Power Lunch - S&P 500 rebounds as Oracle leads tech stocks higher 6/12/25

Episode Date: June 12, 2025

The S&P 500 is on the rise, as a rally in Oracle lifts investors’ hopes and boosted the big tech sector. We’ll speak to Wall Street titans Mario Gabelli and Mike Novogratz about where and how to invest right now. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

We are now just over 1% from an all-time record high for technology stocks with Kelly Evans. I'm Brian Sullivan. Welcome, everybody. Here's what's new at two massive interviews right here on Power Lunch, legendary investor Mario Gabelli and a crypto giant Michael Novagrats. They're going to bring you real-world advice on how to invest in stocks, crypto, and more. It's going to be great. Really looking forward to it. Let's give you the quick setup on the markets, as Brian mentioned, as we kind of march ever higher towards these all-time highs. The S&P. and NASDAQ up about a quarter percent today. The Dow lagging just a hair.

And moving on, one name specifically dragging down the Dow, of course, is Boeing. It's down almost 5 percent today after hundreds are dead on that Air India Boeing 787 Dreamliner crash just after takeoff. Awful. Now, again, we haven't seen much movement in Boeing shares as we try to learn more about what happened to that event. And we'll continue to bring updates throughout the hour if we get them. Elsewhere, names that might be exposed, GE Aerospace, for instance, those are

also under a little bit of pressure there. We're also on IPO watch. Yesterday we had Voyager hit the public markets. It's lower today, but a strong debut. Chime Financial is today's IPO at price at 27, and it's now trading at 38, so a pretty healthy move there as well. And Oaklo shares are shrieking off those initial concerns around its $400 million equity offering, and in fact, they're turning positive and trading at all-time highs. Of course, this follows a big nuclear deal that it struck, many pointing out its equity offering was, quote-unquote, opportunity. but still the investor base is hanging on and pushing the stock higher yet again today. And finally, a couple of names in the news, Philip Morris, IBM, Microsoft Oracle, all of these

hitting 52-week highs. All right, so let's kick off the hour with one of our favorite people. That is Mario Gabelli. Remember, he was on the program back in late March just before all the tariff turmoil hit. Obviously, a lot has happened since then. The tariffs hit. They took down the market, only to see one of the greatest and fastest stock market recoveries of all

time. Now on that program, Mario talked up companies like crane, GATX, Sony, and more. So what is he doing now? We don't know, but he does, and he's here. Mario Gubelli's chair and CEO of Gamco advisors. You were only here like two and a half months ago, but it feels like 17 years ago, given all that happened. If you and your team were buyers in that period, you've just printed money because every stock that we just showed that you talked about is up. Were you buyers? We're doing it a little different. We like to think about what's going to have in three to five years out and what are the values of a company and what are the dynamics that impacted? Yeah, so, you know, understanding what Crane did, Crane went out and bought a business and that pro forma data helped

them. But it stepped back, Brian, it's the defense and commercial aviation side of the world that is all of a sudden having traction. Next week, on Sunday, Monday, Tuesday, in Paris, there's an air show. Probably goes until Wednesday or Thursday. And what they're going to talk about. Now, it got a little blimp because of what we talked about. Obviously, a terrible story today. Absolutely terrible.

And so the notion of commercial aviation, meanwhile, you're seeing the defense side of the house, which was already visible, but became more pronounced, where Canada, for example, saying we're going up to 2% of our GDP, the rest of Europe, the defense stocks in that part of the world are doing extremely well. So, yeah, there's change. But, you know, look, you come into the year, and you see, we as a country had a debt and a deficit. The deficit, we spent 7-2, we took in 5.1.2 or 1.1 trillion. We had to do something.

We have a debt of 36 trillion. We got to do something, interest expense. Then on top of that, we knew there was a tariff. You know, we took in 3-1. and we sold 3.1 billion, and we take in 4.1 trillion, we have a deficit. So the guy, the president had to do something, and it's been a little challenging in terms of the style, but you've got to change the course of those dynamics, and the market's adjusting to it slowly. Are they changing for the better? Are they changing for the worst?

Do you get tactical and just, like, have your team look for very specific areas that might be disloyal? located in good investments, or do you just, to Brian's point, go, you know, the whole market went crazy, we bought, and now what do you do if we're at all-time highs? Now, but from the point of view of companies that are opportunistically taking advantage of this, for example, Skechers, you buy a shoe, they have a tariff impact from China. The stock goes down. So the company announces that the management and the family are going private would have, and they put the price.

