Power Lunch - S&P Hits New Record, Doing Business with Bots, Global Market Opportunities 10/6/26

Episode Date: October 6, 2026

The S&P 500 is rising to a fresh all-time high, boosted by gains in key technology names as well as declines in Treasury yields.Brian Sullivan and Kelly Evans are joined on set by VanEck Funds CEO, Jan Van Eck, to discuss his latest thoughts on the markets amid the record-high rally investors have been seeing.CNBC’s Kate Rooney then joins the program live from San Francisco with breaking news on how Meta Platforms, Sierra, and Stripe are teaming up to try and make it easier for companies to do business with artificial intelligence bots.Later on, Allspring Global Investment’s Derrick Irwin weighs in on the recent surge in Brazilian stocks following the country’s first round of presidential election results and he also lays out which under-the-radar regions he sees opportunity in for investors. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

More records for your money as big tech takes part of the markets to new highs. Speaking of highs, hi everybody. And welcome to power lunch. The chips are up as some big names. Keep making investors, hopefully like you, a lot of money, and you're in luck because the CEO of the firm behind the largest semiconductor ETF, he's here. Plus Constellation Energy getting a nuclear-sized jolt of double digits on a new deal with Google leading the S&P. Other names in the sector are charging higher as well. So could nuclear be the answer to AI's power shortage problems?

And it's Amazon Prime Day, another one. But as AI agents begin shopping for us, what happens to retail? And can these companies afford to keep the bots out? That's all ahead. Did I notice just a touch of cynicism or sarcasm? Is it like Big Deal's Day? I think it's Prime Big Deal's Day. Either way, what did you get me?

It's in July. And it's in October. Christmas and then again after. Anyway, we are at record highs for the, S&P 500 and the NASDAQ. And a big reason for that is the AI trade reigniting in the last month. Just take a look at these semiconductor stocks over the last 30 days. AMD, Marvell, Synopsis, cadence design systems, Terradine, they're all up at least 20% or more in about 20 trading days. Another way of looking at just how much AI has boosted this market, the S&P

500 is outperforming Goldman Sachs's S&PXAI stock index by 5%. So Goldman has a stock index that like strips out AI. So it's like the S&P minus AI. And if you're, well, if you're on TV, you can see the divergence here on the radio. You're out of luck. But it shows a blue line going up and an orange line going down. And the orange is XAI. Let's talk about all of this and more.

Joining us on set is the aforementioned. CEO of Vanek funds. That is Jan Vanek. And we can talk about semiconductors. And by the way, energy, which we will get to in a moment. But let's talk about semiconductors, Marvell, and more. I've got to imagine the inflows to your SMH. They're high again.

Yeah, they're good. They're consistently good. Not great. Not great. Because there's still so much fear in the trade. It's almost ironic, right? It's been the big mega trend over the last several years. AI is very simple.

demand far outstrip supply, the chips are the big beneficiaries, and people are still, I think the market's still very worried about oversupply and, you know, all the worries that are in the market. But look, I think this has been the year. How long do you think that can go on? I mean, because at some point, do you believe supply and demand will ultimately balance out? Yes, and everyone is looking for the deceleration point. And, you know, I look at the quarterly earnings. That's my, kind of reconfirmation, re-underwriting of the trade. So I pay a lot attention to the hyperscalers. And they keep reporting great like 20% year-over-year profit growth, even though they're multi-tillion dollar companies. So I'm really good. I mean, this year has been what I call the AI1.0 trade, which was chips and semiconductors. The AI2.0 trade, which is the supporting ecosystem, independent power producers, right, the nuclear energy trade that you talked about, that's really been suffering, partly because of political concerns relating to data centers. I actually think today is a great day. Maybe we've seen the bottom here with the constellation deal. Wait, say that again.

For the AI2.0 trade, it's been challenged this year, right? Because concern about political concerns about data center growth, so NLR, our nuclear ETF is off, Vistra is off, like you look at all those supporting businesses. I think maybe the fears have been fully baked into the market. And And, you know, we'll see. I'm not predicting exactly the day. But look at the bounce today, I think. And we just need one nuclear power plant to be commissioned. I think the prediction markets say it's less than a 10% shot that it happens this year.

