Power Lunch - Stocks rebound on Thursday as yields back off recent highs 5/22/25

Episode Date: May 22, 2025

Stocks ticked higher on Thursday, as investors tried to shake off fears of rising rates and worries about a ballooning U.S. deficit. The 30-year Treasury yield hit its highest since October 2023 on Thursday as lawmakers passed a bill that investors fear could worsen the U.S. deficit. We’ll cover all of the angles for you. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Well, stocks in your money are shrugging it off. Even as bond yields hit some scary levels. Welcome to Power Lunch, everybody, alongside Kelly Evans of Brian Sullivan. Yields nearing levels we have not seen since before the subprime crash. That could have a big impact on stocks, the housing market. And it is having an impact on solar stocks. That space getting crushed today as the Republican budget bill terminates some clean energy tax credits. CEO of Sunrun.

Mary Powell is here. The stock is down 40% right now. Really look forward to here. hearing from her and how they're going to think about this and invest and plan and all the rest of it. But first, another big announcement in the AI arms race crossing just in the last hour, Amazon-backed Anthropic debuting its most powerful AI model yet. Kate Rooney is following the story and joins us from San Francisco. Kate, what do we know?

Hi, Kelly. So as of today, we know that AI startup Anthropic is unveiling its latest AI model. It's called Claude 4. They are calling it a, quote, significant upgrade to the last version executives say, can work on more complex tasks for up to seven hours straight, almost a full work day, depending on where you work. This company is the OpenAI rival. It was founded actually by Open AI executives, former executives there.

It is backed by Amazon and Google as well, roughly $61 billion valuation after its latest funding round. Cloud 4. It's going to be available on Amazon and Google's clouds as well, other platforms too. But it is one of the models, though, powering Amazon's Alexa Plus. So it could also have implications for Amazon. It does speak to some of the pressure out there for AI startups to keep launching the latest and greatest technology. Its last model was unveiled just three months ago. So things are moving quickly.

Here's what Mike Krieger, the chief product officer and a founder at Instagram at one point, told Andrew Ross working about it. Claude can now work for you for much longer. It's doing hours of work for you. We're even seeing it in our early access partners that have deployed, you know, Opus 4 in their own use cases, whether it's for coding or other hard tasks. And Claude is now doing much, much longer horizon tasks. It's able to manage its own memory. It's able to work through these hard things autonomously without going off the rails.

Hey, guys. That full Krieger interview is going to be airing tomorrow at 730 Eastern on Squawks. So, okay, just the, again, top line summary of what's different in this latest version versus some of the other, like, for instance, offerings from Google this week. How would you describe it? Yeah. I would say smarter, but like stamina is the word that comes to mind, that you can sort of have one of these agents,

not only work with you back and forth, but go and say, okay, you now have the ability to do this autonomously. I can give you a task. Check back in in seven hours and see what you've come up with. But I would say it's very subjective. So when we say,

you know, best model yet, we were joking that it's sort of like the best coffee ever in New York, or you see like the sign that says... Best about dog ever. Is it free, Kate? Yeah, like,

is it free? These things are really quickly, but there's a lot of different benchmarks by which to measure that, although what you hear in Silicon Valley is anthropic and open AI are really neck and neck, anthropics better on certain things like coding at certain points. But the moat and the advantage that they have is usually like one or two weeks or months ahead. So they are going, really sprinting at this. They have to have the best model to justify a 61 plus billion dollar price tag. So there's pressure here.

They got to have the smartest model. But I would say, yeah, the autonomous ability here is probably what stands at most. Quickly, do you have to pay to use it and do you have to wait seven hours or can it give you an answer more quickly? It's more flexible too. So you can do the sort of typical what you do with the chatbot, ask questions back and forth. But it is also, you can do both. You can basically set a task, say, hey, go and do some deep thinking and deep research or just have that more conversational quick thing. So that's actually where we're starting to see these move.

they call them hybrid models, which is increasingly popular. And then the paid option, this new model, they do have different versions of it. So some of it is paid. You can kind of get the juiced up version for, I think it's $20 a month. But it's hard to keep track with all these. I know. I know. You got to pick how you're going to allocate your subscription.

On top of everything else. It's easy to have these build up. I know, right? All right, Kate, thank you. On top of Netflix. Yep, exactly. Kate Rooney, we really appreciate it. On meantime, we've got a news alert from Bill Ackman's Pershing Square.

