Power Lunch - Stocks turn around after early losses 10/14/25

Episode Date: October 14, 2025

Stocks recover after starting the day deep in the red. The auto industry is sending some possible red flags on the economy.And will Disney be the next company to have two CEOs? 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.

Well, morning, gloom turning into an afternoon bloom, mostly. Welcome to Power Lunch, everybody. I am Brian Kelly is still out, and we begin the day with more worries over China. Stocks were lower, but what a turn it's been. Many stocks, many indexes. They are higher right now, including the big banks, Citigroup, kicking off earnings with a record third quarter. Their CFO is here live. Plus, are two CEOs really a good idea? A big story. around Disney you have to hear, plus an RBI in these markets that you will also hear, we're going to help you sound smarter about just how strong stocks have been with some really interesting, dare we say, random but interesting historical data. Welcome, everybody. Hope

you're having a great Tuesday. All right, a lot to do. Let's start with some new comments from Federal Reserve Chairman Jerome Powell. He spoke in the last hour at a conference in Philadelphia. Steve Leesman was there. Steve Leesman is still there. And he joined us now. And Steve, it does appear that Jerome Powell moved markets. Gloom to bloom. I like it, Brian, that's some poetic

stuff there. But Fed chair, J. Powell, not quite poetic, suggesting, but not explicitly saying rate culturalizing to continue. But maybe this new thing, this new dovish twist is what got the market's attention. When he said that the Fed may soon stop winding down its balance, he back, I'll get to that in a second.

Here's what he said about the economy. Downside Risks to Employment have shifted our assessment of the balance of risks. As a result, we judged it appropriate to take another step toward a more neutral policy stance at our September meeting. There is no risk-free path for policy as we navigate the tension between our employment and inflation goals. Powell telling the National Association for Business Economics that the Fed was using a range of private sector data and still available government reports to gauge the economy with that government shutdown and not giving the government reports. The data showed

higher downside risk for employment and inflation mostly stemming from tariffs. Separately, Powell's saying the Fed may approach a point, quote, in coming months where the Fed stops reducing the balance sheet. And then he made these points about the $6.3 billion balance sheets. There are some signs that showing liquidity conditions are tightening. That's a reason to stop selling off assets in the Fed's balance sheet. That says the portfolio right now is overweight, long assets, underweight, short-term assets,

and that long-term the portfolio should primarily be composed of treasurer. He's back on policy. Powell's comments were not a decisive endorsement of future rate cuts, but he did not really lean against Brian the market expectations, which are for two more cuts this year. And that certainly is helping stocks. Maybe I'm a poet and just didn't know it. Steve Leesman, thank you. All right. So while investors, no doubt enjoying most of today's stock turnaround, your next guest says should be a little cautious of the recent rally. Market expectations remain particularly elevated. Joining us now on set, Anastasia, Ammer. Maroso, managing director, chief investment strategist and Partners Group. Anasage, great to have you on set.

Good to see you, Brad. Before we get into all the stuff you're here for, any reaction to what Jerome Powell had to say? Well, I think this is very supportive for both the short-term rates and also the long-term rates, because he clearly expressed concern once again about the weakening of the labor market, which means we are going to cut rates most likely in October and again in December. And at the same time, he's talking about ending the balance-heed runoff and potentially supporting more buying of long-term treasuries.

And so that certainly should be helpful to long-term yields as well. And this is really critical, Brian, because, you know, the pushback that I sometimes get when I talk about the lowering of short-term rates is that, yeah, but markets get priced off some of the, you know, longer-term expectations. So the fact that we may have scope for yields to fall across the curve is really supportive for a range of assets. Dare we call this quantitative easing? No, not yet. I mean, this is reminiscent of what eventually ended up happening in 2018. Yes, it seems like everything starts. somewhere. When I hear buying bonds, bringing down long-dated treasury yields, I'm thinking,

right. Sounds a little bit like QE. Look, it's a tool and toolkit, and we're not quite to QE yet, but it is certainly the sign of the Times, which tells you that there is more and more concerned building about the labor market, short in the mud, because if you don't do it quickly, perhaps with a range of tools, then you may have to do more later. So I'm not surprised. And more and more of those tools are getting activated. This is probably the dumbest question I've ever asked, but is there's a part of me, and is there a part of you that thinks, Jerome Powell, listen, he's a human being, he's going to be gone in a few months, wants to go out liked, right? There's an element I think of, I wonder if there's an element of human behavior that's going to