But I think when that happens, this dry spell for the AI-2-0 trade will be over. Chris Verone of Stratigis was here yesterday and said almost the exact same thing. That to him, there was a little bit perhaps a political overlay to how poorly the AI infrastructure, or the GEVs and all have been trading the past three months. Yeah. And he said either maybe the blue, it's not a blue, maybe the blue wave is just priced in. But that now, ironically, as Ryan Dietrich reminded us last hour,

October is often the best month in a midterm year. Because you, because things get priced in. And I wonder if we're seeing a little bit of that now. Yeah, yeah. Well, we could talk about energy and October surprises and stuff like that. But I do, I do think we've seen the kind of the bottom in that, in that AI correction. You think we stick with the AI.

2.0 trade for now then? When do we go to 3.0? I think that's what's more attractive. Look, I like both. And we've always been saying, like, two things. You want the survivors. So SMH is just the top 25 chip companies, right? Because in five years, we want to remember the names that we're talking about in 2026. So that's number one. And then just diversify your trade. Because you do have parts of the ecosystem, like the core weaves and some of the more speculative names bouncing around. So you just want to have a broad exposure. Where and how does DRAM fit into all of this? You know, that was an even more specific angle on some of this. Yeah. Which had a massive upside corrected throughout the early summer,

has done okay lately today. Some of those names are trading down some of the worst performers in the S&PN concerns about more supply coming online. But how does that fit into AI 1.0, 2.0? I mean, that would be sort of in the more risky part of the ecosystem, I would say, just because, and maybe I'm scarred from prior memory cycles, but you just don't want to have a commodity product. You need a competitive moat. You know, Marvell has a great, you know, custom ASIC technology. Some of the memory companies, there was a big Chinese memory company

that listed a couple months ago, remember, so, yeah. So I think that's the worry for the memory names. We kind of got a little bearish in Q2 on the memory names. All right, DRAM to maybe another type of commodity. that is oil and energy. You also have the O-I-H oil and gas. E-TF. I don't want to jinx. It's been relatively calm for about a week, maybe a little more. A couple random things happened. Oil prices have come down. They're not at 65, but they're under 90. Trend has been going down. Are you optimistic that the worst is behind us in oil and gas,

or are you just agnostic and watching the headlines and watching what the companies in your OIH do? Yeah, I like to oversimplify, Brian. So I'm going to say mid-east is really cooling down. Maybe the word victory is inappropriate, but, you know, the volumes are back. I'm really more concerned about Ukraine, Russia. So what are the implications? So for oil services, that means we're going to be rebuilding. We're going to be building in Latin America. We're going to be building in the Middle East. Oil services companies, I think, are pretty attractive here. They didn't have a big run-up. The interesting trade, just to me, is the refiner trade, crack, right? Because, first of all, it's up like 75% this year, because diesel prices are so high. Refined products are so high. And the cost of energy in the U.S. at least has been disciplined. What's interesting, it's a global ETF, meaning it has names in India and Europe that where the refiners there have actually been hurt. And I'll call it smart money investors. I'm surprised they're

still putting money into that trade. Yeah, and what he's talking about, guys, and shame on me, it's CRAK is the refiner ETF. Right. Also, from Van Eck. I don't know. It's amazing how you just mentioned an ETF, and it happens to be your company. Marathon Petroleum is the largest one in this. To your point, there are some global names.

Listen, the earnings per share on these companies have gone up in some cases, and this is not like a misquote or TV hyperbole, a thousand percent. They literally have jumped a thousand or more. percent. It's crazy. Year over year. It's crazy. And I wonder, again, kind of like our previous discussion, how sustainable. There's no way thousand percent. Right? I'm not a math. Again, we've established. We're not math people. But that's unsustainable math. This is not like a Jan or a Vanek type of trade, typically speaking, right? Because we're into these big 10-year macro themes like AI. Like just

overweight, semi-stay there for a while. And typically, a lot of the oil trades are more cyclical, more short-term. That's why I'm really intrigued. I think the market is saying that this Russia-Ukraine situation is going to be lasting a lot longer. And that feels right to me, right? With Ukraine taking out Russian refinery capacity. Yesterday, another one. Another one. Yeah, I mean, they're not stopping.

