Power Lunch - SpaceX Lockup Expiration, Occidental CEO Exclusive, Rise of Leveraged ETFs 8/6/26

Episode Date: August 6, 2026

The major averages are trading slightly lower across the board as stocks take a break from the recent record rally. Kelly Evans and Dominic Chu sit down with VanEck Funds CEO, Jan Van Eck, to discuss the latest market action and the impact of SpaceX’s first share lockup expiration on Thursday. Meanwhile, Richard Jackson, Occidental CEO, speaks exclusively with the anchors to break down his company’s latest quarterly profit which was helped by a jump in oil prices and a rise in production.  Later, Blackrock’s U.S. Head of Equity ETFs, Jay Jacobs, joins the show to cover the rise in the number of leveraged ETFs on Wall Street as investors look for new ways to gain exposure to specific stocks and sectors. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A mixed session for the major averages, but a much tougher tape for two of the market's most important groups. Welcome to Power Lunch alongside Dominic Chu. I'm Kelly Evans today. Brian is still out. The market's engine of growth is stalling with Sandisk, Western Digital, App Lovin, and Datad Dogg, all lower after their earnings, while the financials and industrials are hitting new record highs. A man at the center of it all is Jan Vannick. He's the CEO of Vanek funds. He's here. He's sitting right over there. Wait, do you see his gorgeous outlook? I am sitting right in the next door right now. Plus, we've got a powerful quarter for Occidental Petroleum, delivering a major earnings beat. Production topped the company's guidance and free cash flow reached $3 billion, its highest level in nearly four years. The CEO, Richard Jackson, is here on Power Lunch exclusively, Kelly. Looking forward to that, but let's begin with some of Wall Street's favorite AI names.

Shares of Sandisk and Western Digital are lower after their earnings reports. Both beat analysts' forecasts, but wasn't quite enough to really dazzle investors. The latest reminder that the bar for these names has moved higher, and investors want blowout numbers, blowout guidance. Has the AI trade reached the point where expectations are simply impossible to meet? Joining us for more is the aforementioned Jan Vanek. Am I saying now Jan like Jan Hatzius? Or is it Jan, like Jan Niven?

It's Jan, right? It's Jan Benix. You know, sometimes. This is my first time here, Kelly? You say it 30 times and then you go, wait a minute. Have I been saying, are you too polite to correct me? No, of course. What do you think is going on with this rotation, which our guest last hour said this will be the year remembered for these kind of whipping rotations kind of from one place to the next? So what do you observe here?

I mean, look, a lot of the AI trade is a momentum trade. But I think long term, you have to look through which companies are going to be around in five or ten years. And there are some I would circle that are on the weaker side of the ecosystem. We sent about a month ago to clients, the memory companies. companies are part of that generally, more of a commodity part of the chip stack. And in particular, like Sandusk and Western Digital are not part of SMH. SMH is our kind of large-cap semi-play. And because the large-caps have been the winners over time, Sand-disk is up 30 times in the last 12 months. That's just, that that's a sign that the weaker names went up higher and they've come down more. So that's how I put the Sand-Disc quarter in context. because the memory space is super competitive. We saw a big Chinese company go public, right?

CMXT. And so if you're not at the high bandwidth memory part of the kind of and have that competitive moat like a Samsung or SK Hinex, I think it's tough. Yeah, I know. I think overall, one of the things that Kelly mentioned was the kind of impossibility, if you will, of trying to top some of these expectations. Where there's a will, there's a way. But in today's market, just how much more do some of these firms have to manage expectations better?

In other words, how much do these CEOs and management teams have to now go forward and say, hey, you know what, we're expecting maybe something a little bit more tepid and then start to reset that kind of expectations bar so they can continue to beat expectations going forward? It's a really tough job. I think short term, I mean, it's just been another blowout course. Right? And I think the quarterly earnings now are 99% of what I focus on with respect to the AI trade. There's a lot of other noise, but really the numbers keep coming through for the hyperscalers and everyone. So that is the key. But at some point, Dom, we know in two years or three years, this growth, the demand for compute is going to slow down. If you are CEO, how do you message that? I don't know. The big number, the granddaddy to me is in video. That's the core. That's 20% of SMH.

Their valuations have come down, right? They're almost in line with the overall market. They're going to have another great quarter. But at some point, the compute shortage will slow. It's not now, and it keeps being pushed out every couple of years, but I don't know how you message that. But I think if you have a quality, competitive moat, I think investors will be comfortable if the companies can get through that.