They took advantage. That's good for them. Yeah. Yeah. So yesterday, for example, two companies. One, Dana, which we had thought would do something. They announced the deal with Allison Technology. There's 145 million shares. The stock was X, and it's around 17 today. They're going to get $2.7 billion. M&A, financial engineering for the sale of this off-the-highway transmission business. They're going to have no debt. They're going to be able to earn a buck and a half to $2, two or three years out.

And they're going to buy back a... The stock's up 52% year-to-date. I know. That's too good for you. No, but they announced that earlier in the year. So this is a company we've been tracking. It's gone through several versions of bankruptcies over the years, and they had a management change,

and Brett Icon kind of helped with the new fingerprints on it. The stock was 9, 10, 11. They announced early to the world. They announced early to the world that they were going to look at monetizing their off-highway business to reduce debt and make a change. You still involved? You still own it here?

You still like it here? The stock was $17.45 this morning. I'm nibbled at some today for new clients. Okay, we do get some. And basically, I like that one. The other one that was announced yesterday around 6 o'clock after the market closed was a company that makes these things. Oh, that one, which one?

If you're on the radio, he's holding up an avocado. Nobody makes avocados. Well, they grow them and they produce them and they cut them and they slice them and they Okay, they sell all that. And they're expensive. But, and the other side of the coin, the stock was 23, 5th, 20, CVGO, CLAVO, growers. Yeah. We mentioned them the other day. And essentially, the numbers were uninspiring. The stock was going down, which is strange that they would wait till after their earnings release tonight announced they had an indication of an unsolicited bid at $32 consisting of a public company giving paper and cash. And so the stock is 26. We like it because we think this is an interest. And there's another company in the same business called Mission.

That one is impossible for me to get my hands around. So you don't like the financials of Mission quite as much? No, I'm joking. Mission Impossible. I got it. Basically, you know, you guys were at Versa at this morning. So you got to understand this stuff about the theatrical world. There's Mission, by the way. It's just under $12.

Then that one's down 17% year-to-date. So you're sticking with Calavow. No, no. buying because the CEO is indicating that he's obviously ready to negotiate some kind of a transaction. It's on the table. It was like what you call a Papa Bear Hug or Baby Bear Hug. Somebody announcing it and they're going to start negotiating. So you like them both. You like all the avocado produced. Well, no. I'm focused on. The other one is Lemonera. The LMNR, it's about $16.

Cablovo has 17.5 million shares in the stock is selling at 26. You multiply that and you get a market value and you look at the balance sheet. okay, even if there's no dealably okay. But in terms of corporate lovemaking, what is going to happen next? You think they're all going to combine? No, not with them, but just conceptually, you have the Federal Communications Commission. Right now, right now, you can only have 39.5% cap on your TV stations, of which there's a 50% discount without getting details of UHF. They want to lift that. So if they lift that Tegna, which almost had a deal at $24, Sue Kim was buying it,

whatever reason the FCC came up with an excuse not to let it go through, or stall it and that blew it up. The stock's 16. They have 160 million shares. They had $240 million, so they shrunk their cap by a third. Sinclair will be one involved in this. Let's just buy Tegna at $16. It's going to be trading at $24 a year and a half from now.

Let's take a short, let's take a pause because we went from industrial companies, cranes, aerospace and defense, avocados, tortillas, and local TV stations. And we haven't even gotten to the luncheables and smoker. Oh, I forgot about that one. So, Mario's brain moves very, very quickly. So this is live TV. So let's back it up just a minute. One thing I've noticed about Calvo, CAL, AVO, which is the avocado company you talked about, and Mission.

one thing they have in common, aside from deliciousness, is that they have very few analysts covering the stock. I know you guys do your own work in-house, but is that kind of a gobelly hallmark? You like companies that aren't followed by 15 people at sell-side research firms, or is that incidental? That's a very good question. What's happened is because of the growth in the ETS,

cell-side broker-firm, also because they can't get commissions and do underwritings necessarily, they have been shrinking their research. So when they have fewer analysts, they cover bigger companies. It's a very practical. Apple has 50 analysts that cover it, and Calabo has effectively three, if that. That's part A.

