Power Lunch - Supply Chain Chaos, EVgo Surges 10/3/24

Episode Date: October 3, 2024

The port strike is stretching into it’s 3rd day, throwing the U.S. supply chain into a storm. What’s stuck on those ships? Commodities like sugar, coffee and cocoa. We’ll get the latest details.What’s also stuck at sea? Key components for electric vehicles like Tesla’s. That company is getting hurt on 2 fronts: the port strike, and tariffs on parts sourced from China. We’ll discuss that.Plus, speaking of EVs – shares of charger firm EVgo are surging after the company received approval for a huge taxpayer-funded loan. We’ll speak to the CEO about that and much more. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Good afternoon and welcome to Power Lunch, everybody. Alongside Brian Sullivan, I'm Kelly Evans. Welcome back. The port does remain in the midst of a storm. The strike is stretching to a third day now. What's stuck on those ships? Commodities like sugar, cocoa, and coffee, but also key components for EV makers like Tesla. And that company is getting hit on two fronts today.

The strike as well as tariffs on parts sourced from China, making some sales adjustments as a result, Brian and the shares are down 4%. Drove by the port of Newark, New Jersey today? On purpose, or as part of your drive? Well, to get here. Okay. And it is so bizarre to see zero ships in port. Really?

None. Nata, Nix, nothing. Hmm. Interesting. Yeah, well, and of course, having bigger ramifications, the longer this goes on, shoppers are starting to hoard products, having flashbacks to COVID, even things that are made in this country. So there are going to be some ripple effects that this carries on.

But a very wise person told me yesterday, no need to go out in bum rush toilet paper. It's all made domestically. That's what I'm saying. We're going to be okay. We're going to be okay. All right. We're also watching some interesting single stock moves today. Electric car charger EV go. It's up 60% today. They got a huge taxpayer funded loan approved and a stock upgrade from J.P. Morgan Chase, the CEO will join us later in the hour. Looking forward to that. We're also watching the telehealth firm, him and hers. It's down big today. down about 11% after they had taken advantage of a recent shortage in weight loss drugs,

but that supply issue is over now. So unless those Mungaro doses are stuck on a cargo ship, the company does not get the edge, Brian, that it was enjoying. And something else, we've got our collective eyes on trading bots. Yep, bots. When we talk about advances in artificial intelligence, we often forget to mention the growth in automated trading. But not today. We're going to mention it with Herb Greenberg and how one company is really catching. his eye on just that. All right. So obviously, we've got a lot to do this hour. So let's get going. Start with your macro money. We've got the Dow down six-tenths of one percent. Nasdaq down two-tenths of one percent. So kind of like yesterday, kind of like the day before that,

we aren't seeing any real huge moves right now. We've got the monthly jobs number tomorrow morning. But it's also, I think, safe to say, Kelly, without editorializing, it's possible the market's in a holding pattern ahead of the election, right? We'll see. We'll see. The real focus right now maybe should be on the Middle East. Obviously, tensions are high and they are growing hotter. And oil right now is popping again today at four and a half percent on concern that Israel could soon strike Iranian oil facilities. Now, that is kind of thought to be mostly off the table until today. Because earlier today, President Biden made some off-the-cuff comments that spooked the market. Listen.

We're in discussion with it. I think that would be a little, anyway. So obviously you got the chopper in the background, a little bit hard to hear. But Biden said this when he was asked if they would support Israel striking Iran's oil facilities. Biden said, quote, we're in discussion of that. I think, I think that would be a little anyway. Direct quote. So again, it's not really clear what he meant, but it is clear that it wasn't a direct no.

and a strike on Iranian oil facilities certainly could surge oil prices. Kelly, I'll editorialize a little bit here. I think we could see a $10 a barrel pop easy with a strike. You're not the only one saying that, so you're not going on too much of a limb here. No, I'm aggregating that from other stuff I read. So here's the question. Why is this not being reflected in the oil price? Or is the percentage increase we're seeing today saying, take that $10, discounted by the likelihood that this happens, or does it depend on where they strike? Because as I understand it, there are several different kinds of oil facilities.

There's a couple of different important production aspects they have. Then there's the refineries. And what kind of strike would it be? And to your point yesterday, what response should we expect? But again, a modest, I would say, upward move in the oil price. We could also just more vigorously enforce the current sanctions. There's also that. There's also that Iranian oil exports have tripled in the last three years, adding more money to their thing.

