Power Lunch - Stocks rally on tame inflation data 10/24/25

Episode Date: October 24, 2025

Inflation data comes in light. We discuss the ad that stopped trade negotiations between Canada and the U.S. And how should you prepare for inflation in retirement? It's all here 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.

And welcome to Power Lunch on this Friday. I'm Contessa Brewer, filling in for Brian Sullivan today. Stocks on a tear. You've got the major averages reaching new record highs. Cooler than expected inflation data is raising hopes the Fed will cut rates at its meeting next Wednesday. And that could fuel the bowl to keep on running. UBS, upgrading U.S. and global equities. It's CIA.

No. CIO joins us momentarily to explain her optimism. Plus next week is key for earnings. It's about a third of the S&P and the Dow reporting results, including five of the MAG7 names. Two are on our traders list of best ideas. And one, just reach a new all-time high today. I know you want me to name names. I will.

But not yet. This is Halloween. This is Halloween. It's in my ear. I cannot help, but I have to show you and share with you. We are on a Christmas countdown, even though it's Halloween. The crucial season for retailers and Courtney Reagan is. taking a deep dive into how stores are staying competitive, even with higher tariffs.

It's not on every business show that you get singing. We begin with the market screen across the screen with all the major averages on pace for a new record close. And the bull run in the stocks is now entering its fourth year. I mean, look at the Dow Industrial. You've got them up a percent. The S&P 500 about the same. The NASDAQ composite up one and a third. How much life does this run have left?

My next guest says, lots. Recently upgrading U.S. and global equities from neutral to attractive. Joining us now for more is Ulrika Hoffman, Bertardi CIO of America's and Global Head of Equities at UBS Global Wealth Management. It's great to see you, Ulrika. Great to be here, Contessa. Talk to me a little bit about your thesis, about what is the momentum behind the stocks on this tear,

and what fuels it higher? Yeah, we have been selectively bullockedly bullies. before in the US, especially around technology and artificial intelligence. But now we think the macro-tick picture is turning, and things are going to be brighter on the horizon. We have seen over the last 12 months that economic growth has been sluggish and inflation sticky. But as we look into the next 12 months, we see that the US economy is poised for re-acceleration, and that inflation is likely to remain contained. We saw it in the CPI numbers this morning. In our view, there,

three disinflationary at least tendencies over the next 12 months. One is that we're going to start to comp the tariffs. We've certainly seen tariff impact not being as large as expected. Secondly, we think wage inflation is going to come down and then lastly also shelter inflation. So again, that keeps us more optimistic that inflation is going to be contained while economic growth we think is poised to accelerate

because of both monetary and fiscal stimulus that is going to be contained. stimulus that is going to hit in Q1 and Q2. Okay, so you put a $7,300 point target by June of next year. What about the skeptics who are looking at all the piling in into these AI stocks and worrying that there's a bubble? Yeah, valuations are certainly extended. We are in the top decal, according to most valuation metrics, but we don't think we're in a bubble yet.

bubbles change their costume, but they do not change their script. And typically there are three factors that come in. One is, of course, loose financial conditions, and we have that right now with the National Financial Conditions Index, being in very loose territory. And we have heard Fed Share Powell now also talk about a potential end to QT, which could further ease financial conditions. Then, you know, we have a few other factors that we think are going to be really conducive, potentially to help with this AI narrative, which is continue to be around the AI CAPEX.

We think that has a long way to run. We in fact predict that we need about five times the amount of compute compared to the current install base. So the second component, the narrative about a new transformational innovation is very important. But lastly, the third artifact of a bubble is that price is becoming reflexive. And we are not quite there yet in our mind. This is really the point where investors. just rush into the market because of price momentum.