And for those who feel like the AI trade and figure out it, it's too hard to quote Charlie Munger put it in, the too hard pile. You have financials at all-time highs. You have industrials at all-time highs today. You like a couple of areas in the financials, for instance, some of the alternative asset managers. You're watching gold. Tell me about sort of those other places. I don't put AI in the too hard bucket, by the way. I think it's just one of these big mega 10-year trends. It's just you have to have diversified exposure. You know, the new world of chips needs the old world of, you know, kind of commodity producers and things like that. So you just want to be diversified. Look at copper.

time. Yeah, exactly. You know, copper is almost my indicator for the semi-trade. Is it? Exactly. Well, I mean, you know, all this build out, electricity and data centers needs copper, right? And despite a slowdown in residential growth in China, or that market's still weak, I should say, you have copper at all-time high. It shows that, you know, demand, computer demands driving it. And arguably, maybe interest rates you go higher because of some of those commodity costs like copper. John, sit tight for a second here, because we all know that the AI arms race is not cheap, it's got to raise money, and now Alphabet is returning to the bond market seeking to raise up to $25 billion in that debt market. Let's get out to Sima Modi,

who's got more details on this big anticipated offering. Seema. So Dom, two banking services we spoke to say that while anxiety around CapEx budgets has grown, there's still very much a market for corporate debt from the hyperscalers with early indications for Alphabet, showing about $100 billion in order similar to what we saw with other big. tech bond sales, including SpaceX a couple weeks ago. Now, this alphabet debt raise follows the company's $85 billion equity issuance and another $50 billion bond sale earlier this year, and it comes less than two weeks after it raised the target on how much it plans to spend on the artificial intelligence buildout. With today's raise, Alphabet is on track to become

the biggest issuer of all the hyperscalers in the corporate bar market so far this year. The key question, guys, is what yield the bond's price at that will sort of tell us, right? How much reward fixed income investors are demanding to lend to Alphabet, Dom. All right, Sima Modi with the latest, there on a big offering from Alphabet for the bond report today. Thank you very much for that. Some reaction from you. We talked about the money it takes and how much people are going to have to raise. This is just the latest indication.

By the way, there's also maybe a crowding out effect, right? Because people who are subscribed to this issuance are making an opportunity cost judgment over other parts of the bond market, maybe even treasuries included. How exactly does that play out in your mind for how financing affects much of this AI build-out? I mean, I think the non-story of the year has been that the CAP-X, this huge compute numbers that keep going up have not really affected the valuations of the hyperscalers. And I think that's, you know, the biggest quote of the year almost was Andy Jassy, right, in Amazon saying the return on capital for compute,

AI compute spend is comparable to that of AWS cloud. That is, I mean, that's the sentence of the year, right? And so, yeah, it makes sense to sweat your balance sheet, borrow some money if you have an investment grade balance sheet. I mean, they had so much cash these companies. Say that sentence one more time, the sentence of the year. Andy Jassy, basically, that he's getting as much return on invested capital from AI compute to data centers as from the cloud computing AWS. My question about that would be, where's the dollar coming from? Again, I should ask him, not you.

I mean, it's his statement, but with the case of cloud, there's a customer on the other side of that. Often, like, a big institutional customer, is the same true with their AI compute? Yes. Because it's going into the cloud business and driving that, or just in any way that people might encounter? I think it's a shift just from, you know, the compute demand is moving not just hyperscalers, right? But Nvidia broke this out in their last quarter. also to corporations. I mean, that's kind of the news, right?

AI with Anthropic in their first quarter and their revenue increased month over month. It's like corporations like Vanek and the TBC are happy to spend because they're finding some return. Now, I know there's a lot of debate about that, but... No, I think you're right. Absolutely about that. A quick question, Jan, we'll hear more from you later this hour.

On this whole thing about leveraged ETFs, we were speaking with Todd Zone yesterday, just asking him, again, long-term positive, but what are some of the risks we could be facing? We hear Jamie Diamond and others talking about kind of leverage in the market. He was saying, look, the rise of levered ETFs means on the kind of market maker's piece of it, on the exchange seat, there's more leverage than there used to be. And individuals are accessing that they're not accredited. There's no kind of back.

You guys obviously do a lot of the ETFs that end up being levered by other institutions. And I'm just curious if you have a point of view on that. I mean, I love Todd's research and he's put his finger on the bubblelessness of the market. There was no doubt. In Q2, things got crazy. But I don't think there's, We keep looking at the market makers. There's not a lot of market makers, but they have pretty good balance sheets, and they're awesome at risk management. But that is the risk.

