Power Lunch - Stocks fail to continue Friday's rally, U.S. government takes stake in Intel 8/25/25

Episode Date: August 25, 2025

Stocks mostly reversed after Friday's Powell-sparked rally. Musk companies sued Apple and OpenAI, alleging anticompetitive practices.  And what is the market looking for in Nvidia's earnings report on Wednesday? We have it all here for you on Power Lunch.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Big technology running hot again as the NASDAQ makes another record. Welcome to Power Lunch. Happy Monday, everybody. I am Brian Kelly's off today. Rate cut hopes rocking the investment world. The NASDAQ is higher, mostly. The S&P and Dow, they're down. But it's not just rates where investors really are focused. Intel also making waves, confirming a 10% stake from the U.S. government. The White House, as Kevin Hassett says, they will not be the only company receiving this. type of investment plus invidia they report their results this week they could be a huge litmus test not just for the a i trade but the entire market and competition in that industry is getting even more cutthroat elon musk's xa i suing apple and chat gpt parent company open ai it's a bit of a crazy story we have much more on it in moments and in fact we just got a statement back from

Open AI. So why don't we start there? Because this week is massive for both big tech and your investments. Invita earnings are out on Wednesday. And what they report and more likely what they say about the future does have the power to move the entire market. Remember, Nvidia is in about 500 or more ETFs. So when it moves, big parts of the market can also move. We'll talk about that as well. Also, two of Elon Musk's companies suing Apple and Open AI. According to the lawsuit, claims that Apple and Open AI have colluded to keep monopolies in the smartphone and generative AI markets. Now, Apple stock is not moving on that news or the lawsuit. But when you have Tim Cook and Elon Musk referenced in the

same story, you know it has got to be big. We also know it's big because Dan Ives is here to talk about. He is the head of technology research at Wed Bush. Dan, we're going to get to NVIDIA earnings. That's why you're here. Get to that in one second. I do have to ask you about this lawsuit. Is this all noise? Is it all light and no heat? What do you make of it? I think 80% is noise, but look, 20%. This is an AI arms race going on. And Musk knows with XAI. They're playing from behind relative to where all men open AI are as well. And look, and Apple obviously caught in the middle here. It's not what you want to see for Apple in terms of the apps doing some of the worries there.

But, Brian, I think it speaks to just an arms race that's going on. Musk right now is wartime CEO. Yeah. So this lawsuit does, I think the reason we're covering goes to sort of the meat of the story, which is, or the meat of what's happening in the market, which is this arms race, as you noted, Dan, for AI talent. These are big companies, though, high-powered attorneys. It's not some small cap, swing another small cap.

This is going to be the biggest law firms. in the world, you don't sound that worried about it. Look, I'm not worried, but I think it speaks like this is going to get nasty. Because you look at the success, Allman Open AI, you look everything that's happened. Of course, Godfather Baye, Jensen, and Vidia, you're seeing kind of have and have not. And clearly, when it comes to AI, Apple is a have not, but given the app store, they're front and center. And I think that's why we got to see how this all plays out, but I'm not worried, but it does speak to this is going to, this is going to get a lot nastier.

We're talking trillions of dollars in the table. Yeah, by the way, we just got a statement from OpenAI. It's very short. This latest filing is consistent with Mr. Musk's ongoing pattern of harassment. That, Dan, coming from OpenAI, we do not have a statement yet. From Apple, this fight between Open AI boss, Sam Altman, and Elon Musk, I mean, it's ugly. Oh, it's going to get ugly. Because to some extent, all men open AI, they're the golden child and they're clearly ahead when it comes to AI arms.

Musk, obviously with XAI, I believe it's going to be one of the biggest AI plays out there. But, you know, they're looking at the competitive environment. And I think they're recognizing they're going to use every tool, technology, legal, and, you know, as well as from a communication perspective, because it comes. comes down to developers are the lifeline. All right. Let's talk about actually why we invited you on this show today, Dan, but we know you can roll with anything, so thank you. Invidia earnings, okay?