Part B is that from a research point of view, the ETFs have taken hold. Therefore, just put together, pay the fee for a Russell index, and just clone it or make some minor deviations, and you don't need any research. You need an algo. So you hire somebody that, can do algos and figure out those kind of ETFs, and they're tax-efficient.

So those are the challenges that what, why fundamental bottoms up research is taking its toll. From our point of view, you know, the ignored and unloved are clearly stocks that we like. So talk about Smucker for just a second here, because this, if I were to say there's one item in Robert F. Kennedy Jr.'s crosshairs. I'd be hard-pressed come up. Maybe that one has shown me that one there. Yeah, okay. Well, let's go to front. It's holding up an uncrustable, which is the peanut butter and jelly sandwich snack.

No, I'm not holding it up. I gave it to you for a snack because I defrosted it. It's not terrible, but it's not great. No, we don't disagree. On the other side is peanut butter and jelly with a piece of, and you can buy, I bought these at Costco for $14.88. Okay. That's a lot of money. I know.

Well, if you're a busy parent who needs to fill a lot of school lunches, this has filled a void for you. If you're an investor in these stocks, though, a lot of these names are, they're driving you crazy. You've got Maha, you've got the GLP drugs, you've got a lot of trends working against you. I agree. This company made an acquisition about two years ago of this company called Hostess at the time. They just rolled it down. So the stock was down $16, which got my extra attention. There's 106 million shares.

The stock's 94. Folger and this product, this product is $10 billion, growing substantially because it offers a peanut butter and jelly, which they are known for. But they also have a coffee business called Folgers. Fast forward. But the current year that starts next, and it will be earnings of $8.50, which they announced, which is way below the street system. The stock got destroyed. Yes, that's fine. That's great.

And then what happens, I'd rather buy them lower than, and obviously than higher. So in that context, what is it going to do in two years? If they can price their coffee differently, which they will, and crustal's continues to grow, and their debt as reduced a little bit with the cash allowed for the dividend, you're going to talk about $12 in earnings. And so by then, the mistake they made and timing of this, they paid $5.5 billion. This business has come down and the cash flow barely, you know, covers the interest expense. So that was the mistake. But, you know, Ted Williams.

The baseball player. The baseball player. About at 400. Only player to ever do it for the entire season. And that means he made out three out of five times. So this company's made a lot of very good hits. And this one has one of those strike. Postis.

Yes. And the timing was not good and the price was high. But on balance, Take a look at what's there going forward as opposed to looking through the rearview mirror. And the price is allowing you to do quite well over the next. So their tagline for Smuckers, I don't know if anybody remembers this, but me, with a name like Smuckers, it has to be good. That was their jingle. And maybe it still is.

I have no idea. The stock has not been good, but you want that. It sounds like you are a long-term fan. Yes, two years from now. And buyer of J.M. Smucker. S.J.M. is the symbol. S. Ohio-based coffee and peanut butter and jelly purveyor. Not complicated.

Any parting. I just took a bite. Any, I've noticed there's a bite taken out of that. Some milk. There's a lot of peanut butter in there. Maria, before we let you go, any kind of parting comments on the media business? You mentioned tag net. Obviously, that's one way to win way to play.

No, no. What happens is the following. Not complicated. You want to go and put money into content. You want to have distribution, but you also would like to get recurrenties. revenues. So the Netflix idea of having it streamed and paying a monthly recurring revenue is an interesting and ideal model. You get a higher multiple because revenue. They have 400 odd million shares. The stock is $1,500 billion market cap. That is greater than Disney, Comcast, and all the

broadcasters. So what you're doing, Zazlov comes along and says, I'm splitting the company to two parts. David Zazlov, chairman of Warner Brothers Discovery. And one of her discoveries has 2.5 billion shares. The stock is 10. That's $25 billion. $25 billion. And the debt will be, when they finish the restructuring that's going on right now, they'll have $28 billion of debt nominal amount plus or minus.

That's $50 billion. They're going to earn $10 billion. And they're splitting the company up a bit more. And then what's that company in Philadelphia? Comcast. Yes. Heard of them. Yeah, they are doing some financial engineering.

