Power Lunch - S&P 500 turns lower as Tesla shares slide, traders weigh Trump-Xi talk 6/5/25

Episode Date: June 5, 2025

The S&P 500 fell on Thursday, spurred by a drop in shares of electric vehicle maker Tesla. Tesla was a big laggard in the session, down more than 11%, after President Trump said he was “very disappointed” in CEO Elon Musk. Musk shot back at President Donald Trump, saying in a post on X that “without me, Trump would have lost the election.”The feud further escalated after Trump called Musk ”‘CRAZY” and signaled that he could cut his companies’ government contracts.We’ll cover all of the 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, everybody, alongside Kelly. I am Brian Sullivan. Donald Trump going after Elon Musk, after Musk went after Trump's budget. Plus, the president talking to two world leaders, why all this really matters for you and your money. Plus, another sign the economy may be slowing, but one that could be good news for stocks. And welcome back, by the way. Before we get to all of that, let's check on the markets, which have been gyrating. Stocks briefly gained on that Trump-She call news, just the fact that they had it. We heard the U.S. readout may be a little more optimistic than a lot.

the Chinese side. Nevertheless, markets giving back some of that. We're trading a little bit sideways as we await tomorrow's Big Jobs Report. And Jobless claims rose for the second week in a row. Hope that's not a cautionary sign. S&P lower by about a point this hour, 10-year yield below 440. In fact, we're talking about the lowest level since about May as we've really dialed things back a little bit. There's the 4398, let's call it, on the 10-year yield. All right, so there's clearly a lot to do on this Thursday. Even though the markets themselves aren't moving in a big way. There's a lot of stories under the headlines. And let us start with what appears to be a growing rift between President Trump and Elon Musk. Musk loudly going after Trump's budget.

And Trump kind of going after Musk saying that he may just be bitter about some of the latest EV mandates and moves. It is kind of a rift that came out of nowhere and has exploded online. And Tesla shareholders, maybe the markets, are caught in the middle. Tesla stock getting hit hard down about 9% right now. Let's get more with Amon Jabbers, who's at the White House, Amy. Brian, that's right, a fascinating and blistering war of words between the world's most powerful man and the world's richest man playing out live on television in the Oval Office

and live on X Elon Musk's own social media site, even as the President of the United States was speaking in the Oval. It started with Elon Musk earlier in the week, breaking with the president over his big spending bill, saying it simply doesn't do enough to cut spending over. over the next decade. The president responding to that in the Oval Office a short time ago saying, you know what,

Elon Musk knew what was in that bill, didn't say a word until he left the White House staff last week. Here's how the president put it. He knew every aspect of this bill. He knew it better than almost anybody. And he never had a problem until right after he left. And if you saw the statements he made about me,

which I'm sure you can get very easily, it's very fresh on tape. He said the most beautiful things about, about me. And he hasn't said bad about me personally, but I'm sure that'll be next. But I'm very disappointed in Elon. I've helped Elon a lot. The president kind of predicting it there saying Elon hasn't said bad about me personally. I'm sure that'll be next. Well, what came next was Elon Musk responding on Twitter and or X, as he now calls it, to what the president said, saying it was simply false. Elon Musk's tweet,

false. This bill was never shown to me even once and was passed in the dead of night so fast, Almost no one in Congress could even read it. And then Musk going farther than that, and really a personal jab at the president because this is something the president is very proud of winning reelection. Musk saying, without me, Trump would have lost the election. Dems would control the House and the Republicans would be 5149 in the Senate. Elon Musk tweeting such ingratitude there by the president of the United States. Now, we'll wait for, I guess, what is the inevitable response now from the president to that?

But the president bristles at any suggestion that he wasn't elected, didn't win election fairly, didn't win election on his own. As you see, the German chancellor, by the way, just driving right past us here in the back of this live shot. And then here comes his staff banning the second as well. So all of that going on at the White House here in real time as we watch this titanic battle of billionaires and political leaders taking place in the Oval Office guys. Well, I do love the fact that German Chancellor's people rode by in a Mercedes sprinter van. right, as you were on camera. Anything else would have been disappointing, Aeman Jibbers.

Thank you very much. All right, well, let's kind of stay on the stock story angle because your next guest has been watching all these sort of machinations closely. He has a sell rating on Tesla. It's also one of the lowest price targets on the street. Let's welcome in Colin Langan. He is automotive and mobility analyst at Wells Fargo.

I don't know. Colin, good luck. You've got an amazingly hard job because your job is to look at numbers, right? Look at sales and margins and sort of try to predict what's going to happen. You had Elon Musk who became like persona non grata to a lot of...