The earnings are going to be big. The guidance, I think, is going to be bigger than the earnings, what they say about China. But what is Dan Ives focused on from Nvidia Wednesday? I'm focused on demand and spy right now being 10 to 1. And there's only one shift in the world fuel in the AI revolution. that's Godfather via Jensen Ovidia. And I think what I want to hear this week from Jensen is about China demand,

maybe even some forecasts what they think, but that's now green light in terms of the pay for playing in the White House. But really importantly, when you look at Blackwell and you look at, you know, as this now expands around the globe with Middle East, it's really trying to get some ballpark around just how big this opportunity. I think streets still underestimate numbers by anywhere from 20 or 30% next year. Wow. And I know the sales, the official sales to China, the official sales, I'm winking. I don't think you can see that, Dan, there's zero. But if we get some real nice language from Jensen or his team about China, I would imagine that's something I could make the stock rip even higher. Because the market wants to hear that the two sides, us and China with Nvidia in the middle, are going to hug it out, I think.

Yeah, and Jensen, I mean, he's first for a seat. Because Trump knows that the biggest chip on the poker table is Jensen and the video, because that's the chip that everyone wants. That's new oil and gold. I think you're going to get positive comments about China. You combined in what we saw from the hyperscalers, massive AI pound here and overall tech earnings season. I mean, this shows that this AI revolution is just saying it's next stage of growth.

Tech stocks have a huge rally into year end. this is going to be a seminal moment. Invidia and Microsoft combined are 15% of the market. It is the most concentrated we've ever seen two stocks being, at least going back to 1980. Invidia is in over 500 different ETF, some of them as the largest stake. How important to the market, the macro market, Dan, is Nvidia? I mean, you have watch parties in New York. It's the watershed event.

It's not just in tech. It's energy. It's really, it's every other vertical that's watching it. It is the epicenter. But I expect that this is to get the popcorn moment out. I think there's going to a $5 trillion mark happening higher. And as we've talked about, we're only in what I believe, when I talk about the AI revolution,

we're in the second inning of a nine-inning game. Second and nine, guess what? Wednesday night, I shall be hosting fast money as well at 5 p.m. That is going to be a big one. Dan, I've really appreciate you coming on. Thank you very much. All right, your other big story right now also has to do with semiconductors, The Trump administration saying it will do more deals like it just did with Intel, meaning it will take or demand an equity stake in a company that receives taxpayer money.

Now, some people call this crony capitalism or even a shakedown. Others say it's unprecedented. But is that true? Not exactly. Because while we still don't know all the terms of this Intel agreement, it does make us think a little bit about the past. Do you remember the days of subprime and the financial crisis? the government demanded equity stakes in many of the big banks and general motors. And while it's certainly not the same as it was then, I mean, GM was going through bankruptcy,

it does indicate it is not entirely unprecedented for the government to get stock in companies it is helping out, or you are helping out because all the money of the government is taxpayer money. Now, the Intel stake is ostensibly being given in return for billions of dollars in your money. This comes from the Chipsack, which was signed under then President Biden. So what do you think about this? Well, we asked for the poll on Twitter, and I asked, is this crony capitalism or is this good business? And 60% of you said it is crony capitalism.

Although some of you said it's the best choice with only bad options, or if Finnell needs a bailout, the government should get a stake. But let's talk more about this and the moral hazard around it, bringing MCC Global Enterprise, CEO, CBC contributor, colleague and friend, Michelle Caruso-Cabrero. I'm a little surprised by those results. Is this a bailout? The company was struggling, right? I mean, the president doesn't see it as a bailout.

He made it very clear, we're going to get a big stake in Intel. He's a business person, and he thinks in business terms. So he said it was a no-brainer. They've gotten $11.1 billion in taxpayer money. why shouldn't the U.S. government take a stake? But the reason why he should be concerned and why many people are concerned is the minute the government gets involved,

you start to worry about conditionality. It happened under Biden with the Chipsack. Remember, they started saying, oh, if you're going to get Chipsack money, all of you semiconductor factories, you have to provide child care for your workers. Now, that was something new that they didn't expect,

it added to costs, etc. All of those political motivations can start to come in. You get a lot of risk. What if Intel has to do layoffs? Now, the government holds a position in a company that's laying off American workers. So it's a very, very thorny place to go. It is.

And I think some people are frustrated because the deal terms were changed after the fact. The Chipsack was signed in the law by Congress, by the president. Here's your money under the Chipsack. Whether you can agree with it or not, it is a law. It was done. Now you have a new administration that's saying, oh, remember that money we gave you under the previous administration? Actually, we're still going to give the money, but we want stock. you're changing the game after the fact.