Leslie Picker, what is said news alert? The news alert is that the firm has acquired a position in Amazon, those shares moving higher on this revelation, which comes from a public investor call that they are having as we speak is part of kind of the justification. Basically, the firm is saying that they had been watching Amazon for a long time, but its multiples were a little too high to get an entry point. And then they received that entry point during the turmoil in April and ultimately took to acquire a position. Now, they haven't said how big the position is if they still plan to be building that position. Those shares are up about 2% right now.

But this does not appear to be any kind of an activist situation on the call. They said that they're supportive of Andy Jassy, the CEO, of course. They think he's doing an incredible job and getting more efficient with the business. So Pershing Square taking a new position, not sure the size or whether it's shares or options and the like in Amazon. And that stock moving up about 1.8% right now. Guys? Huh. It is moving it up.

You do wonder, as rich as Bill Ackman is, Leslie Picker. I mean, the guy is really rich. Amazon is like a few billion shares outstanding. I mean, to really move it, this would have to be one of, if, not the biggest Bill Ackman position ever, I think. Well, they took it in April. So this just seems to be a reaction to the news that they had acquired the position. I don't believe they're actively building the position while on the conference call.

But it's certainly, you know, notable that oftentimes we see these activists take positions in smaller mid-cap companies. Those do tend to see a spike. But a behemoth like Amazon, certainly it is a pretty big reaction for a company of that size. Indeed. Leslie, thanks very much. Leslie Picker, we appreciate it. Get Amazon up a little less than 2% on the session. Anthropics News meantime was just the latest announcement from the billion dollar battle over AI supremacy. We got the news from Open AI yesterday, spending $6 billion to buy former Apple design guru Johnny Ives company. If you don't know or care about I, if you do care about AI, Apple, or where the investment dollars are heading. Moment of truth as the company holds its developer conference in just a few weeks.

Steve Kovac is here with more. Yeah, I mean, it's hard to see this as anything but a, I don't know, a glance or a shot across the bow, whatever metaphor you want to use against Apple, right? You take Apple's biggest designer, legendary, like you said, guru, legendary designer here, who, by the way, yesterday was telling us, we don't like these legacy products so much anymore. We have a better idea. So the thing I've been thinking about a lot today, guys, is the enormous pressure, one, for them to deliver. because you have Johnny Ive, again,

one of the key people behind the design of the iPhone, the reason why we talk so much about Apple every single day, core to that mission of Apple back in the day in the Steve Jobs era, now saying he's invented something new, but I'm not going to build it for Apple, I'm going to build it for opening. I found this other guy I like a lot better. We have some detail.

If Ming Chi Kuo is believed. Which I do believe him, by the way. Who does? Who? Okay, the analyst who's been following Apple and always gives us the little, like, the news ahead of the news for years now. Yeah, you can follow him on that.

He's the best Apple reporter you never heard of. Exactly. Because if he was that good of an analyst, he'd work for a hedge fund and we'd never hear from and be worth billions. Well, we don't know how much he's worth, but he's certainly... He's an analyst that's not that much. A track record that's been, you know, pretty good for something so competitive. It says this current prototype would be slightly larger than the AI pin with a form factor

as compact and elegant as the iPod shuffle, Brian. And one of the intended use cases is wearing the device around the neck. So this reminds me, remember the original iPod shuffle guys. This is 20 years ago. It was just like, it looked like a stick of gum almost. Came with a layered. I still use it. You would wear it around your neck.

That's what this sounds like. It's going to have cameras. It's going to have all this stuff. A couple things here, though. One, not according to Kuo, who, again, has just insanely good supply chain sources. So I believe when he says this kind of stuff, 2027 mass production. So as far as when we're going to be able to get these in our hands and actually use it, 2027. Open AI, though, says we're going to start showing this off next year, so we're going

to at least see if they can live up. But the thing I've been thinking about is this enormous pressure that Open AI has just put on itself. When you have Johnny I'm going to deliver something that is better than the iPhone, in not so many words, think of what happens if he doesn't deliver on that promise. Think of what happens to his reputation. What products does he have now? Right now, so he's running this company called Love From, which is a design firm. They don't just make tech stuff, they make clothing, they make turntables, they make everything. So what exactly is Open AI getting? So opening I is getting a plan.

They're getting, it seems like they're not getting. They say they have something. So it's the design, it's not just Johnny Ive. It's the design team that took over after Johnny I've left, this woman named Evans Hanky took over the whole operation. And you don't need to know who she does necessarily. I was like, Minko Evans Hankton. I'm just throwing names out here.

What's happening right now? I'm just throwing names at yet. But look. All they're becoming still. But she is quite important because Johnny I've said, I need her, takes her to this new company. Another guy, Tang, I'm going to throw another name out here. Here we go. Tang Tan, another product designer.

