Stocks shake off morning sell-off 11/14/25
00:00Welcome to Power Lunch. I am Courtney Reagan, filling in today for Brian Sullivan.It's a choppy session for stocks with the S&P and NASDAQ and the green,pairing steep initial losses, AI names like NVIDIA, AMD, Oracle, Palantir,all changing course following Thursday's short sell-off.Most of those names still on track post-weekly declines, so is now the time to buy tech?We'll discuss that ahead.Plus, a CEO change at Walmart.The retail giant announcing Doug McMillan is stepping down after,
00:30after a decade at its helm to be replaced by insider John Ferner,the chief executive of its U.S. operations currently.We'll take a closer look at McMillan's achievementsand how this shakeup could impact the company's business.And an AI platform for financial analysis and forecast,we are asking reflexivity key questions you want to know,like how the data blackout during the shutdownis going to impact the Fed's next rate decision.
00:54Stay tuned to find out its answers.We will start with the markets, which are mixed,following the worst day in more than a month.The Dow and S&P 500, still down but well off the lows of the day.The NASDAQ now positive after starting the day in the red.Your first guest is not surprised by this week's dipand amid those valuation concerns, perhaps,but says it's not the time to add to tech.
01:15So here with more on a strategy and how to position for the year end is Paul Hickey,co-founder of the bespoke investment group.She tried to say, Paul, it's great to have you here.You know, Mike Santoli was saying this is what it looks like when things expand,when it's not all tech.What do you make of yesterday's action and then the follow-through or not today?So, I mean, I think the way you got to look at it is, as it became clear that the government was going to shut down in mid-September,you started to see a real widening in the spread between the cap-weighted index of the SP-500 and equal weight.
01:44And basically what that's telling you is that the mega-cap tech stocks were driving the gains.As investors in the market, we're looking at those to be more insulated from the overall effects of the shutdown.Federal government is a big part of the economy.When people who work for the government stop getting paid, that's going to cause ripple effectsin the rest of the economy, especially consumer-facing stocks.Then once we got to election day, it was pretty clear that people thought once the electionwas going to go past, that was going to be the catalyst to get the government reopened.We started to see that spread narrow.
02:14And the result is that these mega-cap stocks, which got all the inflows through the month ofOctober, through the second half of September into October, started to see those outflow.and you started to see a big impact on the market because they have such a high weight.But now we've seen the spread start to narrow.So the smaller stocks in the index have held up.Breth was better yesterday on the worst day in over a month than it was on the Monday and Tuesday of,Tuesday and Wednesday of the week before when the SEP was actually up.So why then did we see sort of the air go out of some of these big cap tech names?
02:49It's not because a fundamental reason of losing belief in the future, right?Yeah, no, I think you just got to.take a step back and have these things gone too far too fast. You know, I always tell my kids,if you're going to go out drinking, have a glass of water before each drink. And, you know,a night at the brick street, you know, when you're with no, when you don't pace yourself,great college. That's going to cause problems, okay? So I think when this case, I think it'sperfectly healthy for investors to be questioning what's going on. And have we gone too far, toofast? Because we can't keep going up in a straight line. And if we do, the, the hangover effect
03:22to keep the analogy going is just going to be worse.That's why you're not really interested in buying tech even at sale prices.I think some of these mega-caps tech stocks, you want to just, I mean, again, let's put this in perspective here,what they've done over the last several weeks here, and it's been a couple of days sell-off.So I think in that respect, I think you want to let things settle out here and look for a broadening of the rally.These companies that were more tied to the consumer that underperformed during October,Now you're seeing these federal workers getting paid, and there's almost a boomerang effect,and I think those stocks will see better returns as we go into year end.
04:01Just in time for the Black Friday weekend, too, which is just around the corner.Yeah, this is very interesting.So what names might you be looking to buy here?So on the facing the consumer, I mean, one stock, Starbucks is, I think that's the turnaroundsituation there is starting to take effect.they're seeing small, it seems like small steps, but it's increasing efficiency at the companyto streamline the operations.The company has a pretty good dividend, and while trades at about 30 times earnings, the thing
04:33to remember is that's trough earnings.So as we see earnings start to improve, that valuation will start to look better.When I think about consumer behavior, I think about a Starbucks is sort of like a little luxury.So even when, you know, other things you might be giving up, it's like the lipstick effect.Like, eh, it's just a fancy coffee makes me feel better.But, yeah, it may make you feel better.But during that time when you aren't getting a paycheck, you know, it's an easy thing to just cut out.And then now that things have opened up and we're back to a more normal.