And that is the risk of political involvement because every time an administration changes, a leader changes, these things can happen. Now, Intel gave up a stake. They also got more lenient terms. Clawback measures were removed as well. So they got something out of this for sure. And the stock is acting positively today, right?

Suggesting that people think, okay, Intel's going to survive now as a result of this. I wonder, Intel aside, Why don't the government should take a stake in the debt, not the equity, right? You know, you're talking about. I mean, yeah. I mean, if I was a, if I'm a creditor and now the government is ostensibly one of, if not the largest creditors on Intel, right? You'd say that.

They gave him $11 billion for a stake. Take the, take the debt, take the bonds. Which is more protected. More protected. Than stocks are. Sure, that's a different way to structure the deal for sure. Remember, this all comes down to, I mean, they don't want to get to negotiating over the debt, right? Their whole goal is to keep Intel and business for national security reasons.

Yes. Right. We need you. We need production here in the United States. That's why this is happening. Ooh, I went back. I had this flashback to 2008, 2009, Michelle, remember those days? Oh, yeah.

And the term systemically important just came back to my mind. Yeah, yeah. I thought I'd never have to say those two words again. And so that is always the rationale, at least in this country, the rationale for the government getting involved in companies is because there's some kind of national security risk, there's some kind of systemic risk. It's different than there are other countries where the government just says we want to stake because that's the way it is. What is the lesson for CEOs? So Trump was aggressively slamming Lipbutan, who's the new CEO, newish CEO of Intel. Liputon goes to the

White House. Now Trump is suddenly saying he's a visionary leader. He's a great guy. He's got a great backstory. What is the moral hazard here and what is the lesson for other CEOs, which seems to me to be like, if you have a problem, go to the White House, be really, really nice, or kiss tail, and you're going to get maybe what you want. I'm not sure what the lesson is, but I will say this. There's a dramatic difference between this administration and the previous administration where this administration wants to talk to business. It's filled with people from the business world. They want to interact with the business world. They want the business world. they want the business world to succeed and to help the country succeed. It's very different than the previous administration where you talk to people in this business world.

Even people who are very supportive of Biden, even people who gave him money, say, there was no one to call. There was no one to see. Well, they would have these meetings that were like camera stage and they'd have names around a table and they'd pretend to ask a question and somebody would smile and nod. It was kind of a show of the thing. You had a cabinet that didn't have a lot of business experience, right? I mean. Or didn't, by the way, or didn't meet?

They did it, yes. without a full meeting at one point? When I read the Intel press release, and they're very clear about the deal structure here, this deal structure is done by people who are very familiar with deal structure and how it works. Yeah.

Right? And I think it's very illuminating to see all of that know-how at this point. I gotta imagine if you are an Intel shareholder and they've had a very, very difficult 10-year run. I mean, it's been a money loser for 10-year-old. Terrible. This provides a measure of safety. Yes, for sure.

Sure, I will say that there's also the risk of meddling in other people's business. The Morgan Stanley Research Report out today says the best case scenario is that the government encourages or perhaps even regulates that other companies have to use Intel's foundry. Right? And that's precisely the kind of slippery slope that people argue is picking winners and losers and that the government shouldn't be doing. But now the government's got a nearly 10% stake. Why wouldn't they tell other buyers of chips you got to buy from Intel? Well, I would say that in a couple years. We're going to have a new administration. And maybe it goes back the other way.

Right. Exactly. That's my point. That's the other point. Getting involved with government means that you are subject to the changes. Now, by the way, all these companies live with changes all the time. Every single time there's a change in administration. The head of the DOJ changes.

The head of the FCC. All these changes happen, and they impact. By the way, I want to remind our audience that may be like, yeah, that Fannie Mae and Freddie Mac, which by the way are systemically important, they are still under the government. They are not independent companies. Since 2008. Yeah, they've been in receivership, conservatorship, some sort of ship. I'm not sure that ship is ever leaving port.

Michelle Crusoeuvre, great stuff. Thank you very much. A pleasure beyond. All right. So speaking of ships on deck, we're going to put the market's massive move on Friday into historical context with the great Jeremy Siegel, NASDAQ, up two-tenths. That's a new record.