Not Tang Tan. Yeah, not Tang Tan. No way. When you lose Tang Tan, you've lost it all. But we have them. But we're getting Tang Tan. And so it's notable that Johnny I've called these people up by name because he poached them from Apple to work on this project specifically saying, let's design the next generation

of hardware, consumer gadgets beyond the. iPhone. This is what they're working on. And this is why it puts enormous pressure on Apple because they let Johnny Ive walk out the door. There's, you know, so many reports of this sort of schism between what Johnny Ives' vision was and what Tim Cook's vision was. Tim Cook has done an extraordinary job as CEO. The numbers do not lie how he's grown that business and stock price immensely. However, the sort of artistic nature, this sort of like, let's get innovative, Let's try a cool thing. Let's be designed forward.

That has kind of faded away. Look at the Vision Pro. How many Vision Pros do you see people walking around? It's not the remorse that people. Exactly. It's too heavy and they never used it. Exactly. The Apple car, which Johnny I was supposed to be working on,

that never came off the ground. So the last thing, major product, Johnny I've actually got to do at Apple was the Apple watch. And that came out in 2015. And so this is a significant moment. You have this legendary designer who made Apple what it is today or it was a significant part of that. creating this thing for Open AI and not Apple, oh boy, watch out. All right. Steve, thank you. Appreciate it. Steve Kovac. Our next guest watches all of these companies very closely, and his top pick in the AI

race is Alphabet. Joining us now is Michael Nathanson, Moffat Nathanson's founding partner and senior research analyst. Michael, are you excited for the new iPod shuffle you can wear around your neck and do I don't know. Totally. I have one of my draw here from 10 years ago. I'm going to try it out again. So I'm psyched about it. Do you think a new physical form factor is going to be important part of the AI race? Because I don't find that I need one per se. I just enjoy using the apps on my phone and desktop. I've learned never say never, right?

That's kind of my first rule. But, you know, the consumer need just isn't there right now. We'll see if they blow us out of the water with a great product. Who knows? But you have pretty big modes around Apple's business today, around Google's business, Amazon's business. So it's hard for a company like, you know, Open AI to break into device space right now. You know, it really is.

It is. And so where does it? And look, Open AI is not yet publicly traded. So let's talk about the names that are Apple, which is now kind of suffered. You could call it this loss of talent. Or we are certainly reading about its internal struggles over what to do about AI. You have them on the one hand. Maybe this is an opportunity if they figure it out.

Alphabet, which is your favorite player in the space. Meta yesterday we were saying maybe they now are caught a little bit flat-footed by some of these developments. Where do you kind of look to as the big winner of what we've learned this week so far, at least? Right. So to be fair, we have a buy-a-meta, but it's bounce back so much post the tariff sell-off that the value is at alphabet. But we had a conference last week and we can recognize I spent a lot of time thinking about the next five years and laying out a vision. And my biggest fear is that this was an industry, everyone stayed in their own lane, right? There was competition.

and they all kind of had date-dent, and everyone had their own large niche or large market to go fishing, right? So the worry I have is that, you know, Amazon with Anthropics, you know, as you mentioned, they're moving greater and greater into advertising, you have Alphabet moving into glasses, open AI into search, meta into devices as well. It just feels to us, and it just feels to us, and Apple is a huge question mark here, that the road ahead is not as easy as it was, right? So our feeling is you really have to look at the moats, how high is the competitive barriers here to entry.

And I think we're at a point now where basically you have to look past all these flashy announcements and really get to the heart of, you know, how much impact. Are they overpaying? Are they over who? Basically, you know, it's funny. We've covered telecom and media for a long time. What scares me is that this is an arms race. And to your point about overpaying, I don't know the answer,

but I know that everyone's, you know, paying right now. And it feels like an industry is where everyone is paying or investing, the returns go down, right? That's my simple answer, Brian. But that's how it's been in telecom or media or streaming. When too many people are chasing a dream, usually the returns are not that attractive, right? Yeah.

So I'm thinking to myself, I feel like, and I know Kelly's a student of history as well, We're in the 1880s with railroads. There were like hundreds of railroads in America. There were hundreds of car companies in 1910 and 1920. There were hundreds of radio companies in the U.S. in the 20s and 30s. Ultimately, some of them buy each other, some of them go bus, some of them go away. We end up with three or four dominant players.