And then Disney is going to do something. Would you invest in any of these pieces right now? Yes. Well, we're buying Disney. Not Disney. Well, we own Disney, but because we own what they bought was Fox. So we have a very low cost basis, and we're not going to take the gain, and the stock is $118. But right now, Warner Brothers at $10.

We like what Zasloaf is doing. We like what's going to happen. So you're going to buy it in anticipation of the split. Yes. And then in addition to that, we're starting to come back and focus on Comcast. In addition to that, we own Fox because of the case. cash flow and the stock buyback. In fact, they have no debt and they have total... But you'd be interested in Comcast Post to spin, basically?

The cable business has got some challenges. The CAPEX is going to start slowing down. The government is throwing some money unnecessarily at building out cable and giving companies. And then SpaceLink, despite the challenges with Musk, is getting got the right to put in services for some of the monies that are going out for the program called B-E-A-D-L-Caps. Starling, which is why I think he's being very very... nice all of a sudden again to President Trump. There's a lot of money on the line. But you're not saying clear. But there was more money on the line when people were burning

his cars in China that had challenges, Europe had challenges. You know, there's a lot going on. Yeah. But it's not as if you're running away from the media business. It sounds like you're actually looking at some of these pieces. Well, you have national, when you have a stock selling a $500 billion market cap and everyone is selling it, Paramount is selling it a $10 billion. And they have capabilities that are going to do. will be enhanced when they do the deal with Skydance and... That's Larry Ellison's son, effectively, David Ellison. And they have a transaction in the pipeline.

And the one way to solve the FCC problems is to just spin off the... But it'll take time. Yeah. The television stations. So there's a lot going on. And so from my point of view, there's also things that are so obvious. Matt Gans. Today, there was a story about how much, you know, it costs,

for electricity that could be reduced by allowing gas to go from Pennsylvania up to New England. There's always a lot. I think I know a show that's talked about. Brian's been on this for literally years, but how would you play that? What's the investment? You buy an EQT is what you do or a pipeline company. The simple is NFG. National fuel gas.

Located in Buffalo because they have the acreage under the Marcell. They own the acreage in Pennsylvania in which Marcellus, the Nat Gas Play at 10,000 feet below. level is and then you got to deal people to protest every time a pipeline gets they'd rather import their natural gas via carbon spewing ship from Trinidad or Venezuela into the harbor and offload it and burn trash literally burn garbage or trees to make power then put in a pipeline those are factually accurate statements well the company's doing great cash joe net gas prices around four dollars plus or minus and they're going to earn six 50 to seven And it's one of the few utilities that is not selling stock, but buying it back.

So there's a lot going on. Well, a lot of people expressing their love for uncrustable. So maybe you've picked up the stock at a good moment here with its ardent fan base. Oh, my goodness. Well, you took a bite. I would eat more, but I don't have any milk. And I'm on live TV. This is not the hot ones.

I'm not going to be doing it. It's a two-minute commercial. And when we go to that, I'll eat more, Mario. Thank you so much for coming in. This is fun, but it's all for profit and focus for the clients that are on the show and for your teammates. So thank you for having me. It's great to see you. It's great to see you.

Mario Gabelli. Thank you for lunch. Gamco investors. A second day of inflation data has yields lower. Rick Santelli is tracking the bond action this hour. Hi, Rick. Hi, indeed. You know, if you look at the year-over-year PPI Corps X food, X energy, X trade,

on a six-year chart, it really jumps out at you. Inflation is moving lower. However, there's a few asteris. Like CPI, there's a couple outliers. First of all, we're not really near that 2% objective of the Fed yet, but we're getting closer. And actually, four out of the six parts of the PPI today were actually sequentially higher. And maybe that's because last month had such an odd complexion to it, down half a part. percent on the headline was reduced to only minus two tenths, up one tenth.

So the numbers were less than expectations, and that's very important. If you look at the market, it gave you a quick synopsis. That's a two-year chart. You can clearly see at 8.30. It's the maturity that gave you the best glimpse of how rates dropped. Then, a few hours later, we had the last of $119 billion in coupon supply in a form of $22,000, 30-year bonds. And you could see at 1 o'clock Eastern what happened there. made new fresh lows, but they reversed just a smidge.