It's kind of invisible to the everyday investor. But I'm not really worried. I told Todd we had lunch, like, I'm a three out of ten. He was like a nine out of ten in terms of nervousness. And I'm like, I'm okay so far. Well, I figured especially you would not want your products to be swept up in something like this, even if it was not due to your own fault, but due to someone else who, you know, was having issues just kind of making the crisis. Yeah, no, I mean, I love focusing on it.

We have to risk manage our industry. But to me, it's the fixed income markets in terms of crises where you get the discounts to NAVs. That's the weak part, right, of the market. And we haven't seen any of that, really, even in some of these volatile markets, massive discounts in an asset value. Not a lot. Even the CDF spreads on like Google bonds and all that Oracle bonds, right? People are talking about it. Come on. I mean, it's not nothing. Not at any kind of systemic or worrisome level. All right, Jan, thanks. It's great to have you here.

All right, well, buckle up because we got a lot more coming up on the show for you this hour. An exclusive sit down with the Occidental CEO, Black Rock is U.S. head of equity ETFs. Jay Jacobs is on set with us here as well. And there are just better crypto use cases outside of Bitcoin, perhaps. All of that's later on this hour. But first, SpaceX shares, that lockup period has expired this morning, Does that mean blast off to the moon or not for the stock? That story, we're backing to.

All right, welcome back to SpaceX. As you can see, there appears to be passing its first lockup test. The stock is moving higher as early investors get their first opportunity to sell a portion of their holdings. Now, that puts as much as $101 billion worth of shares in play. So what does this unlock say about the demand for those SpaceX shares? And does it change the case for retail investors looking to buy into that stock? Let's bring back Jan Vanek, CEO of Vanek funds. We're well off the highs.

We're north of 115, I think, at one point today. We're back down to 109 right now. But there's a battle brewing, and this is a momentum stock. This is a fundamental case for AI and what the future of technology looks like. What does the price action post-IPO tell you about what the appetite is for retail investors in companies like SpaceX? This is really hard to tell. There's so many sharks in the water, right? long-term holders, people, market makers pre-positioning for index inclusion. It's really hard to tell.

So I think the calmness of the stock is under, there's a lot of balance sheet positioning around this. I would say, look, SpaceX is a great story. It's a vertically integrated AI company. You know, they're building all parts of the stack. You know, so that's kind of my overall look. you know, the index inclusion game is impossible to figure out. Let me give you a factoid. We have, you know, ETFs that are in the tens of billions. Marketmakers will reposition, you know, index rebalances a month ahead of time, six weeks ahead of time. So you can't wait for that.

They're not waiting for the last minute. They're excellent risk managers like we were just talking about. Some were asking because they said, look at the shares today after all of this talk about, oh, the lockup is kind of, you know, and they said, is this overblown? Is this significant? How do we know how many people are really going to have access to this? and do something with the... But I agree with that, right?

Like, this overhang of stock is going to put pressure on it, you know, I think through the rest of the year. You do. Right? Right? Because now we just had the, you know, the free shares. They doubled today, right? And then they're going to go up another three or four X by the end of the year.

So that's a lot of stock coming to market, right? So you've got to clear that in order for the stock. So I think that the prices have corrected 50%. Like, it's an Elon stock. This is not a normal stock. Look at Tesla. Right? So it's going to be...

It's a belief stock. stock. You know, we owned a pre-IPO. When we get unlocked in September, we're going to hold. I'm going to hold for years. Because I think it will take a while for the story to play out. Well, if you want to see what they're working on, have you seen this? Speaking of SpaceX, Elon Musk is offering a first look at what he says could become the world's most valuable building. It's called TerraFab. It's a massive new AI semiconductor complex planned for Grimes County, Texas. SpaceX and Tesla say they will initially invest $16.8 billion. to get the project off the ground.

They added that it will help, quote, bridge the divide between current global chip supply and the compute demand of the future. I mean, look at this. I mean, this is a rendering, of course, right? This is a concept, but it just shows how vast, this data center, terra fab, whatever they want to call it facility,

is maybe just, believe it or not, a very tiny slice of what the future could look like in terms of data centers and multi-facility type operations all over the country, all over the world. So just how early are we in this whole build-out cycle? It's got years to go, right? Like we were talking about, what Elon is so brilliant at is engineering costs down, right?

Starship, the big rocket that hasn't become operational yet, but will next year. I mean, that's going to drive down, you know, cost per megaton or whatever it is, into space by 80%. Right? So I'm sure he's driving costs down here further. That's the magic of Elon. What's your instinct or reaction just when you see the video and what this could look like? Is it excitement? Is it, you know, some react viscerally.