just lean him toward less conflict, going out kind of on top. You know, maybe there's that, but maybe there's also this notion that he has been successful against all odds in delivering the soft landing. So many people have doubted him on that and the Fed on the ability to execute that. But here we are with the economy, the third quarter, on pace to grow something like 3.5% again. You know, they're on the cusp of lowering interest rates. The labor market is still okay. And if he invoke, again, if he can invoke the set of measures to actually make sure that we maybe softland the economy once more, softland the labor market, maybe that's the legacy.

Maybe it is. But, you know, we forget, Jerome Powell is actually a man. His heart pumps blood. And everybody, I think, mostly wants to be liked. All right, let's move on to the reason that you're here. I know it just started, okay? We had a few banks come out this morning. Citigroup in particular, Wells Fargo.

First inning, half of first inning. You've got to like what you see so far with earnings. Right. I like what I see for sure. It's beating expectations. And, you know, the four or five or, you know, six companies that reported, the headlines are all very positive. But, Brian, my point is that the bar has been reset higher going into the. this earnings season. And for example, Banks was one of the sectors that had actually the greatest

upwards revisions. And so I do think it becomes more challenging. And if there's any mention of an additional risk that wasn't already priced in, then the reaction is maybe not as positive as you would expect. And of course, what I'm referring to are J.B. Morgan results, for example, being broadly positive. And yet there's some concerns about the credit markets. And that's what the stocks ended up reacting to. All right. You saw that little graphic that we had. If you're on the radio, by the way, We had a graphic that said technology is basically going to be the most, the biggest part of earnings. We all know that. I want to play something for you.

Earlier today, BlackRock CEO, Larry Fink, was on CNBC this morning, really talking about the AI buildout. But he also talked about winners and losers. Listen and respond to what Larry Fink had to say. I don't believe this is a bubble, but I believe this is capital that in most cases is going to be well spent. That being said, will there be one or two failures in that? Absolutely. And that's the, that is capitalism. We're going to have some big winners and we're going to have some big losers.

So that caught my ear. Big winners, we know we've already had them, by the way. But when Larry Fink, arguably one of the or the most powerful people on Wall Street, says, big losers, he's got my attention. What's your tip? I mean, look, we agree with that view. You know, AI is one of the greatest commercial opportunities that we have today, but is going to disrupt some companies and is going to create winners.

But also what ends up happening is, you know, people get excited about themes and they invest for the theme, and they invest in a linear way. You know, whether it was the housing market, whether it's the tech bubble building in the 1990s, and they assume the demand is going to be there and they invest for that demand. I'm not saying demand is not going to come, Brian, but that's the risk. You know, if you think about whether it's the data center capacity, whether it's the semiconductor supply that we're building, you know, it's built for this hope and expectation that the demand will come. I do think as we progress, and maybe the time is not now, maybe it's a couple of years from now,

But there is a risk that some of the hyperscalers will start to rein in their CAP-X. And it's the semiconductor industry that will likely feel the biggest brunt of that. Not yet, but that's a risk. And if they do that, I'm not going to say when, if they do that, because right now everybody in the world is literally in the world, Middle East, Europe, whatever, throwing money at data centers now known as hyperscalers. that would have to, I would imagine, ratchet down valuations with it, earnings expectations with it, but we're not there yet. No, we're not there yet. I mean, look, you know, the hyperscalo-capax is certainly, you know, on pace to be at record levels once again in 2026, but you start to see the pace of growth taper off. And I do think investors are eagerly awaiting for some killer apps.

You know, for example, Open AI investing in a number of potentially circular deals, you know, what, how do they monetize that product? How do they go from unprofitable to profitable? I use that just as one example. At some point, investors will require proof in adoption. They'll require proof and monetization as well. So you're bringing up the, and we would expect nothing less. This is the critical point. It's like 1997.