We don't have 100 AI companies, but we're not far off. Who ultimately, Michael, comes out? Who wins? In 10 years, who's left? Okay. So you have to put Open AI into that mix, clearly. I think scale still is going to matter here. The returns may not be as great going forward,

but it's hard for me to imagine alphabet being knocked off from where they are. Apple will, of the names, Apple's only sell on, we worry about Apple's moot and whether or not they've moved too slowly on AI investment. Right. So in our hierarchy, we think Amazon will be strong. Microsoft, we don't cover that. That feels fine to us. but there's going to be lower returns in an Apple's business, and we'll see how well Applebed

pivots, right, from here with search being under pressure. So it feels to us that you still have the scale players winning with Open AI in there, but the growth rates and the margins will not be as high in the near term as we just have exited that period. We had a great five-year run with all these names. It can't be as good going the next couple of years going forward. And you have a buy-in most of them, Michael, but Apple, you still have a sell-on, is that right? We have a sell on Apple. That's, Craig has got to sell an Apple. You know, metadata our price

targets kind of run a lot. Alphabet's the one where there's the most investor uncertainty, almost dislike of that name. And we see it as an opportunity for people to look at alphabet. Because that, it really is not, it has had a strong, you know, year and a half versus the others. He just hasn't come back yet. It really has. So that's, you know, that's when we look at. 220 is the price target. I love how you're saying they're all now kind of getting into each other's turf and going to kick up the dust, make things. a lot more interesting from here on out. Michael, thanks so much for the time. You got it. Thanks, guys. Michael Nathanson. Still to come, the bond yield playbook,

what should you be doing with your money here? We'll ask our experts how to navigate all of that uncertainty. And we mentioned solar stocks getting crushed as the president's tax bill advances through the House. Up next, we'll speak to the CEO of Sun Run about a possible end to the green energy subsidies. Power lunch. We'll be right back. All right, welcome back. Well, your other big story today is the moving yields and higher borrowing rates. the president tax and spending bill, clearing a very key congressional vote. Let's stop bringing in Rick Santelli. We'll just call it the bond report, but maybe we should call it the yield report.

Because Rick, I think this is a massive story, not just here, but globally, maybe one that we're downplaying a little bit, I think. I disagree. I disagree. First of all, there's a reason that 10 years are the benchmark, okay? 10 years of the benchmark, because does anybody realize that we didn't even have issuance of a 30-year bond from 2001 to 2005? They stopped issuing them, and then they brought them back. So the 10-year has been the benchmark for decades, and all of a sudden, everybody's switching gears. And remember, the 30-year in Japan is going wild because much of the tenure was manipulated.

They wouldn't allow it to go higher. So, you know, I want to get to some of these charts, Brian. So if you're in the control room, forget the first few charts. Here's the chart I want to go to. I want to go to the last two charts, okay? Last two charts. Here's a chart of the 10-year JGB for two months. The high yield there today, the close was 156.

It is under where it was just two months ago. Now, here's the one I love the best. Everybody's showing the 30-year bond of Japan at 315 because it's not. ever been there. Let's look at a 10-year note going all the way back to 1989. Does this strike any fear in your heart? Nope, sorry, it doesn't. In my opinion, interest rates have been going up for a reason. Debt and deficits. I was screaming about it for years. People are paying more attention now, and even though that may be seated in politics, I don't care. But the notion to make story that what we're doing right now is somehow out of the ordinary makes no sense.

the average yield of a 10-year note is significantly higher than people think. It's in the fours. So I don't see anything unusual here except for the fact that all of a sudden we're showing 30-year charts that we haven't shown to this extreme in many, many years. But Rick, it happens in markets that they sleep on a story for a long time and then suddenly wake up to it. Could it be that simple as to what's happening now? No, I don't think so. I really do think that 30-year going up is all fine and dandy. It isn't the benchmark, it isn't what people are considering when they finance, it isn't going to be as important to the housing market as a 10, but I'm not dismissing the fact that we should pay attention

to it, but that's not where we should always have our eyeballs. The 10 years important, what's going on in Japan is highly unique. And interest rates, I wouldn't be shocked to see a 5.5% 10 year. I wouldn't be shocked to see a 6% tenure. And even at those rates, I wouldn't be pulling my hair out, and I think it was killer today. Kilberg, who said, you know, we got really spoiled in a way by having interest rates manipulated at zero for so long. It took away the notion that that's not where they belong. But the Fed is talking about cutting rates. Do we start to have a conversation about raising rates? I think that would be a pretty good conversation. As a matter of fact, today something unique happened. At 945, we had better May preliminary

S&P Global PMIs, and interest rates actually moved up. Two-year actually spike. So there is some stimulative effect to the tax package that they passed, and it isn't always a given that interest rates are going up for the wrong reasons because we had a glimmer today that they actually can go up for the right reasons. Rick Santelli, Rick, thank you very much. All right, so Rick talked about it. Bonds are certainly a big story.