Some people say, right. This is crazy. I mean, it's game on for compute. He said he's going to get 10 gigawatts of, you know, data center built in the next whatever, 12 to 18 months. He's in the race and he's got scale. And so he's got a cost advantage. A lot of this is about cost advantage. Invidia has a cost advantage to Blackwell, right?

It's all about that. The tough thing with Musk sometimes is on the one hand, you've seen these incredible, the factories they've built, the gigafactaries they've built for Tesla. On the other hand, we never got the hyperloop. So, you know, it's not the first time we've seen a grand ambitious plans. Look what he's done with the rockets on the one hand. So I guess... Well, he never gets their own time or rarely gets their own time, but you know what directions he's going in. And he's offering products that no one else can compete with. All right. Jan Banks. Really appreciate it. Thanks for joining us today. Yeah, it's good to be here. Yon Vanek. Vanek funds.

Coming up, our market navigator thinks these stocks can keep cruising past the summer. We snuck a hint in there on which industry it is, and we'll tell you after the break. Welcome back. Time now for your market navigator, despite higher fuel costs, it's clear the American consumer's not done spending. But can that momentum persist? Our next guest is here with his data on whether there's smooth sailing or choppy waters ahead for the cruise and travel industries. joining us now is Jan Salaji, the CEO and co-founder of Reflexivity. So from Jan Vanek to Jan Salaji, let's talk about travel and leisure and just what the data and the market action is telling you about travel and leisure and crew stocks in particular. Hi, good to see you again. Thank you for having one. Yeah, as you said, I think it's been a pretty, as we've done the analysis at reflexivity here and really crunched the balance sheets and kind of looked at what's happening in the sector, you see really, really strong momentum.

The stocks have done very well. It's been a broad-based story, right? So you have Carnival, Norwegian, and so on, World Caribbean, all doing very, very well. The basket is up 18% just over the last three months. But what's interesting is that the confidence in the sector appears very strong. You have, you know, if I share a couple of tidbits with you just to highlight this, you're seeing a deleverging story, which is Carnival, effectively, against higher fuel prices, improving. You see Norwegian ordering ships all the way out into 2030,

and the bookings and the cost of bookings has gone up. So it really is a story of consumers prioritizing experiences over goods. And, Jan, one of the reasons why you're highlighting this particular group is because you run a company that has an AI platform that crunches all of these numbers, looks at all of these different variables and factors, and then comes up with analyses of these types of companies and industries. What factors stand out to you that bring these cruise line operators to the front of these screens that your AI systems are looking at? Yeah, that's correct.

So as you pointed out, reflexivity is primarily used by, we have primarily hedge fund clients who are really using this as the example of this analysis shows to kind of monitor. What are some of the key drivers of, for example, the earning season that are highlighting what underpins the outperformers or underperformance of particular stocks? And I think what is really standing out here, as I was mentioning before, is that the kind of the visibility and the pricing power that you're seeing across cruise operators is really quite exceptional. And it is highlighting that there's confidence both on the consumer side, again, limited to travel. So I don't want to speak more broadly on the macro side. But there's definitely confidence on the consumer side in being able to book and wanting to book these things far in advance, gives obviously ship operators. quite a lot of visibility. And so putting together these kind of micro facts,

they underpin a much broader optimistic macro thesis. All right. Jan Szilaghi at Reflexivity wants to take you on a C. Cruz. Thank you very much. Kelly, I'll send things back over to you. Thank you both. There are now more ETFs than single stocks in the market.

How does that work? We've got the U.S. head of equity ETFs at BlackRock, one of the biggest players in the space. He'll answer that question. Next. Welcome back. The investment vehicle that helped democratize Wall Street is also now reshaping it. A breakneck pace of launches has pushed the U.S. ETF universe past 5,000 funds. And yes, that means it's more than the total number of individual stocks, as you can see on that chart. That explosion has delivered lower costs, broader access, an unprecedented choice,

but also fueled increasingly complex products, including leveraged ETFs that give you two or three times in assets daily move. So as the industry races to innovate is investor protection keeping pace and where should the line be drawn between greater access and greater risk? Jay Jacobs is U.S. head of equity ETFs at BlackRock. Jay, it's great to have you here. Can we start with a simple fact? A lot of us struggle to understand how can you have more ETFs than single stocks? Or, to put it differently, what happens if a single stock is kind of spoken for by multiple different ETFs at the same time? Well, I think you could look at it through two lenses. And one lens, having more investor choice is great for investors. Everyone has different perspectives on how to build a portfolio.