Right now we'd be on pace for basically the lowest yield closed since early last month on a 30 year. Now, dollar index is the big story today, and I will tell you the one single word that anyone who trades foreign exchange will tell you is the most important word. Stability. It isn't necessarily about the dollar going up or the dollar going down. It's about stability and volatility, because it's not necessarily about the dollar going up, because once that disappears, all the dollar-denominated assets may need to be hedged. And when hedges get expensive, many times they sell whatever it is their hedging.

In this case, it's the dollar. So as you look at these two charts, we are taking out that 2025 April low, which caused more hedging, which is making things get more and more aggressive on the sell side. You want to really pay attention to today's clothes, especially if it's below 98. Kelly, back to you. Agreed. Rick, thank you very much, Rick Santelli. A lot of people watching the dollar today. And oil is popping, not just because of that.

Much more front and center are these concerns about Israel and whether it could strike Iran. We will talk about the potential for that and for greater unrest. WTI around 68 a barrel today. Halima Croft is next. All right, welcome back to power lunch. Let's talk oil prices. They're easing off a little bit, but they hit a two-month high yesterday on growing tensions in the middle. East. Tensions that are high enough that President Trump addressing concerns about a possible

Israeli strike on Iran. Listen to this. How imminent is an Israeli strike on Iran? Well, I don't want to say imminent, but it looks like it's something that could very well happen. Look, it's very simple, not complicated. If it's big enough for the president to talk about, it's certainly big enough for us to talk about with our friend, Halima Croft, head of commodity strategy at RBC Capital Market, CNBC contributor, and somebody wrote about this, again, in a must-read

note, you work all the time because this came out late last night. So thank you. Oil moved up four and a half, whatever percent, on this, and there is talk, as we hit yesterday, thank you for flagging it, by the way, to me, that potentially the U.S. embassy or embassies

could be partially or completely evacuated. Scary time. Scary times. Non-essential drawdowns of three embassies, our embassy in Baghdad, Kuwait and Bahrain, raising questions about are we on the precipice of some type of military action. We also had the UK Navy come out yesterday and warn about potential military action around key waterways. So it was a lot of news about potential unrest in the Middle East. Why?

Well, we're getting to the precipice of do we get a deal or no deal on the Iranian nuclear talks. It really sounds like Sunday will be make or break. We're waiting for the Iranian counteroffer. It all comes down to the issue of zero enrichment. The White House, the Israelis, hawkish members of Congress keep insisting Iran can enrich no uranium as part of a deal. The Iranians are saying, no, we want to enrich at low levels. And if you deny us enrichment, we're not going to come to the table. Do you think this was saber-rattling then just to kind of make a point ahead of the counteroff?

Well, that's so interesting because you do hear some whispers resist saber-rattling to say we're serious. What I question, is that going to show the Iranians you're serious, a partial drawdown of an embassy, or sending B-2 bombers back to D.A. So the question is, is this going to scare the Iranians into coming to the table or do the Iranians essentially believe the U.S. is not going to participate in the military strike and they can continue to hold a hard line? Why is Israel like the proxy here for whatever skirmish may break? And I understand that Iran's missiles that's what they can hit Israel. And so Israel is now trying to think through whether it needs to do something preemptive.

Can you just kind of explain the possible sequence of events? Well, I think we really need to be watching, you know, what happens? with the Israelis. The Israelis have said that they cannot tolerate Iran having enrichment capabilities. There is a view that Iran is getting increasingly close

to being a nuclear state. If you look at the IAEA latest report, Iran's highly enriched uranium stockpile has grown by 50% since the last. Is there, I'm sorry, intro, but is there, in other words, a difference of opinion between the U.S. and Israel

on what's acceptable here? And is the back channel talk potentially happening between the U.S. and Israel about whether the Israelis feel comfortable with whatever we might feel comfortable agreeing to. So what's interesting is we don't really know what the final U.S. offer is going to be. What is the final term sheet?

Sometimes we hear we could live with some enrichment as long as there's intrusive monitoring, inspections. Other times we go back to zero. Zero is what the Israelis want. It's going to be key what the U.S. final offer is. And that leads a possibility of do the Israelis go alone? What happens if talks break down? I think there is an increasing view.

If talks do break down, that is when the probability of an Israeli strike grows. There's plenty of oil in the world. If we take out all risk, supply demand is pretty well balanced. We're balanced now, but if you did see a situation, so for example, if there was a strike and, for example, Karg Island, 90% of Iranian oil exports, Karg Island. And so if you saw something like that happen, all of a sudden you would be in a materially higher price environment.