And as you just said, there's still a lot of skepticism about how AI is going to be monetized. There's still skepticism about geopolitics. So this is in our mind a good backdrop for the market to climb the so-called Wall of Worry. Okay, so what are the metrics you look for to say, yep, we're there. This is bubble territory. I think we need price to become much more dissociated from fundamentals. We need positioning to be much more extended than it is. right now, both on the retail and institutional side. And we really need a much stronger positive

narrative on having to buy into this really truly transformational new technology. Is there an industry that you're looking to diversify away from AI? Yeah, we actually like US healthcare as a diversifier to AI in particular. And this may sound paradoxical. We actually think it's not only a diversifier to the AI, but it's also going to be one of the biggest beneficiaries of AI healthcare in general. I think the cost of bringing a product now to market, a drug to market, has increased quite substantially over the last decades. And AI, in our mind, has at least a means to bring down those development costs, but also

ultimately the cost of clinical trials. So that is a good setup now that the policy headwinds are also behind us. We have more clarity around tariffs, most favorite nation pricing, valuations are cheap. And I think finally, the de-stalking cycle from COVID is also coming to an end. So confluence of factors that we think makes us bullish on health care along also continued strong trends on AI. Orica Hoffman-Burchardy, thank you so much for joining us today. Have a great weekend.

Thank you. We want to go to another part of the market moving today. Treasury yields reacting to today's data. the U.S. 10-year, broke above 400 right now. It's sitting just slightly below that at 3.993. Rick Santelli joins us from Chicago with the bond report. Hi, Rick. Hi, Contessa. Indeed, a very interesting day. Let's look at a couple of important variables. If we look at a 10-year chart of CPI year-over-year core, which moved from 3.1 last month to 3%. And that was one of the reasons we are calling this cool in terms of inflation, because

because it was less than expectations. But as you look at that chart, it certainly looks like we're going to be hovering around 3%. 100 basis points above the Fed target. Cool to expectations, but really somewhat warm when you look at what the Fed wants. Look at the second chart. So today we had consumer confidence,

and from the mid-month read from University of Michigan to the final read, we lost ground. But if you look at a 20-year chart of S&P versus University of Michigan And confidence, what you see is once COVID hit, they don't track correctly anymore. They've gone kind of rogue. And I find that very interesting that it doesn't correlate as much. Who's right here? The equities are confidence.

I would say maybe a survey wouldn't get my priority. Now, if we look at how the 10-year reacted, 10s, twos, the entire treasury complex, yields dropped. Hey, we're lower than expectations. But they came virtually right back. Here we hover at 399. We settled at 401 last week. We're near unchanged on the week, as you see on that last chart. And that's, of course, after we hit a new one-year low yield close this week at 3.95%.

Contessa, back to you. Rick Santelli, thank you for the breakdown. Appreciate that, sir. After the break, the advertisement that ended trade negotiations between the United States and Canada. We have the latest on the impact here in the U.S. Stay with us. Welcome back to Power Lunch, trade talks with Canada, taking a big turn. President Trump terminating negotiations with Canada over the high tariffs that he imposed on its steel auto parts and other major exports.

And, of course, this all adds new uncertainty to the relationship with America's biggest trading partner. Let's get to Amon Javvers at the White House now with the very latest. Hey, there, Contessa. Well, Canadian Prime Minister Mark Carney was speaking to reporters earlier today and offering his first reaction. to President Trump's announcement that he has canceled trade talks between the United States and Canada. Here's what Carney had to say. We stand ready to pick up on that progress and build on that progress when the Americans are ready to have those discussions because it will be for the benefit of workers in the United States, workers in Canada's,

and families in both of our countries. Now, despite these tensions, White House National Economic Council, director Kevin Hassett said that Trump does plan to speak to Carney when they're both in Asia next week because it was the provincial government in Ontario, not the national government in Ottawa that ran that TV ad on tariffs that provoked Trump's anger last night. And don't forget the China talks as well, Contessa, Treasury Secretary Scott Besant and trade representative Jameson Greer are expected to meet with their Chinese counterparts later today in Malaysia, where, of course, it is already Saturday. That meeting coming on the heels of the year,

US launching a new so-called Section 302 investigation into whether or not the Chinese have lived up to commitments they made during the first Trump term. Now, the launch of that investigation just hours before Trump is set to fly to Asia for talks is widely seen as a way to prod the Chinese side ahead of his meeting with Xi Jinping next week. Contessa, back over to you. You know, it's interesting when I was in Macau a couple weeks ago, I was asking business leaders about the impact of the tariffs, because when all of this first came about, in fact, when Trump was inaugurated, we saw a kind of a pullback. Yes, there was an effect on the Chinese economy, but there was a lot of worry from, say, factory owners about what was going to be their cost for shouldering the tariffs. What I was told just a couple weeks ago is that largely the business community in China has shrugged and been like, we'll just deal with it.