People have different views on the financial markets and what their financial objectives might be. But on the other hand, when you see this breadth of product coming to market, and this year alone, we've seen about six ETIPs launching every single day on average, it creates a lot of onus for the investor to understand what am I buying and how do I differentiate between all these products to really align with my goals. And the SEC, Dom and I spoke with them. They've been very, on this show, just a month or two ago, they've been very clear. They want to say, go for it.

Go for the innovation. We are encouraging it. We are in some ways promoting. But if everybody liquidated their ETFs at the same time, would there be enough stocks to, I guess it wouldn't matter because it's not the person's receiving cash, not receiving the equities, but are, I'm getting into the re-hypothication.

I don't know how it works behind the scenes. Can you explain it? Well, there's a lot of plumbing happening behind the scenes. But at the end of the day, ETFs are tremendously efficient vehicles for people to express a view on a specific asset or asset class or even, is narrow as a specific subsector. So what we often see is even in times of higher volatility in the markets,

ETFs have been a great vehicle for people trying to discover price on something like fixed income or even in Bitcoin or even in individual securities because there's a lot of liquidity around ETFs and a lot of people with a lot of different opinions. And I think what Kelly was alluding to, we had talked in various forms over the course of the last several months and years about this idea that the create and redeem process, creating ETFs and then kind of getting money to investors when they sell those

ETFs has become very, very efficient over the course of the last several years. But it's not the same when it comes to using swaps and other derivative instruments to generate 2x returns on indices or individual stocks, which has been at least thought of as a possible cause of outsized market volatility. Is that something we actually have to worry about? the create and redeem process for leveraged ETFs when everyone's running for the door hypothetically at the same time and risk management becomes under stress. So I would separate the create and redeem process, which is something that is highly used

across the ETFs for a variety of different reasons. When you look at the markets today, there's a lot of ways that people can deliver leverage, whether it's through a levered ETF, whether it's through margin accounts, whether it's through using derivatives directly. And yes, in moments like we've seen in the middle of June and July, there was a lot of leverage in the markets, which contributed to some of the volatility. I think for our core investor base, we are focused on making the highest quality products for long-term investors, not around volatility maximizing products.

I love how we're pressing you on every facet of the ETF business. But you're here, and we want to do so because yesterday on this program, Baird Stratigis, chief ETF strategist, Todd Sone, commented on what he believes the Fed should be more aware of in the markets in terms of kind of broad risk or where the leverage is hiding. Here's what he said. I think they should be aware of how. how much leverage on exchanges and, frankly, off exchanges are on counterparties balance sheets.

And is it just banks or are we getting into kind of otter corners of who's providing the leverage out there? And I don't know if you caught that, but I mean, do you, what would you say to that point? Is that, is that a kind of like a risk point? Not again a maybe systemic crisis, but in times of panic, should those be the corners where we're looking? For our clients, what we're telling them is when you're invested in an I-share ETF, we are not. providing daily multiplied leverage on a specific stock. We are investing for the long term, and we are very focused on having the highest quality markets around that. I mean, I think it's still incredible that you can trade a global portfolio of 5,000 plus stocks around the world at a penny

wide spread on a given notice. This is incredible market quality for a long-only beta-providing ETF, and that's what we are focused on delivering for our clients. I think it's, you know, to those who want most people in the markets investing at low cost, for the long run, you go, you'll go into those products. Not in and out of the 2x and 3x. I know they're exciting and you can get big returns, but the beauty of the ETF revolution is that it's lowering cost,

and it does make it so much more powerful to stay invested in the long run. And I think that's the most important point. For so many investors who are just trying to build a portfolio for retirement and they're investing in the S&P 500 and international stocks and emerging market stocks and maybe a couple different themes in sectors,

ETFs have a tremendous track record of delivering those exposures efficiently and through incredible market quality. But there's a wide range of products out there, and it is important to do your homework and understand where the quality lies in those products. All right. Jay Jacobs of BlackRock, thank you very much for the conversation. It's bigger, but we'll have you back for more. Thank you.