This is really. There's anyone controls Zelensky or Putin? I mean, you know. But this is really important what you're saying. I mean, if that, and this is why sometimes you can look to the market for these signals. So what are the repercussions, if that's true, there's repercussions for what we're paying here for gasoline for diesel. They have to come up with other ways to try to keep diesel prices down. But so you think there's more to go. Yeah. The Gulf, right, the Mideast won't solve the price of

refined products here in the U.S. And again, you know, globally, I think they're giving us bad political signals about Ukraine and Russia, that that's going to be hotter for longer. And you're making, to Kelly's point, an incredibly important point, because we've got to tell a viewer again, if you're not paying attention, Russia is a gas station that has nuclear weapons. That's how people sort of only half-jokingly refer to the country. because it exports so many petroleum products. Good for Zelensky for going after Putin and his money. You want to stop the war machine, right?

You want to defeat Putin, defeat Russia. But they're causing massive damage. These refineries, and again, we can root for that because we're going to root for Ukraine. But at the same time, it's getting, it's heating up. It's not cooling down. They're fighting dirtier and dirtier, right? I mean, Russia's going to try to take all the, all the civilian infrastructure. Russia hit a bridge, a civilian bridge in Kiev.

Yeah. Yes, we showed that video. And other civilian targets. Yes. That's what Zelensky's talking about. No, I think it's very different situations. And that's purely to the diesel and refining story. I'm interested that what I consider smart money, even recently, has been putting money into that refiner trade.

Right. Right. That's just what the market, and the stock market prices are telling you that, right? With other energy parts of the sector, you know, correcting, if you will, those refiners have been rock solid. It's just something to look at. I'm not saying it's a trade per se, but it's a reflection of the market right now. It's a great, great thing to shout out. Jan, thanks, as always.

Good to be here. I appreciate it. Jan Vannack of Vanek fun. All right. Well, another big market story that you need to hear about that we didn't have time to get to is what's happening in Europe around debt as new warning signs flash on debt and the bond markets. Don't believe us? Look at this. The yield on France's 10-year government bond is now 4.75%.

Now, that may be lower than what we've got here in the United States, but France's yield is now more than Italy's 10-year yield of 4.52%. In other words, Italy, which was, like Greece, once a poster child for Europe's debt crisis, is now being viewed in parts of the bond market as safer than France when it comes to long-term debt. And consider this. Speaking of Greece, in 2008, the 10-year Greek bond was yielding, about 4.8% right before the massive debt crisis there hit. I was in Athens. I watched people firebomb banks. So what is happening in France right now? By the way, massive protests all around France, mostly

about schools, but you got huge protests, you've got a big spike in yields, you got a lot of, there's some video from France, a lot of unrest that's happening in France. France is not Greece. No offense. Watch France. Yeah, and obviously the frustrations. You know, there's just not

enough money to go around for all of these problems. There's never enough money to go around. All right, coming up, how a major AI nuclear deal is sending the entire sector higher. Plus, with U.S. stocks at records, is it time to go global? And after the break, how retailers are using AI to drive sales, but they do want some new rules. We'll talk about that with Kate Rooney coming up. Welcome back, Meta announcing some new partnerships to help its muse agent navigate e-commerce more smoothly, as more businesses prepared to interoper.

with AI bots. Kate Rooney has the details. Kate. Hey, Kelly, so this is just out. You have Walmart, Meta, Stripe, Sierra, a handful of other companies now teaming up to try to really set a new rulebook for this new age of AI agents. The companies are introducing what they call a personal agent protocol. So it's essentially an open standard to let AI agents securely interact with businesses on customers behalf. I talked to Brett Taylor. He's the CEO of Sierra, chairman of OpenAI, and has been spearheading this. He likened it to signing into another website with Google or Facebook, if you've ever done that. So the idea would be to help businesses verify that an AI agent is actually working for a real customer.

It's not just a rogue bot and that it has the authority to do what the customer actually wants here. Brett Taylor did tell me that it is a common standard. And without that, he's called it kind of chaos right now for businesses. So they're trying to smooth that over. Meta's Muse now has millions of users. It only launched a couple of years ago. I spoke to David, or excuse me, weeks ago, David Singleton over there. I talked to yesterday.

He said that people are now using it for everything from signing kids up for classes, booking doctors appointments, and that other companies have pushed back on AI bots overall. We've seen examples of Amazon blocking news from accessing its website over some of these concerns, also blocked perplexity. Open AI and Anthropic are not part of the group we should note, but Brett Taylor does expect some of these rivals to work together and join the Open Standard. that's sort of the way that's going to have to work here is everybody's going to have to sign on board, guys.

Trying to help all small businesses in a way, right? Like basically, they don't want to be left out? Well, that's part of it. Right. If you have a small business in a local shop that has an online store and is not used to interacting with these AI agents, I mean, the speed at all, which all this is moving, guys, you've seen how viral news has gone.