04:59Any short-term hiccup there, I think, is going to be reversed.And then, again, like you said, it's the little things going on when you don't,when now there is more certainty, you're not going to forego that.And I think consumers are starting to come back.The sentiment towards the company is improving.Finanials have actually had some nice pickup recently, and there's one in particular you like.Yeah, so I think Bank of America is the stock we like here.It's just within, you know, doing this most recent rally, it just got up near its 2007 highs.
05:29And I think once you get through that level, it's going to be, you know, that's a psychological barrier for the stock.It trades cheaper than all its peers, and rightly so.But I think you're going to start to see, they just had their investor day last week.And I think you're going to start to see the company make moves here and,and improve their fundamentals.They have more tied to the consumerand the health of the U.S. economy.I was just thinking that.
05:53It does somewhat go along with your theoryabout the consumer, potentially, too,more so than, say, of Goldman Sachs.Right.But IPO activity is going to start picking upnow that we've seen,as long as the market cooperates here,but we saw a dearth of IPOs during the shutdown
06:07and that should start to improve as well.Got it.Okay.And just very quickly, because we are out of time,but you have a third name in the healthcare industry.I am somewhat familiar with this one.Yeah, so Netara,They do genetic testing.
06:17And what's really interesting, health care, the sector has been out of favor.It's been on a strong rally recently.Natara does genetic testing for prenatal.Their higher growth area is cancer screening.And they're seeing 60% growth in their signetara testing.And, you know, it's not cheap, but they've been routinely reporting earnings triple plays,what we call is better than expected earnings, revenues, and raising guidance.And when they're consistently doing that, they have a lot of confidence in their outlook going forward.
06:49Very interesting. I wanted to get to that one because it's not a name that we talk about very much.Well, thanks so much for joining us. Tell your daughter, congratulations at all over time at Miami University.There we go. Thanks. Go Hawks.That's right. Let's move on over to crypto. Many more of the speculative plays have sold off this week.And crypto has been no different. Bitcoin actually dipped below $95,000 earlier today.CNBC's McKinney Sigales is here. To give us a check on the whole space, I mean,This one often perplexes me.Sometimes I can understand the moves in crypto, Bitcoin specifically,
07:21because it seems to have a fundamental reason.Sometimes I don't get it.So what's going on?It's a court.This is partly a rotation in tandem with tech,because Bitcoin remains tightly correlated to the NASDAQ,especially in thinner liquidity environments.But what we've seen in this past week is a far more disorderly unwind.
07:41Billions enforced liquidations across crypto have piled up,including another sharp wave in just the past 24 hours.You've seen funding rates flip negative, market depth thinning, and then ETF flows have turned netnegative as well, all signaling real structural stress here.And I will say, Cort, it doesn't help that pro-crypto regulatory tailwinds that we sawearlier this year have stalled out.And altcoins are underperforming, particularly those that saw really big year-to-date gains.So you've got profit-taking, hitting hard, and meme coins giving back earlier.
08:14advances. Okay, so that's Bitcoin itself or the cryptocurrency itself. But then we have theseother names that are obviously linked to cryptocurrency. What's going on with sort of thesecrypto-linked stocks? Right. So this sell-off is dragging down the entire digital asset equitycomplex, and we're really seeing it hit in two clear buckets. You've got the fintech names and thenthe crypto treasury plays. And in the fintech camp, it's Coinbase, Robin Hood, E. Toro, Circle.Most are well off of their recent highs in trading like high beta tech.Circle, it is down nearly 20% this week alone.You've got Dan Dolev over at Missouho, which he's long been bearish on the Circle
08:54trade since they initiated coverage.They're warning that there's more downside ahead.But then the more dramatic damage is really showing up in the companies that holdcryptocurrencies like Bitcoin or Ether on their balance sheets.So those are the crypto treasury asset equities.Michael Saylor's strategy, Tom Lee's bitmine emergent, and then Peter Thiel, he has backedHeath Zilla. These are all proxy trades for other Bitcoin and Ether, and they are down double-digitpercentages on the week, Courtney.