All right. Let's get over now to Kate Rooney with a CNBC News Update. Kate. Hi there, Don. President Trump reportedly told donors in a recent Oval Office meeting that he wants to see J.D. Vance win the 2028 presidential election. that is according to the Washington Post. Over the past year, the president has publicly talked about advance,

and Secretary of State Marco Rubio would make a great joint ticket, but has not favored one over the other publicly. Meanwhile, Virginia Democratic Governor Abigail Spanberger says she will now intervene in the state's review of Nexttera's $67 billion acquisition of Dominion Energy. In a Washington Post editorial, Spanberger argues she is taking the unprecedented legal step about concerns over affordability. Spanberger writes that she is deeply skeptical about whether selling the state's primary regulated utility is good for the Commonwealth. And finally, guys, Kellogg said today will remove artificial colors from all of its cereals by the end of

26 pushing up a deadline by a year. The company now says it's investing in new equipment and found fruit and vegetable-based juices that will still give those cereals, including fruit loops and applejacks, their distinctive color. What is a fruit loop? without the color guys. Don, back to you. It just needs to be a little bit more, or maybe less bold, I guess, is the way what they're going for. Yeah, more subtle. There you go. The version of a fruit loop. All right, Kate Rooney, thank you very much for the news update there. Coming up on the show, the Strategic Petroleum Reserve is at its lowest level in more than 40 years.

We're going to ask the Occidental CEO about that and more in an exclusive power lunch interview right after this break. As our country celebrates its 250th anniversary, CNBC spotlights the leaders, driving business and the nation forward. America's superpower is creativity. The ability to come up with new ideas, the ability to express those ideas, and the ability to bring together people as one community through creativity, I think that's America's superpower.

I'm Anil Chakravorthy. I run the enterprise business here at Adobe. When I think of America as the land of opportunity for me personally, I am very grateful to America for all the experiences and success. and my family has had. I came from India when I was 21 years old. I had the privilege of going to MIT as a master's and then a PhD student. America has been very kind to me. I went from being an

aspiring scientist to an aspiring businessman. And, you know, only in America. You can go from doing one thing to saying, no, I want to do something else. And you know what? The country always gives you a chance. America's success over the last 250 years, one has been around the values of the founding of the Republic, liberty for all the continuation of democracy and making sure that the expansion of rights to everybody. You know, it has taken through its own twists and turns through the civil war and through many other historical events to get there. But those values have really sustained at the growth of America. Then you go back to creativity and innovation does have been critical to powering America's economy and society. To me, the American dream

is the ability for anybody to build their own career, to build their own family, and build their own community. As long as you are putting your best foot forward and you are not taking anything for granted, you will have a tremendous amount of opportunities. All right, welcome back.

This turn now one of today's biggest winners in the S&P 500. That's Occidental Petroleum. Those shares are moving higher to the tune of 4.5% after the company reported its strongest profit since 2022. Joining us now for a CBC exclusive interview as Occidental Petroleum President and CEO Richard Jackson. Richard, thank you very much for joining us here on Power Lunch this afternoon. Let's get straight to the conversation about just what you've done over this past quarter

and some of the details around your longer-term strategic plan that you've unveiled today with regard to what those ambitions are and how to position Occidental for superior performance in the coming years and decades. Yeah, great, great to be with you today. Really exciting for us today on a couple of fronts. I think earnings today gave us the opportunity to really highlight near-term delivery. Our teams continue to outperform our 2026 delivery, which was a real proof point of the efficiency of our resources and of our operations have come through. You know, despite volatility that's tough for all of us, our U.S. performance.

performance continues to outperform. We more than offset our Middle East impact in terms of production. But the second part of the story, I think, was really important. We were able to lay out really a multi-year plan over the next three years to drive really sustainable value. And a big part of that that is unique to OXE, I think, is our ability for advanced recovery. This provides lower lower decline, durable production to really weather through this volatility. And so in total, it's a great story. We're focused on strengthening the business, driving operational efficiency, and we're able to deliver this value at even lower prices. So speaking of those ambitious goals, one of them is to pretty much almost double your sustainable cash flow ability by the year 2030,

from where we are right now in 2026. We talk a lot about cash flows these days because of how much money hyperscalers are flowing through to other companies to build out the future of AI. Does an oil and gas company, like Occidental Petroleum, have a role in that kind of future buildout of artificial intelligence and just how much cash needs to flow

from big companies that are building these things towards other companies like you providing the power? Yeah, no, definitely topical. And, you know, in places in the Permian, we're really centered in terms of operation. There's a lot of discussion today around, you know, the ecosystem as you think about power generation, what fuels that power generation, and then ultimately, too, something like a data center. I think from our standpoint, we have a unique position on a couple of fronts. One, you know, again, strong, durable supply. this advanced recovery that I talk about, we're actually able to extract more from the wells that we have today.