Also pay close attention to... Because you'd be down over a Karg Island, you'd be down over a million. barrels a day. Oh, definitely. I mean, it's 90% of Iranian oil exports. Then you have to go to the issue of you have these militias in Iraq. Where are the Iraqi militias located? They're located in southern Iraq, close to key places like Basra. So again, there's a lot of risk in terms of potential targets that involve oil. The question is, are we going to get to that point? And if we did get to a situation where we saw intensification of attacks, you do have spare capacity. So would we see OPEC spare capacity coming on to the market.

Let's hope we don't get to that point, because if we get to a point where the Israelis are carpet bombing parts of Karg Island, you're probably going to see, you said, materially higher oil prices. For an administration that isn't... I mean, President Trump was out... Because then what is Iran do in response?

Luckily, it hasn't happened yet, but I think what you're talking about is that sort of that cascading... Escalatory spiral. Correct. We saw it in 2019. We saw the Iranians. When we reimposed maximum pressure, they hit pipe. pipelines. They hit critical infrastructure. Remember Abcake in September? So again, pay attention to Sunday because that could be make or break in terms of the talks. Working on a Sunday. Working on a Sunday. Halima Croft and let's keep the B-2s off, Diego Garcia. Halima, thank you. Thank you.

Coming up, this sector facing a potential crisis from the president's one big, beautiful bill. Market Navigator will tell you what that one could be right after this. Crypto.com is America's premier crypto platform. Welcome back. We're hanging on to modest gains this afternoon after some much better than expected inflation data this week, painting a better picture than many had feared at least for now. But our next guest is worried more about the jobs market anyway and about the president's big beautiful bill. And he thinks international markets are the right idea for investors right now. Eric Pacman is chief analytics officer at Bank Creek Capital Advisors. Eric, so many people, I mean, look at the dollar today, right?

They're so looking to international stocks and hoping that they're not jumping in right at the moment that this trade is about to turn. So reassure them. Yeah, so maybe I have some good news for them, I guess. If you look at the job market over the last two years, on the surface, the private job ads have looked pretty strong, right? 127,000 jobs per month on average. But when you look at the BLS's data and you start digging down into the details, you don't have, have to go very far before you actually see that 80,000 of those jobs per month came from healthcare and social assistance. So that 63% of all job growth over the last two years came

from this one sector. And for context, only 17% of our workforce is working in health care. And so I've been covering health care for quite a while now. And what's very concerning is I really haven't seen a setup that is this negative for health care job growth. The things that the engines of job growth over the last 30 years were expansion of Medicaid, Medicare, things like that. And potentially almost all of those are at risk within the one big, beautiful bill, not to mention the NIH funding cuts and the most favorite nation drug pricing reform. All of these things are almost the perfect storm of risk for the health care space. And it's very, very hard to see how health care jobs keep carrying the entire economy.

That's interesting, because most of us are focused on the cyclical nature of the economy. You say cyclically, it's actually looked okay lately. but you're saying a structural underpinning of job growth, which is health care, is weakening. So then how does that lead you not only maybe away from health care equities, which have also underperform, but how does that lead you to investing in international markets? Well, if you have this one big risk that's sitting in this country right now, which frankly I don't think enough people are talking about, then the best way to do it is just sidesteped that risk.

The international risk is highly idiosyncratic. It's really only related to this country. you have, you know, some to make matters even more interesting, the tariffs are actually helping some of the highest quality non-U.S. companies, as it's kind of removing some of the competition that they were facing from their multinational U.S. companies. Plus, you have this additional tailwind with any additional dollar weaknesses. And then on top of that, a huge valuation discount. So it's really like a value play that really is safer in our view. And that's the reason why we're so excited about this at Ban Creek and launched last year our international

ETF, BCIL. Right. I was going to say conveniently enough, you have an international large-cap ETF. If folks want to hear more about this and look through your methodology and your picks, they can definitely go do that. Eric, for now, thanks. It's good to talk and we'll check back soon. Eric, Bankroft. Brian, over to you. All right, thank you. Market Flash on GameStop right now. It is crashing down over 20 percent. The company's surprising the market by selling nearly $2 billion worth of convertable bonds. Those, if they convert, could seriously dilute current GameStop investors. That is why GameStop stock is down over 20% right now.