One of my neighbors sold both of their Teslas because they thought Musk got too close to Trump. True story. Now they've got a rift. Do people come back to Tesla? How do you analyze any of this stuff? I mean, I kind of take a long-term view, right? So I look at the fundamentals around all of this sort of noise,

and I think this is unfortunate... I think over time this will be noise. I don't think we'll be talking about this in a year or so. Who knows? So I focus more on the fundamentals. And the fundamentals and the reason why I have an underweight rating are poor, right? Sales in Europe are really bad. I think it's actually going to be a lot harder to repair the brand damage in that region

when I talk to investors over there. The U.S., I think, as you point out, some of the more liberal states have been pretty anti-Elon, and that probably has had an impact. We see data in California has actually been pretty weak, which has traditionally been a very, very pro-Tesla state. So, you know, I think it'll take time. I think long-term, though, you know, we have real strong long-term issues about the affordable model, how much help that's going to be.

Where is the growth actually coming from? This is a growth stock that is actually not growing and that has earnings pressure, and that's really the fundamental driver of our underweight. Does today's move make sense to you, Colin? Does the valuation need to change by 10% based on what's going on between these two? I mean, I think the valuation, in my opinion, is too high in the first place. So, actually, I do think it makes sense. And there has been, you know, for some period, a positive premium associated with the benefits that were perceived to come out of this.

But, you know, let's face it, IRA, we knew that $7,500 was likely going to go away all year. So I don't think that was a big surprise at all. I mean, actually, the only thing that surprised me is that you actually probably have to the end of the year based on the current form of the budget for that credit to last. So, yeah, hard to gauge on a daily basis, but... What would you say about Dan Ives' point? There are sort of two issues that he raised. One is, and again, he doesn't agree with this, but is the possibility of the regulatory turning against Tesla higher now, for one,

and kind of offsetting that is Musk actually playing the long game on China and trying to give himself some wiggling room to work with the Chinese directly, maybe whatever needs to happen on the rare earth magnet dispute that they're having, without having the negative perception that may come from being close to this White House? I mean, hard to get into Elon's head. I don't really see the regulatory positive here. I mean, as it said up front, I think the IRA credit was going to go away anyway. We know Trump was already kind of going to lower the EV targets, and that seems to be happening. We saw CARB get pulled away. I mean, again, coming back to the fundamentals, look,

CARB means lower EV credits. That's lower profit there. IRA going away makes the economics of the core auto business. tougher. So these probably were going to happen regardless of what happened today or not. How do you factor in potential robotaxie, full self-driving aspect? Our friend Jeff Kilberg tried one out yesterday. We was just saying what an amazing experience it was. It doesn't sound like you're that bullish on that part of the Tesla story. Well, to be totally fair, half of my valuation is still the cyber cab and the optimist robot. The problem I have, though, is I really don't think, I am not bullish at all. I think it's going to take a super long time for this to ramp.

There was actually an accident yesterday. I do still have issues with, you know, glare, fog, and dust and how the camera-only solution actually will solve that. And so, yeah, I do think it's going to be a lot longer. And I think June is going to be a pretty narrow, pretty limited demo. And that is another reason to be cautious on the stock. All right. Colin, stay with us. If you would, we'll kind to put the musk issue a little bit to the side. Dig more into the growing fight between the U.S. and China over these rare earth magnets. Not just the U.S. by the way. Europe and India are warning this could slow production. Colin's got a new piece on that today. Let's set the scene here for just a moment. China controls about 90% of the processing capacity of rare earths. They're

used in things like EV engines, magnets, headlamps, sensors, and displays. Industry trade groups are sounding the alarm on shortages after they apparently, the availability fell by half in April. They write to the Trump administration that the bottleneck could reduce production volumes or even shut down entire assembly lines. Colin, you write all auto production is at risk here. We also have Grace Lynn Baskar in with us. She's director of the Critical Mineral Security Program at the Center for Strategic and International Studies.

So, Colin, what's your expectation of what happens in the next couple days and weeks here for U.S. auto lines? I think the point of our note this morning is when I think auto analysts and my clients hear critical minerals, we always think EVs. and clearly they're very, very important in EVs, and I think names like, you know, Rivian and Tesla are probably more at risk for rare earths. But what I don't think many investors fully realize

is that there's trace amounts of these critical minerals in many parts of the car. You're talking about the exhilarating motors that might go into a seed or a window, and that could stop production. And so I think there's wider impacts that could happen. Now, we'll see what happens, you know. I think Trump today was talking positively