Either way, this is moving oil. It's moving energy stocks. Not moving the overall market yet, but let's kind of tie it all together. Joining us now to kick things off, Jason Pride, Chief of Investment Strategy and Research at Glenmead and CNBC's Mike Santoli also as well. So Mike, yeah, energy, oil and gas, they're moving. Oil itself moving doesn't appear yet that there's a macro impact on the markets. No, not evident right now. Brian. probably in part, that's because of just the absolute levels that we're coming off of here. Big gains. We've been at 73 and WTI not that long ago. So until it really imposes itself in terms of getting out of this ban, I don't think it's a macro driver. We do, though, have a market that's apprehensive.

It's in this kind of tactical pause mode, a little bit of an unsteady equilibrium here ahead of the jobs number on Friday, the October 7th, you know, anniversary of the Hamas attacks on Israel. I mean, I think that's on people's minds. well as everything stacked up between here and the election. And we're in this anticipation motive, as you've been talking about, some kind of retaliation. All of that means we're going to wait and see perhaps nervously. Now, against that, you have Nvidia popping. Remember that old story? And that is supporting the overall market, as is the general sense out there that we have a Fed easing into what should be an earnings upswing, which creates a bit of a buffer against anything that we might be worrying about right ahead of us. That said, Jason, would

you kind of, there are energy investors who could say, okay, a couple dollars of upside and crude will take it. The energy stocks are benefiting. At what point does this turn from a help to a bigger headwin for the economy and for markets? I think it really depends on what exactly happens. And this is something that I don't think very many people are in a very good position to predict. Only those that are actually in the governments making some of these decisions have an idea of the magnitude of impact that we could have. What we do know is that events like this can escalate that risk is, I believe, being reflected on the margin in the markets today, but not to a dramatic degree. Jason, as you look into year end and the kind of shaky start we've had to October,

we've had the stock market doing worse, but the data actually doing a little bit better. Explain that to us, and where would you be laying your bets? I do think that we need to recognize that this market has been up quite a bit this year on a resumption of this thought process that we are in an ongoing soft landing. We've now transitioned to a period where the economic data, I think is still coming in on the margin mix, maybe a hair onto the positive side. You have interest rate cuts coming, but valuations sitting relatively full. With us sitting at highs, there's reason or opportunity for us to see a little bit of downside in the markets, but not so much that actually derails this ongoing market return and expansion. As far as where we had put our money,

we'd recommend that investors take a hard look at their portfolios, recognize that quite often you're going to look at that and you're going to realize your portfolio is overly concentrated in a handful of very big names. And when you have overly concentrated markets or portfolios, the best thing that you can do is take a step towards diversification. This is an environment to diversify your portfolios. Yeah, Mike, you know, listen, it's tough. to talk about politics, but we have to be. The election coming up in about a month's time. I know you're down there every day talking to people. I see it firsthand. How much is the election do you think on the mind of the market, if at all? It's absolutely on the mind of the market,

mostly because there's a recognition that a lot of people, even though they know that usually it's not the biggest swing factor that's going to determine how a cycle moves, it's sort of waiting out there. It's this known catalyst. Most of the time, the market, what they want is for the election to be through and then to kind of get it out of the way and mark and we can respond to a policy mix as it evolves. There is a wrinkle, which is the S&P 500 in the first nine months of this year was up more than it ever has been in a presidential election year. So that would suggest that one, we're not super worried about it, breaking anything. Two, it's kind of a tie, give or take, no matter how you want to slice it. So it's very difficult for the market to

decide it wants to lean hard in one direction on an outcome. And, Three, as Jason was saying, we were kind of pricing in a pretty good scenario here of a soft landing. And so it's not clear that we necessarily are in need of reassurance from one side or another to hang on to these levels. We basically need the economy to confirm what we think it's doing. And I think that's why tomorrow's jobs number is pretty significant in terms of either telling us that we were correct to be worried the last two months when we had disappointing monthly payrolls or to say we're okay for now. Mike, you took it exactly where I was going to ask you. So we do need that confirmation. I think the data has been very conflicting. Even as the ISM services was better, the employment component was weak. So, you know, tomorrow, I mean, tomorrow could be kind of a big deal. It could tell us whether the Fed should be in the continuing series of 25s or even 50s or whether that assumption of, you know, one cut after another should actually go out the window.