Down has to be down. Let's focus on Big Tech. We're back right after this. All right, welcome back. Friday's massive rally was won for the record books. It was a rare 90-90 day. That means 90% of stocks went up with 90% of the volume on the NYSC also rising. And Carson Group's Ryan Dietrich says this is a really good historical sign because the

90-90-day has only happened 14 times going back to 1980. 13 of those 14 times, the S&P 500 has been higher a year later. The only time the market wasn't higher 12 months later was kind of what we just talked about, the financial crisis and when it hit back in 2007. Otherwise, the S&P 500 is up 91% of the time with a median gain of 20% in a year. That from Carson Group and Ryan. Let's talk more now about that and more with Jeremy Siegel, Professor of Binance at the Wharton School,

at the University of Pennsylvania, also Chief Economist for Wisdom Tree Professor. Great to have you on, and I know those historical stats don't mean squat. They don't mean anything. They don't guarantee anything. But if you're a investor or even a gambling person, you've got to kind of like those numbers. Right. Right.

If the roulette spin is red four times in a row, doesn't mean it's going to be red. time. But I think that a 90-90 day is significant. I don't think we're going to be 20% higher, but five to 10% higher within the next six months certainly seems like in the realm of possibility. I mean, I think this bull market is certainly still intact. Ernings revisions are still upward. And finally, as you know, I've been calling for lower short-term rates. I believe that Fed funds rate should be in the low threes, should be 100 basis points below the 10 year.

I think it is heading down there, and I think that's a great comfort to investors. Yeah, were you surprised by just how powerful the market move was on Friday? Yeah, I mean, when you have such breadth and such power, both in growth and the value, I know Russell was up big because it's the small stocks that are certainly looking for the short-term rate to go down. But it really shows you that this was not a tentative rally.

I know there's a little bit of backup now on the Dow, but when you have such a big gain and you hold most of it on the following Monday, especially in a seasonably weektime as we have now, I still think that that's a signal that this rally isn't over. Does the volume, though, or I should say lack of Friday aside, Friday, we just talked about the huge volume. The rest of last week, it's August. It's the summer volume has been terrible, professor.

Today, I'm sure the volume numbers won't be great. Does that matter in how we should think about the market? Well, again, late in August, we've finally had, we've had wonderful weather here on the East Coast up and down. People are saying, hey, finally beach time. They do their trade in the morning when the announcements are out, and then they go to the beach. The afternoons are really dead in the market.

and second half of August, you know, given that circumstance, I think, is not unusual. So I'm not worried about the lack of volume, certainly, you know, in the afternoons. And again, in a seasonably weak period, as we know, last half of August and first after September, if you can show strength, even if you can just maintain where you are in that period of time, That's usually a good omen for the rest of the year. Yeah. What's the risk, though? There's always a risk to the market.

We've given the bull case, a lot of historical stuff, a lot of money coming into this market. By the way, the U.S. markets are actually some of the worst performing in the year in the world this year. Almost every market in Europe, which I think except for France, is better than us this year. But what is the bigger risk to the macro market? Well, first of all, one reason, of course, the foreign markets are doing better is the dollars down. I mean, they've got. gained on their own to be, but when you have a 10% fall in the dollar, that adds 10% to Americans' foreign returns that we have there. You know, when I look at the risk, I say no follow-through

by Jay Powell. I found September 7th, he said, hey, I'm looking at the data, and, you know, I've decided against it, or we've decided as FOMC against it. I, you know, I think that puts an end to the rally. Now, I think on Friday we're going to get that PC. I think that's going to be a good one. Despite that upside surprise that we had in the producer price index, I think we're going to have a quite online or maybe even a tenth lower on one of the months to month. But I think we're going to be online in the PCE. Yeah.

Okay, so, Professor, but what if it comes in hot, the PC? And as we always say, this is the Federal Reserve's preferred measure to gauge inflation. So everybody's all, yay, about Friday and the first. Fed and we're probably going to get a rate cut in September 17th. What if the PC comes in red hot, signals inflation is still out there? The Fed's got to change its thinking, or maybe it doesn't. Well, Brian, first of all, we don't get big surprises on PCE because PCE is built off of CPI and the producer price index.