09:21Wow, there is a lot of movement in that space, and you can see that downward momentum on themulti-charts. Mackenzie Sagalas, thank you for coming and explaining it to me. I appreciate it.Now to the Treasury markets, it's been a vault a week for yields, including today, with theU.S. 10-year yield trading above 4.14%. So Rick Santelli joins us now.from Chicago with Bond Report and an education for me here too. Hi, Rick. Hi, indeed, Courtney.You know, we've had a lot of volatility this week in Treasury yields, but I like my analogy aboutthe roller coaster. You could have a lot of loop-de-loops, but you kind of get off right aboutwhere you get on. That's kind of like the Treasury market this week. A lot of volatility,
10:00but right now if we were to close a 10 year at 414, he'll be up only four basis points on theweek, a two-year, also up about four base points on the week. But what is really driving it?Today, it's all about stocks. Look at the S&P futures on top of 10-year note yields. And I pick thefutures because they trade virtually 24 hours, so the charts match up nicely. They're righton top of each other. That explains it, but there's another force going on here. Think about howI always say debt and deficits matter. Well, let's look at one-month charts of all ourcounterparts in Europe. Let's look at the UK, the guilt yields. They're at six-week highs. Theyclose. If you look at boon yields, they're at one-month highs, and the reasons are easy. The
10:46UK has a 20 billion pound hole in their fiscal budget, and they don't know how to close it.They're talking about taxes and a lot of moving parts. In the UK, well, France is basicallyin the same scenario. So there's a lot of issuance and debt areas that the market's focusing on.Now you put up our tenure for one month, you'll see that even though we're moving generallyin that direction, we're still not at the highest yield close.We had those earlier in the month, but we are tracking some of that on the arbitrage.So there's this latent feeling in the Treasury market that yields are going to remain stubbornlyhigh, but the equity markets do have their influence.
11:26When they get really sloppy, we go down.When they start to come back like today, we follow them right back up.Courtney, back to you.Back up on that.loop-de-loop. Rick, thank you so much.We've got a news alert on Alibaba.We're going to turn to Amin Javers.He's got more details.
11:40Amen, what's going on?Yeah, Courtney, the Financial Times is reporting that Alibaba provides tech support forChinese military operations against targets inside the U.S.Now, the paper is citing a national security memo circulating inside the White House forthat claim.No comment yet from the White House on this report, Courtney.The memo allegedly says the Chinese company supplies the People's Liberation Armywith access to customer data that includes IP addresses,
12:08Wi-Fi information, and payment records,as well as AI-related services.And the FT reports that employees had transferred knowledgeabout so-called zero-day cyber exploits to the Chinese Army.Now, we've reached out to Alibaba for comment.They haven't responded to us yet.The FT says that Alibaba told them it rejects the claims,saying the claims purportedly based on U.S. intelligence
12:32that was leaked by your source.complete nonsense. This is plainly an attempt to manipulate public opinion and malignAlibaba. Now, by law, Courtney, companies in China have to share information with Beijingwhen it's requested, which is one of the reasons why U.S. officials have been skeptical fora long time now of Chinese-owned firms that have access to vast swaths of American data.So we'll bring you any White House comment on this as soon as we have it.Well, that is an interesting and a terrifying update. Amen, thank you very much.You back. Walmart CEO Doug McMillan's tenure is coming to an end.
13:06Its stock has searched more than 300% under his leadership since 2014.Where does Walmart go from here?Those details and forecasts right after this.Welcome back.An end of an era for Walmart.The retail giant announcing CEO Doug McMillan is retiring after more than a decade at its helm.Walmart sales steadily growing under his leadership estimated to top $700 billion for the first time ever this year.Though ironically, it is expected to lose the total revenue crown to Amazon, although if you compare just retail revenue, Walmart still wins.
13:47Some key decisions McMillan made during his tenure as CEO buying e-commerce companies like bonobos, eloquies, shoes.com, jet.com, of course, while selling unprofitable operations in Argentina and Brazil, John Ferner, CEO of Walmart U.S. is taking over the reins starting on.February 1st. Joining us now to discuss the executive shake-up is Corey Tarlow. Hecovers discount and specialty retail at Jefferies. Corey, thank you so much for being here.What did you think when you saw this announcement this morning?Thank you so much for having me, Courtney. Delighted to be here. So I view Doug's tenureat Walmart as CEO as an investment phase. Because we all remember that dayin October of 2015. Very clearly.When he announced we're going to invest in our associates, we're going to invest in our
14:32stores and invest in our supply chain. And the stock took a big hit. But then the fruits of thoselabors years later are now being felt. And he's leaving just at the precipice of, or the culminationof all of this investment. And so now the onus is shifting to John Ferner, who is in this phaseof innovating and accelerating. And I think the next phase is really going to be about howHow does Walmart leverage the groundwork laid by Doug McMillan to then harvest all of thosebenefits and drive more profitable growth ahead?Yeah, really good point.And I remember, like, Jet.com, buying that for $3.3 billion.
15:12A lot of people scratch their heads.Other people said, well, if you get Mark Lorry with it, I mean, that's quite a powerfulaquire.And he stayed for some time and really did help try and build out a lot of things at Walmart.comand using the stores and online.Not everything worked, to be fair, but the big stuff seemed to have taken hold.Are you worried about Walmart's ability to continue to grow same-store sales?What are they, they have, 39 straight quarters of same-store sales growth?
15:35And if you're looking at a revenue base of $700-plus billion, how do you keep growing?That's a great question.Right now, in the data that we look at on a regular basis, we've seen Walmart's traffic up low single digits.And if you combine that with inflation, i.e. tariff-induced inflation, you're looking at same-store sales growth, at least in the quarter,to report next week of like four to five percent.We're at four and a half.The street's at four.The bulls are probably close to five even.