this is just the new normal. We've got to get around it. What's your sense for when, when you've got high-level trade meetings, whether it's with China or whether Trump goes in and has some conversations with Canadian leaders, that some of this cools down, that there's sort of this immediate reflexive reaction that takes a toll on the markets. Yeah, well, look, I think that's right. I mean, we've talked about this term on the air before, you know, there's an old phrase in Washington called Gorilla Dust. You know, that's when like big figures stomp their feet and stir up a lot of dust and, you know, people get scared. But it really is no more than that. And some of this is that, right? Gorilla dust being exchanged ahead of the meeting next week is both sides try to sort of jockey

for position and show that they're the bigger gorilla in the fight here. So I think you can look at it through that lens in terms of China and also a little bit in terms of Canada. I mean, you saw the president last night say that, you know, the negotiations between the two sides are hereby terminated. And then this morning, you saw his National Economic Council Director come out and say, well, yes, but the president is still going to meet with the Prime Minister next week. So, you know, maybe that meeting is, you know, not at all about trade, not all about economic negotiations, but clearly there is an ongoing relationship between the United States and Canada and really has to be.

So the question is, how long does this signaling of frustration last and does the U.S. use that leverage to get something from the Canadian side during the course of the tension. Yeah, I said the hubbub has an impact on the markets. Clearly, it's not reacting today. You've got the Dow up, 540 points up more than a percent, and the others following suit. But it does have an impact on the individual businesses to whom tariffs matter. Amen, thank you for that, tensions, tariffs, and this trade war with China also translating into trouble for travel in the United States. the number of Canadians traveling to the U.S. has declined every month this year,

according to the U.S. Travel Association. July and August, those were down more than 30% year over year. And for 2025, Canadian inbound travel down more than 20%. Jeff Freeman is the president and the CEO of U.S. travel. We have seen this to be the outsized impact of whatever tensions are going between countries. We've seen a decline in some of the other inbound travel, Jeff, but it's been really marked from Canada. Why do you think that is? Contessa, it's good to be with you again. There's no doubt that Canada has been the largest source of the decline in travel to the United States.

We're down 23% year over year on Canadian visitation. And the situation is different. It's different with Canada than it is in Europe and elsewhere. There are other markets with whom we're having trade negotiations, Japan and the UK stand out, where we've seen an increase in travel. But with the Canadians, it's become personal, I think, particularly on their end, and we're paying a price for that. And obviously, if we want to see a rebound in this travel, we've got to get this trade negotiation put behind us as fast as possible. Or we've got to focus on how we goose the numbers from Europe and elsewhere around the world.

And that's something we look forward to working with the administration on. Okay, one thing that's, we're showing the hotel stocks. One thing that we've heard from Marriott and Hilton and others is that whatever hit they took to, inbound Canadian travel to the U.S., they've picked it up because those Canadian people are still traveling, they're just going to maybe a Marriott or a Hilton in the Caribbean or in Mexico or elsewhere. In the United States, 60% of our hotels are small businesses that likely don't have the hedge of having another property overseas to accept that business. What other factors are going into shoring up or helping these travel and leisure reliant businesses because they've spent

a tough summer. If you ask people in Lake Placid, Coastal, Maine, Door County, Wisconsin, they've really taken it on the chin. Well, and we're looking perhaps at a tough fall and winter if these Canadian visitors aren't going to Florida, Texas, and other places in the United States, they typically go during that time of the year. I've heard the same thing you have from hotel leaders who have benefited with Canadians staying home and travel. more in Canada. In the U.S., they've filled that void with more Americans traveling. There has been a little bit of an increase in domestic travel, particularly at the affluent end of the market. They've been able to fill that void there. We've filled it

with some of the increase we've seen in aspects of Europe. But there's no doubt the industry is feeling the strain of the decline in Canadian visitation. And that strain is growing. We've got to get this issue resolved. We know it's a priority for the administration. We've got to get this issue resolved. Canadians are our number one travel partners. These are the most important visitors to the United States, spending about $2,000 per person per trip. We've got to get this situation resolved quickly.