There's also instinct, which also signed on to this protocol and agreed to do this. They have just boomed in popularity. So the amount of e-commerce that's now all of a sudden being done by AI agents. I should also mention Rocket is a part of this. They talked about loan originations being done by AI agents. So it really signals how the economy and e-commerce is changing so quickly.

They're trying to make this a lot smoother and make sure businesses know who's actually calling. Is it an AI bought by themselves? Is it an AI bought on behalf of Kelly or Brian? And they just want to make that more clear and make sure that it's secure in a lot of ways. Kate, Rune. Kate, thank you very much. All right. So what could these partnerships mean in the broader AI race?

Well, your next guest says Facebook parent meta is well positioned as agents become more popular for online shopping. He just raised his meta price target to $1,000. Let's bring in Ken Garuski. He is a senior internet analyst at Wells Fargo. Ken is the idea that basically these agents are just going to drive sales because they buy things automatically. And you kind of remove the human component of them. Maybe I don't need it. the agent just buys it anyway, or is it something more meaningful?

Yeah, well, thanks for having me first. The way we look at it is that AI agents or consumer AI agents really reduce the friction of discovery. So anything from there's been a lot of discussion of or use cases you've seen about reducing bill prices and negotiating mobile phone rights or cable bills to more complex. multi-step processes like planning a trip, maybe across multiple families. But we're talking about even things that will be as simple and frankly as daily occurrences, such as planning lunch out with a friend. My friend, instead of us texting back and forth, that friend's agent, my agent,

will correspond, figure out the best time. And so I think all and all of this reduces friction. We do think this accelerates e-commerce penetration across the Internet. How does that drive money, though, to meta? How does meta make money off Muse? And you'll pardon all the alliteration, Ken? Absolutely. So today, the only model is there's a subscription.

But really the intention here is to say, for almost all, users, this is a free product. This is a free product. And the best model to get to, you know, hundreds of millions and eventually to billions of users is free, right? And so they're following this same kind of template with other products. It's a free product at a certain threshold of usage. And I'm a heavy muse user myself. And I've never, you know, I'm kind of cat, have made it to about 60% or so of my weekly limits. So the intention here is to keep this free, and at that point, there's a subscription. Now, longer term, where are we going here? They've talked about a cut of transactions, a percent of transactions. I think that's a good way

to build trust and to kind of build a business model. In the end, we think this likely ends up in an ad model. It may not look the same as today's ad model, but ultimately in the end, we think it's an auction-based ads model, which is where, most meta businesses end up, and frankly, where our Google search has been so successful. Yeah, I think they would easily pivot that business model. Ken, what do you like most about using Muse? You know, we talked to Chris Ferone yesterday from Strategious. We're talking a lot about Chris after his appearance, but he was just that he had used it

to say he was trying to find a flight and it was able to find the flight and book it for him and his family, all without his involvement and did it correctly and successfully. So I just like hearing more of these use cases. What do you like about Muse? What are you using it for? Yeah, well, it's interesting. I'd say I have an older child who's just beginning out of college selection process. So that's one use case.

I mean, there's so much data out there and it aggregates it and it all puts it together and I can present that. So hopefully that will make our college, our family a bit more calm during this college selection process. So that's maybe one on the personal side. But on the commercial side, I've found that it just reduces so much friction. If I, the hours it takes to plan a trip or a multi-step process, and you can just narrow that down to just the, you know, give me three or four great properties and simplify it all for me. And the important part also is you can present that to members of your family, other parties that may be involved in this.

transaction are involved in this trip. And that's really the beauty. The beauty is that you can actually collaborate and share. And maybe the last thing I'll say here is this. What really makes this special is that it is proactive often. Like these agents are proactive for you. And so they will put you in a, you know, they'll see you're between meetings, you're walking, you know, across town in midtown Manhattan. And there's this great coffee shop that and you, they know, out that coffee. This is where the ad model eventually will go. You'll get a 20% discount if you stop and have that coffee. I think that's, we're going to see that the ads first around this proactive nature. Ken, quickly, it's Prime Day. As Kelly said, again, I feel like it should be a