16:08And I think that that sets up a very conducive story to continued sales growth.It's really driven by top of funnel market share gains at the end of the day for me,because the traffic is what's really leading the way.And a lot of that traffic is coming from higher income consumers.But going for the grocery, which is lower margin business.They're coming into the stores, but then they're also shopping online, and they're coming in for the grocery for that great value, but then what they're staying for is the convenience.And I think that's the remarkable shift that's changed under Doug and John, is that everybody loved Walmart for low prices, but it wasn't always the most convenient option.And now with buy online pickup in store, buy online ship from store, drone delivery.
16:54In home delivery.In home delivery.They'll put it right in your refrigerator.Yes, exactly.And they'll be able to deliver to 95% of the U.S.and under three hours by the end of this year.And that is what's going to contribute to share gains for Walmartagainst retailers like even Costco or Amazon or Target.
17:14It's going to put Walmart in a much different positionthan they were 10 years ago when Doug first took the home.So you open the door to other retailers.It's a big earnings week next week.And then a big week after that with Black Fridayand Cyber Monday, you and I are going to be very busy.You have, you upgraded by a gap to buy today, which I'd love to talk about because they're reporting next week.But you also have 41 buys or overweights and only one hold and one sell.
17:39So you're bullish on retail almost across the board?That might be our Jeffrey's retail team total.I only cover about 30 stocks in total.Okay, okay. So you plus others, okay.Yes.But generally, you feel optimistic about the consumer?Yes, for sure.I think that the reality is that there's what people say and then there's what people do.
18:03Sure.And what we've seen is that the credit card data that we look at, the foot traffic data all seems to point to a really strong holiday.Albeit though, we are seeing some areas where there's some squishiness, right?People are trading down.I think Amex had some comments that they reported last week and they're obviously super prime consumers where spending was resilient.And these higher-income consumers do tend to drive a lot of the spending for a lot of American households.Now, the kicker is what happens with SNAT and the lower-income consumer?Because as of November 1st, we've seen a little bit of shakiness in that data.
18:41Absolutely.And so do these customers then become even more reliant on retailers like Walmart or BJ's wholesale club as examples,which might cater to more of a food-oriented purchase?Okay. When people talk about Walmart, they almost always compare it to Target.We know that it is not an exact comparison, but it is a big box store that is multi-category thatdoes offer food, not as much as Walmart. And they, too, are going to have a CEO change comingup. Where are you in your recommendation for shares of Target? And what do you expect them to saynext week? Michael Fidelke has not technically taken over, but like Furner, he's been along for the
19:19ride with the CEO that is leaving. So bear me with me on this one, but we are byrated ontarget. We're one of the few analysts who actually are. And it really starts with the new CEOto catalyze change. They've made announcements about SG&A cuts. So they're going to cut about 8%of the workforce over the next several months. So you have a bona fide commitment to solidifyingmargins. You have tariff narratives that were a lot worse than they are today. So that narrativeis being de-risked. And you have among the easiest compares in retail in 26.for target.Combine that with a valuation that is very undemanding at 11 times and a 5% dividend yield,
20:02the stock actually sets up to be pretty attractive.And just today alone, they're at about a 5% margin.They've historically averaged about 7.So if they start comping positively on these, again, the easiest, one of the easiestcompares in retail, that margin profile is going to go from 5 to maybe 6 or 7.And we could be looking at $100 plus stock from 90 today in fairly quick,But maybe not this quarter, maybe not this year. You're talking 2026. Yes. Well, our goal is to look outabout 12 months. So it's a 12-month price target, and we're looking at about $115 within the next
20:3512 months. So this next week, though, in our earnings expectations aren't nearly as high as yourlong-term outlook. Yes. But I think that a lot of people recognize that there's going to besome weakness in the data, and I think people are largely positioned for that at this point.Okay. Interesting stuff. I could sit here and talk about this all day. Corey, thank you very much.for joining us, Corey Tarlow. Up and down weekend markets, as we've discussed, but thisETF is on track for its ninth positive day in the last 10. We'll reveal which one, theexact name. That's right after the break. Welcome back to Power Launch. The mysteryticker. We teased before the break. It was the Healthcare XLVETF. Health Care. Healthcare. Health
21:23Care is the best performing sector in the S&P 500 this week. It's up over 4% since Monday and outperformingevery other sector by at least 2%. Despite a slow start to the year, healthcare stocks have ralliedrecently as the sector is up 7% over the past month. It's been higher in eight of the lastnine sessions. Joining me now to discuss is Evan Siegerman. He's the head of healthcare researchat Bumo Capital Markets. Evan, thank you so much for being here. It feels like over the courseof the year, when we've looked at sector-specific recommendations, in the beginning it washealth care, then that trade kind of went quiet for a while, and perhaps maybe now it'sseeing a resurgence. What do you think is behind it? And can it continue? So a few things.