It was a company called Global Crossing. And Global Crossing spent billions and tens of billions and whatever. of dollars laying fiber optic cable across the oceans all over the world. Global Crossing did not have a great ending, but those cables are largely what we still use today. The spending was incredibly valuable to society and the corporate world. I'm not saying that Open Eye is Global Crossing in no way am I saying that, but to your point, some point you've got to make money off the quote cable that you're laying around the world, right? There's going to have to be somebody It says, wow, we installed chat GPT into our servers and built this new app and we saved X amount of

dollars. That has to happen. That's right. It has to happen. And I think for investors, it's really the next year or two that will require some proof. And look, some proof of it is coming. We have something like 9 or 10% of companies that are adopting artificial intelligence. But I think what's not being captured yet is to what extent is it actually generating revenues.

I think what there is a better understanding of it is saving costs in some cases. It is driving productivity. But you know what else is driving pride? It's layoffs. You know, AI and technological change is being mentioned as far as attributing some of those layoffs off to. But not huge. It was a Goldman Sachs note today where they basically said, AI is going to hit the job market

in certain pockets, but there's not been a massive hit yet, although it is super duper early. Right. It's super early. And it is doing so in certain vertical. goals. It is doing so in certain functions. But again, I go back to that 9% adoption. You know, we're still very early stages. So I would expect more disruption. But to your point, I would say in the next year or two, investors are going to require some proof that there's monetization.

It has to work. It has to work. And it has to produce revenue. It has to be more than one app. Otherwise, we're just putting cables on the ocean floor. Anastasia Amoroso. Partners Group, Managing Director, Anastasia. Thank you very much. Thanks so much. All right. So, Jerome. Powell was talking about moving bond yields or at least maybe buying certain types of bonds. Bond yields have come down. In fact, let's go down to Rick Santelli. And the bond report, Rick, that 10-year treasury, that yield is like a cat-whisker above 4%. And it seems to always be a cat-whisker above or near 4%. And then it seems to move away.

Several occasions. And why is this so important? Well, Brian, I'll tell you, 4% is a huge psychological level. And the Fed could talk about manipulating and quantitative easing and soma. But in the end, the market has a voice. Look at the April 10-year chart. And the reason, of course, is because that's the low-heal close of the year in early April, basically right at 4%. And, well, if you look at the intradate chart,

we touched it a little after 6 a.m. in New York. We touched it briefly on September 19th. And every time we seem to touch it seems to move away. from it. But notice the scaling here. What is the range? Basically five and a half basis points today. Now let's pair the Dow on top of that, which currently has about a 1,100 point range against the five and a half basis points in tens. My point here is that all this volatility in equities isn't translating to much volatility at all in treasuries. And to think that all this is going on and we can't keep that volleyball below the water surface of 4% I think is very

telling, especially when the Fed seems to be talking so dovishly. And finally, another dovish logical market is the dollar index. Now, it's not right at the highs as you see on that monthly chart from the beginning of October, but it's hovering very near the highest closes since the end of July. Brian, back to you. This is what it sounds like when doves fly. I think Rick Santelli. Thank you very much. Thank you. Dropping music references left and right. Coming up, our two CEOs, better than one.

Well, Disney may be thinking so, but is that a good idea? The exclusive story from Alex Sherman. You've got to hear, and you will. Next. All right, welcome back. One of the biggest questions hanging over media is who will succeed Bob Eiger, a CEO of Disney. Of course, Iger has tried to lead before, but like another industry,

they just keep pulling you back in. But next year, he is set to leave for real this time. And as Alex Sherman reports, it may take two CEOs to replace one Bob Iger. But is that a good idea. Alex is here. He's our media and sports reporter. I know Oracle just did it. But, man, two CEOs is tough.

Were you likening the Disney CEO to a mob boss? No, I just, no, no, no. Now use can't leave. Right, yes, understood. Look, there has been a trend recently among other media companies to go this co-CEO route. We've seen it late last month with both our own parent company, Comcast, elevating Mike Kavanaugh's CEO, along with Brian Roberts. Spotify did it the same week. Oracle recently said.

What's the why? It's never worked. Right. So the historical corporate governance says, terrible idea. The party line on this is if you have two people, who are co-CEO, really you have no CEO. So if there's two people in charge, nobody's in charge because ultimately one person needs to make the decision.