national holiday. Should we really be working today? We should be working today. No, no. We should be a national holiday. I think Amazon would be in favor of that. Yeah, and just sit home and just, it's like Cyber Monday. We can dial up on our AOL account. Anyway, does, does, Prime Day matter to Amazon on the stock? Tell us what you think about the stock. Should we buy it or sell it? But does Prime Day matter to the company? Well, absolutely it matters, right? And the reason is because it is a showcase day for them from a product standpoint, from a promotion standpoint. And I think really what Amazon does and Prime Day is it really flexes its muscle around not only it's the great supply chain that it's built and probably very differentiated, but also,

its abilities in fulfillment and logistics. And to the stock, you know, AWS has been the story, it's been a great growth story, an accelerating growth story. And this is one reason we like the stock. But the other reason, despite some of these agented concerns around advertising, we believe that the real competitive moat here, and it's durable, is fulfillment in logistics. You can have as many agents you want to run around. Those agents are not delivering. that package from the fulfillment center to your, to your home. It's just, there's no AI that does that. You need a physical, the offline logistics network. And to us, that's the real differentiator in Amazon retail. All right. I want to know where you're trying to get your kid to go to college, you know.

I feel like you're trying to persuade, like there's a persuasive maybe element of what's going on here. But let's just say we're trying to reduce conflict in the household. How about that? If Muse can do that, then even I'm going to get on board. No. Ken, thank you. Good to see you. As always.

Ken Gorelski, we appreciate it. I see. Coming up, Google goes nuclear. That's a headline. The major power deal that got the AI and energy worlds on notice. We'll tell you more about that next. A major power deal in the world of energy. Alphabet signing a 20-year deal with Congress.

Constellation Energy. The deal will secure 3.6 gigawatts of power. What does that mean? It's roughly equivalent to about 3 million sort of average-sized homes. Constellation says the agreement will unlock more than 4 billion in investments across 11 nuclear units. Shares are on the move. In fact, Constellation stock is up 11.5%. That is the best day for Constellation in more than a year. and your next guest says this could be a big win for the broader nuclear trade. Joining us, James West, Head of Energy and Power Research at Mellius Research. Just absolute must-read stuff. James, good to have you back on the show. Another day, another deal.

3.6 gigawatts? That's a lot of power. What do you make of the deal? This one's a monster deal, but not surprising. We know that the hyperscala see power as the biggest constraint. And so we've seen, particularly in the nuclear side, 2025 was a year of kind of, restarts, extensions, and existing capacity being hoovered up here. What we're seeing in 26, though, is extensions and actual power generation.

So what we call up rates to facilities and being paid for by, of course, the hyperscalors with the pricing. And as you saw with the consolation today, already dealt with the DELE loan that was announced on Monday for Vistra. You know, the big guys are winning here. So if you have existing power that you can add more power to that you're already on the grid, it is in high demand. Does it tell us anything about future deals? The size, the pricing, the scale, the source, James. How do we read this for the future, if at all? I think we've entered into a new paradigm here of much larger transactions

because the data centers are getting bigger as well. So when we went from 100 to 200 megawatts to a gigawatt or more gigawatts, we're going to need the same size of power to be either constructed or upright or delivered to the sites. And so I think this is the new generation of power deals. Yeah, Constellation up 11.3%. Is this deal, James, try to sort some stuff out. We keep here, okay, well, we're going to build this, and it's going to steal power away from homes.

Are these deals additive? Are they subtractive to the general population? Are they completely separate from the population at large? These deals are bi-directionally negotiated. They're separate from. rate payers. What FERC and really PJM market are trying to do is make these guys work together, negotiate together to stay really out of the auction market, quite frankly, so you don't touch the ratepayers at all. It's been very clear, don't hurt ratepayers, don't drive up electricity

costs. And quite frankly, the hyperscalers are in agreement there. They don't want the backlash on data centers. They don't want the backlash on power costs. And so they're perfectly willing to pay for this. It's small in terms of the scale and size of what they perceive as the prize of winning A. James, it's Kelly here. And at the top of the hour, Jan Vannack was talking about some of the nuclear names that he said, you know, had been not trading well, but are trading obviously really well today. And maybe it is just the news.