Maybe not the biggest story in the stock market, but they are big, yield spiking. but not just here. It's also around the world. The yield in the 30-year U.S. government bond is now back to 2007 levels. Higher yields, as you could see, not impacting stocks right now, but they certainly could play a role

on how stocks in your money trade if they keep going higher. At some point, higher bond yields could hurt the market because they siphoned money away from stocks and into bonds. If you can get 6% risk-free, why not do it? Let's talk more about all this and more with Jay Woods of Freedom Capital Markets,

and Victoria Green of G-squared private wealth. I got to say, Jay, I'm a little bit surprised that the markets are holding up as strong as they are, even as yield spike. Are you? I am very surprised. I was surprised first yesterday when the 20-year auction went off at 1 o'clock,

and the market sold off on that news. You know, doing this a long time. We did the side-eye look at the tape and it was like, this is what caused us to sell off. It wasn't the Moody's downgrade. It wasn't the Walmart tweet over the weekend. This is what we're worried all. But now yields are higher now than they were yesterday.

And the market's going up. So clearly, respect to everybody, that was wrong. Well, markets didn't sell off on the 20-year auction because if they did, they would be down again today because the 20-year bond yield is higher now than it was yesterday. And that's the befuddling part of this. Maybe it goes to a narrative that this is becoming a little bit of a new normal. We are getting through earnings season. We're going to talk about Nvidia all next week. That will be the bellwether.

But right now, this is the part of the market that's got us confused. I watched the 10-year too, the 10-year being the bellwether. It is ticking up 4.6. Technically, we've got an inverted head and shoulders bottom there. That could really cause a spike for 8, 5% quickly. Yes, it may become normal down the road. But right now, if this market was to absorb a shock to 5%, equities are not going to hold on the way they're holding on now.

So to me, something's going to give, and I think equities are pausing. Not sure why we're rallying today. It is discretionary. It is technology. not the sectors that would be leading an environment like this. Utilities are worst performer. But it is a little befuddling, and I believe that the equity market will tire out

if this continues on this path. Victoria, you agree, if I'm not mistaken. You're looking at around 480, maybe anywhere between now and there, becomes more tough sledding for stocks. What do you think? Sure. I think four and a half year,

we're able to kind of deal with it and take our medicine. We start creeping up 47, 4, 4,8. We get a little bit nervous. And at 5, I do think markets absolutely start paying attention. And you are seeing small caps pay attention. You're not seeing it in the MAG7. We're all raw, ral, spanding AI.

You know, UAE in the Middle East is throwing so much at tech right now. It's a huge stimulus for them. But look at what small caps are doing. You know, they are reacting to the rise in yields. And at 4-7 and above, 4-8 and above, we think we're starting to start to see the large caps react as well. So maybe the market's not paying attention right now, but it certainly will above 4-7, in my opinion. And the Russell, as we had shown there was coming off.

They had like a five-week win streak now. it's starting to rethink that, Victoria. Are there any, which do you make any moves yet, or do you just wait and see how this plays out? You know, I love staying put in my quality dividends. I've been staying put in my core tech. I know it's boring to do nothing. I feel like sometimes there's this desire to have to trade around it. But right now, the chop is so news driven. So if we get some bad tariff news, we could see it come back down. We get good tariff news. We get good spending bill news. Then everything's all hunky-dory again. So for me, I'm holding on right now to see if we're going to break up or break down.

Because right now we're going sideways, trending water, which is totally normal, right? We're up 17 and a half percent off of the lows. This is a consolidation period. But right now, I think it is a little bit of a crapshoot and very news-driven if we break up or break down. And yields may have something to say about that. Because we are paying attention and inflation expectations, I think, is the one aspect we haven't talked about, which might be driving long-term yield expectations. It's a global story.

I know we're, you know, we're in the U.S. We like to believe that we're the center of the universe. for only 5% of the global population. There's a whole 95% out there that may think otherwise. And this is a global story, Jay. Japanese yields are up. German yields are up. By the way, German stock market is soaring.

Time high. Like, the amount of money that appears to be floating around the world just blows my mind. Yeah, and our equity market is lagging the rest of the world. Yeah, we're like the worst major performer in the world this year. And we are in a little bit of that treading water. Like Victoria said, sideways is a direction. And I think given the sell-off post-liberation day, which turned into liquidation day, we're recovering. But now there's too many news stories to focus on, which shiny object is going to draw our attention next.