Okay, there are other factors at play here. We've got FIFA World Cup coming up. It's a huge opportunity for U.S. travel businesses and hotels and restaurants and the like. You have the Olympics shortly after that, and yet the United States has hiked its visa times. There are long visa wait times. a government shutdown doesn't help. Right now, you've got questions about staffing at TSA. They're still showing up to work, but they don't want to work extra shifts. Is there going to be a slowdown as this thing continues? And then the airport infrastructure, I mean, Newark is a nightmare

right now because of the construction that's going on there. Of these, which do you think are capable of being tackled and tackled before these big travel events happen, about soccer and Olympics. A couple comments there. We certainly see with airport construction, there can be downtime. We've also seen the positive results at LaGuardia. And I know we're going to see those results at Newark as well. And credit to Secretary Duffy, the Transportation Department, particularly United Airlines, the improvements that have taken place in Newark have been great to see. But we've got a lot of work to do. If we are going to see a 20 plus percent decline in Canadian travel, we've got to ask ourselves, where do we make that up? We're not going to

make that up with long visa wait times, with new fees on travelers that want to come here, which is something Congress recently did. We've got to, I think, really go back to the drawing board and ask, how do we make the United States more competitive? Overseas travelers to the United States are spending more than $4,000 per person per visit. If we do the World Cup, right, we've got an opportunity to attract an incremental 8 million visitors next summer, but we only do that with the right type of focus. The administration's taken some important steps. You see TSA, you no longer have to take your shoes off. There are efforts underway to keep liquids in your containers when you go through, perhaps a pre-check.

They've taken some important steps, but we've got a lot more work to do if we're going to make the U.S. more competitive right now. This year, the U.S. will be the only major nation that sees a decline in foreign travel. Okay. And talk to me a little bit about the government shutdown and what that's costing U.S. travel, because, again, Hilton just reported earnings and it called out some softness in U.S. in part because of declines in government spending. Clearly when the government is shut down, the non-essential travel has ended. It's just been sheled. The industry felt the first blow earlier this year when you saw a significant decline

in government travel, even when the government was open, the result of Doge efforts. You saw a decline in government travel. We've already felt that first wave go through. I think what we're feeling now is, as you were suggesting, TSA officers, a little less likely perhaps to come to work. We've seen it with air traffic control where they're doing an incredible job. but people deserve to get paid. No one deserves to work and not get paid for that.

We've got to get this shutdown resolved. The longer it goes on, the more the strain in the system. I spoke with airline leaders this week who felt they were seeing more pressure this week than they saw the week before, and they expect to see more pressure next week than they saw this week. So the longer this thing goes on, the more you're going to see employees look for alternative ways of making an income, the more you're going to see delays at the TSA checkpoint, the more concerned you're going to see among travelers. I think particularly business travelers, people who have a choice, they can do Zoom or some other form. If they're worried about hassles, you're going to see a pullback.

And I think we're seeing the beginnings of that right now. We're likely to hear more next week when booking holdings, reports earnings, MGM, and Caesars might talk to us about the impact of travel in Las Vegas, which has had a very soft summer. Jeff, it's great to talk to you. Thank you so much for your time and your perspective. Thank you, Kudessa. Our next guest has a new AI powerplay for you. And it's at a record high today. We'll reveal it right after the break.

Welcome back. It's time for a power check. And today we're looking at a few names, getting ready to report quarterly earnings over the next couple weeks. The first stock is Amazon. The company is set to report third quarter results next Thursday. Shares are only up about 2% this year. But our next guest believes recent positive momentum will carry this stock through the end of the year. Let's talk more about that with Nancy Tenk.

the CEO and CIO of Laffer Tengler Investments. Nancy, it's great to see you. Good to see you, Contessa. What do you love about Amazon? Well, one is the recent underperformance. It looks a lot like Apple did until just a few months ago, kind of hovering and flatlining Apple, that is, around $200 a share.

So it's a member of our 12 Best Ideas portfolio, so we've owned it for some time and enjoyed robust performance. But this year has been a transition year. We think the backlog growth is solid and will drive future earnings growth. On the last call, Amy Hood said that they are not going, that's the CFO. I'm sorry, that's Microsoft, forgive me. The demand is healthy for core retail biz and strong advertising demand continues.