So we know like 90% of those inputs going in. So it's very unlikely that the PCE is going to surprise on the upside, such as the producer price, you know, index did, you know, last week. So I'm not, I'm not worried about that. Secondly, I think if you listen to what Powell was saying, he said, I think we can look through tariff-induced increases, as long as we see they're not getting into inflationary expectations, as long as we see. long as the service number, you know, service sector of the CPI is down. And by the way, housing is a big part of that. You know, we're going to get two housing index, the Kishower and the FHFA, tomorrow. It looks like they're going to be very mild. We had a negative, I think the median price on the new home sales that we saw late last week was down. We are, we're getting the data. We're

that that housing boom that started really a few months after the pandemic began is over. And that's a big component in the service sector of the consumer price index. Yeah, and we actually are going to be doing a segment on new home sales here in about four minutes. So we'll save that for that. But Professor Jeremy Siegel, love having you on Power Lunch. Really appreciate it. Thank you very much. Thank you, Brian.

All right. You're very welcome. All right. So now, let's get a read on what is happening in the world of the bond market. For that, who knows better than Rick Santelli in Chicago? You know, Brian, we are, as the professor said, giving some back, certainly not all of the rate drop that we had on Friday. Look at twos and tens since Friday's drop. And maybe the most important issue that occurred Friday is, in many of my sources' views, in my opinion, as well,

I think the Fed upgraded its nervousness regarding the late. market and hiring. As the professor also stated, talking about inflation from tariffs, maybe a one-time event, that is very significant. This chart, if you open it up to the end of July, shows the big drop that we had on the weak jobs market. So now the Fed is getting more in line with the market. Look at how 10-year yields have come back a little bit more, but two years more flat. That's because it's most closely associated with the Fed. The market's worried about the labor side. And you could even see it in these Fed Fund futures. And you know, Friday after the big jump in equities and dropping rates, we're around 79 to 81%. Today we're around 80 plus percent as

well. We're holding onto those gains in terms of percentages for a rate cut in September. And finally, if you look at our tens minus German tens in Europe, the EU, we are now the widest in almost five months. We need to monitor that. It gives us an idea how capital flows may be affected. Brian, back to you. Rick Santelli, appreciate it. Thank you very much. All right, coming up, he promised it to you on Friday. And on deck, Phila Bow with some big numbers on just how hot, expensive car sales really are. All right, welcome back. On Friday, we talked about how expensive SUVs like the Jeep Grand Wagonier and others have gotten. I posted some of the prices on X, I put yes or no, would you buy one of these cars? As of right now, 1.1 million of you

have looked at that tweet. A lot of feedback. A lot of you were also upset by how expensive. Some cars have got, not just that, but really all of them. But guess what? It doesn't seem to really matter. Phila Beau rejoining us now with some new data that you had promised us on Friday. It's eye-opening, Phil. Well, the fact of the matter is, Brian, auto prices continue to move higher, and it's the upper end of the market where you're seeing the most growth.

Cox Automotive has pulled this data for us, and this is just a stark snapshot of just how much prices have increased and the willingness of the buyer out there to buy these vehicles. You go back to 2019. Now, that's the average transaction price. Let's call up the full screen

that shows the cost of vehicles. Over 50,000, over 60,000. and over $70,000. If you, there it is, now if you look at this data here, look at 2019, Brian, and compare that with today. One out of every four, more than one out of every four vehicles, sells for over $60,000, almost half for go for over $50,000. That's the reason why when you look at the previous chart,

average transaction price is close to an all-time high at just under $49,000. Brian, this started during the chip crisis. When the automakers were restricted with how many semiconductors they could get, What did they do? Well, they're smart business people. They prioritized making the most profitable vehicles, the highest-priced vehicles, higher-end vehicles, and they sold, mainly because there was limited supply out there.

And that was the beginning of the shift within the market. I know people will sit there and say, it's ridiculous. There should be more vehicles for under $40,000, under $30,000. Not happening. Don't get about under $20,000. That doesn't happen anymore. And the reality is the automakers are in the business to make money. And this market, because of higher income households, buying a greater percentage of the vehicles, has shifted to the upper end.

Like it or not, that's the reality if you look at the numbers. Yeah, listen, I don't blame the car companies for doing it. Like you said, they had pricing power during COVID. People got, you know, interest rates were low. PPP money was flowing. Everybody wanted a car. Prices are not going to come back down. Is that a fair statement?

They're not, they might with incentives. here and there. I get it. Cars not selling. Here's $5,000 cashback. Generally speaking, generally speaking, they're not going to go back down. There's no expectation within the industry that auto prices will drop. If anything, the expectation is that they will continue to edge higher because we still don't know exactly what the tariff outlook is going to be when it comes to Mexico and Canada. That has a far bigger impact than Europe tariffs for the autos. Korea and Japan are huge because those are big markets in terms of exports to the U.S. But it's Canada and Mexico. that really have, especially Mexico, have an outsized influence in terms of cost of vehicles.