And with a tariff story, boom, we can have a sell-off, we could have a rally. China negotiations were down to 30%. Wow, 30%. That's still going to kill margins, especially in the retail sector. So there are too many moving parts right now. And quickly from the chart point of view, do you take the signal more for? from the sharp rally we've had as that this is a sustainable rebound or the last couple of days is that is that something different? Yeah, people calling for the V-shape rally. I think we got a little too

far out over our skis. We're going to probably retest that 200-day moving average, maybe 5,600 around the 50-day and treading water. That's fine. Let's watch what Navidia does because Nvidia can really move this market in the semis and the tech stock. And that's next week. All right, Jay Victoria for now, appreciate it very much. Victoria Green, Jay Woods from Freedom Capital Markets. We'll see you a little bit later on. Bitcoin extending its record run today, crossing above 111,000 nearing 112 right now is the sky the limit. We'll ask our market navigator about that next. Welcome back to Power Lunch. You can see a nice turnaround in the markets there, really just in the past hour or so we've hit session highs up about half a percent for the S&P and Dow, eight-tenths for the NASDAQ, and Bitcoin

is hitting a record intraday high again as well. It's up 19 percent this month, and that puts it on pace for its best month of the year. Names like Coinbase, which was also just added to the S&P 500, has soared more than 30% in May, Domchu. All right, so if we are talking about Bitcoin, how exactly are investors navigating this particular rally? That climb that Kelly points out today is just adding and hitting new records above the 111,000 mark. And our next guest says the crypto coin stands to benefit from a range of factors and points out it's not too late for traders to get in on this rally.

So joining us now is David Chosler, the head of multi-asset solutions at Van Gogh. FNEC funds. And David, you think Bitcoin is headed for a big price target. We're not talking the millions like some other people have said in the past, but it's one that's achievable, hypothetically, near term, medium term, and that's 180,000. Why that target price and what gets us there? That's exactly right. So the United States is in the early stages of realizing that the laws of financial gravity do apply. Deficits matter. Debt matters. If you think about the world that way, the assets that are best situated to diversify you, Bitcoin first and then gold. So we want to see people own those. $180,000, we think that's a very realistic target.

So we're a couple of years right now to the bull market in Bitcoin. Based off historical precedence, we can easily see Bitcoin going to $180,000. And on gold, easily see gold going to $5,000. These are relatively small markets. They get a lot of attention, but A relatively small reallocation from global stocks or bonds into Bitcoin and gold sends those prices up significantly from here. Is the biggest risk to this thesis, David, which I'm very much kind of a believer in, but if real growth comes back to the fore, if it turns out that this bill is more stimulative and GDP does better and it kind of mitigates the deficit in debt concerns, is that what triggers what otherwise seems unstoppable runs for Bitcoin and gold and so forth? We think that we're past the Rubicon from a debt perspective. optimistic on growth. There's certainly catalyst for growth, AI, one of them. But the idea that we're going to grow our way out of this, if we were going to grow and cut our way out of this, we probably

should have started that maybe a decade ago. Deficits, debt, right on sustainable levels at this point. So what you don't have a lot of options, the options become pretty clear. And big debt, it's here to stay. You need protection from that. The world's de-dollarizing. You need protection away from that. You need to invest in decentralized store value assets. We want to to see people buy gold. We want to see people buy Bitcoin. So when we run asset allocation portfolios. Our asset allocation portfolios hold 2 to 3% in Bitcoin. They have two to, they have 5 to 7% to exposure to gold. That's the type of allocation we want to see people have to these decentralized store value assets. And is it just those particular decentralized assets?

Are you even venturing out into other parts of the crypto markets, say like Ethereum or Solana, Cardano, others? Not opposed to it, but for the typical investor, we want to see them in Bitcoin and we want to see them in gold. That's where we want people to centralize, totally not opposed to it. And we do have solutions that offer that. But for most investors, we think Bitcoin's where you should be. All right, the de-dollarization theme. That's the play there.

David, thank you very much. We'll see you soon, sir. Thank you for having me. So this is interesting because if it is a situation where people are just saying, you know what, the dollar treasury bonds have been the place for a long time. And all we have to do is carve out a little bit from that trade into Bitcoin or into crypto and gold. That could be a big tailwind. People like Bill Miller have been making that argument for a decade.