about the talks and mention rare earths with China. And so we'll see if there's progress. But, you know, I think this is a lot bigger of an issue that maybe people realize, and it's clearly a pretty major risk over the next month or two. Yeah, Graceland, to quote these auto groups, they said, without access to these elements and magnets, suppliers will be unable to produce components, including transmissions, throttle bodies, alternators, motors, sensors, seatbelt, speakers, lights, motors, power, steering, and cameras going so far as to suggest that more

of that will have to be done in China with the final vehicle brought here. So probably the opposite of what the administration was hoping when it first started going down this path. Absolutely. I mean, you know, I think a few years ago we saw Rare Earth as being kind of an electric vehicle kind of narrative. It was a clean energy narrative. What we know now is that Rare Earths are such a core part of the manufacturing sector here in the United States. We've already seen it with the Ford Explorer production being paused for a week in Chicago to these shortages. So certainly we're seeing the knock on particularly strongly in the Midwest where a lot of this manufacturing sits. Yeah, and Graceland, you know, we've got to map up, but the reality is that the one,

there's one part of the map, which is something it's not, it's not rare, so it's not on the map, but it's probably the most important thing in that is cobalt. Cobalt, thankfully, is being phased out of many batteries, because cobalt is the furthest thing in the world from any kind of clean energy. It's dug by 10-year-olds in mines in the Congo and ends up in these horrible supply chains where families almost starved. the death. So I would eliminate that map because it doesn't show the Congo. Is the U.S. auto, and this is becoming more, people are becoming more aware of this in the supply chain, Graceland. So when do we get to a truly, we say, okay, there's no emissions for the tailpipe,

which is nice, but when do we start to have an honest dialogue about all the things that go into these batteries? Look, when we think about an EV battery, right, for a car, the conventional gasoline-powered vehicle uses about, you know, 32 kilograms of critical minerals. When we look at the EV, it uses 210 kilograms. It is a six-fold increase in minerals. The one thing we have to remember, though, the defense industry is an absolutely critical off-taker of these materials, but they're small. If we want large-scale investment outside of China, the auto industry is going to be a critical driver of those really big investment. So it may not be cobalt, but we're never, all of these vehicles are highly materials intensive. And Colin, what's the takeaway then

for investors and for U.S. auto suppliers? Again, now that this is going beyond just EVs, but to cars of all kinds. Yeah, it's an interesting dynamic. I mean, I'd like to be more positive on most of the suppliers, but I think it means that, you know, we might see some choppy production schedules. We might see production get weaker in the second half if these kind of stops and starts continue. And that puts a lot of pressure on the auto supplier group, similar to what we saw in the semi-shortage crisis. And then I think from the automakers, it does mean lower production, but for automakers and dealers, there's an opportunity at least to maybe take up pricing because they'll actually be potentially fewer cars on dealer lots if this persists in a bad way.

Is it going to quickly, Colin, is it going to, the people I know that dumped their Teslas, many of them went back to gas. What are you seeing? We're actually seeing EV penetration rates that have faded a bit, even with some pretty good incentives that are coming out of the vehicles. There's a lot, you know, I think we've hit the point on EVs in the United States where the early adopters have already adopted, and we're seeing that sort of leg to mass adoption has been a lot more challenging, which is why we're seeing the push to lower the fuel economy regulations because the consumer's not there. Colin and Graceland, listen, we can do the whole hour on this topic, or at least I could. We appreciate your views. We're going to roll on from there, but we'll see you again soon.

Thank you very much. All right, on deck. We are moving on. We've got a stark warning for you, the investor around America's debt levels. Stay tuned. Crypto Watch is sponsored by crypto.com. Crypto.com is America's premier crypto platform.

All right. Welcome back. Let's talk about debt and bonds because borrowing costs are on the move. Could it be because of concern over the budget passing, maybe debt ceiling concerns, or maybe something else. Let's go now to the professor Rick Santelli.

Rick, it is. There's a lot. I know people are focused on the jobs number tomorrow. I personally could care less. But I think the bond market does care. You know, let me get this straight. Maybe I'm missing something, Sully. Okay?

Okay, so they say if we do nothing, we're 2.3 to 2.7 billion higher deficits over 10 years with this tax and spending bill roughly, right? Yep. Okay. And where's the end spot after 10 years, around what, 55 to 57 trillion in debt? And higher debt to GDP rates? Yep.

Right. Okay. So what I'm getting at is if there was no spending bill, and they didn't do anything, in 10 years, we're still going to be $55 trillion in debt, aren't we? Yes. Okay. Isn't that really the story? The $2.3 trillion is not a good thing.

But in a way, it's rounding air when you get out to $58 trillion. So the point is that this administration's budget really isn't the story. The story is the baseline of spending is taking a sky high. So all we need to do is tell us 435 Congress and Senators this is an easy fix. Just go to pre-COVID baseline spending. What Democrat or Republic and wouldn't agree with it? They agreed with it in 2019. I just don't understand that when you raise the baseline almost 20%, what do they think is going to happen?