So look, Netflix has done it for a little while now, and the shareholder results indicate they've done it pretty well. And by the way, Comcast, our parent company has so many different disparate business units. Maybe you need two people to run that. It's complicated enough. Oracle, massive business, two people. And so is Disney. And that may be the thinking here, which is that Netflix could.

be a decent parallel for Disney in the sense that Netflix's co-CEOs, Ted Sarandos and Greg Peters, have very different areas of passion and expertise. So if there's a decision that's about content, creative, Ted Sarandos makes the call. If it's about product or technology, then maybe it's Greg Peters that makes the call. And if there's some gray area, the chairman of the board is Reed Hastings still, who is the co-founder of that company. So that is the trium. So that is the triangle structure, two co-CEOs and an executive chairman. Who's the real CEO? And this is critical for whether it's Oracle, whether it's Disney, whether it's Comcast,

whether it's Netflix. There will be a time in any corporation where somebody, one person, has to make a decision. Like, so if you have two people, you think, oh, we've got to flip a coin. No, the executive or the chairman of the board would ultimately be, for lack of a better term, the tiebreaker. So theoretically, Disney could elevate. Bob Iger to executive chairman and could be in that role. The downside on that is Bob Iger has five times already pushed back his retirement for CEO. Does Disney really want to enter in another

situation where Iger sticks around and is the de facto CEO with two people with the title of CEO underneath him that are perceived as not the actual CEO? We just did this. If Bob Cheapack is still there. Right. In executive chair or whatever title, whatever title they give him. Correct. Right. If he's still there in the building or around the building or his number is approachable, he's going to be viewed to your point by investors and many of the Wall Street community as the boss. And this led to a, and he is the boss. He is the CEO's boss. And that was the problem with the Bob Cheapeck, Bob Iger era, which was that Bob Cheapeck was the CEO and wanted to run the show. But there were two problems. One, Bob Iger was his boss. for a little while.

And that was problematic from a power sharing standpoint. The second problem was Bob Eiger actually said, I'm going to keep running creative endeavors here. And that led to this blurred lines thing of who's actually in charge. So the question is, there's two obvious candidates

internally at Disney that have very different backgrounds, just like Netflix. Dana Walden, who's the co-chairman of entertainment, Josh DeMorrow, who runs the Parks Division. You elevate both of these people and you name them co-CEO. It looks kind of like the Netflix situation. The one's running media, the other one's running parks, and then there's somebody there to

this makes sense. Break a tie. But would Disney really want to do this again with Bob Eiger sticking around in some form where people say, oh, yeah, yeah, yeah, but he's the actual CEO. When are we going to win? Early 2026, Disney has said it publicly that they plan on making an announcement for Bob Iger's successor as CEO in early 2026. So what is it with media quickly?

I know we've got to go. What is it with media companies with the co-CEO thing? Comcast is doing it? Netflix's done it. Disney's doing it. Well, I think Netflix's success has led to this mini boom in thinking of it. I will say Comcast is a little different. Comcast is Brian Roberts, who's the controlling CEO saying,

Mike Kavanaugh is going to be my co-CEO. It's very much a succession plan in training there. He's basically saying to the world, look, this guy's going to be the CEO when I decide my time has done. So they're not really co-CEO-C CEOs. They are co-C CEOs, but like Brian Roberts is the controlling show. Yeah, his dad, Ravel, the company started the company built a company. Very clearly the decision maker, and he will still be the decision maker on anything that's really, really important, even after Mike Kavanaugh is the sole CEO. All right. One of the most right out there on CNBC.com, and we would expect nothing less.