And there are some offsets with USMCA and domestic production, but we're still waiting to see where they finally settle out. It is. Driving in the suburbs, Chicago, here in New Jersey, areas like that, D.C. Just shocking how many like $130,000 SUVs you see driving around. Philibault. Really appreciate it. Thank you.

You bet. All right, coming up, why the Fed's September rate decision could have a deep impact on housing. All right, welcome back, new data out this morning. Payne of a bit of a mixed picture for housing, new home sales. In other words, homes that nobody's ever lived in before fell in July versus June. But it really doesn't tell the story. The annual rate of 652,000 units topping estimates by 20,000. Your next guest says this remains a rate-driven story, especially for first-time buyers here now on set, Noble Black, broker at Douglas Elliman Noble. Good to have you on.

Thanks for having. All right. So we were just talking about New York and some of the craziness around here. What's happening nationally? Because let's be, I mean, New York City does not reflect Cleveland. Sure. We're our own market. You know, nationally, it's still a story of different markets. So what's happening in the Sunbolts is different from what's happening in Northeast, different from what's happening in California. But all of that's affected by rates. Certainly what you're seeing in those numbers, I think, are just the rates having an effect. It's affecting the builders. They're not building as much coming to market. And then people that want to be buying, the people that can afford it may not have all of their options,

depending where they are. And the people that really want to get in may not be able to afford it with the prices and the carry cost. So that's kind of where I want to go with this, because what has been very surprising to me. Now, as a homeowner, I guess I'm happy about this. I thought that when rates went up, prices would come down. Because most people, most people, non-all-cash buyers, they buy on the monthly. payment as much or more than they buy on the actual cost. We haven't seen prices come down at all, have we? Yeah, a very small amount. And there's still, I think, 50% up what they were pre-COVID.

How? Same than we just talked about with cars, I think. Yeah, I mean, again, it's hard when you look at the national numbers because there are different pockets, right? And there's certainly markets such as New York, such as Palm Beach. You know, some of these luxury markets are other just general markets in the Northeast where there's not enough supply. So that's kind of, you're looking at an average. But in a lot of these places, there's not enough supply for people to come into. The rates are high. If you've got a low mortgage, you're not going to sell that, right? So everything's kind of stuck. And that's, again, I think a matter of we need to get rates gradually lower. To get it unstuck. It's something that we talked about years ago. And a lot of people

got, they poo-poot it. But I said the market's going to get stuck because of exactly what you said. People have a 3% mortgage. They're not moving to a 6.5% mortgage, unless it's a severe down size or something like that where the kids are gone. So we see some of that, but it's not enough to really move the wall. Are we seeing supply at homes for sale? Is that coming up at all? I think you're going to start seeing it. I mean, it seems hopefully a certainty that we're going to start getting some rate cuts, right? It seems that some of the uncertainty is less than what it was, you know, let's call it six or eight months ago. So the tariffs hopefully are not going to be as negatively affecting things as people fear that they would. So I think

you're going to start seeing more supply. But none of that. it's going to be, you know, there's not going to be a damn broken and all of a sudden we have a ton of new supply. Well, what was interesting was in April, I'm sure you remember this, when the tariff stuff hit and stock market tanked, bond yields fell for about two weeks. Mortgage rates came down with it. For about two weeks, mortgage rates were like 5% again or something like this. And the numbers for refis and stuff just boom. There's huge demand. So if we see rates go back down to 5%, whatever, foreign. I think that's a huge.

I think that's a huge difference. I think the issue is going to be it's going to take a while to get there. I don't think that we're going to cut a point by the end of the year. I think it's going to be gradual. I think that it's going to get absorbed. I think we'll be moving in the right direction. But I don't think this is a place where we're going to be in a totally different location in six months. I think it's going to be a 12 to probably 24, 30-month story.

How was the Northeast doing overall? Everyone's like, they're dead. They're dead. But guess what? folks, I'm sorry if you're in Phoenix or Boise or L.A. And like you're thinking, the Northeast is doomed. We haven't been doomed yet. I'm a little surprised by it.