This isn't about the here and now. It's about the baseline. And that's what they need to do. Rick, what is the bond market saying is going to happen? Because if the bond market believes that debts and deficits are going to continue to go on. The bond market, we're at 439 in a 10 year. We closed last year at 457. What's it saying?

It's saying things have been worse. You know, listen, I get it. But, you know, we can't push buttons and say the bond market's speaking. This debt and deficit's been going on for years and years. And all these big billionaire institutional traders, what if they had their head? I don't mean, Rick, I don't mean today. I'm not saying what is it. I get it.

We're focused on the day-to-day we're alive. You and I- The treasury market isn't making enough noise. If the treasury market was really as concerned as it should be, these interest rates for the longer dated treasury yields should be well over five and a half percent. That's what if they were really worried. Okay. Let me put it a different way.

See, the problem is, hold on. Last year, we need to pay attention for it, but we got to take politics out of it. Last year, we got three rate cuts, two, okay, 75 basis points, three quarters of one percent. I found the rate cuts a little bit odd. Doesn't matter, again, what I think. It means absolutely zero. I thought the timing was a little bit weird given we just kept hearing how strong the economy was. Now we keep hearing about the need for rate cuts.

They're not coming. And the bond market... Hearing it from who? Hearing it from who? I don't hear it from the market. No, no, the guy in the Oval Office? Nah, you know what? The guy in the Oval Office, he used to be in what business?

He used to be in the real estate. He doesn't get anybody in that business that no borrowing costs. He wants no borrowing costs. Yeah. He wants to bring it down. But he wants hired. He wants higher growth, too. You can't have both.

Listen, I don't want to argue about what 47's thinking. I'm just saying to viewers, okay, that this budget isn't the problem. The problem is our baseline spending needs to be addressed. End of story. And real quickly here, okay, jobless claims did reach the highest level since October. But show the second chart, please. What I want people to know is that even though it's inching up on the bigger picture. Next chart.

On the bigger picture, going back four years, it still doesn't look very threatening to me. That's the chart right there. It's a good discussion. Oh, so I got back from Alaska. Jet lagged, a little grouchy with Brick Santelli, do appreciate it. Let's talk about all this with our next yes, who says yields are at risk because the market doesn't believe the government is serious about the deficit. He says, you can't grow your way out of a hole this deep. Joining us is Elon Muskno, Annex Walth Management, Chief Economist Brian Jacobson.

So Brian, if you're singing from the same hymnal and you just heard Rick, I'm not saying that Rick is trying to downplayed. He's trying to put it in context $2 trillion on 35 or whatever the number is, is, you know, less than 10%. So what do you, is the market fine with this bill? Are they just shrugging it off? It does kind of seem that way lately. Well, yeah, the market, remember, we have really come out of this period of zero interest rates. So to go up to 4 to 5% on the 10-year treasury, that has been quite a big move. Longer term, where might we land here?

It's possible, let's say the Fed gets down to three and a half percent with their target rate. If you tack on about a 150 basis point term premium onto that, right? That puts you out about 5 percent for the 10-year Treasury. So in my mind, just given the uncertainty and the apparent lack of appetite for U.S. treasuries when we get below 4 percent, I find it very difficult to believe that we're going to see a big move lower in rates, even if the Fed does begin resuming the rate cut cycle. Given some of the fissures that we're seeing in the growth numbers, I think that they would be justified in cutting rates this summer,

not necessarily waiting until September, because so far it does feel like growth is beginning to slow faster than what inflation is beginning to re-accelerate. If I wanted to put this a little bit differently, if I were, you know, Senator Johnson or, I mean, he'd probably say, look, this is about my grandkids, not about the bond market this year, But if I were someone with concerns about the $2.5 trillion price tag of the bill or what have you, and I looked at the bond market this year, would you say, what would you say its message is right now?

Is it, if anything yields, to me right now, seem to be following developments on the econ and inflation from, which have been pretty dovish. And that seems to be it, really. Well, and maybe that's really the way that it should be, because if you think about these projections, They're looking out 10 years and they are going to be wrong. Are they going to be wrong to the upside or to the downside? And so I think that really the market is more focused on not just the here and now, what's going on with growth and inflation, but then what's sort of a more reasonable expectation about the effects of these?