You know, prolific shale wells in the Permian. We have a technology where you deploy carbon dioxide to double the recovery. That's important if you're stacking on the need for highly reliable power. And so, you know, our role is really to be able to provide potentially the gas. We have strong land, technologies around water, and then uniquely as we're able to build out that power system, carbon capture can be deployed to, again, pull CO2 to put back into our core business, which is oil and gas supply. So it's an interesting development. I think we're well positioned. This is technologies we've done for decades.

And so ultimately, it all comes back to this sustainable value improvement that we've been highlighting. And I think, you know, Oxi is as focused as ever. Our resources are as good as ever and just well positioned to do just what you described. Richard, it's Kelly here back in studio. It's great to have you on. The last we heard, Berkshire had bought a unit OxyCem about a year ago. I know they've written down some of the value on their original investment as well. What's your relationship been like with Warren Buffett or the other players there? Yeah, no, appreciate them as a long-term investor. You know, during my career, got the opportunity to lead our investor relations as I jumped out of operations. And, you know, it's just been meaningful for me to be able to really engage with all investors. They're clearly

a pinnacle. And so, you know, have been able to engage, excited to share this value delivery that I'm talking about. I think this cash flow, the unique attributes of our operations really play into, you know, hopefully what they are looking for in all long-term investors. Now, Richard, a final point here before we let you go. Being an oil and gas CEO comes with a lot more, I guess, nuance these days with regard to relationships with the administration. Just this past week, we saw ExxonMobil and Chevron CEOs both being targeted by the Trump administration with regard to how much money they were making, some of the more downstream refining activities and the impact on consumers. What is it like for you in this role at Occidental in this administration,

And how exactly do you navigate that kind of movement with regard to President Trump and the oil and gas industry? Yeah, I think first focus on our role as an oil and gas supplier, very focused. I talked about the near-term delivery and outperformance of our production this year, the longer term, you know, lower decline, advanced recovery projects. I think that creates durability. We appreciate where the administration is coming from, durable supply in terms of permitting reform, infrastructure support, federal lease sales, these things all happen. We know volatility is tough. We want to play our role. We've leaned in. We're outperforming this year, but we plan on doing that going forward. And we want to be constructive to help, you know, through this time.

All right. Richard Jackson, CEO of Occidental Petroleum. Thank you very much. Please come back and see us again soon with any further update you've got. Very good. All right. Coming up on the show, does crypto need the clarity act to actually pass? we're going to get into that conversation and the pros and cons right after this break. Bitcoin is trading flat today, which is kind of the new normal. It just doesn't do a lot. It's been a rough year, but our next guest is intrigued by some other areas of the crypto industry lately

and how they're being used to the financial systems plumbing. On set with us as neoclassic capital co-founder and managing director Michael Buchella, who is also on the board of Terawolf, we should say. Okay, so there's so many things going on with Bitcoin at this juncture. clarity acts. I understand. Everyone's excited about that. We also had this hack of the cold wallet this week that I've been getting a lot of questions about. Maybe you can kind of explain. And then Jim Kramer, other people are talking about does quantum represent yet another risk to Bitcoin's kind of, you know, staying power? How do you tackle all of those concerns? Like as in the Bitcoin itself is trading so eh. It's like it's on a GLP1. It's just that. So we either get volatile price and no underlying action or a lot of underlying action and no price movement, which we have today, which is, so I'll go piece by piece. So Clarity Act, we have effectively until tomorrow before recess to make something happen.

And I think there's a few components that are getting more attention that I think they really deserve at this point. I know it's obviously the ethics piece is the biggest piece that most people are concerned with, but we either need to make this happen now or there's a short window between September and October. What happens if nothing happens? Nothing. We've done fine as an industry for the last 10, 15 years without, you know, government regulation. It would be nice. That would be a likely driver of a lot of the things that are working in crypto today, which are stable coin transaction volume, things like perpetual derivatives, things like prediction markets, possibly banking the crypto industry still would be a lot better, I think with some clarity through clarity.

So that, you know, I think it would ultimately be a good thing for the industry. But, you know, we've always said we don't need the government to work with us, but we'd like to. And then going back to the wallet hack. Because this, just so I understand it, because it used to be that, like, to do the cold wallet, which everybody said, own your keys, own your wallet. You've got to have the cold wallet with the, it was like a 15-word metal code and all that. So how was that hack? Well, metal was one option. There were many options back.