My boss, Alex Sherman, I'm here to serve. You are here to serve. All right. Up next, why that mystery stock right there, that one, could stall out after earnings rollout. All right, welcome back to Power Lunch. Let's get right now over to McKenzie Sigelos for a CNBC News Update. Back. Hey, Brian. A federal judge set in April 27 trial date for lawsuits over the midair collision between an American Airlines regional jet and Army helicopter. Sixty-seven people died as a plane attempted to land at Reagan National Airport in January 2025. The trial will include at least

two lawsuits filed against American Airlines in the U.S. R&B and soul singer DeAngelo died today following a prolonged battle with cancer. The singer whose real name was Michael Eugene Archer went platinum with his debut album, Brown Sugar, in the 1990s. He later won a Grammy for his 2000 single, Untitled How Does It Feel? DeAngelo was 51 years old. And a NASA spokesperson says billionaire businessman and Elon Musk ally Jared Isaacman met with acting NASA administrator Sean Duffy this week as a candidate to lead the space agency. It came after multiple reports that Isaacman met with President Trump about the job recently.

months after Trump pulled him from consideration for the role, citing his ties with Musk. NASA says Duffy is currently betting several candidates. Brian, let's send it back to you. All right, Mack, thank you very much. All right, now to one of the best performing stocks in the S&P 500 today, that is Citigroup. They posted stronger than expected third quarter earnings with every division generating record revenue. Wow, let's find out how they did it. Leslie Picker, speaking now exclusively with the CFO Mark Mason.

Leslie, take it away. Thank you, Brian. And Mark, it is great to see you on this earnings day. Great to see you, Leslie. Thank you. As Brian just laid out, you had revenue gains, record Q3s in each of your five businesses, big jump in net interest income, and a lower provision for credit losses. So how much of that was all possible without the current macro backdrop? Yeah, you know, Leslie, first of all, thanks for having me. I'd start by saying what we saw today was a byproduct of us continuing to execute on our. strategy. It also demonstrates the resiliency of our business model. Every one of our five segments delivered top-line record revenue growth. Top-line performance was up about 9% in the quarter. And importantly, if you look at year-to-date, our revenues were up 7% year-to-date. Each one of the businesses, the businesses covering off on our institutional clients, like our services business, was up 7% as we're doing more with them in their operating deposits, but also with their

trade financing and their clearing volumes and cross-border activities. We also saw strong banking revenues. Our investment banking fee revenues were up 17 percent with good M&A activity, good ECM activity, and DCM activity. And then on the consumer and wealth side, we saw similar strength in both of those businesses. Much of this comes on the heels of us investing in these businesses to drive top-line growth. And so we feel very good about that. We're well positioned to serve our clients. Earnings were up. We returned more capital to shareholders. And I think the market is starting to recognize these proof points that we've been consistently delivering on through the year. On the broader environment, you mentioned on the media call earlier today that you felt

like there were some sectors or some pockets in the market that you believed were frothy. Could you expand on what you mean by that? I think when you look at equity valuations are up significantly. And I think when you look at that, you have to believe that there are certain sectors, given the multiples that they're trading at, that probably have some frothiness to them. As we see the uncertainty play out around things like tariffs, what that means for inflation, how the credit environment continues to evolve, what happens with unemployment, you're likely to see some leveling off in some of these sectors over time. What are you seeing in terms of credit quality and how are you thinking about it at this moment? I know you had, you know, overall it was a great picture during the quarter, but just thinking forward, both in terms of city and industry wide, because you have these tri-color and first brand bankruptcies that have really raised questions about whether the issues are contained to these two companies, contained to the auto sector or a canary in the coal mine. And I'm just curious how you're thinking about that as you assess your own balance sheet. Yeah, well, first of all, we feel very, very good about the risk appetite framework that we have.

You know, as you know, we tend to play on the investment grade side of credit risk as it relates to the corporate portfolio, so we skew much more heavily towards investment grade names. We also skew towards prime balances on the consumer side. We have reserves to the tune of $24 billion, 2.7 percent of a reserve ratio. So we feel very good about the reserves we have against the high-quality exposures that we have. And that discipline is really, really important when you're playing into an environment that is as uncertain as this one is. When I look at the underlying factors for consumer, for example, the credit losses that we've seen this quarter have been consistent with the normalization that we've been expecting. The early delinquency buckets are showing no abnormal signs of stress.