Right? We know that that $2.4 trillion number, that's just multiplied by whatever it is this year by 10. Right? So divide that by 10. That's the annual effect. The tariffs, when the CBO scored that, I was thinking, well, you know, Trump isn't going to be president 10 years from that. now? And so why are they assuming that these tariffs are going to stay in place for that period of time? So there's a lot that goes into some of those projections where I think the

market can look at it and saying it's kind of like an IMF or an OECD forecast where they're talking about what's going on now. It's like, well, tell me something I didn't know. So, Brian, how much longer can we see stocks can basically continue to move higher? S&P's 3% from the all-time highs while bond yields are drifting lower, but appearing to do so on a little bit weaker economic data. Can that divergence hold? I actually do believe it can because if we look at what was in the beige book talking about the radical uncertainty that we have, uncertainty leading to hesitancy, leading to a slowdown. But the market already has priced that in, right? So the market is going to lead the economy. And that uncertainty will eventually resolve. I think we're going

to get a little bit more clarity. Let's say by Monday when those briefs are filed by the plaintiffs in terms of whether or not we're actually going to get a stay on the tariffs or as we get closer to the July 4th deadline for the passage of the one big beautiful bill. This uncertainty, I think the market is actually just kind of looking through it a little bit and saying we're going to get some clarity. Businesses are going to adjust. Corporate America is proved itself again and again at being very adept in adjusting to changing circumstances. And we're likely going to experience some resumed economic growth, if not during the summertime, but at, perhaps at the latest by the fourth quarter here. And that's what the market, I think,

is really looking forward to, not the here and now, but about what's coming down the road. All right, Brian. Thanks. Brian Jacobson with Annex We appreciate it. Thank you. All right, we got to give you a check on Circle. Circle is a company with a new IPO today. Circle has it with stable coins. It's really kind of a crypto-based company. Circle stock. Do we have a trade on that? That's what you're seeing. It's hard, yeah. 83. It's up. Yeah, it's up. Is it at? So we're off the session. It's up. There we go. I don't know what that. It's up 100. That's a shot of the New York Stock Exchange sign. But it's up 167 percent, Kelly. Price to 31 last night. Opened it, I think, 60 something. Shot up to almost 100.883. It's almost a 20 billion market cap a little less than that right now. Incredible story. One of the biggest most successful IPOs we've had recently. Yeah, because see how that, see how the line. This is a good kind of a good window. Kill the music guys.

kind of a good window into the New York Stock Exchange where see how it's the down arrow is 8368 that's the tick down tick up of trade by trade so I know like if I'm trying to figure where my eyes are going to go it's so that's what you're looking at the stock opened at what 30 you said it priced at 31 last night I think it opened in the 60s maybe 69 and now and now it's it basically 84 bucks right so you made money even if you bought it on the open and you certainly did if you were in this IPO bohoo broadcom by the way another stock that's on the move High and airs the music. Higher ahead of its After the Bell reports up.

Four tenths of one percent. Coming up, why there is one big segment of the economy, you're probably not paying enough attention to. Welcome back to Power Lunch. I'm Tipa Stevens with your CNBC News Update. Harvey Weinstein's New York sex crimes case is now in the hands of the jury. The Hollywood movie producer is accused of rape and assault and three incidents spanning from 2002 to 2013.

Weinstein is on trial. for a second time after New York State Appeals Court throughout his previous conviction last April. Four states petitioned the FDA to remove lingering restrictions on abortion pills nationwide. The attorneys general of California, Massachusetts, New Jersey, and New York argue the current regulations make it difficult to prescribe Miffipristone in primary care settings.

The petition comes just days after the FDA's commissioner announced a safety review of the drug. And the original air mass prototype for Jane Burkin's iconic Birkin, will be on the auction block this summer at Sotheby's. The bag will be on view in Manhattan starting tomorrow until June 10th, and then it heads to Paris to go on display in July. There's no public estimate for how much it might be worth. There's more power lunch right after this break.

Welcome back. Shares of Circle are surging in their debut like we haven't seen for an IPO since maybe 2021, everybody. This stable coin issuer priced at 31 a share last night, opened at 69, was actually halted immediately for volatility. trading at 84 right now is still a hefty gain. Let's check on the rest of the crypto complex publicly traded names. You got Coinbase actually down 3% today.

Bitcoin itself selling off ever so slightly. My next guest notes that 14% of Coinbase's revenue last year came from circles. USDC Stablecoin. I'm trying to think that through for a second. Dan Dole of is here in studio with us from Missouho. He's senior analyst and their fintech equity research. So stable coins are they're kind of like the collateral of the whole cryptocurrency. system, for lack of a better word. So a little bit boring, but also can be very unboring in

moments of crisis. They've been tested a little bit by some of the pressures we've seen in that space post-pandemic. Why do you think this IPO is doing so well today? I mean, it's a very sexy topic right now. I mean, it's almost like a very kind of a silly business model, but it's, if you think about it, it's like a- What is the business model? It's basically like a money market account with a crypto-sex appeal. Right. It's like a money market. That's it. Yeah. With a crypto sex appeal. And it gets a lot of headlines. You're seeing it in the news today.