22:01First of all, I think the recent deals you've seen with some pharmaceutical companies in theadministration have helped significantly. If you go back to April, there were major fears aroundtariffs across the board, but specifically on pharmaceuticals. I think Trump at one point had said100% tariff on some pharmaceutical products, which really made the sector hard for generalists toinvest in. And now that we're seeing these deals being made, it's a level of ease. I also thinkwe're seeing deals in the sense of M&A. We've seen a lot of M&A last week. We had, of course,Pfizer-Metzerra with Novo. Today we had Merck announce a deal. So that type of action suggeststhat biopharmac executives have confidence in their ability to do deals. And that's really great
22:44for the entire ecosystem from biotech up to big biopharma. It's kind of hard to talk about health careon biotech without talking about the surge and GLP ones, the success there, the differentiterations, different companies are going through. Can you give us sort of a state of playwhere we are there and who may be the continuing beneficiaries or new beneficiaries as wemove forward? So I'm going to highlight what happened last week. Last week we saw deals betweenLily and Novo Nordis with the administration for cash pay, but most importantly, we have a pathwayfor Medicare on beneficiaries to access GLP ones for obesity.This has been kind of a sticking point as there has not been a pathway yet available for these patients.
23:26So we estimate it could be 25, 30 million potential patients that could get on therapy or be eligible once this kind of gets into play.In terms of who's the leader, you have Lilly, of course, they are our preferred pick when it comes to the obesity play.They continue to execute when it comes to the commercial side of things.And of course, later this year, we could have them launch their oral drug orphaglipron.The other key player is Novo Nortis.They've had a bit more of a challenging run, shall we say.Today, they actually reelected a new board.They were this kind of interloper in terms of the Pfizer-Metsera deal.
24:00But taking a step back, we've really seen them starting to lose share to Lilly.And we're concerned around growth into next year despite category growth in the overall GLP1 space.That's interesting.And obviously speaking of deal news, you have Merck-nearing a deal for flu treatment startup, Sedera, or at least that's been reported.I mean, being able to prevent a flu as opposed to just lessen the symptoms would be amazing.For sure, for sure.You know, I think it's an interesting technology.Merck has a lot of work to do, shall we say, to deal with the Katrina Eloy later in the decade.
24:32They are making progress.You know, last weekend they presented data for their oral anti-collestral drug that's targeting PCS canine.Very interesting.Could be very important.You know, this deal is still TBD.We notice there's no CVR, so they're taking all the risk.risk up front, I think it's about $9.8 billion in cash. Wow. I noticed the sheer price of Eli Lilly.Do you think it could be looking at a stock split any time in the future?
24:59Ooh, that's a tough one. I mean, I think there's a bit of a psychological threshold that the$1,000. Sure. People like that, it's also getting close to a trillion dollar market cap,so you really have to be confident in the long-term trajectory of the GLP1 obesity space, which weare. A stock split could make it easier for some folks to invest, but I don't think that's anentrance necessarily. People see value and could see value more from where the stock is now.Good stuff. Evan Siegerman, BMO Capital Markets, Head of Healthcare Research. Thanks for joining ustoday. Thank you for having me. Well, Apple was widely critiqued for its AI strategy or lackthereof, but what cautious approach has helped it weather the tech sell-off while others have gotten
25:38battered. Steve Kovac has the full story right after this.Well, this might surprise some of you, despite yesterday's tech tumble, shares of Appleare on track for a positive week. At one point today, the stock was headed for a record closedbefore losing some steam. Still, Apple is on pace for its six straight month of gains.That's the longest win streak since 2023. So what kept Apple at bay while its AI peersslipped this week? I bet I know, who knows, Steve Kovac? What happened here?Yeah, so, I mean, we got this great chart that I'm going to show you of the KAPEX spending forthe September quarter from all the big.