Obviously, he was very bullish on Bitcoin. And I noticed that Carter Worth yesterday, not necessarily a dogmatic fan of it, but said based on the price action alone, 140 could be next. I'd be waiting to see when the allocations really happen on a broader level. Absolutely. Dom, thanks. He's always appreciated it. Over to you, Brian. All right.

Should you buy shares of this mystery stock? is up 13% in the past month. Jay Woods says you should buy it. Do you know the chart? Let us know. We're back right after that. Welcome back and with the markets at session highs pretty much. Let's do a little three-stock lunch. We've asked our trader, Jay is back for three names he's bullish on and would be buying right now. Jay Woods is the chief global strategist at Freedom Capital Markets. You want to start with BJ's wholesale. I do. Their earnings came out today. It was a solid quarter, but they're caught in this, you know, conundrum. raising prices on the consumer. Are we going to mention tariffs in our guide? Price action going into the earnings? Fantastic. It was trading at all-time highs on the opening

120, and then it failed. It reversed. I don't like the price action we're seeing today, but I think it gives the longer-term investor an opportunity. This stock is a $15 million company. Costco's biggest competitor, $400 billion company. Still a lot of room to go. If this breaks $120, I want to buy it, but I think 108 is a good support level, and we can go sideways for a little while, but it has been leading. All right. All right. Uber? Uber.

It's your favorite stock. Long term, long term. Put this thing away. This stock had been acting well. It is now in the XLI, the industrial ETF, as well as the transportation average. We're not sure where to put this. It's a technology stock. They're with Waymo on the self-driving.

A lot of people afraid that Tesla's going to come and hurt their margins, but no, they've been acting on all cylinders. gross bookings a little light last quarter, but technically this stock went sideways 60 to 80, broke out ahead of earnings, came back, tested that 80 level. Any pullback to 80, I want to buy it. Risk reward setup is great. I think 120 over the next 12 to 18 months is a very easy price target for Uber to achieve. Let's end with Palo Alto, which you also want to buy. They had a dip after yesterday's earnings. Yeah, I've done this one before after earnings where it's dipped. The earnings were fantastic. Yes, the valuations are a little extreme if those people looking

at the PE numbers are going to step back and be like, whoa. But, you know, Every pullback has been a good opportunity to buy the stock. It's been hitting on all metrics. Guidance, they didn't really give guidance. So what are we worried about right now? We're worried about guidance. We don't get anything rosy, but they didn't cut their guidance. So to me, it held a key average in the 200-day yesterday.

Got to 178-in-day, closed above 181. That's positive for a short-term trade. I think you're going to get a little more of a bounce out of this stock. Long-term, it'll probably rally into next earnings, and then we'll see where we go. We're not afraid of a 52-pe. No, not. It continues to hold its own. Jay, thanks so much.

Again, Jay Woods. We appreciate it. All right, remember, you can recap every three-stock lunch. I mean, any time, anytime you want. You just got to scan, Jay, that QR code riding your screen, or you got to go to CNBC.com for more. It's three-stock lunch. We're back, brother.

Crypto Watch is sponsored by Crypto.com. Crypto.com is America's premier crypto platform. Welcome back to Power Lunch. I'm Pippa Stevens with your CNBC News Update. The Trump administration announced today it would no longer allow Harvard University to enroll international students and current international students will have to transfer.

In a statement, Harvard called the move illegal and said it remains committed to serving its international student body. The federal government has already pulled millions in funding amid a high-profile fight over Harvard's policies combating anti-Semitism on campus. Israeli Prime Minister Benjamin Netanyahu says he is ready for temporary ceasefire in Gaza to secure the release of the remaining hostages held by Hamas.

He also announced a humanitarian aid zone would be complete in the coming days as Israel faces mounting pressure to address starvation in Gaza. And SpaceX's massive starship is cleared for flight. The Federal Aviation Administration announced today it approved the launch of the starship's ninth test flight as soon as next week, following an explosive test flight in March. The mishap was the second since January. The FAA says it has nearly doubled the hazard zone for the upcoming flight.

Kelly, back to you. Pippa, thank you very much. Up next, we'll speak to Sunrun CEO Mary Powell about the potential impact from the president's tax bill, which has her stock down 40% today. We're back in a moment after this. All right, welcome back to Power Lunch solar stocks getting slammed today after House Republicans passing a tax bill that would end key clean energy tax credits. The legislation, of course, still has to pass the Senate and changes could still be made. But if it does pass as is, it's going to remove that tax credit by the end of this year as opposed to the planned expiration in the year 2035.