All right, coming up, one of the market's most important voices. Michael Novagrads will join us on crypto, AI, data centers, and much more. Welcome back. There's the dollar melting away below 98. It's now at its lowest level since March of 2022. And it's down about 10%. against a basket of currencies year to date, as you can see there. Outflows fueled by the president's trade policies, rising odds of a Fed cut, and more.

Our next guest, though, knows it's good news for another asset class. The Rise of Crypto. Mike Novagrath's founder and CEO of Galaxy Digital. They also had an IPO lately, Mike. It's good to see you again. I think what was the high we hit on Bitcoin, like 110? And it's odd how little attention that even gets anymore. You know, Bitcoin's become a macro asset.

And so one of the great things is most people have it on their screen next to gold and silver and the S&P. And, you know, I think back 10 years ago when people thought we were crazy. And now it's an institutionalized macro asset. And, you know, it goes from 110 to 107. That's 3%. That's within the realm of volatility. It's not newsworthy. Now, if you had a lot of Bitcoin, it is.

But broadly, I think one of the great things is it's just become institutionalized. Yeah, I do have one question about this. I thought Bitcoin looks absolutely stellar back during the early April sell America, kind of weak dollar trade. In fact, it might have sold off at the same time, but you know my point. Like, as we've seen a lot of diversification away from U.S. dollar, all these things, people are going into gold. They are going into Bitcoin.

It's showing that it can be a stalwart in that sense. But the world is starting to get back, for better or worse, to a little bit of normal. Like, kind of it feels like that whole period never happened. Do you think so? Well, I wonder, right? But then you look at the dollar and you're like, maybe not. So I'd love for you to just kind of like break this down for us. Listen, we are in a dollar bear market.

For the last 15 years, American exceptionalism was the story. Europeans were wildly overweight and Asians wildly overweight the U.S. stock market. And we have a administration that wants a weaker dollar. They're pretty clear about it. You know, even in the way Trump negotiates and you can argue if it's successful or not successful, but by telling Canada they want to be the 51st state and telling people that they come here to kiss his rear end, it doesn't engender people to say, I want to buy more dollars. And so we're having people reweight their portfolios away from the dollar.

You've got a time where we're talking about having a shadow Fed share, right? There's a lot of talk that the administration is going to pre-pick, in essence, J-PAL replacement and have them go side by side with J-PAL. That's not good for the dollar, right? That's not institutional. And so I think one of the easier trades, and I think most macro funds are having a great year, is they're short the dollar. They're long the euro.

They're long the yen. They're long Aussie. There's a lot of basket of currencies. Well, Bitcoin, you know, gold, silver, platinum, they all fall into that same category as something that's not the dollar. It's interesting because Bitcoin, there's theoretically going to mine 21 million of them, right, Mike? And in your company Galaxy Digital, by the way, I think one thing people get wrong a lot of my side of the camera is that you're also a power company. You've got Helios out in Texas going to grow that as well.

It's part of the whole story. You've got to make the power. Is there a bull case for not finding any more Bitcoin? I know it probably will be found, but if more of something is bad. There's no more Bitcoin. What's unique about Bitcoin as an asset is it was created with 21 million coins total, period, end of story. There'll never be more than that. But not all those have been mine, is my point. Most of them, lots of them have been lost. There have been more Bitcoin lost than will be mined for the rest of eternity. And so you've got this idea of a fixed supply of something. And more and more people are being brought into the Bitcoin Ted.

Mormon people are realizing this is a story that they want to care about. And so once Larry Fink said Black Rock's getting behind this, right, all that pushing the snowball uphill, it started rolling downhill. And now we've got all these treasury companies buying Bitcoin. We've got sovereign wealth buying Bitcoin. We've got retail investors buying Bitcoin. There's easier ways to get it. And so the adoption of Bitcoin as a macro asset, as an asset to save money in,

I think that's now a ball rolling downhill. And the bull case becomes that over time, young people care about it more than old people. And so gold slowly gets replaced by Bitcoin. And so, you know, if you look at gold's market cap and Bitcoin's market cap, Bitcoin has a long way to go, right? 10x. And so that's a million Bitcoin just to be where gold is. And I think gold could go from 3,000 to 10,000. The only thing, Mike, when I look at the enthusiasm now, the consensus nature of Bitcoin, you know, short-tile, like it reminds me a little bit of three months ago when American exceptionalism was on the cover of every, you know what I mean?