So I think that's a positive. And we think the cloud business is going to sort of straighten out after the outage. We think, you know, the business will continue to grow at double-digit levels, which is really all we need in that business because it's law of law of large numbers. So that, so the massive impact that that outage had, all the businesses that for a while didn't have their platforms up and running, you think that that was a blip? I do. And just look back as recently, Contessa, as a crowd strike. You know, that was a major outage. Stock the airlines, Delta in particular. We own that stock, and it's had a business. very nice year up close to 40%. So market does forget those things. And I think one of the critical factors with Amazon is revenue per employee. And this is before the announcement of the

automation of a significant number of their jobs. Yeah. Is $33,000 per employee. The next closest is Walmart at $324 and Target, you know, pales in comparison. You mentioned, you mentioned Microsoft CFO Amy Hood. Here you've got this Magseven name. The company's scheduled to report Q1 earnings Wednesday shares up. Again, about 2% over the past three months. What are you hoping to see from Microsoft? Yeah, I mean, we want to see cost discipline. And I think we probably will see that. That will support margins going forward, their new historic highs. We think, well, we know the company has infused AI at every level of the staff. And so we think you'll start to see monetization and discussions around that. And then lastly,

Amy Hood did say on the last call that CAPX is going to grow with revenues. And that's, that's music to analysts, Sears, because they can model that and they can wrap their brains around it. So, you know, stock has been a great performer for us over the last three years. These things, they tend to consolidate. So it's also a member of our 12 Best Ideas portfolio. All right. And then finally, we have coherence, which is hitting a record intraday high. Today, it was the mystery stock before the break that everybody wanted me to name names, and I said I would. It's coherent up 7% this afternoon. When you look at this, how important is the acquisition of critical technologies to its growth? Yeah, I mean, that has been a driver of growth for them. New management

team came in in the summer. The company's vertically integrated, the leader in integrated quantum photonics. That's important because it may be a solution to the energy crisis we may face over data center growth. So 20 plus percent EPS growth, double digit revenue growth. We think this is a company. It's in our thematic portfolio of new technologies called macro cycle. And we think this is a company you can own for some time because they're driving growth, they're expanding margins, and they're in the sweet spot of optical and photonics. These are three of the names on your list of a dozen that you really like. Nancy Tangler. of Laffer, Tangler investments. Thank you so much for your time today, Nancy. Great to see you.

You too, Contessa. Thank you. Okay, here we have not even had Halloween yet. I mean, my closet is full of costumes and candy, and yet Christmas is everywhere. The retailers especially are putting it in focus. What you need to know about the holiday prices and the impact of tariffs right after this. Holiday shopping season is coming quick, and executives of retail firms have to navigate a lot of tariff headlines. and sometimes tariffs themselves, as they stock their shelves for the most important time of the year. Here with the retail read for us

as CNBC's retail reporter, Courtney Reagan, senior retail reporter. I don't want to let that title go. Oh, thanks. Okay, so what are they doing? Because they've had a whole year of consumers hearing how tough it's going to be on prices in the stores.

So how are they combating that? So really interesting. Well, it wasn't always clear in some of the inventory numbers that we saw because that's dollar value. as opposed to units, we are hearing from retailers that they did bring in a decent amount of merchandise ahead of the highest tariffs so that they are going to be able to offer more competitive pricing.

So I think that's one thing that consumers can sort of breathe a sigh of relief about. We were told that directly from the Academy of Sports and Outdoor CEO, Steve Lawrence. He said that. Cole said that they're pretty happy with the level of inventory they have. And Dick Sporting Goods, Executive Chairman Ed Stack sort of said that similarly. that we really shouldn't fear the headlines about how much tariffs may increase the cost of goods and or the supply. None of them, none of the three of them, that I spoke to, really thought that that was going to be an issue inventory. Although you've got millions of federal workers who now are missing their first paycheck.