So back when we launched my first firm Block Tower, our original custody process was, it would have blown your mind. It was air gap devices in Faraday cages and tamper-proof bags. And this was the institutional custody process back then. Now it's changed quite a bit. And the reality is everyone's worried about AI and quantum. This stokes the fear, but it's not the reality. So what happened with this particular wallet, there was a firmware upgrade. It reduced the complexity of the seed phrase.

And so you just need a traditional compute. You even really need AI to basically... Generate enough words. Yeah. And so the Bitcoin network was not hacked. I think traditional and other forms of custody are still fine. There are still a bunch of folks that want to be self-sovereign, self-custodied. But I do think this is actually going to drive.

You had Jay on earlier, you know, I do think this may drive incremental dollars into ETFs versus self-custied assets, which is a little bit against the ethos of Bitcoin, but I do think that was a trend that'll probably progress a bit further now, just given what happened with that. Yeah, well, you sort of go, well, ETFs are a lot easier. And you could borrow against them, you can write calls against them. Right. I mean, you can do that with Bitcoin, you know, physical Bitcoin or, I guess,

independent Bitcoin, but it's much easier and more bankable as I bit. Yeah, exactly. I think one of the things a lot of us have questions about is just what the next stage or evolution of crypto will be vis-a-vis things like perpetual futures, things like prediction markets, things like everything that can go on a blockchain, that could be the next generation of financial product out there. How exactly do investors, traders position for that kind of next stage, that next stage, that next chapter when it comes to markets before. It was about, you know, stable coins and those networks. Ether was a big, yeah, exactly, right. And so what is the next step on top of that? So I feel like I am back on Wall Street at this point. I think I have more meetings with with bankers

and traditional finance folks I do now than, you know, the next defy founder or certainly in anything around NFTs and meme coins and the things that were kind of the cycle past. So what, what is work you know, stable coins. You know, we've had $10 trillion of transaction volume in the last year. Perpetual derivatives, which are perpetual swaps. There's these new form of derivative. There's a half a trillion dollars traded in the last 30 days. And, you know, a good half of that being hyperliquid, which I think we're all familiar with at this point. Prediction markets are at record highs in terms of volume. And so you're starting to see this, you know, export of crypto primitives into traditional markets. And so a lot of that perpetual exchange volume, for example,

are traditional assets. It's perps on stocks, indices, commodities. And so, you know, what are we doing? We're exporting the U.S. markets to the rest of the world. A lot of that's offshore. A good chunk of it's onshore, but the liquidity flywheel is happening. So the biggest market makers in the world have dedicated perps desks. They have dedicated, you know, prediction market desks. And so you're starting to see an infrastructure of liquidity, which we know is the sort of the foundation of every market evolving around a lot of these new parts of crypto that are now all that we meant to, maybe three months ago that are not all at record highs again. And where does that take us?

Also, just to kind of go back to the point people are making in the last couple of years, as this all builds out and tokenization of stocks and everything else that's going to go on, everyone's expertise from this industry is going to be more valuable. Bitcoin, I don't know where it fall in that world. Yeah, I'm still, listen, I still love Bitcoin. I think I will forever be a Bitcoin holder. I will forever be a buyer over, you know, the long term. I always say dollar cost average.

I get, you know, a lot of people, you know, jumping on me for saying dollar cost average because I just think it's the responsible to do it. But yeah, I think ultimately the growth in crypto and things like tokenized equities, for example, it hasn't taken off to the extent perps have simply because you need to integrate things like voting rights and a lot of complexities around custody. And so when it comes to perps or other things that are synthetic exposures that trade on chain, it's a much easier growth path for them than traditional assets. Like he said, it feels like he's back in finance.

This is how it ends. Back at Goldman back. All right. Michael Buchella of Neoclassic Capital. Thank you very much. We'll see you soon, sir. Thank you. All right. More power lunch up after this. Keep it right here. Welcome back. A college football team, believe it or not, is taking a creative approach to boosting season ticket sales. This is the University of Akron. It's giving one lucky fan the chance to script the opening drive of its home opening game against Robert Morris with the head coach, of course, they're supervising. Now, the viral announcement has been viewed more than 20 million times on X.

What? And according to front office sports, Kelly, the university has sold out its suites for the first time in program history. Wait, wait. So it worked. So in order to drive sales, it's letting people get a chance to call just the opening. Yes, the opening drive of their game of their home opener against Robert Morris. That gives me an idea. What's the idea?

You know, we should offer viewers the chance to call the opening, you know, the close here of the market. We're going to put an exploratory committee together for this. Kelly. All right, guys, thanks for watching. Power Lunch, everyone. Downs down 421 points. Isn't this fun? Closing belt starts right now.