But he said, imagine if there's the first approval, first new approval in years for a nuclear plant. There's only a 10% odd from prediction markets that could happen this year. Talk about that. How real a catalyst is that when do you think that might? realistically happen? And what would it mean for the rest of the space? I think approval for that, maybe not by year-in, but sometime early next year, I can tell you if we got approval before a year-end, this Westinghouse IPO is going to get hotter than

probably already is going to be. And so it would be very good for whoever announces it. But they want government backstuffs. They want government financing. So it isn't going to take some time for that to happen. But it would probably even learn the big guys, a constellation or a vista. And I wouldn't even rule out one we haven't talked about yet, which is a just talent. And notice that talent's been pretty, pretty quiet. Constellation announcement today and last week, Mr. announcement on Monday, what's talent up to? What do you think they're up to? About to sign deals. If that's true, does that mean a lot more upside for these stocks? Absolutely. I think we're just getting in early stages here. I mean, all these stocks trade at

cash flow yields that are in either the high single digits or low double digits. Talent actually is close to 20 percent on their own guidance, which we think is stopped. And so, So we see tremendous upside, even more so in some of the natural gas dames like NRG. What if those approvals don't come, don't happen, are years off still? I think that's a different story for the equipment manufacturers, but for the guys that have existing nuclear power, that's going to get soaked up into long-term PPAs. We're going to turn from merchant power companies into really exist kind of infrastructure-like assets with contracted cash flow, which deserves lower cash flow yields and higher multiples.

James West Malius research, always a must-read. James, really glad you came on the program. Thank you very much. Thanks, Ryan. Take care. Thanks, Brian. Thanks, good. Alphabet isn't the only megacamp making power moves today. SpaceX is seeking approval to build a natural gas pipeline in Florida. The pipeline would help fuel rocket launches from Cape Canaveral. It would mirror a similar project. SpaceX has proposed for its South Texas launch site, which is an 8-mile gas pipeline near Starbase.

Nat gas, or I'm sorry, SpaceX shares fractionly higher, today at 172. All right. So speaking of another commodity, before we go, let's take a closer look at oil. Now, oil was lower earlier. It's now slightly higher. But here's the number to watch. $88.67 per barrel. We're above that right now, but 8867, why do you care? That is the 50-day moving average right now on oil. If we close below that, we probably won't today. We know that it's over. But tomorrow maybe, who knows, we'll see what happens. With the first time we'd close below the 50-day moving average since August 7th. Again, it has not happened, but we're going in the right direction. You got Brent crude at over 100. But keep in mind, as we've talked about Kelly extensively,

these are the future prices. These are the paper contracts. If you want to get a physical barrel of oil, if you said, give me a barrel of oil, someone rolls it to you, it's going to be a lot more expensive than that. So we get it. Berylls of oil are more pricey than that, but the futures market slowly trickling down, slowly. Which makes those refiner spreads that, Jan was talking about at one, all the more interesting to watch. If they're not coming down, is that a signal of Ukraine, Russia, the tensions there escalating. And we'll see. Thus, the aforementioned crack spread. Yes. All right, with markets at record highs, is there more upside overseas than there is here? Emerging Markets portfolio managers' top picks around the world just for you. Next.

The I-share's Brazil ETF is holding on to yesterday's big gains, as Morgan Stanley and J.P. Morgan are now upgrading Brazilian equities, all of this following the recent election results. Our next guest believes Brazil's continued success is by no means of foregone conclusion, though, and sees better opportunities and other under the radar global areas. Joining us now is Derek Irwin. He's the senior emerging markets portfolio manager at Allspring. Derek, it's great to have you. Let's start with your thoughts on Brazil.

What are they? Well, look, in a year of mostly negative surprises globally, this has been just a great positive surprise for emerging market investors. Not only did we see a better than expected election result with regard to the presidential election in Bolsonaro, who was perceived as more market-friendly coming out ahead, at least in the first round, but also the lower houses in Congress came out more positive for markets as well. So really a very positive result. We're not out of the woods yet, but I think the market can begin to look forward to maybe a more credible fiscal spending path. Maybe we start to see rates coming down and ultimately moving into

a virtuous cycle with Brazilian equities, which we haven't seen in some time. So are you, would you be in favor of people owning and having some exposure, especially your other strata just talking about how the currency could appreciate significantly. So that could give you kind of like a double boost there. Yeah, I think there's a lot of room. This is a very interesting rally because almost everything rallied, rates rallied, the currencies rallied, equities rallied. And so it speaks to a lot more than just the market and positioning and a big pleasant surprise. It speaks to what is the potential for a real structural improvement in Brazil. So there is room for continued performance in Brazil. I think yesterday's move was very big

and it priced in that kind of surprise in the election. But I think as we look forward and Bolsonaro's government, should he win, the runoff, begins to implement positive reforms. We can really start to see a cycle that could really see a very strong uptrend in Brazilian shares. So there's still, there's still room here for this market to move. All right. So you are, I would say, cautiously optimistic maybe there. What about, what else is in emerging markets these days? You got the big, you know, memory trades with Korea and Taiwan. China's been kind of eh. Where else when you look around India? We were just talking about this with a previous guest. a lot of pressure from higher oil prices there?