The tan ETF is getting hammered down about 7%. It's now down about 12% in a week. But if you take a look at stocks like Sun Run, down 40 percent. They're single worst day ever. Many other solar and storage stocks are also down. It's a big day, and it's a big ultimate decision for Congress. Joining us down for a Power Lunch exclusive is Mary Powell. She is the CEO of Sun Run.

Mary, I wish she was on a better time that we were talking like this, and I appreciate you jumping on in sort of short notice. Listen, many members of Congress, their staff, many of your investors are watching right now. what is your message to them? Well, my message, Brian, is that what we are all about is delivering on what, actually what our president wants, which is delivering American energy independence and doing it in a way that is creating a more affordable, resilient future for so many Main Street Americans, while we also are the leader in the nation that is bringing together storage and solar in homes to also provide energy back to the grid. as we all know, we're facing challenges from a capacity perspective in the country with the grid

needing more energy, whether it's AI or electrification. So we very much see that what we're doing is delivering on what the administration wants. And we're hopeful that all the hours that went into the House Ways and Means efforts to deliver a bill that was very thoughtful, that then got changed in the wee hours of the morning. We're very hopeful that as we work through this with the senators, we will ultimately end the Congress folks that we're working with as well. Yeah. So you are optimistic. It sounds like, Mary, that ultimately, because the Senate kind of runs the show, the House is going to do it, Senate's going to do what they want, that they've got to kind of figure it out. So you're optimistic that the Senate will sort of put back in, or

eliminate the elimination. How about that? Put that tax. break back into the finished bill. And also, it's not just the federal government. It's like you're right about everything you just said. We need all this power. It accomplishes climate goals. And yet the state of California, which we've talked about before, also changed some of their net metering rules to make it less economical. I feel like your industry is getting hammered from all sides at a time when we need all the energy we can get. It's just a little weird. Yeah. Yeah. I, you know, So again, I have been in energy, as you know, Brian, for over 20 years. And yes, you're right. What we are doing is about helping to deliver American energy independence and dominance.

And so ultimately, that is why I feel like this will land in a reasonable place, because America needs what we're doing. Main Street, America needs what we're doing. And frankly, without changes, you're talking about the loss of, oh, my gosh, probably at least a quarter of a million jobs. You're talking about energy prices going up for Americans, for Main Street America. So it just feels like, yes, it should land in a logical place when what we're doing is delivering on what the administration wants, what America needs, and what Main Street America is asking for, which is also to have choice and to have independence in how they power their homes and how they store that energy and control their own lives. How much, hi, Mary, it's Kelly here. How much would this change the cost? Because I know, as you say, a lot of people want, you know, everything you just described. A lot of other people don't want the handouts for a solar industry that they view as kind of ancillary or even sucking resources that could be better used elsewhere. So how would the move in this bill change the cost for a typical homeowner trying to use solar power? Well, I mean, the big challenge is that this is going to drive up the cost of energy. And so, again, you know, what the House Ways and Meansville did was a thoughtful approach on thinking about how do you phase this over time. And that is the way that you do it in a way that's not disruptive for business in America.

And that's also the way you do it to accomplish the very goals that you're talking about. So again, what we do is about delivering energy independent. for individual consumers, but also in a way, we are pulling together like over 60,000 customers this summer, as an example, in California, to support the grid. So actually, these resources are very much an important part of the future of America's grid. Yeah, and Mary Powell, Sun Run, I know tough day for you and your investors, but we're glad you jumped on the show, very short notice. Mary, thank you very much. Appreciate that. By the way, Kelly, it's not just solar. The bill, people think also does away with the $7,500 tax credit on EVs. You've got a Rivian that's down

2% right now. Maybe tomorrow we'll focus on the car side of this. Yeah. Because I know a lot of car dealership owners, some of you are probably watching right now, that $7,500 tax credit can make a difference to a lot of people. We'll see. Big difference. And it's interesting that there's not a bigger stock price reaction other than that it's already been priced into a large extent that these would be going away. Power lunch will be right back. Before we go, keep an eye on shares of Nike up 2% on plans. They will return to Amazon for the first time in more than five years. Under the new CEO, of course, they're trying to boost lagging sales. Shares are down 40% from their 52-week high, Brian, and they will be raising prices reportedly.

For items up to $150, maybe by $5 above that, maybe a little bit more, not huge hikes, but for a lot of consumers, this is going to make the shopping experience much easier. But the stock is up. It's not going down on talk of higher prices. That's interesting. Yeah, I mean, again, they're not huge price hikes. We'll see how much. We're going to learn data point by data point about what's coming. It will surely get tongues of wagging in the shoe industry. Nicely does.

Thanks for closing bell starts now.