Yes. And I don't know, Kelly, if truly this one number is going to really push this. the November expectation to clearly to one side or another on a cut. I do think, though, what we really should be wishing for is for the job market and the economy to hang in there reasonably well and not force the Fed to get more aggressive and pull forward cuts and get to neutral in a hurry because historically, that's when the economy is kind of run away on the downside and the Fed is chasing it. Right, exactly. Gentlemen, thanks for now.

We appreciate it. Mike Santoli, Jason Pride. How is the bond market preparing for that jobs data? Rick Santelli has that insight. I'm noticing, Rick, these yields are moving higher today. Absolutely. They're moving higher today. If you look at the last couple of days, we have what we call a staircase.

We are trading above previous days high yields. Look at a chart of twos and tens on one chart. This is just today. And notice how we started to move up aggressively, especially after the 10 o'clock Eastern data. Now, we could talk about how the employment index that was a bit weak. But overall, service sector is strengthening, and even to drop in the employment index, we've seen bigger drops recently. Now, if you look at a two-day chart, it says it all.

All maturities are trading above their yields, high yields yesterday. And if you put the previous day, we did a good amount of work above those highs as well as we build momentum. Why are we building momentum? Well, there's a variety of reasons. First of all, the data, if I had to grade the data, It's mostly been C plus B minus, and with the notion of what the dollar index is doing, rates moving higher, even though geopolitics makes all of this flight to safety confusing, the dollar certainly seems to be a positive recipient, both on rates, moving higher and on geopolitics. Let's look at a chart starting in mid-August, and you can see that we're at the highest levels of one-and-half months, after we touched a 14-month low recently went back to July.

So what I'm seeing is the dollar index has had a lot of false starts. But overall, the way it's aiming higher, I would think that we're going to continue to see interest rates and dollar moving up, despite some of the fears going on in the Middle East. Kelly, back to you. That's interesting. It's bounced off that recent soft patch. Rick, thanks. All right, we are just getting started still to come here on Power Lunch. There are plenty of red flags in the market recently.

But one you might have overlooked is algorithmic, computer-driven trading. And our friend, Herb Greenberg, has been tracking one stock that got boosted into the S&P 500, maybe all thanks to passive trading. It's on his radar, and he'll explain why. Back. Welcome back to Power Lunch. Oftentimes, when we talk about an under-the-radar name, it's a company on the smaller side. But today we're focusing on one with a market cap of over $25 billion that trades on average about $40 million a day.

It's also a recent addition to the S&P 500. However, it's also driven largely or even solely by passive algorithms. Here to reveal the name, talk about what this means. Herb Greenberg is editor of Herb Greenberg on the street and Herb's red flag alerts on substack. He's also a CNBC contributor. Do tell Herb what's shaking here. But you know, Kelly, I bet you most people before this was named to the S&P 500 had never heard of eerie indemnity. And when I first heard of eerie indemnity, a friend mentioned it to me and I said,

indemnity, it's an insurance company. I don't want to look at it. No, it's not an insurance company. Eerie indemnity, and when you think about what does Eerie indemnity do and how can this stock have gone up more than doubled over the past two years, riding at about $500 right? Look, the only explanation I have for what this company's stock performance is that its earnings have actually done phenomenally well over the past year, a little over the past year. They've just risen for a reason most people would never understand, and that is this company's primary business. It's not insurance company, but it's what's known as the attorney in fact, which is like a glorified third-party agent for a group of related insurance companies, all part of this eerie family of

insurance companies, and their money is made by a fee, a 25% fee that it makes by from charging these companies for doing things like issuing policies, handling claims, managing. investments and all that. The fee, this is the important part. The fee is tied to insurance premiums, and we all know what's happened to insurance premiums. Insurance premiums is going straight up, and therein lies the rub here. The algorithms, by my analysis, or my belief, have, they've tied into the headlines of higher earnings. But you have something here that you know is not sustainable. The minute insurance premiums start to level off, this company's growth will slow down. You know, I say live, I say live by the, die by the algorithm.