Yeah, well, I mean, obviously the year has been a year of Korea and Taiwan tech. Really, an AI trade has been driving the bus with regard to emerging market performance. And we think that continues. We need there's very good fundamentals there for the big chip makers and the kind of ecosystem around that in Korea and Taiwan. So we think that will continue, maybe not quite as aggressive as we've seen earlier in the year. But there's certainly a long-term good story there. So we're pleased that that's going to provide support to the market. But I think what's important to understand about emerging markets is a lot of parts of the market are trading at pretty low valuations.

They sold off after the Iran crisis began in March and have yet to reach those pre-March highs. So there's some really exciting areas of the market that we've been looking at and maybe adding a little exposure to as well. Maybe the most interesting, you mentioned China, as one of the big drivers in EM, it has really struggled year to date. But it's now sitting on a very substantial discount to the rest of emerging markets. There are very good companies that we believe are trading in near depressed multiples. And maybe most importantly, the Chinese market and the Chinese government is one of the few governments that is stimulating right now in an environment where rates are rising and many governments in central banks are doing just. just the opposite. So China has a little bit of room here to really rally off a low base. I don't know that there's an obvious catalyst tomorrow, but I think as we look into 2027,

I think we can start to see some pretty interesting things happening in China. So that's great. That's a big piece of the market. Yeah. And then we can look a little further afield, maybe a little more interesting parts of the market. For instance, South Africa, where I think a lot of folks might not spend too much time looking at is a really interesting story. It's very exposed to oil. It's very exposed to global interest rates. And that's put pressure on the market. But it's also an incredible transformation story.

Over the last few years, we've seen real progress in power generation, logistics. The government appears to be more functional. And we have an election that is probably going to improve that even more coming up this year. So there's a lot of room to be structurally positive on South Africa and the shares are cheap. We're showing the ETF, the EZA. If people's curiosity is piqued, mine certainly is after hearing those updates. Derek, thanks so much. Appreciate it. Thank you.

Derek Irwin of Allspring. All right. Meantime, got a couple of interesting moves and some biotech names. First up, Moderna, a big name you know. Now, Moderna has been on fire. It hit a 52-week high earlier before the stock ended up turning down. Moderna was the coming into today. It may still be the best-performing S&P 500 stock over the last couple of months.

Novavax seeing a similar swing, opening in the green. and then tumbling that stock on pace for its worst day in a year. The move showing up across the group as well. Not exactly clear what is driving the reversal, but we are digging into it. We get some news. We'll bring it to you. But either way, these are moves in biotechs, which there is a lot of room to cover, these names. And let's get to Frank Holland for the CNBC news update.

Frank? Good afternoon, Kelly. Ukrainian president Vladimir Zelensky said today the latest intelligence shows that Russia is preparing for a massive attack. His warning coming hours after Ukraine launched one of its largest aerial list. assaults on Russia's capital. Zelensky did not elaborate on the timing of Russia's attack, but said Ukrainian services and its Air Force are ready to respond. Cornel is bringing in former acting U.S. Attorney General Sally Yates to lead an independent review of the explosive sexual assault allegations made by a woman identified as Jane Doe. She filed a police report weeks

after saying she was raped at a fraternity party in 2024, but the local district attorney declined to file charges. The university says Yates and her team will examine whether Cornell followed its policies in responding to her claims. And the U.S. military is pausing all operations and canceling off-based privileges in Okinawa after a Marine was arrested and a local woman's killing. Officials say service members will receive training during the 48-hour pause, which also bans drinking alcohol on and off-base. More power lunch coming up after this break. Welcome back. Time now for our market navigator segment. AI obviously driving a massive investment boom, but the opportunity may be spreading beyond the usual suspects. Our next guest is on two AI adjacent stocks that have been soaring this

year. He says it's not too late to get in on the rally. Joining me is Jed Ellerbrook. He's a portfolio manager at Argent Capital Management. It's good to see you. Welcome. Okay. United Rentals and Dina Trace. Dina Trace, I believe, is also making a new 52-week high today. Pick whichever place you want to start. but what is it about these two that is giving them such momentum that you think can continue? Yeah, sure. I'll start with Dinotrace. So Dinotrace makes observability software, which for us, layman means it tells you when your cybersecurity tools break and why. And of course, that product is in higher demand today. AI is a threat that companies want to protect themselves against. And so we expect Dinotrace's revenue growth to accelerate. Their competitor is Datadog.