You're still seeing bidding wars and the suburbs. The rents are up pretty dramatically in New York City, right? Record highs, I think. Record highs. Yeah, I mean, the discount for rentals is negative, which means people are going above ask for that. Again, the suburbs are on fire. People want to be here.

Taxes and all of that aside. I will not ask you to ever wait into Pops. Politics do not worry. Not what I do. But I'm going to ask you, are people even asking you about the mayoral race for New York City? Of course. Is it even coming up in any conversation? It's coming up in a lot of conversations, but it's not. Are people saying, should I be worried? And you're not choosing aside here, but like, it's the idea of a rent freeze is great for people whose rent gets frozen. Right. But for property owners, potential property owners, it's probably a little bit of a nerve. Right. And as a broker for luxury real estate, those are not my client. So the ones that

I'm talking to are not so excited about a rent freeze, right? You also think through the repercussions of what that means. It's kind of a negative story for... Why would you build anything new if you can't? Correct. Correct. It's, you know, yeah. Yeah, I mean, you've got to play that out and you see pretty quickly, okay, that's not the answer to this. There's a real problem

in New York in terms of affordable housing, but the solutions that are being... The solution is more housing. Correct. You need to cut red tape. You need to incentivize developers. There's a, you know, very clear what to do, It's just not really... It's weird, too. Yeah, I mean, just there's all this...

New York City doesn't have a lot of room to grow that way, but it has a lot of room to grow up. Right. A lot of air rights could be sold to add units. Right, you need to up zone it and, you know, decrease the right tape. But to answer your question, people are talking about it, but people are not running for the hills. It's not the case that he wins, which I think he's going to. People are still going to buy. They're still going to be here.

It's a topic, but it's not like the death knell for New York. Good stuff. Noble, Black, Douglas Ellman. Appreciate your views, Noble. Have a great day. Thank you. Thank you. All right, now let's get the Contessa Brewer for your CBC News Update. Hi there, Brian.

Israeli Prime Minister Benjamin Netanyahu said today Israel deeply regrets what he characterized as a mishap. It was the bombing of a hospital in southern Gaza today. It killed 20 people, four of them, journalists. Officials in Gaza say two missiles struck the Nasser Hospital in Kahn Yunus. The attack drew criticism from President Trump, the United Nations, France, Germany, and the United Kingdom. Justice Attorney General Ken Paxton instructed schools today to post the Ten Commandments in classrooms next week, in spite of a court ruling that temporarily blocks that law for nearly a dozen districts. Paxton appealed.

And he says the districts unaffected by the ruling still have to comply with the state law to display the religious text. It takes effect September 1st. And President Trump says the Defense Department will shed its nearly 80-year-old name and revert back to the original, the Department of War. He said the change would take place over the next week or so. The Pentagon was called the Department of War until 1949 when it changed to the Department of Defense following a World War II restructuring. Brian, what's in a name? Back to you. Methinks what's in a name will be greatly determined by what side of said name you might be on.

Just going to throw that out there. You're straddling the fence there. That's what I do. I straddle fences. Contessa Brewer, thank you very much. Just not super sharp fences. Still ahead. The under-the-radar stock that has actually outperformed Apple, and trust me, just trust me.

You have no idea who it is, but we're going to tell you coming up. CryptoWatch is sponsored by Crypto.com. Crypto.com is America's premier crypto platform. Time for today's RBI, and this one comes from Apollo. Torsten Sloc, and it is pretty amazing. Going back about 20 years, did you know that as good as Google has done in the stock market, Domino's Pizza has done just as well?

But that is not even the most interesting comp that Sloc made. He also found that over the past 25 years, retailer tractor supply has outperformed Apple. Tractor supply has soared roughly 31,000 percent the year 2000 versus Apple's gain of only 20. 25,000 percent. Tractors and toppings. Outdoing tech. That is random, but interesting. All right, still ahead. While your trader says it is time to sell this mystery stock has climbed nearly 30 percent this year. All right, certainly much of the focus this week is on InVidia, but it's not the only

big company releasing their earnings. Crowdstrike numbers also out on Wednesday, affirm holdings and Dollar General out on Thursday. Any of these at all worth owning? Let's talk about that and more with Brian Vendig. He is Chief Investment Officer at MJP Wealth Advisors. Brian, good to have you on. Great to see you. So, I mean, listen, Nvidia is eating all the oxygen. I get that.