26:17tech companies that we talk about all the time. And you'll see Apple just looksinfinitesimal compared to the rest of them. We're showing you the operatingexpenditures right now. So that's something a little bit different. But when youtalk about CAPEX, only spent about three billion as opposed to the tens andtens and tens of billions that we're seeing per quarter the others are spending. Sowhat's going on here? We know that Oracle's borrowing enormous amounts of money to dotheir data centers. We know these other companies are cash rich and they're able to dothat there are now questions whether or not the depreciation of these chips really justify the
26:50spending. Apple is taking a completely different approach to AI. They're partnering with, or that'sat least the plan, for them to partner with Google or someone else in order to power theirAI. And it's all going to run on what they call their private cloud, which is instead ofNvidia chips, they use the same chips that they put in your MacBook. So instead of spending tens ofthousands of dollars on one Nvidia GPU, let's call it a couple hundred bucks for one of thesemac chips that can run all these Apple intelligence processes in the cloud. So now they're lookingreally smart for adopting this strategy, this partner versus build strategy, as opposed to the others,because there's less risk involved. They're offloading so much of the risk right now on
27:30OpenAI and ChatGBTBT. That's currently integrated in Siri. Eventually, that's going to likelyexpand to Google's Gemini, maybe Anthropics Claude, maybe some other models that kind of come up,but those are kind of seen to be the leading one. So they're saving an enormous amounts of money,They're sitting back and waiting until they can get the Siri thing right with this kind of technology,and they're looking pretty smart right now as you watch the sell off.That is interesting because for so long, it seems like many were very critical.Apple, what are you doing on AI?You're so far behind in AI.
27:59You're saying at least for now, this looks like the right thing.Do you see any chance that they change the strategy?Does this feel good?Let the guys that know AI do AI.Not, well, they're still doing AI.So let's be clear.And in the medium term, fine, yes, maybe in the longer term, they do try to build themodels and things like that. But in the medium term, it's very similar to how they work with Google
28:21right now. Apple does not own a search engine, right? They use Google. So when you go into yourSafari browser and you tap at the top and you search for something, it kicks you over to Googlebecause Google turns out is really good at search. So Apple partnered with them to do that.We're going to see something very similar happen with artificial intelligence. They're not goingto go out there and build their own search engine. They're not going to go out there and buildtheir own frontier large language model like some way these other guys are doing, and they're doingit so cheaply. Now, where are the expenses coming, though? We showed you earlier, the operating expenses,those are increasing enormously, and that is the spending. Apple is tying to artificial intelligence.
28:58They said all this, we're doing a lot of research and development in artificial intelligence,and that's where operating expenditures are going up. We're not doing CAPEX. We're not doingCAPEX. We're not building these enormous data centers, a size of Manhattan in Louisiana, like META is.We're being very thoughtful and deliberate about our spending on this.They're not going out there and acquiring perplexity like so many people wanted them to door one of these big AI companies.They're taking their time seeing where it's going and then figuring out how they can leveragetheir user base of a billion iPhone users to play on top of that.
29:30So it's going to be really interesting to see what the final version of all this looks like,probably next spring.But in the meantime, almost no risk for them.It's all upside pretty much.Interesting. Of course, Apple has a history of not always being first, but doing it pretty well.Yeah. Have you heard of the iPhone? They did it pretty well, yeah. Right? Good stuff. Steve, thank you so much.We're going to pivot to another mover within tech, Micron. It's one of the top gainers in the S&P 500 today.CNBC's Christina Partsenilus joins us more with those moves. Hi, Christina.
29:58Hi, Courtney. Well, today we're actually seeing quite the reversal in memory names after yesterday's sell-off. Micron, like you said, up over 5%. Sandisk as well, another memory name, up almost the 9%. And there's three major factors.that are helping these names. First, you have the simple dip buying after yesterday's drop.We're seeing that across tech. Second, competitor Samsung is reportedly hiking prices of itschips by 30 to 60 percent because of short supply, which also implies tight supply for micronchips as well. And then third, we're getting bullish signals from the street and from chipequipment makers. And I mean that by saying, just yesterday, Morgan Stanley upgraded micron in theirnote calling this, quote, uncharted territory with a, quote, 2018-style shortage forming, asCompanies really raced out to build out their AI factories.
30:42They're going to need high bandwidth memory.Micron plays a role.Also, yesterday, chip equipment maker applied materials.Had its CEO say he believed the DRAM market,that would be the dynamic memory market,and leading edge foundry logic,would be the fastest growing segments in 2026within the chip space, which again bodes well
31:01for Micron and Sandisk.Worth noting, though, if you just zoom outfor micron shares for a moment,you can see that shares have jumped almost 200%this year alone.So maybe just maybe so much of that optimism might already be reflected in the stock price, Courtney.Very interesting. I love the Zoom Out chart. It does give you perspective,but it seems like most of that growth has been in recent months earlier in the year,
31:21the stock kind of just flagling along.When people realize the benefits of high bandwidth memory and the role that Micron can play in this whole AI buildout,so that's what we saw that stock uptick in the last little while.And there was a point in time when Micron was one of those momentum stocks.Not so much anymore, but it does seem like there's some fundamentals at play herethat's helping to drive it higher.A little bit, a little bit.I can say the same thing about Palantir,
31:43but then that's a whole other debate.Good call.Good call.And Palantir shares, of course,have also pulled back a bit.But when you look at that chart,year to date, it is impressive.Christina, thank you so much.