But at the core of it, it's just like a money market account. They're taking a dollar. They're investing it in treasuries. And they're giving you crumbs. Well, they're giving you dollars in a different kind of form that should hold their value. And that's where sometimes problems can crop up. But is this a lucrative business model? What do you think this should be worth?

For Coinbase, it's great because they are distributed. Why is it better for Coinbase than for Circle? It's obviously the best for Circle because they own the IP on this one. But it's great for Coinbase because they're distributing it. And there's a lot of, they're kind of tied by the belly button because Coinbase needs Circle because they mint the dollar. And Circle needs Coinbase because they have a lot of users. So they're kind of like intertwined. It's great for everyone.

But at the core of it, it's sort of like. It reminds me, I'm not going to know names, but it reminds me of sort of fast food chains that try to say, we're going to give you a sexier burger, man. Forget about McDonald's and Wendy's and Burger King. Shake Shack. No names. But we're going to make up the same exact stuff just a little bit different. And we're going to mark it.

We're going to charge you twice for it. Exactly. But it's kind of that way in a way. The difference, though, I would argue. And what do you think, Dan, is that in order, if you are in the crypto ecosystem, which increasingly institutional, other people are, you don't want to keep changing back into dollars and then back into crypto in order to be that. Right.

So what is the ultimate differentiator to Brian's point that they're really deliberated? There is a use case, to your point. So at the end of day, at the end of days, you could technically undercut a lot of like the cross-border fees that are being paid right now. So if you want to send money to Europe, you're going to get, you know, Swift. You're going to, you have to tie it to the banking system. You're going to get like foreign exchange fees. Like by the time the money gets to Europe, it's going to be a whole lot less money. That's the way it is now, though.

That's the way it's now. But with stable coin, it's better. It's better. Eliminate it. Which is good because let's be also clear. Correct. A lot of our viewers or a lot of people who send money around, particularly over the round, have been ripped off or feel ripped off by maybe currency exchange rates.

Totally. Totally. Right? I do have some news for you, though. I guarantee you that the payment industry is going to find a way to charge people just as much, even with stable coins down the road. So don't worry about it. Yeah, I mean, why are you so sure about it?

Because that's like how payments works at the end of the day. Isn't this supposed to go around that to a point? It is. That's the whole concept, which is to eliminate the inflationary effects. I agree. But at the end of the day, in payments. Fiat currency. I agree.

But at the end of the day in payments from our experience, which is great for payment companies, there's always a middleman. So let me ask you this. Circle now has done quite well. There's going to be a lot of people who aren't in it who wonder if they should own the shares now. Should they own shares of Circle? Should they just own Coinbase?

Should they just own Bitcoin out right? I mean, what are the different advantages? So in crypto specifically, and I don't cover Circle, of course, but in Crypto, specifically, I would still go with the most diversified of all, which is actually Robin Hood, because you get the best of all worlds, right? You get exposure to crypto, you get exposure to Bitcoin. The volatility, I mean, we're okay with Coinbase. We upgraded a while ago, and we warmed up to them, so not, you know.

I know. I listen. We upgraded, but from a diversification perspective, you don't want to be exposed 100% to crypto, because today things are great, but as you said, Bitcoin's straighting down, you know, Let me ask you a more basic way. Let's bring up Circle again. Circle is up 250% whatever from its IPO price. Not its open price, but what it listed at. It's at 83 bucks. It opened it what, or traded. Price at 31. Price at 31, opened it whatever. Is this the new visa? No. Are Visa and MasterCard dead?

No, you know, and we just upgraded Visa today. So it's actually a very timely. That was what we call it a leading question in this industry. Yeah, thank you. No, I think I have an okay. answer for that. And the reason for that is at the end of the day, the consumer has to opt to actually show up with some sort of like a stable coin. So next time you go to a restaurant and say, hey, can I pay with stable coin? Then it might be the end. But this day is very, very far down the road. Because the restaurant is going to say, like, just give me your card. Yeah, they don't care about your stable coin. There's like the crypto kind of locked in ecosystem and then there's the dollar

where we do, you know, things like buy burgers at Shakespeare. Correct. And B2B course border might get disrupted, but that's a very small part of Visa and MasterCard. The bigger part is consumer. It's you going to the restaurant. It's you going to Europe and paying with a Visa card. That's very powerful. I think he squared the circle. Nicely done. You're welcome. Dan, thanks. Appreciate this day. Dan Dahlav with Mizzuho. All right, coming up, one of the most important voices in real estate and maybe in the state of California will join us next. Welcome back, folks. It's been a spicy few hours between the president and Elon Musk, and things just ratcheted up even further. This time the president responding to some of Musk's criticism.