So we're watching that very closely, but we don't see anything in our book that is alarming. And similarly, on the corporate side, again, we have a very diversified portfolio across sectors. We skew towards the higher investment grade quality, and we're well reserved for the names that we have. So despite continued uncertainty in the market, we feel good about our exposure and our ability to continue to use balance sheet with our clients. Yeah, yeah. The numbers would suggest what you said in terms of resiliency. see, but obviously, as you mentioned, there's certainly a lot of uncertainty out there. Mark Mason, CFO of City, really appreciate your time today. Thank you. Great to see you.

All right, some comforting words there for Mark about credit quality. It's a big issue on the street right now. All right. Up next, the RBI that will make you smarter about stocks. We promise. All right, time now for a Tuesday RBI, and this one is timely because the markets have been in a strong streak. You know that, but did you know just how strong? Let's show you. Deutsche Bank highlighting how it's been six months since we had the last 3% sell-off for the S&P 500. The firm actually looked at data going back to World War II. There it is. And they found that this time or the time without a big pullback is actually one of the largest gaps ever. It's been 133 days since there has been more than a 3% down move in the S&P 500. That normally happens about once every one to two months. Well, now it's go a little bit longer term. This next chart is between the five-year sell-offs.

Very similar look, and Deutsche Bank finds that 5% sell-offs normally, historically happen about every three to four months. But right now, it has been, again, six months since the last 5% total sell-off. Got to go all the way back to the April tariff scare. The S&P 500 is about 1.2% from its all-time high. And unless we get a really weak market, at the next few days, that streak right there will keep going. Bonus info? The longest ever streak without a 3% sell-off. Coordinated Deutsche Bank was right after the 2016 elections, with the market

run lasting nearly 15 months. That is definitely random and interesting, hopefully. All right, keep those numbers in mind because time now for your power check. We still have not had that meager 3% sell-off that Deutsche Bank was talking about. Should we expect it now? What name should we be looking at? We don't know. But Victoria Green does. She's CIO of G-squared private wealth, also a CNBC contributor.

Six months. Without a 3% sell-off, that explains, I think, why everybody's so nervous. It is, it is. It kind of feels like it's like an earthquake over volcano where the pressure is building and building and we're not seeing any of these small corrections. I don't think it's that bad. This is just a normal bull market. This type of low volatility tends to happen when we're seeing the run like this.

We've seen it in 2016. We saw it in 2020. We see it now coming off of the tariff tantrum. Now, remember, we packed a lot of ball into three days in that tariff tantrum there. So maybe we kind of front-loaded the ball. But I also look at this and I say this is just a normal bull market. If you look how bull market's run, I get it's been extremely low volatility. Nobody'd be surprised if some other tweet sends us down 2 to 3%. But to me, this is just normal. I know it feels abnormal. And yeah, maybe we've had a little less downside. Well, six months. Normally, sell-offs happen one to two months going back to World War II. That's a pretty long timeline.

We haven't had a meaningful sell-off in six months. It's noteworthy. It is, it is. Does it mean anything? I don't know, but it's noteworthy. Well, I don't think the sky is falling. I think this is almost a little bit of, if you look at statistics and data, hard enough, it'll tell you anything. And so I look at this and say, well, what's the catalyst behind it?

What's the reasoning behind it? I think this ball market has four really strong legs to stand on. Number one is seasonal. Fourth quarter is great. November's the strongest month of the year. You're coming in here with a great setup. Number two, technicals are very, very strong in the long term. Yes, near-term overbought, but general technicals are very strong.

Three, fundamentals, earnings growth, driving us forward, driving us faster. And then number four is historical. Historic bull markets, you get to this point. Usually last five, six years. We're three years into it, now off the 22 lows. We still have a ways to go. You have a four-legged stool for this bull market to keep rallying off of. All right.

So speaking of four-legged stools, you actually have four top picks that you brought in. I don't know what it is about the number four, but let's go. We've been talking a lot about these big regional banks. One of them is literally named Regions Financial. We never talk about them. I know. Why are you talking about them? Well, I like them.

I think they're great. I love their position geographically. They have above-trend growth. If you look at their growth or net interest income, if you look at their interest in deposit charges versus their peer, they're just superior. They've got a good growth target. They've got some dry powder set aside.