Rick Santelli was sharing with us this chart of consumer sentiment going down while equities has gone up. There's a lot of worry among segments of the population about what the rest of this year, is going to look like. And I think that's really fair. And one thing that, or two words, I would say that retail CEOs tend to be using a lot over the course of the year, but also going into the holidays, or that consumers have been both resilient, but also choiceful. It's a little bit of an irritating word to some of us. But I think, you know, they're using it to describe that they're being selective. They know what they want, but they're going to be careful with how they do it. And so I think that is going to continue throughout the holiday season. And that's what

the executives think, too. But also, we're seeing this bifurcation. I've heard it in travel too and in gaming that the budget-minded consumer is being hit hardest. When you look at SNAP benefits, these are benefits for families to go and buy food at the grocery store. If all of a sudden you're not getting those benefits and what was discretionary now needs to be spent on something that is essential, that's going to affect holiday shopping. Very much so. And I think we need to watch that really carefully for sure. Hopefully it doesn't get too dire. And other retail executives will always say, look, people do what they can to make holiday good,

especially if you've got little children and just kind of circle back to having to make choices and to be choiceful and to seek value. Some of the executives that I spoke to said, yes, consumers want value, but that does mean more than just good prices. Take a listen. I think certainly with inflation in certain categories, it's, it's, put some pressure on their spending power. But, you know, what we've also seen is the customer's very resilient. They do come out during the key shopping time periods. Our belief is the customer is going to kind of aggregate their spending around those key kind of shopping moments in the calendar where they know they can get the best deals. If you're going to provide value to the

consumer and they can see that, feel that value, and I'm not talking about from a price standpoint, it could be innovation. I'm going to get real value out of it. It's going to help me. Then they're going to, they're going to come and they're going to buy it. So it's not that prices aren't important, but we've seen, and we've heard this from lots of types of retailers, that if you've got a new really cool product, that also is actually going to be attractive to a consumer. And they're going to make other choices to figure that out at Christmas time, especially. It's also interesting the way that stores for the budget-minded have really tried to elevate their offerings. I mean, it's surprising to me when I walk through a Walmart now,

the kinds of clothing options that are now available for sale. Sephora, in coal, and the like, are those bets that will pay off if we're in this sort of bifurcated economy right now? I think very much, and that's a great example with some of those retailers. I think for Walmart, when they see consumers cross-shopping, they go in for groceries, but then maybe they pick up an apparel item. It also helps their margins because that's a higher margin item. If you're going into coals because you're just going to Sephora, but you have to pass other things that become attractive to you,

which they have said is happening, then you pick up a new consumer that way too. By the way, I'm shocked by how much spending is happening on Halloween, costumes, candy, decorations. It's very interesting. The Bath and Body Work CEO said we actually are calling it SummerWeen, and we've developed new product lines to sort of capture this moment because it's beyond just October 31st that people are celebrating. And so Bath and Body Works has developed products like Vampire Blood Laundry Detergent. It's red. Okay. But it's selling.

All right. Like, if that's what you need. By the way, I said that there are costumes in my closet. I want to be... Wait, any skeletons in there? Would you expect anything different? Thank you, Courtney. Thank you, Contessa.

Let's get to Julia Borson now for a CNBC News update. Hey, Contessa, premiums for the most popular plan sold on health care.gov will reportedly spike on average by 30% next year. That's according to documents reviewed by the Washington Post. The price increases are the largest annual premiums. increases in recent years. They come as Democrats in Congress pushed for the extension of subsidies that help lower premiums amid the government shutdown. Open enrollment begins on November 1st. Kilmar Arbrego Garcia, who was wrongfully deported to El Salvador earlier this year by the Trump administration may land in the West African nation of Liberia. In a court filing today, DOJ attorneys

wrote they'd received diplomatic assurances on the arrangements for Garcia to be sent there. says a move could happen as early as October 31st. And Oreo maker Mondalese is planning to use AI in ads next year. A senior executive tells Reuters the move will slash its marketing costs by 30 to 50%. The company which also makes Chips Ahoi, Sour Patch Kids and Ritz, has invested $40 million into a tool from Accenture that it says will be able to make short TV ads. Contessa, it's going to be a revolution for that industry. $40 million would pay.