Amen Jabbers has the latest at the White House. Amen? Kelly, that's right. There's that old saying that it's not personal. It's just business. Well, now it's business and it's personal between President Trump and Elon Musk, with the president responding inevitably, I think you could say, to Elon Musk's jabs on social media over the past hours.

So president posting on his social media account, the easiest way to save money in our budget billions and billions of dollars is to terminate Elon's governmental subsidies and contracts. I was always surprised that Biden didn't do it. Trump going on to say, Elon was wearing thin. I asked him to leave. I took away his EV mandate that forced everyone to buy electric cars that no one else wanted, that he knew for months I was going to do,

and he just went crazy. All of that following on a post from Elon Musk, who posted shortly before that on his own Twitter feed or his own social media feed, responding to Laura Lumer, who posted about some of the interactions between Trump and Musk, she says it's heating up. Elon Musk responds to her point saying, oh, and some food for thought, as they ponder this question.

Trump has 3.5 years left as president, but I will be around for 40 plus years. So Elon Musk sending a very clear signal to the Republican Party that he is going to be a player in American politics. And I think a couple of thoughts here, Kelly. One is that you heard Elon Musk tell our David Faber only a week or so ago that he was backing out of politics, refocusing on Tesla. There were a lot of Tesla shareholders who were very happy with that. They wanted him focused on electric cars and the business and the technology, all that stuff.

Well, you can see how Elon Musk has spent his afternoon today, very much focused on this war of words with the President of the United States and this spending bill. And then you have this question here of what are the stakes? here. I mean, if you step back from this, on one level, there's a lot of criticism of this back and forth and the coverage of it on social media saying, well, this is just two billionaires being childish on social media. But the stakes here are enormous, Kelly. This is the richest man in the world versus the most powerful man in the world. And at stake is, you know, sort of the way that the U.S. military gets to space, the way that the U.S. military and military allies around the world access the internet globally, the future of the EV industry in the competition

with China, but also the future of the Republican Party in terms of the internet. of who is going to be the dominant figure in that party. Is it going to be Elon Musk as the money man bankrolling candidates for a generation, or is it going to be Donald Trump? All of those things are the subtext of this Twitter battle between these two men as they play out each with his own personal social media site that he owns, firing broadsides at each other. It's a fascinating moment in American politics and American business county.

And Tesla shares are now down more than 11% to news session lows on that. Amen, we'll have more of the fallout right after this quick break. Stay with us. All right, time for the market navigator. Earlier this week, Meta signed a 20-year agreement to buy nuclear power from Constellation Energy. While that particular deal for power generation has gotten some mixed receptions here, perhaps the better way to play the technology sector's backing of nuclear is the fuel chain,

so to speak. Joining us now is Rob Thummel, the portfolio manager over at Tortoise Capital. Rob, would you talk about that supply chain for power? What exactly are you referring to and how can investors capitalize? Rich uranium, right? And so the U.S. needs more uranium, needs to produce more uranium, and needs companies that enrich more uranium. So a company like Centress Energy, L-U-E is the ticker. It's a small little company right now. But if we're going to use more nuclear power and generate more nuclear power in 2030 and beyond,

we're going to need to enrich more uranium because basically uranium needs to be enriched to be able to be utilized to generate electricity. So a company like Centress is actually going to be really center and important and critical into the future with that process. Now, it's also just about the idea that maybe these power utility generation companies have to do more as well. So as you look at, is it Constellation alone out there or are there other ways to play this tech power boom? Yeah, so the electricity for the future is going to be kind of a not M&M but in and in. So nuclear and natural gas. And so on the nuclear side, constellation, as you mentioned, largest nuclear operator in the U.S., it will continue to experience significant growth in electricity demand.

And Vistra Energy is another example as well. Vistra Energy is the second largest nuclear operator in the U.S. But also remember, what are both of those companies doing as well? They're buying more natural gas. So you're going to need more natural gas generation, and natural gas generation actually can really provide electricity today. Nuclear will provide electricity into the future, and together, they will really be the primary electricity supply sources

that will really power this AI revolution in the future. All right. Rob Thummel at Tortoise Capital with the N&N trade, Kelly, nat gas and nuclear. I'll send things back over to you. NNN, NN. It's like M&M. Dom Banks, not as tasty.