Their loan growth is right where we want them to be. I think they're a little ignored. They're like 11 PE, solid 4% yield. this stock should be talked about. I know regional banks versus the mega caps, the regional banking index, underperform their large peers. Maybe it's a little bit time to shine on the smaller side. Yeah, if somebody asks me, what's the largest super cap company you guys never talk about? Not by choice, just because they just don't talk. They're super quiet.

My answer would probably be Amgen. If not Amgen, it's one of the tops. It's one of your top picks. Amgen is like a quiet giant in biotech. Huge quiet giant, great company there, huge cash flow. And you know me, I love my free cash flow. That's my favorite matrix for a stock of how much cash do you actually generate with your business? Their business is growing. Their pipeline's great.

They're on oncology drugs, cancer drugs, rheumatoid arthritis. They've got all of these catalysts going for them. A little bit of some of the headwinds are now fading, right? And if you're trying to balance your portfolio with some of the higher growth names, this to me is a quality core holdings. They've had sustained growth. They have a great runway with their pipeline. I look at this knock and say, you should be talking about Amgen.

What airport did you? You're from Houston. Where did you fly into? Newark. LaGuardia. Oh, you flew into LaGuardia, which is rare on United because United, you know, I do that. I have to pay a premium to my New York. I'm asking for a reason.

If you fly in Newark, you know that we have a lot of things called potholes. And I think you might have a few of them on the 610 around Houston. Vulcan Materials is a company that they do a lot of things. But asphalt, concrete, gravel, that's kind of their. sweet spot. We're spending billions, and we were on road reconstruction, VMC. Is that part of your thesis? Yes, absolutely. That we've got to

fix these holes in the... Oh, for the love of God, will somebody please fix hot holes? I have a whole list around Houston. If anybody's in Houston's listening, 6-10-100%. Like, literally a giraffe could fall into the pot hole and you still wouldn't see the giraffe. They hurt to hit. Look, bulk of materials, they are the leader in aggregates. That's what builds

asphalt, builds concrete, and they're well positioned for all of this expansion. And we do need infrastructure spending. I know there's a little freeze there, but they will get the state, local governments have to keep building their roads. Think about data center infrastructure, too. You've got building there. They're also an Alabama company

and what's moving to Alabama that likes to use local contractors? Space Force. Space Force? There's a space force play on Vulcan materials? Possibly. I mean, that's a long-tale play. And space. If anybody, you're on the radio, you have no idea what I'm doing, you know what this is? Do you know what this is?

I sure do. Live long and prosper. Yes. Live long and prosper with Vulcan materials Amgen, Regents Financial. Victoria, thank you. I've got the spot here's too. Coming up, we're going to take a look at what could be a key flashing red light on the consumer. That's next. Or less talk cars and trucks because there's a lot happening in the auto world right now.

In fact, really, there are three big stories kind of all happen at the same time. So who better to have on than Mark Fields, former CEO Ford, CNBC contributor? Mark, kind of a rapid fire here. We're going to ask you about some couple different stories and kind of go bang, Bang, bang. First off, these bankruptcies and some other stuff, but I want to start with General Motors, because you and I have talked for a couple years about EVs. It's really hard. Tesla's got a big head start. GM taking a $1.6 billion charge related to EVs. I think they're doing okay. Anecdotally, I see more on the road. But what's your take on this story?

Well, as we've discussed, Brian, over the last couple of years, the automakers really went full bore in putting in capacity for EVs. And they really didn't have a good discussion on the consumer in terms of what it was going to take to get the consumer to buy these EV products. And you've seen a lot of capacity go in. And what you've seen over the last 18 months or so is some of these bets went wrong. You saw GM's announcement today of impairment of about $1.6 billion. They noted that there could be more to come. And I think there are. So you're going to have a lot of stranded capital.

Ford had last year, you know, they took a $1.9 billion charge for canceling an EV program up in Canada. And so this is clearly an issue where the market didn't develop the way the automakers thought. And a lot of them, particularly in GM's case, you know, they boasted that they had the full lineup of EVs. And what was an advantage, at least they thought at the time, has now probably turned into a bit of an albatross as the market take-up of EVs. is going to be lower, at least in the near to medium term, than they planned for. Listen, you and I talked about it two years ago, ad nauseum. We probably both took a lot of heck for it, but we've been right on the mark, Mark. All right, story number two, it's a little wonky.

