did the math for you.

And it's up basically about 10, 15%, at least. It's close to $50,000 when you take a look at what the average, the average transaction price is for a new vehicle here in the United States. Part of what's driving it higher is the demand for luxury autos, and those are also seeing increased sales. In fact, luxury auto sales, this is according to Edmonds, up 16% compared to just a couple of years ago. Now, more than 2.1 million. That's how many were sold last year. Porsche is a good example of the demand that's out there in North America. Its sales in North America last year up 1%. Compare that with its global sales down 3%.

And the head of Porsche, North America, is optimistic about 2025. We are very positive in terms of our ideas and our direction for the year 2025. And we see that already based on the demand that we see for our products right now. When we talk to Tim Oresh, he said they see strong demand, at least for the next several months, very optimistic. As for the German automakers, you know the story here. The main market for their sales over the last five years was China, in addition to Europe, obviously. China is, they're all struggling there. Their sales are all down in China, guys. Bottom line is this. Luxury demand continues to be extremely strong here in the United States. And the stat of the day,

uh, 37% increase in sales in December for vehicles priced over $80,000. Let me see. say that again, up 37% compared to December of 2023. So I was also struck, Phil, when I saw that a quarter of vehicle trade-ins towards new car purchases had negative equity last quarter. And you wonder, again, like, what is brewing here as the price just goes up, up, up, and may go up yet further with tariffs? Well, we've seen this play out before, Kelly. What ultimately happens is that people either have to lose their vehicle.

It's going to be repossessed. But they're very, very adamant about hanging out to the vehicle as long as possible. For a lot of people, they just have to eat the cost of being upside down into the next auto loan, which then drives up the monthly payment. Phil, I mean, it's amazing how many cars, because I, and again, I'm a car guy, you're a car guy, Phil, I get it. We have to go. We had a time, Joe. I was going to ask him, no, but do we have time?

We have to. I was about to launch into a rant about $100,000 SUVs, but they cut me down. They shut me off, Philibault. We're going to let you go and enjoy your weekend. What was the one that was $130,000? There's like a $125,000 Jeep Grand Wagon here. That's the highest trim. I get it.

And I love Jeep. I'm a Jeep guy. I own two of them. It's a lot of money. Oh, my gosh. For a Jeep? Yeah, that's all. And it's, yeah.

I'm not picking on Jeep. I own two. Novo Nordisk is lower after two of its popular weight loss drugs landed on Medicare's list of drugs due for price negotiations. Shares are down 5%. It's in three stock lunch next. It's time for three stock lunch where we hit three different stories and how they matter to you. Here with our trades is Gina Sanchez, Chief Market Strategist at Lido Advisors and a CNBC contributor.

Gina, welcome. We've got Intel lower today on renewed acquisition. I'm sorry, higher today on renewed acquisition chatter popping 8%. What do you do here? So we own this stock and we're holding this stock. I think the question is who is this mystery acquirer because there will be regulatory issues. This is a strategically important company. Now, for that reason, it's a great. acquisition target. So we think that there's long-term potential here. All right. Long-term potential, again, on a day where it's kind of giving us glimpse of what that might look like. How about Sherwin-Williams? Evercore just lowered the price target there. B of A, RBC, cut their targets. It's a new Dow component, but it's down about 6% since joining. So, yeah, this one, though, if you look at their actual

trends and revenues, it's actually going in the right direction. This is a great dividend payer, and that's why we own it. So we've actually continued to own this. dock. Okay. Continue to own Sherwin Williams throughout some of those downgrades. And what about Novo Nordus? This was interesting. Lowered today after those weight loss drugs, Wegovi and OZembek, both landed on Medicare's list of next drugs to face price negotiations. It's down about 5.5%. Is it an entry point? Look, we think that this space is not going away. If you look at the secular drivers behind obesity and the need for these drugs, it's not going away. But more importantly, I do think that while they may take a short-term revenue hit in the price, in terms of lowering price,

I do actually think that they could gain a significant amount of market share. Also, despite the huge obese population, there is an equally large population that does not want to become obese, and there is a massive movement towards microdosing. So I actually think that this can still be a relevant drug in that world. Gina, thanks. Appreciate it. As always, Gina Sanchez, three-stop lunch. All right, and before we go, Kelly, I want to throw, we'll call it an RBI, random,

interesting. I used to do it. We'll see what happens. By the way, look, I know it's going to be super cold in D.C. for the inauguration. Look at hotel prices. We looked on booking.com for the Sunday to Tuesday. It's like $1,000 a night for a hotel that normally would be like $120 a night. We just talked about cars and SUV costs. Well, hotels for the inauguration in D.C. What else? Yeah, but listen, if you're Mark Zuckerberg. Old man yell about this week. Well, I think it's just a sign of interest. Now, now that they're moving it indoors, maybe that moderates somewhat. And maybe it doesn't, I don't know. I've never been there to see the difference between one or the other. But people are flocking there to be part of this event,

to be in front of Trump. And I have a feeling if they have the capital spare to get down there for it, they have the capital for the hotel. Now, the public, different story. I don't know where people are going to stay. Maybe they made their plans on November 6th, was it? It was election November 7th? Got in there before the big surge. We're going to see, but the price is really high. Yeah. Temperature, not so much. Watching Power Lunch, everybody. Closing bell starts right now.