31:52Thanks.Really appreciate it.Let's get over to Bertha Coom.She has a C&BC News update for us.Hi, Bertha.Hi, Korn.U.S. Enve to the Middle East,Steve Whitkoff,
32:01will meet with the chief negotiator for Hamas,according to the New York Times.According to the report,there is no specific day for the meeting.But it would come as the Trump administration looks to ensure a lasting peace in the region following the ceasefire deal Israel and Hamas agreed to in October.Defense tech company Govini has fired founder Eric Gillespie from the board after he was arrested Wednesday for attempting to solicit an underage girl for sexual contact.Gavini said in release that his actions, quote, should not diminish the hard work of the broader team.A judge denied Gillespie bail, citing flight risk and public safety concerns.
32:42And a woman has fleeted guilty to lying to law enforcement after accusing astronaut Ann McLean,her estranged spouse, of illegally accessing her bank account from space.Heather Warden alleged McLean guessed her password and used her bank account while deployed to the International Space Station in July 2019.An investigation found that Warden had actually granted her spouse access to the account.count. Courtney, you can bank it from space.I was just thinking that. What do you need money for in space?But I guess maybe you do. Thank you, Bertha.Pay the bills.
33:15Yeah, somebody's got to do that, I guess.Well, up next to how much is AI actually affecting the workplace?New data from the CNBC Workforce Executive Council will tell us right after this.AI is rewriting workplace rules from daily tasks to how HR leaders think about the future of jobs.For many executives, it's raising more questions than answers.So CNBC pulled top HR leaders to understand what's really happening.Sharon Epperson joins us with some new survey results.I'm really interested in this because we all wonder, what is the impact?
33:52Is it here or not yet?Well, we're looking at it.And we decided to poll some workforce executive leaders, actually workforce executive council members that CNBC has.And these are senior executives at many different types of organizations.And what was fascinating is that right now, 22% say it's really not having any impact on jobs.AI is not having an impact on jobs.But 67% said, yes, it is, whether it's less than half of the jobs or more than half of the jobs or nearly half the jobs.And some are not sure.
34:22But fast forward to what happens next year.That's where it gets really interesting.89% of jobs will be impacted, according to these folks that we talk to from the CNBC Workforce Executive Council.Only 11% say no jobs will be impacted.So that's very interesting.We're definitely going to see more of an impact in the year ahead.So do you think when it comes to the jobs that are impacted, it's more about increasing efficiency?Isn't that what AI is supposed to help us do?
34:50Well, certainly, and that is definitely something that people thought is going to happen.First of all, there's that concern that that efficiency is going to cost people jobs.We did not see a majority of people saying that they're going to reduce head counts.In fact, 38% said they're going to keep the head count the same as it is now.28% said they would increase headcount and 28% said they would decrease headcount.Now, when it comes to that reduction in head count, it's not because of the efficiency of AI.They're saying it's because they need to control costs.That's the main reason.
35:19But in terms of how many people want to make sure that it's more efficient company,and expect that it will be a more efficient company with AI, 61% said they believe that to betrue. And 78% it said it's making folks more innovative.So these council members that you talk to, I mean, these are some of the ones thathelp make hiring decisions.What other details did they offer when we are going through these questions?Well, one of the things that they said is some of them said it's too early to tell.We don't really know what the impact's going to be.
35:45But this was a very thoughtful response, which was don't just rush to buy the latest AItool until understanding exactly how that's going to enhance your work.workforce because it has to be a human digital connection. It has to be a human experience aswell. And so while some are saying that when it comes to hiring, we're going to see moreAI skills-based hiring and less based on degrees, there's still that human component to getin the door and to stay employed at the company. I still want to figure out how to use AI toclean my house. I know, exactly. Do my expense report. Like don't replace me as a mom. I just want to do,I just want to play with the kids. You clean the kitchen, robot AI guy. Exactly. Thank you. I really
36:23Appreciate it, Sharon Epperson.Well, these, we appreciate Sharon for bringing us the latest on that.And coming up, our next guest has built an investment analysis platform, she tried to say.It allows traders to ask the LLM, that large language model, anything they want.I don't know if it'll clean the kitchen, but it's got some other cool stuff.We're going to talk about the next generation of investing and how it helps that after the break.An emerging force in institutional investing.Reflexivity is aiming to rewrite how the street discovers opportunity.
37:01Using autonomous AI agents, it takes financial, market, and macroeconomic data from leading globalproviders and turns it into real-time market intelligence.It's a push to give money managers not just more data, but sharper conviction and faster.And today, we're looking at how the lack of economic data will impact the market and your money.Jan Salagi is CEO and co-founder of Reflexivity, an AI platform that is designed for institutional investors.So this is fascinating.Tell us, I guess, just generally, how it works.And we were talking before that this is not going to replace a money manager, but help them be more efficient?