Maybe it won't be supercharged, but it sounds to me like a pretty good business model. And let me ask you why you think the algos in particular are keying off of this. This sounds like the kind of name that maybe an active manager who knows a bit about insurance would have been happy to uncover and, you know, maybe you can stick with. If there's a pullback, maybe if the algos sell when we start seeing, you know, insurance premiums drop, maybe that's the chance for the active manager to scoop it up. Well, maybe. Look, this company has little to know Wall Street coverage. Most of the big investors are quantitative investors that basically do their investing via

algorithms. They're pulled in. They're pulled out. They move around like that. And it's not a company, again, it's a fairly regional business. And again, it's tied to fees. All of its revenue is tied to fees by one customer. It is one customer that provides the fees. that creates great risk. There's also one other overhang here. And I had red flagged this a few weeks ago. The other overhang is that PNC, the big banking company, owns about 10% of the shares. PNC, if they ever decide to liquefy some of that, to sell some of that, because maybe they have, you know, they have plans to expand further. This is a sort of hidden asset in PNC that most people never even think about. So that is another overhang to a stock like this. And look, when I read flag

companies. I red flag them as stocks to avoid because you would expect them to lag the market, not lead the market. And at this point, this stock looks like one that has a lot of risk. I mean, I don't know what Brian thinks, but if it weren't up 82 percent, Herb, I might look and go, gee, everything you're saying sounds to me like a decent mode and a decent business model and a clever, I don't know. Insurers are printing money. Because they have a great business model. They take your money, but then they don't pay you the money. It's a great model. No, that's the point. They're tied to something that when that growth slows, so will their revenue growth and their profit, profitability as a result of being tied to that one customer in those fees. And when that happens, those same algorithms that pulled it up, they're going to push it down. That would be my bet. And that's why I think this company ultimately will lag the mark. Let me clear. If you wanted to make this a conversation about whether the price hikes and insurance are largely behind us, I'd be happy to, I agree with you on that. I'm curious what Brian thinks he's looked at this.

minute detail as well. There's no way we can go up much. The consumer pushback, you know, the regulatory pushback, right, Herb, don't you think we have to have seen at least 80, 90% of the price move already? Look, on the commercial, you can start seeing some of this. Look, on the commercial side, which is a smaller part of the business, you already see softening in premiums. On the retail side, you can start seeing it flattening out, at least when I last did my work and I looked at some of the numbers that are out there. You can start seeing it starting to apply. So I think that's, again, with a company like this, it's tied to one thing like that. And again, people see the name. They see Erie indemnity. It's in the S&P 500.

It's an insurance company. No, it's not. It's a company that basically is a glorified third party administrator. That's what they are. That's what they do. And there are a lot of little companies like this out there. And I've been kind of looking for them to the sort of highlight. Erie is my new tell on Fed rate cuts. If this stock stops working, not only will Herb be right, I'm thinking we can have more great because inflation is going to finally start to add. Brian, what are you going to say? Well, I was going to say number one, I was talking about the, I was making a tongue and she come about the industry writ large. But if we redo our 2020 election road trip, which I hope we do, Erie, Pennsylvania, maybe the most important place in Pennsylvania, that was a stop in 2020.

If we redo it, Herb, I'm going back to Erie. Some great hot dog places, by the way. And maybe I'll make a stop in Erie indemnity. And I'd be like, hello, what do you think of Herb Greenberg? I think they might have a few choice. street. And by the way, I should also mention the whole markets, the whole structure of this company is actually some controversy about the deeper structure of the company. There's been a bunch of class action lawsuits. And that's a whole, it gets into a very murky, arcane area of not just

accounting, but insurance that I think it's actually bears watching because, yes? You know, my friend, on the other hand, I'm going to quote her Greenberg, but aren't a lot of these insurance and insurance adjacent companies always being sued, to be fair? I mean, that's, there's always being sued because people are never happy with whatever they might get. You're right. In this case, what's very interesting is this company's fees come off of this, what's called an insurance, an insurance exchange. It's called the Erie Mutual Exchange. That exchange, which again, is an umbrella for a bunch of insurance, it's not making anyone. If you look at the statutory insurance records, it's not making any money.

So Erie indemnity is making a ton of money off of a company that is making, or a group of companies are making no money. That's what the lawsuit sort of is about, because in theory, that money should be going back. If there's any extra money, it should be going back to the insurance policyholders, you and me, if we were Erie insurance policyholders. So it gets into a murky area there, but I think it's actually, the more I dug, the more interesting. I found it, and you can really go down to deep rabbit hole there and try to untangle this. It's always fun to kind of do these case studies for what's going on in the market. Herb, thanks for joining us. Good to see you today.