for a lot of ad production, too. So thank you for that, Julia. Ready for retirement. A new survey shows a lot of people think they're financially prepared. Reality may say otherwise. Right back. All right, we've got two key data points out today that affect your finances. Inflation hit 3% annual rate in September. And based on CPI data, Social Security benefits will increase 2.8% next year for more than 71 million Americans, but a lot of people have not factored in inflation or government benefits into their retirement planning. Sharon Epperson joins us now with some exclusive reporting

on these survey reports, the results that show not only it's an issue in the U.S., but it's an issue for investors in other countries as well. It is. It is. What's interesting is that many people say that they're optimistic about their retirement. They're confident that they'll have enough money to be able to cover retirement,

essential costs and things that they're going to need to pay for. The reality is, though, that they haven't done the planning to make sure that they are going to be able to do that. What the survey show is when you look at the essential expenses in retirement, 89% of people in the United States say that they'll be able to cover them, 90% in Brazil, 88% of Mexico, 82% in Japan. But how about inflation? That's a key factor we know everybody's rent's going to be going up,

housing prices going up, the cost of living overall going up. they haven't factored that into inflation. And so that inflation into their planning. So 55% of folks in the U.S. haven't factored that in. They also haven't factored in health care costs, and that's really important because as we're looking at the latest CPI data, we're seeing an increase in health care costs that's outpacing the overall inflation rate. But why do you think that they're not factoring in inflation?

I mean, we know what happens, and especially over, if you're 20 and you're planning for retirement when you're 70, you've got 50 years of inflation data to, try and factor in. And you've got 50 years to try to figure it out, and they keep waiting, and they keep waiting. Financial advisors tell me that, you know, their clients who may be millennials may be very confident right now because they think they're going to have time to work it out. And the reality is they may not have that much time to go through everything.

They're also very uncertain about what's going to happen with government benefits. Will Social Security even be there for them? That is something that is across the board, regardless of whether you're in the United States, Brazil, Mexico, or Japan, people are not confident about their government retirement systems being for pay benefits when they retire. I mean, I can see why, because the headlines can be scary, and especially when it's up on the chopping block. What about Generation X? This is my generation, Gen X, were the sandwich generation, and then there's millennials. How do you see the outlook for retirement bifurcating? Well, that was one of the most interesting things about this prudential,

global retirement poll survey, is that it looks like millennials are now feeling the pain that we're feeling right now. And they're anticipating it's going to be even worse. So the majority of millennials, more so than any other generation, believe that they are going to be caring for adult children and elderly parents in retirement. And the problem is, are they going to be prepared for it? I got to tell you, I was on a plane the other day and got asked for the first time in my life. I've never been asked this. When do you think you might retire? Oh, I'm asked that quite a bit. I ask a lot of people that question.

Oh, my goodness. I'm like, never. I've got small kids. Thank you very much. Thank you, Sharon. Be sure to check out Sharon's Money 101 Newsletter for more insights like this. You can scan your QR code on the screen or go to CNBC.com slash money one-on-one. I didn't know if they meant like you're old enough to retire.

When are you going to do it? Or you look really rich. Maybe you're soon to retire. There you go. There you go. So take the ladder. Okay. Major League Baseball's

CBA expires at the end of next year. Whether the Dodgers winning the World Series could dramatically change the negotiation process after this. Game one of the World Series between the defending champs, Los Angeles Dodgers, and the Toronto Blue Jays is tonight. We got a lot riding on this series. But the World Series could have particularly large implications when it comes to the collective bargaining agreement between the league and players

because it expires at the end of the year. Joining us now, CNBC Sports and Media reporter Alex Sherman. Okay, so how could what happens in the World Series influence what happens in negotiations? Yeah, so as you mentioned, the Major League Baseball Collective Bargaining Agreement expires at the end of next season. And what is sure to be the hot button issue really throughout next season is whether or not the league should adopt a salary cap. Now, there are many owners and the Major League Baseball Commissioner who have come out publicly saying we're going to at least take a look at a salary cap because we think it can better the competitive balance of baseball, which is a very controversial issue on its own, which we'll get to in a second. But here's the argument that the more team spends, the more likely they are to win. And I wouldn't say this World Series is the dream world series for that.

I think that would be the Yankees against the Dodgers. But it's pretty close. If you take a look at team spend, the Dodgers spend the second most amount of money out of any of the 30 Major League Baseball teams. They had a total team spend of about $320 million a year. It may surprise you that the Toronto Blue Jays were actually fifth over. overall. So I think that's quite a bit more than what some casual baseball fans may think, because the Blue Jays haven't been in the World Series in about 30 years. So these are two of the highest

spending teams in the league. It is an anecdotal data point that suggests that yes, in fact, perhaps we have a problem here, and we should adjust the rules around team spend so that there is more parity in the league. Even Dodger's CEO, Stan Kasten told me last year after the Dodgers won the World Series that there may be a bit of a problem here in terms of the amount of money that each of these teams bring in. Take a listen to what he told me. Parity would be a benefit to the game. It doesn't help that our revenue per game is 10 times that of a team on the bottom.