So that's why I appreciate you trying to give us some short-term versus long-term context here. Yeah, listen, what at the beginning of the year, you know, like I like Scott Besson a lot. I think he is a wonderfully bright guy and I think his mind's in the right place and his heart's in the right place. He told us he wanted to go 3% budget deficit, 3% growth, right? Get debt to GDP curve heading back towards 100 from where we are, what, 1, 125, 130. We brought Elon Musk who was going to cut government spending. And what we got is Elon with a black eye. And it's just harder than everybody thinks to get Congress and the administration to agree to cut spending.

Right? We have populist government. We had one on the left with Biden. Now we got one on the right. And in a world of populism, people want to spend money. Our, you know, 36 trillion of debt is growing. And it would not shock me if it's over 50 trillion, you know, totally.

Before I retire or hire. Because we want everything, but we don't want to pay for it, Mike. I mean, I'm going to say something that it's probably 99% of my audience going to hate me for. But the reality is that 50 years ago, look at the IRS data tables. Everybody in America pretty much had a net effect of federal. income tax bill. Even lower income folks paid a little bit of money in. Whether it's right or wrong, I don't know. Now 47% of the country has a negative or no net effective tax bill. They pay taxes. Then after the refund, they file whatever. They have a zero balance federal income,

not Medicaid, Social Security, income tax bill, not sustainable. It's not my opinion. It's not political. It's just math. Listen, we need, we needed a, and we still need a set of leaders that will means test Social Security, will means test Medicare, will move the age further on Medicare, will cut excess spending. Like, it's just math. And those are really hard political things to do. I think Elon must approach the job with the right mindset of cutting spending, but by making it so partisan, but the chain saw and everything the Dems did was bad and everything the

Republicans did was good, he lost his credibility and then it became too. too much of a political lightning rod. And it gave the Democrats a huge, you know, war cry to blame, blame the Republicans on stuff that we need to do. And so, listen, it's really hard to pull this off. We just had an attempt, maybe the best attempt we're going to get in years, and it failed. And it's, you know, it's painful as an American and as a patriot to say. And listen, that's why the dollars.

Now, is it failed for good? we'll see what best said, you know, he's got three and a half more years. And now Scott has said, hey, at the end of his term, he'd like it to be 4%. So he's already downgraded some. But listen, if we can even get the deficit of 4%, it's in the right direction. But until you get government spending under control, Bitcoin is in gold is going to head higher. And what we all should fear is it starts heading higher really fast, right? Because then all of a sudden we're losing confidence.

Right. We're not at that point yet. You know, the country and the markets can handle the slow decline, but they can't handle the fast decline. That's what felt a little scary about the last couple months, you know, it was kind of like, wait a minute, let's not go too far here. And they pulled back for better or worse. Mike, really appreciate it and great to have you on today. Thanks for your time. Thanks.

Mike, Novogratz of Galaxy. Thank you, Mike. Let's get over now to Kate Rogers with a CNBC News Update. Hi, Brian. In California, Democratic Senator Alex Padilla was just forcibly removed from a news conference with Homeland Security Secretary Kristi Noem as she was addressing the protests in L.A. This video was provided by the senator's staff. As Padilla began to say, you insist on exaggerating to Noem, he was shoved out of the room and then taken to the ground and handcuffed.

It's unclear whether he was actually placed under arrest. We'll update you as soon as we have more information. Indian media is reporting that a British national survived the crash. of an air India flight just after takeoff this morning with 242 passengers and crew on board. The Hindustan Times reports the 40-year-old British man told them, quote, 30 seconds after takeoff there was a loud noise and then the plane crashed. It all happened so quickly. And the Senate voted this afternoon to confirm Billy Long as the new IRS Commissioner by a 53-44 vote. The former Republican congressman from Missouri was criticized by Democrats for his ties to

pandemic-era tax credits that became a target of fraud, while in Congress long sponsored a bill to get rid of the IRS. Brian, back over to you. A lot going on. Kate Rogers, thank you. Just a quick reminder, you can catch our show and podcast version. Check it out today. But first up, a huge run in Oracle. Talk about that next.