Always pleasure. It's always just good seeing her. I agree. Any day with a herb or herb. Any excuse to have him on? There you go. All right, earning season. Get ready, folks.

We were in the third quarter, fourth quarter. Earning season is gearing up. We're going to kick it off. You got big banks coming out next week. J.P. Morgan shares began the year strong. They've underperformed. We're going to drill down on that as part of your market navigator. Next. Welcome back to Power Lunch. Still seeing pressure across the major averages, not a significant amount, but the Dow is down 246 points. The S&P by a third of 1%, the NASDAQ down a quarter percent. JPMorgan kicks off bank earnings next week. The banking giant has actually been showing poor absolute and relative performance recently.

guest has some thoughts on what's causing that shift and what to expect going forward. Carter Worth of Worth Charting joins us now. Carter, it's great to see you. And what's catching your attention about J.P. Morgan? Well, obviously, this is the big one. And we do know, of course, that we've got earnings coming next week. Big banks are very important. It's sort of the transmission mechanism of the economy, if you will.

And look, of all the factors that have ever been tested in markets, relative strength is very important momentum, of course. And what we know is that J.B. Morgan acts poorly as the old-time technical expression goes, just as you've suggested, poor absolute performance and poor relative performance, both to its peers in the BKX index and to the market over the past three, four, five, six months. If you were looking to make a trade on this name, what would you do exactly? Right. So, look, 98% of all capitals long only. very few people short in general, but if one is long and as simple, I would take some measures.

I would either, what, buy a put or sell some calls, trim the position, I would reduce exposure going into the quarter of the report. It's worth noting, actually, Kelly, that, of course, the last three quarters, J.P. Morgan has reported earnings that beat earnings consensus on the street, and the last three quarters the stock actually went down in response to those results. But here you see a table that's very straightforward. It's just columns and rows that tell the tale. One month, three months, six month, J.P. Morgan is underperforming the index of which it's the biggest constituent.

And, of course, on a six-month basis, both the banks are underperforming the S&P and J.P. Morgan is underperforming the banks. And then in terms of the technical setup, we have an uptrend. This is clear. The question is the uptrend is under pressure. And my hunch is that this is going to break trend here. would take measures if one is long. For short sellers, I'd put the position on. Do the banks writ large catch your attention?

You did reference they've been underperforming. Did you look through them to see kind of which might be the sagiest, or might these comments apply to the sector broadly? Well, others have been sagier, and it's a great word, of course, which is Wells Fargo, City. Now, some of the investment banks and brokers have been quite a bit stronger, Goldman Sachs, Morgan Stanley, you look at a trust bank like a bank in New York straight up and steep and extended. So it's a very bifurcated group, but we shall see. J.P. Morgan, I would say buyer beware. A note of caution going into earnings season for the banks and for obviously the whole S&P.

Carter, for now, thanks. We appreciate it. Carter Worth. Brian, over to you. All right. Let's talk more about this port strike because billions and billions of dollars in trade, halted. The Longshoreman strike now entering its third day and thousands of consumer products like critical commodities are getting rerouted. We're going to talk about why you could see a spike in some key commodities coming up. Plus, it is not just car deliveries also getting delayed. Critical components like chips for EVs. Sort of lost at sea right now too. We'll get an analyst take on what this could mean for Tesla. And speaking of charging an electric car, the CEO of EVGo is

coming up, that stock ripping up 60% right now. They got a billion dollar taxpayer loan. They're going to talk about that and more coming up. Welcome back to Power Lunch. I'm Bertha Coombs. And here's your CNBC News update at this hour, a grim milestone in recovery efforts following Hurricane Helene as the death toll rises to at least 202 people, according to an NBC news tally. More than half of those deaths in North Carolina. Authorities say, Hundreds of people are still unaccounted for. Toyota is reportedly delaying by several months the start of electric vehicle production at its Kentucky factory, according to Japan's Niki Business Daily. The change is reportedly due to vehicle design adjustment and slow EV adoption.

The car maker is planning five to seven new electric models over the next two years. And Smart Ringmaker, ORA, unveiled its latest model, which starts at three years. $350 and has new features including up to eight days of battery life. Orr rings track things such as sleep, exercise, stress, and heart health. The company is facing more competition in the category with Samsung launching its own ring this summer. And persistent rumors that Apple is working on one, too. Brian, I know a couple of our colleagues are into those auror rings. Yes, because I read, yes, so I'm holding.