It really isn't good for anyone. So he's making this point that these teams, all the different major league, baseball teams have different revenue coming in. The Dodgers have the second highest revenue of all teams, just a little bit below the Yankees based on last year's data, according to our own CNBC sport valuation guru, Mike O'Zanian. The Blue Jays are sort of in the middle of the pack there, but certainly these are not too small market teams. So again, anecdotal evidence that the highest spending teams are the ones that are winning. I'll give you, how about this for anecdotal evidence? I'm contest a brewer. I worked in Milwaukee. As you might imagine, I was rooting for the brewers in the

series against the Dodgers. The Brewers were coming off a fantastic summer season. I've got little boys wearing Brewers' jerseys and getting ready to watch every game. And then they go in against the Dodgers and that showie Atani just pitched great and just, I mean, they didn't even win a single game, not even at home. Imagine the heartbreak. Don't you think, and And look, the brewer's owners getting all kinds of flack for not spending more on the team. But don't you think that this is an area where it would have been good for the Midwest to see the Milwaukee Brewers get to the next level that maybe a world series with the Brewers in it would be the bomb? Look, I grew up in Oakland A's fan. So talk about frustrated fan.

The A's aren't even in Oakland anymore. They're a traveling team until they get to Las Vegas. But look, let me break down the other side of the argument for you. There has not been a repeat World Series champion since the Yankees three-peated from 1998 to 2000. If you look at the NHL or the NBA or the NFL, there have been repeat champions more recently in all of those sports than Major League Baseball. And so the Dodgers, of course, are going for the repeat here. But there's a legitimate argument that at least when it comes to World Series winners, team spend doesn't necessarily correlate with winning more than it does for any other sport.

Also, you mentioned Shoah O'Tani. He sort of was in obscurity when he was on the Angels. Now that he's on the Dodgers, he's by far the biggest star in the league. That has to be good for the sport. Alex, it's great to see you and talk some baseball. I guess I'm rooting for the Dodgers against the Blue Jays. Okay. Let's get to some breaking news out of Washington, D.C.

Amon Javvers at the White House now. Hi, Amon. Technically, Contessa, this is breaking news out of Ontario, actually, because we've been talking about this TV ads. all day that the government of Ontario ran. And it was focused on Ronald Reagan's comments back in 1987 about tariffs. President Trump took exception to that, said it was fake, said it was deceptively edited. And now we have a statement on social media from the Premier of Ontario, Doug Ford, who says

in speaking with Prime Minister Carney, Ontario will pause its U.S. advertising campaign, effective Monday so that trade talks can resume. He goes on to say here, we've achieved our goal, having reached U.S. audiences at the highest levels. I've directed my team to keep putting our message in front of Americans over the weekend so that we can air our commercial during the first two World Series games. So this ad will continue to air for a short time, but is coming off the air relatively soon. And you can imagine that the national government in Canada was eager to clear the decks of this distraction ahead of the Carney conversational. with President Trump in Asia next week.

The White House National Security, National Economic Council Advisor said that, in fact, that meeting is going to happen next week. So it looks like talks are on track, and this dust up may be coming to an end here, contestant. Well, let's hope it's much to do about nothing. Okay, Aman, thank you for that. We have a final check on the gaming industry. Still ahead here. This is coming up one stock in the sector up more than 50 percent.

this week. I'm going to tell you all about it. A head. All right, let's take a look at some gaming stocks before we go today. I just wanted to point out Las Vegas Sands had earnings this week that really astonished analysts because of the outperformance at Marina Bay Sands in Singapore. As you can see, that stock is up almost 20% this week. This is the world's most profitable casino and it just continues to outperform.

Bally's, look at this one. 45% this week. I talked to Sue Kim, who's the chairman of Standard General, who's buying ballets and taking it private. I said, what's behind the stock move? He's like, I think it's just a delayed reaction to the fact that we sold off our interactive business. And Churchill Downs beat expectations with their earnings. They're up 13% week to date. Thank you for watching, Power Lunch. Hope you have a fantastic weekend. Here's closing bell. It starts right now.