DataDog's revenue growth accelerated a couple quarters ago. Dinah Trace hasn't seen it yet, but we think it's. It's inevitable and coming soon. So we like that stock. We think it's reasonably priced, and we added it to our portfolio a couple months ago. This feels like if you're right about the business, but certainly the industry is in a great spot right now. It would seem. All right.

So what about United Rentals? Explain that one. Yeah. United Rentals is one of our longtime favorites. They offer rental equipment to, you know, various construction sites around the country. And what's driving their business today are these mega projects. That includes semiconductor manufacturing. It includes, of course, all these data centers.

And their products, you know, aerial lift equipment, earth-moving equipment, it's actually become in shortage recently, which gives United Rentals more pricing power, which helps them expand profitability and grow revenue. So these are great times for United. Are these companies where you have to have a point of view about kind of AI CAP-X or, you know, the mid-term results and all, I mean, is that implicit in your recommendations? Or can you just look at the numbers and say, you know, valuation? numbers, it just points to more upside. Yeah, I think for United, you know, which is a stock that's done

really well, and it's actually trading at the high end of its historical evaluation range, we do need data center, KEPX, to continue to grow. And we also need these mega projects to lead the way because high interest rates are hurting, you know, hospital construction, office construction, et cetera. That's a great point. Jed, great to have you here. Thanks. Appreciate it. Jed Lerbrook. Brian, over to you. I don't have a camera. I mean, it's like the radio. Still ahead. Some big data you got to see. We're going to break down. We're going to break down where all the data centers are getting built and just how much capital is powering that boom. Nobody wants to see me anyway. We're back right after this.

On Wall Street, on Main Street, and now on the campaign trail, data centers, of course, at the heart of the conversation, all the conversations. But where exactly does the build out stand, literally and figuratively? Well, Bank of America is out with a new note with some very interesting numbers. Listen to this. Bank of America says August alone saw $14 billion in new data center starts. That brings the year-to-date total to nearly $99 billion. That's already above all of last year. And of course, we've basically got three months to go. Projects are also getting larger. Physically, the average data center like that now spans more than 700,000 square feet. Of course, Texas is the epicenter with about $22 billion in spending so far this year.

So about one-fifth. In fact, Bank of America says about 85% of all planned starts through a year-end will be either in Texas or the southeast. But the build-out is also putting pressure on the grid. Bank of America expects power infrastructure starts to jump 30% in the next year. Although, Kelly, like we just talked about, some of that, would be purely dedicated to a data center and never touch actually the grid. True. And we'll see if that's how it plays out.

Oh, and I'm on camera. Brian, you look like the weatherman right now. So you can see the storm and then it's something, yeah. Heat dome. More power lunch after the break. Welcome back before we go over the summer. LeBron James signed a two-year, $8 million deal with the Philadelphia 76ers. It's actually the smallest contract of his NBA career.

And off the court, he's making up that difference and then According to front office sports, LeBron's polymarket endorsement is worth $15 million a year. That's four times Brian as much as he'll make from the Sixers. Interesting wrinkle in all this. I don't know if you've seen this, but Wembe Yanna is out there talking about how he doesn't want to make money from the online betting platforms. And I respect that. But LeBron is, he's taking it all the way to the bank right now. Wembe's also like half of LeBron's age.

He's got a whole career. Of earnings, hopefully. Of earnings ahead of them. If it goes the way that LeBron. And with inflation. We could be looking at a billion dollars. Yeah, sure. The dude is good.

Chearing for it. Very quickly. Are you looking to fly in like the next month or plan the trip? Well, guess what? Maybe do it now or get a muse AI agent. Get a muse agent. Because prices for airfares have just, they've gone up faster than a united flight out of Newark. Maybe that's not the right metaphor.

Either way, expensive flights, they're rising. So if you want to book, maybe book now or wait and take the chance or drive, Kelly. Or if you're going to remote Alaska, like 10 people are, then you have something to worry about. Thanks for watching, Power Lunch, everybody. Closing bell starts right now.