I think I was the first, to be fair. I got it right when COVID hit because we had the founder of the company on CNBC, Bertha. And that was when the ring, and I'm not a commercial for the ring, but it tells you when your body temperature goes up. So it's like you woke up and you're like, oh, man, your body temperature was up. Point six degrees. You know, am I getting sick? So the NBA used these at the beginning of their season when COVID was hitting.

So I got one and bought one for my dad, too. Yeah, a lot of us who like that quantified south. Although I don't like my sleep stats, or at least on Worldwide Exchange, I really didn't like my sleep stats. Three hours? Not enough. Bertha, thank you very much. I feel you. All right. All right. Meantime, it is day three of the Port Strike leading to lines of ships at every major U.S. dock because the West Coast is picking up more business, disrupting supplies for every major industry, including cars, just not delivered. And it's not just cars. It's also components of cars and components of Tesla vehicles. Many of those also stuck in the ships. Now, Tesla specifically, that is not the only issue right now facing the company. It is discontinuing sales of its cheaper Model 3 here in the U.S.

One potential reason, higher tariffs on Chinese-made battery parts could be driving up costs. For more on what this and what's next around Tesla's, bring in Craig Irwin of Roth MKM. Sort of a dealer's choice there, Craig. I mean, take your pick of where we start. Listen, the port strike may not go on. for very long. But if it does go on for weeks or longer, what would that mean for Tesla? Oh, man. So every single day is about a week of supply chain disruption for most of the companies involved. So I would expect that to translate directly into what this means for Tesla

right now. The only positive here is that Tesla's deliveries tend to be really back-end loaded in a quarter. So if this is something that's resolved and maybe another week or so, they probably We will have enough time to get some of these components in there and come in close to their deliveries target. The really issue on deliveries, though, is that demand is weak, which is why they've been missing. But let's just say they'll come close to their aspirations, hopefully, and for the benefit of the industry. But is it just them, though, because when I drive by Newark or you go to Baltimore, all the

VWs are coming off in Baltimore, all the BMWs are coming off in Charleston, South Carolina, almost. Newark, I think, is heavily, heavily Nissan. Is it just Tesla, or is it all automakers? I would expect this to be the whole industry and not just the auto industry, but, you know, everything from consumer products to, you know, medical equipment and pharmaceuticals, right? But, you know, I cover Tesla, which is a piece of the automotive industry, particularly the EV side. So I watch that closely. And, you know, I think this is going to be sort of a wrinkle. in the story, you know, it's not that material yet for Tesla. I think it probably is for some of these other industries. You know, Tesla has done a very, very good job managing their supply chain globally.

It's something that's differentiated them from even the Tier 1 OEMs. But the reality is that, you know, they have been falling short on deliveries even this past month. And this creates an environment where the miss or the magnitude of any miss is probably a wider delta, given this headwind. And, you know, having time to fix it is a good thing, but, you know, the longer this goes on, the greater the pressure. And Tesla's, you know, Tesla's used to pressure. Elon brings that. But they don't need pressure right now.

They need room to execute. They need to get it right on the robotaxie and get the miniccar out. I mean, geez, that thing is way too late. Yeah, it's been five years, if not longer. You are among those who say discontinuing the cheapest M3 car probably helps them on the margin. Consumers probably can afford the higher price, especially with the rebates. Craig for now, thanks. We appreciate your time.

Craig Irwin, he's got a neutral on Tesla, 85 for the price. Sticking with the EV space, shares of EV infrastructure firm EVGO are soaring 60% today nearly after it received a billion dollar loan from the U.S. Department of Energy in order to extend its charging network. here first on CNBC is Bader Kahn. He is the CEO. Bader, welcome. And why did you qualify for this assistance? Thank you for having me. We have been in business for a long time. We've got a very long track record of building out charging infrastructure across the United States for over a decade.