37:37That's correct.So one of the very difficult things for anybody, a market participant, always has been how to really unlock the insights in the data.And so what reflexivity really does is help.portfolio manager or an analyst tap into and look through any market event withthe data lens. So we use large language models to intermediate between you and a host ofanalytics and so on. But all of it is publicly available data? The data comes frompublicly available sources, but there are sources that we call premium content,things that they would normally have to subscribe to. Okay, okay, got it. And is it
38:15currently being used right now by institutional investors? Yeah, we have a number of hedge funds,investment banks, private banks who are currently using it very actively, and the number ofusers is growing as fast as we're able to allow it.Have they given you sort of any feedback?Do you have any numbers you can share on how it's improved, I don't know, efficiency oranalysis?So I think no question, it improved a lot of productivity.We have examples of cases where it's alerted people to certain events where they were able
38:41to reduce risk in time.But by and large, I think it just lets them explore ideas much, much faster.they have a throughput of ideas that they can get through in, you know, half or a third of the time.So this may not replace a portfolio manager, but junior staff?I think at the moment it's going to make everybody better.I think that, yes, it can act as a junior analyst to a senior portfolio manager.But I think even now, you're able to tell your junior analyst, look, I'd like you to do this,and they can do two or three tasks at the same time, as opposed to just toil over the weekend on a single one.
39:15And so we've been talking a lot about data the last two months.I mean, we're always talking about data,especially when the Fed is using its inputs to make interest-free decisions,when times are a little difficult to read.But we haven't had any, at least, of that government data.And now we've found out that we're not going to get some of it.There's just going to be gaps in the data.How could your product help fill in those gaps?
39:34It can't fill in, obviously, government data,because some of this would be based on surveys and so on.But what it can do is try to think about, okay,have we had similar episodes before?what was the uncertainty then, how did markets handle it, and so on.So, yes, the government shutdown this time was much longer than any of the previous ones.Nonetheless, we do have data that can at least give you a proxy for the official data, right?You have things like ADP payrolls and so on, and there are some higher frequency survey data
40:02that a system like reflexivity would look into and then say, on the basis of a more limited information,here is the trajectory for the economy, this is where we think we're headed.And so this is a more specialized model than chat GPT at its premium features, because this is very specifically targeted for institutional investor information.No question.First of all, this set of data that it has access to is very different.And then secondly, also the way it's combined and analyzed is very much the way you would expect to happen inside a hedge fund or an investment bank, rather than things that you might just do on the fly on, you know, on your phone.You used to work for Stan Drunken Miller.What would you have used this for, have you had access to it?
40:44You know, for example, in his case, he would often have really good intuition about inflection points in the market that would come from a micro-observation, even though we would then build a macro thesis.What reflexivity is able to do is then pursue that and say, like, okay, if this logic is correct, where should we see some of the implications, what are some of the assets, where these ripple effects should become apparent, and it can do so in an astoundingly short amount of time.Hmm. It is really fascinating. It doesn't, though, build, say, an Excel model with all the assumptions in it necessarily. You still have to put in that data to some degree, right?You know, it's starting to get some of that ability, too. I think that that could happen over time, but yes, at the moment, that's true.And, I mean, our hedge funds and institutional investors wanting to spend, wanting to invest in tools like this, I imagine there are others that may be offered that may not be identical, but many people sort of, hey, I think,and help you do your analysis, get your information faster?Yes, I think what we see, there's a lot of interest in us helping them seed their ownAI infrastructure. So effectively come in and actually almost offer a degree of advising
41:53in terms of like what are some of the pain points that technology is currently ready to solveso that they're able to then start there and then iterate and then eventually address anotherpain point and so on. So that's what we've seen. And I imagine the deeper adoption, the betterit gets over time as it continues to learn. No question, yes, because you can see obviously the natureof questions. You can see the types of analysis that are required and all the analyticaltools get better and better. Fascinating. Maybe it gives some hours back to some of thosefolks' lives. Thank you very much. Really appreciate you joining us here. Jan Salagi.Well, billionaires don't want sports cars and expensive art pieces anymore. Find out what they are
42:30buying. Coming up next.No longer cut it for the ultra wealthy because according to a new survey of billionaire families by J.P. Morgan, the rich are pouring more money than ever before into sports teams, overtaking other luxury assets like high-end art and exotic cars. And if you want to read more about it, scan the QR code on your screen now or check it out, CNBC.com. Thank you so much for watching Power Lunch. We have the Dow a little bit lower here with a couple hours left in trading, but it has recovered a lot. Closing bell restarts right now.Thank you.
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