Coming up, one of the most important voices in real estate, Rick Caruso joins us right after this. All, your next guest has an on-the-ground read in the consumer in the state of spending. He owns properties in California, ranging from retail, the residential, the office and hotels. Rick Caruso is the founder, and former CEO of Caruso is also the chair of the

board of USC go Trojans and almost became the mayor of Los Angeles. Rick, I wish you had 100 hours to talk because I got a lot of questions. I was just in Santa Monica. What a disaster that is, but we're going to focus on something else. From your perch, from your perch as one of the most successful real estate entrepreneurs in America, how are things going? I actually think, Brian, things are going well, surprisingly well. We went through this period, what was it, Liberation Day, whatever it was called. There was so much unpredictability that everybody was buckling up and holding back. Personally, I'm sort of past that now. I think most of my contemporaries are past that. We needed time and some information and sort of get a cadence of what was coming out of the White House.

But the consumer is strong, sales are strong, our attendance continues to grow, sales per square foot is growing, single digit to double digit depending on our properties, retail properties. the resort business that stayed strong for us. So I'm very optimistic that we're going to have a good year. Sounds like 5% 10-year yields and 7% mortgage rates. I know you're a commercial guy, but commercial real estate is built on borrowing costs in some ways, Rick. Sounds like that's not necessarily kneecapping the real estate industry.

It's not, Brian, because you know what? When you look historically, a 5% rate would I prefer to be three sure? We all would. But a 5% rate isn't that bad. So what you do is you organize your budget around it. You stress test your pro forma's, which we're doing now. We had put all of our projects on hold. We were about to break around on three projects.

And then the market was going crazy a few months ago. Now it's settled down. We're green lighting them. We are going to stress test them in case the 10-year is moving a bit more. But if we hang around four and a half to five, we're going to organize around it. We'll be fine. Rick, what's going on with the consumer? Because the data points have been all over the play.

How is demand at the shopping centers? What are you seeing? So there's three things that I look at, Kelly. One is sales per square foot, which has stayed strong and growing. The second is attendance on the properties, which we monitor daily through our placer AI program. And the third and the most important is the attitude and the sentiment of the retailers and their growth plans.

And what we're seeing is best in class retailers want. more space, they want more a locations, and they're growing. And we're trying to accommodate them, both at the luxury sector, but the other sector that's doing really great is the sector that's going after the younger consumer. The younger consumer is spending and engaged, and they want to be in an environment that has a great experience, which obviously that is our forte. And those, you know, the Eritzias of the world, the sephorres of the world, aloe, Lulu Lemon are doing great. So things are fine. So the economy is fine.

The consumer is fine. The tariff fight. Did it matter? Does it matter? I think it may matter in some circumstances. It may matter in some segments of the market. We're out pricing out projects right now. What's interesting to me in pricing out pretty large construction projects,

there's not a great impact of the tariffs. We're buying lumber from the U.S., and so that has helped. Actually, lumber costs have gone down, which is good. And building in this country, unfortunately, is nowhere near as robust as it should be. So contractors are competitive, and we're seeing it being competitive in Southern California here. So I'm pretty happy about that pricing, which is offsetting a little bit the increase of interest costs. We'll see how that plays out. But right now, little worried about steel, but we'll focus on buying U.S. steel and let the tariffs play out.

It's not, you know, Liberation Day was this T-Rex coming out of the closet and scaring the hell of everybody. And now we're sort of settled down. We understand this thing is going to bounce all over the place and we don't need to react on a daily basis like, at least I was. I was, I was buckling up in my desk chair. Didn't know what the hell was going on. You have a desk chair with a buckle cheese. I've been, I did get one of the, yeah. He should come host a Sunday night CBC special. That's a product. I mean, look at what's happening today. It's just amazing. You're right. Yeah. Buck buckle up again. Here we go.

Desch chair with the buckle. You do some info, commercials for us. Rick, thanks for joining us. It's good to check in and get the Pulse out west. We really appreciate it. Thanks, Kelly. Thanks for him. Rick Caruso.

He's, of course, referring to this back and forth between Musk and the president today. Check out shares of Destiny Tech 100. Its portfolio consists of 100 of the top venture-back private tech companies. Here's why we're telling you. It's down 14% today. And SpaceX was 52% of its holdings at the end of last year.

This is the Musk effect. seeing in real time. But shouldn't my stocks go up? And Tesla is down about the same amount. But shouldn't it go up? If now he appeals to more Tesla buys. That's what I just tweeted out. I sympathize with that as well. Why isn't Tesla up? Maybe it should be. We'll see what happens on the regulatory front. Robotaxies and all the rest of it. We're confused, but thanks for watching Power Lunch. Closing bell starts right now.