Calls WBI, wonky but important. There have been two big bankruptcies in auto parts, a company called Tri-Color, a company called First Brands. Leslie Picker just referenced them in the Citigroup, CFO interview. First Brands in particular is really rocking parts of Wall Street. I don't want to get into the whole story. but how big of a deal is this? Well, I don't think it's a huge deal as it pertains to the auto industry. I do think it's a big deal when you look at credit

and how credit's been taken out over the last couple of years. I mean, in the first brand's case, this is really about a story of over-leverage growth, opaque financing, refinancing, and it seems like governance and accounting issues. And, you know, when you have a company that depends heavily for growth on acquiring companies plus layers of debt, plus off-balance sheet, you know, complex financing. It's very sensitive to things like changes in credit conditions, interest rates, consumer,

and you've had disruptions in each one of those. And, you know, this is a case where they took out a lot of debt. And, Brian, as you know, when a company, part of their financing strategy, quarter of their financing strategy, is factoring receivables, that's a really big red flag. because a company normally doesn't want to give up any portion of their receivables and they'll collect them themselves. But I think in this case, and we'll see how it plays out, I think the growth of private credit is playing out here. And I think that is what's getting a lot of attention on Wall Street because private credit doesn't necessarily have the same kind of, you know, stringent requirements that bank debt does. And so I think this may be a little bit of the canary in the coal mine as you look at over-leverage companies that are having margin and growth pressures.

The first brand story is just gets weirder and we're going to move on. Story number three, some new data out. A car loan's mark are being paid later. Repossessions, they are on the rise. They have been for a couple of years, but they keep going up. You know, the average price of a new car is like 50 grand now. Is the consumer finally starting to crack under the weight of, you know, $1,000 a month car payments? Well, you're right, Brian.

I mean, it was reported yesterday that last month, the average selling price in the industry was over $50,000. Wow. So I think you're starting to see the confluence of, you know, the automakers have done a good job in trying to absorb a lot of the tariffs. But as the new model year comes in, I think they're looking at opportunities to kind of raise the prices and maybe decontent the vehicles to keep the prices down. But, you know, when you look at the payments, you know, an average payment now on an auto loan is over six years and a, it's over $750, that's up from about $570 pre-COVID. I don't think when you look at the bankruptcy of tricolor is kind of impending doom in the auto industry. And the reason for that is when you look at subprime, it's still a relatively small portion of auto financing.

The banks, as well as the auto company finance companies, have tightened up their standards. But, you know, it's not a foregone conclusion that, you know, weak performance in supplying auto loans and, you know, in any way a shape or form signals doom for the U.S. auto industry. But it's a legitimate warning flag. And that's why you're seeing only wealthy people being able to afford vehicles to these days, new vehicles. Yeah, the numbers are just so high. There's so much technology in these cars that the costs are higher, the insurance are higher.

And if you can sit rear end, you know, a small fender bender can do thousands of damage because now your backup camera is destroyed. Talk about that later, though. Mark Fields always love having you on. Thank you very much. Thanks, Brian. All right, take care. We've been talking about it folks for years. All right, up next. A big update on one of the hottest parts of the stock market. Some say it might be too hot, but you can decide. We'll show it to you. Next. All right, welcome or welcome back. We're almost done, but not quite. So let's wrap it up with this. The red hot minerals and element sector just keeps getting hotter today. We showed you these names yesterday. Most of them are higher again today. Energy fuels up 11 percent, empty materials

up three. The metals company up slightly USA rare earth is down. It's really one of the only ones that is lower. Critical metals was up, look at that. It's up 30 percent right now. U.S. Antimony up three and a half percent. Now, if you did miss yesterday's program, just a friendly reminder. of those companies that has showed you currently have no sales and no earnings. They have big plans. They got big ideas. They got backers. They're going to build out rare earth mines or scrape the ocean floor or go after valuable elements at Greenland. It's an exciting time to hopefully build out some new sources of critical minerals and elements. But just keep in mind some of these maybe a year or two away from beginning, really, operations in full. We'll see you tomorrow.

Closing bell carrying up this market. Next.