And the infrastructure we're building today is high quality. It's fast. It's 350 kilowatt chargers, which means you can charge your car in 20 minutes or less with the right, the right vehicle. So we believe for all those reasons, you know, we were very well placed to receive this conditional commitment. So, Bader, it's Brian Selman. If you may know, I'm sure your excellent PR people have probably told you that I've been a little, as an EV buyer myself, I've been a little more critical of the industry, but I will go into your stock. You got a huge run today, and I'm looking at an Evercore ISI note, and it basically says that there's a possibility that sort of this sort of semi-negative macro sentiment around EVs is masking.

your own strong operational performance. Do you think that the sentiment around EVs, which has come down off the initial highs, is impacting your equity? Brian, we've had six consecutive quarters of triple digit year-over-year growth in throughput, so which that's the energy dispens for network. And so, yes, I think that there, I think some of the overall sentiment has, unfortunately, hidden that strong performance. We are an owner-operator of our equipment as opposed to selling equipment to site hosts. And so we're generating revenue every time someone is charging their electric vehicle. And of course, there are more electric vehicles on the roads, and they're charging at our stations. And here's what's amazing about the more EVs that are on the road,

Bader, including the one that I myself purchased, which is they're big. We're electrifying trucks. we're electrifying SUVs. Just like regular cars, EVs are getting larger, they're getting heavier, which means they're getting less efficient. Do you think you guys will benefit more because we're supersizing EVs,

just like we did normal cars, which will require more charging and more charging infrastructure? I think that's exactly right, Brian. I think there's two things going on. Actually, they are becoming heavier and therefore less efficient, and so require more kilowatt hours

to be able to go the same distance. But at the same time, what we're also seeing kind of globally, but also eventually here in the United States, more affordable battery electric vehicle models being rolled out. And what that does is help move from the early adopters to the mass market. I think we've seen that in China. I think we're seeing that in Europe. And I think we will see that in the United States too.

Bader, what are you going to do with the funds? We just showed a map of your locations, which do predominantly seem to be towards the coasts. We've got about 3,400, just over 3,400 charging stalls across the United States and 35 states. If we're successful in closing this loan, that'll give us the ability to add 7,500 charging stalls across the United States over the next five years. So it's a significant acceleration of the charging infrastructure that we have in the United States. And that said, why shouldn't this money sort of be better spent on a Tesla network or one of the other? where they might see bigger ROI in the long run,

just kind of to the point that this is a $4 stock before this announcement. We serve every, we serve there's about 70 or 80 battery electric vehicle models in the United States, and we've always served every battery electric vehicle model. It's a core part of who we've been since our reception. So that's a key part of why I think the U.S. government has decided to award the funding to us.

How do we fill out the gaps in the charging infrastructure, I don't know where you are physically located. We're in New Jersey. Everybody's got an EV. Plenty of charging, not just at home here at CNBC. We have a ton of charges. Go out west, chargers everywhere. You get to select Austin, Madison, Wisconsin.

But as I drive back and forth to the Midwest numerous times every year, once you get into Pennsylvania and go west to Ohio and Indiana, it's pretty grim. How do we, how do we, what has to come first? Does the charging infrastructure have to come first, or does the rollout and build out and more sales of cars justify the build out of more charges? Sort of the chicken and the egg of charging, if you will. Yeah, look, it's a little bit of both. The reality is it's a bit of both. I think the fastest growing states in our network today are Texas, Florida, Michigan, Arizona, the charging infrastructure that will build out through.

this DOE loan will span, you know, 30 states. And it's, we're not just talking about the coasts. So we're talking about states across the United States. So I'm quite excited by that. Buttercon, EV Go. That stock is up a cool 60, 60%. I'm sure you have no idea that it's up 60% today, but I just want to let you know in case you weren't, you weren't aware of ButterCon, a CEO of EVGO. Congratulations on the loan and the stock move today. Take care. Thanks very much. All right. Coming up, air, land, and the GOP. Elon Musk has ruled the road with Tesla and reached outer orbit with SpaceX.

We're learning more about his involvement with politics. Those details are next. All right, welcome back. While Elon Musk deals with the trickled down impact of tariffs on his business, looks like he is working behind the scenes to try to gain more influence over public policy, spending millions to boost GOP campaigns. Emily Wilkins has more. Hey, Brian.