But when that happens, sometimes I sniff opportunity. How do we read Crowdstrike? Well, let's take a look at that company right there. Very competitive from a data protection security. And it's using AI as it means to be more efficient in the way it runs its business model. and a lot of great adoption coming from Charlotte AI. So the way we look at this stock is for our investors, for ourselves, it's something that we want to own.

We definitely recognize that the price to earnings ratio is a little bit higher than some of its peers. So I think if you get a move in earnings and the stock pulls back, this could be a good entry point. Any take that this could be a takeout target? When I saw Palo Alto buying CyberArk, I was like, eh, maybe everybody's in play. No, that's spot on, Brian, because across the industry,

there are so many names of software providers in this space. Our view is over the next 12 months, there's definitely going to be some MNA, which I think is going to unlock some value for some of these companies. Okay, you are not recommending your clients a firm. In fact, you say sell the stock. What's your beef with a firm holdings? Well, they are the top competitor, but I look at it as a little bit more sell now, buy later, just from the standpoint.

So you don't hate the company. You just don't like the price right now. That's right. I think from a price to earnings, it's had a good run. But at the same point in time, when I think about how management, forecast its outlooks, always seems to be a little bit cautious. So if they set a low bar to jump over again, it might be something to look at from, again, a pullback and an opportunity perspective.

Yeah, and I don't know how to read the dollar stores. I know there was a deal, Dollar General, Family Dollar. There's Dollar General, which is the one you're here to talk about. It's not a decent year this year, but a lousy year last year. Right. Where do they fit? Like, how do we, what is Dollar General? So Dollar General is one that we're saying, take a look at, but if you're an investor, it's definitely a hold.

I mean, last 12 months, you're right, it's down 9%. It's got a good move this year. It's a countercyclical stock. So if you're concerned about policy decisions moving forward, we don't have a 100% view on trade and tariffs. We know the Fed's hinting at rate cuts, but if the economy moves slower than expected, that's a company that actually is going to do a little bit better. So that's why I think right now, it's a wait and see knowing those policy decisions are still out there. You guys have a macro view on the market generally because it's, man, not just ours. Every market in the world, Asia, Europe, throw a dart at a map, and that market is probably up over the past 12 months.

100%. We look at things from that tops down perspective and quality of earnings is what drives value, Brian. And when we look at earnings most recently, analysts forecasts were eclipsed by double what folks who are expecting. The contributions coming from areas outside of just mega-cap tech should improve over the next 12 months. So as much as it's going to be volatile through the end of the year and into next with some of the macro policies, I still think it's a bullish environment. Well, today, Friday in particular, investors would agree record highs. Maybe not today, but it's a slow summer Monday. I will say NASDAQ, though, another record high. Brian Vendig,

MJP, wealth advisor, CIO. Brian, appreciate you coming down. Thanks, Brian. Thank you very much. All right, coming up, a huge merger in coffee and why you care. And a reminder as we head to break, be sure to follow and download the Power Lunch podcast, catch audio-only versions of the show. Any time you want, we're back right after this. All right, before we wrap up this show, we've got to tell you about a huge potential deal in the world of coffee.

I mean, it's maybe the biggest coffee deal of all time. Currig Dr. Pepper is buying coffee company J.D.E. Peats for more than $18. billion dollars in cash. Curig says once the deal is done, it's going to merge the companies and then split them into completely separate publicly traded companies. One will be coffee. The other will be other beverages. The company says it will do it as soon as practicable.

The two companies will be listed in the United States. They'll be led by Currig's current CFO and CEO, respectively. The deal, once done, will create the world's largest pure play coffee company. and resulted about $400 million in expected cost energies over three years. Currig Dr. Pepper, if you might remember, was created back in 2018 through the merger of, you guessed it, Currig Green Mountain and Dr. Pepper. Thus the name. Those shares are up roughly 9% this year.

But before this morning's move, J.D.E. Pete's stock, which is based in actually the Netherlands, was up 60% on the year. Remember, coffee futures also moving higher. A lot of talk about tariffs on Brazilian coffee coming into the United States. We're down a little bit right now. But look at the far right side of your screen. It has been certainly a big, big spike. All right, folks, thank you very much for watching Power Lunch.

Don't worry. You haven't gotten rid of me that easy. I will see you again on Fast Money tonight. 5 p.m. Eastern, closing bell. It starts right now.