Well, yeah, Elon Musk, he created. a political action committee earlier this year that has given tens of millions to Trump. But in the last month, Musk packs, it's called the America pack, also started giving to House Republicans in competitive races. At least 5.1 million so far to 15 House races across the country, and that's according to CNBC's review of public filings. Now, these funds come as House Republicans, their campaign arm is lagging behind their Democratic counterparts in fundraising. The House, of course, is a toss-up. Either party has a shot of winning, and of course the funding's going to make a difference here. Now, public filings show that we've got the Winklevoss twins and Palantirist Joe Lonsdale

that have donated to the Super PAC, but it is not clear exactly how much of Musk's own money has gone into the PAC, although he has posted on X that he plans to make some donations. A spokesman for the America PAC declined to comment further, but we've got new reports now out yesterday from the Wall Street Journal and Reuters that find that Musk quietly poured tens of of millions into Republican campaigns since 2022. Now, that includes a 10 million donation to DeSantis' presidential campaign, plus 50 million to a group with ties to former Trump aide Stephen Miller. Now, Musk reportedly donated through dark money groups that do not have to disclose their donors,

but we will expect to get more clarity on which races Musk's America Pack is supporting later this month when the next round of filings are due. Guys? Yeah, I would imagine, Emily, without getting into it, If you remember, you know, if you remember President Trump, okay, we're talking about how if all we get flooded with cheap Chinese-made electric cars, it's going to be a bloodbath for the U.S. economy. That word, unfortunately, got taken in different directions. I don't want to go there. But if you're Elon Musk, your biggest existential threat is BYD and all these Chinese companies coming in and trying to sell $25,000 electric cars to the masses.

I got to imagine if you can spend a block down. then that wouldn't be the dumbest thing to do. I mean, EVs are definitely going to be on the table next Congress, regardless of I think which party holds it. I think both Democrats and Republicans have concerns, but Republicans have said they'll reduce regulations. Typically, that is better for businesses, and I think you're really seeing Musk respond to that, or at least that's what we've heard from him in some of the interviews that he's

done around this topic. Emily, thank you if we appreciate your time, Emily Wilkins in Washington. Coming up, the other key movers of the day in three-stock lunch, we're back after a break. Welcome back. It's time now for our three-stock lunch. We're going to look at some of the big movers today. Here with our trades, Quint Taitro, as founder and president at Jewel Financial. It's great to see you again, Quint. And we're going to start with Invidia, the biggie. Why not just go right to the heart of this, which is up 3% after Jensen Wong told overtime yesterday. It's next-gen backwell blackwell chip demand is, quote, insane. What would you do with the stock here? Yeah, Kelly, thanks for the setup. It's really great to be back with you, but we're going to take the unpopular opinion here, and we're going to put a sell on Nvidia here. It's been a sell for us for some time. In fact, the first time it hit around the 126 level and was trading 35 times forward. We sort of decided to sell the name. Now it's trading a little less rich, 30 times forward earnings with those earnings set to grow at 42%, which obviously they've traditionally beat and it made it.

it look extremely undervalued. But we're just not seeing that at this juncture. And, you know, NVIDIA's had this tradition of just surprising, I mean, blowing away to the upside. And I'm a little suspect of sort of the cheerleading that we seem to be getting. The stock's up on the news today, but it's too rich for me. And we're in the camp that we're looking for the names that are really going to be implementing these chips and now, you know, using AI to improve their bottom line. So it's not for us here to sell. I peaked at the notes, so I know that the stock that you're not getting online with also is Levi Strauss. How come? Yeah, Brian, this is a structural issue with us here. I mean, we think that the cut in the full year sales could just be the beginning. I mean,

they're trying to turn things around. They're not richly valued 14 times forward, and those earnings are set to grow about 14%. But they've got a debt issue. And I think the sell of dockers would be good to shore up the balance sheet. I like the renewed focus on the yoga brand. But ultimately, there's no rush here. And once we start to see a turnaround, it'll show up in the numbers. I think we would be okay to buy it at that point, but not here. No rush for us. All right.

Quickly then, Quinn, what about Hymns and Hers after they're losing that edge from their weight loss drugs? Yeah, let's take a flyer, right, Kelly. I mean, Hymns is the one that we would say actually as a speculative buy. Little to no debt, $200 million in cash, you know, really fairly valued 22 times forward, 80% growth. This is one that will take a flyer on this pullback today. You're surprising me. Quinn, it's great to have you. Thanks for your time. Good to be here. Quint atro. Quite the mix of stocks. Levi Strauss, hymns and hers. And a G7 statement on Israel as well, saying they support their actions to defend themselves.

So keep an eye on that. Well, thank you for watching Power Lunch, everybody. Thank you for being here. Closing bell starts right now.