Power Lunch - Tech Earnings on Deck, Bonds Digest Fed Decision, Entergy CEO on Data Centers 7/30/26

Episode Date: July 30, 2026

Stocks are rallying across the board as mega-cap tech stocks help drive the gains in the market. Brian Sullivan and Kelly Evans are joined on-set by Michael Landsberg (Landsberg Bennett Private Wealth CIO) and Jay Peters (NewEdge Wealth Portfolio Manager) to discuss their market views and how investors should be trading the recent volatility. Yardeni Research President, Ed Yardeni, also joins the anchors in-studio to debate how Fed Chairman Warsh is handling his new position with CNBC’s Rick Santelli. Meanwhile, Entergy CEO, Drew Marsh, sits down for an exclusive interview to break down his company’s power pledge and the recent nationwide surge in data center demand that we’ve been seeing. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Tech stocks booming as many stocks recover in a big way. Welcome to Power Lunch, everybody. Really a monster day for many of the mega caps. The NASDAQ posting one of its best days of the year. Microsoft rallying as Meta Falls. Apple, Amazon earnings on deck will get all of that and much more in moments. Speaking of tech, the AI buildout is creating an unprecedented surge in power demand. And Entergy is at the center of it. The utility is partnering with Amazon, Meta, and Google to fuel the next wave of data center growth. the CEO, Drew Marsh, joins us exclusively. And the bond vigilantes are back. The 30-year-old surging above 5.2% highest since 07,

as investors question whether Fed Chair Kevin Warsh's hawkish words will actually translate into action. Ed Yardinne says he just failed his first credibility test. He'll join us later today. All right, so obviously it is a big day. It is a big hour. And I want to highlight a top story, one that David Faber broke earlier today and has been all over all day long.

It's a little bit complicated, but we're going to tie it together, folks, and make it make sense for you and why you care, even if you are not in the hedge fund world. All right, there's a hedge fund out in San Francisco. It's called situational awareness. Odd name, but that's its name. It's run by a 25-year-old wonderkind or former wonderkin named Leopold Oshinbrenner. And it is a bit in crisis after AI-related bets sank. David Faber, who broke the news, joining us now. And David, really appreciate you staying for Power Lunch.

Listen, I think, and I'm talking to other people, this is a market story. It's not only huge today. It probably was huge yesterday. What do we know right at this hour about exactly what happened with one of the biggest, and I think fastest growing hedge funds in the world? Yeah, I mean, as you say, Brian, also reflective sort of of the current period, certainly of a lot of the gettingness around AI, at least when it came to the stock market prior to July 1st and then the significant reversals we've said.

As you know, I reported earlier in your last hour, of course, this is a fund that had reached $45 billion in net asset value at the beginning of July because of so many levered and correct bets on so many of the different constituencies in the overall AI trade, as we describe it, Brian, and also a big short position on so many of the software names that we've talked about as being disintermediated potentially by advances. by the large language model. So that was at the center of this, but what also is at the center of it and something we've all seen, having reported for many years, was leverage and how it can work both ways. And that is, perhaps was something of a bit of a surprise to Mr. Ashenbrenner,

given that the fund suffered significant losses as a result of the reversals that we saw over the course of this month, where so many of the stocks that we have talked about for so long and had incredible a sense. Think of Mike Brown or a sandisk or S.K. Hinex went down, while many of these software names went up. And that caused a lot of pain, in fact, so much that his prime brokers led by Goldman Sachs, J.P. Morgan, Bank of America, said, uh-uh, we got to get you out. You're done. And you got to figure out a way out. And you know, you know what this, Brian, reporting, of course, on the oil markets and so many things, how things can move so quickly. And so there's been a lot of fits and starts here.

Yesterday, he was trying to figure out, well, can I create liquidity by selling someone by private investments led by a very large stake in Anthropic? That then moved to, well, now I've got to get out of my public investments, and they did that with that big deal to sell everything in the portfolio, other than the slightest bit, I'm told, to set it up, Brian. And so they now own all that risk, but it's been de-risk to a large extent. What's left at situational awareness is not an insignificant portfolio of private investments. It is still, I just got off the phone moments ago, based on the back of your reporting, David,

was somebody in the market who said situational awareness is still alive. The fund still exists. Maybe you're hearing different of the same, confirm, not confirm. It is still in existence, but it is wounded. Talk to us about the Ken Griffin factor. Also, Aschenbrenner, who I believe was scheduled to be married this weekend. His fiancee has a high-level job at the aforementioned Anthropic. that would seem to be a little bit tension building.

I'll just kind of leave it there. But do we know anything more about the leverage? The public filings on situation awareness show a lot of longs in tech, as you said, but also a lot of put options position. I think options were used heavily here. Yeah, a lot of that actually garnered attention sometime back when he showed these put options in his 13S. But as you well know, 13Fs are very much dated.

In fact, this is certainly dated. And a lot of those expired. they were done. So they were not having an impact in terms of really providing a hedge. He was hedging again or trying to through the shorts and software. And also this basket of CDS. It's another area, actually, we haven't really discussed yet today. The big moves we've seen and so much of the credit default swaps of so many of the big hyperscalers,

you know, there's baskets now being put together by some of the major investment banks that allow you to buy them as a hedge in part. And that can have an impact on widening the spreads for some of those corporates as well. You're right. Apparently he is still getting married, although it's unclear to me, but I believe he is. I've asked enough people, and that does seem to be the case. And yes, I believe it's bright to be as the chief of staff to the CEO of Anthropic. As for this reporting of what's left, yeah, these private, I mean, you know, it's a $4.5 billion stake in Anthropic alone, and then a number of others. So there is significant assets there, not on the public

equity side. pretty much nothing left there. But the privates will go on. This will be a firm. And who knows, given the incredible move he had and track record he had, at least for some period of time, Brian, he may be able to raise money again for public. He might. I mean, I want to be, and that's why the story I think is so important.

Not only there is a market impact, and I think one of the things that happened yesterday, obviously Kevin Warsh, the markets got rattled. I'm not sure what the chicken or the egg was, whether or not the markets fell yesterday because of this or because of Warsh, the markets fell, which, led to this. Maybe you could comment on that. I mean, we're speculating. I understand that, David. Either way, go into a little bit about what we know, and I'm sure you've heard the chatter, okay? There's the Ken Griffin aspect. There's the Citadel letter about the Fed raising rates. Citadel's buying some of these assets. Is it like the father saying to the son, I win? I mean,

what do we know here between these two, one who's been a giant of the industry for 20 years? The other one who is arguably the most important new hedge fund manager in America, if not the world. Well, I can tell you one thing. One of them knows how to manage risk. And I can guess which one. David Favre coming in from the top rope, by the way. That is about as aggressive as David Fabor is going to get. One of them knows that a managed risk.

Yeah, listen, I don't know about the whole Fed side of things. I'll leave back to you guys in terms of speculating around that. I do know that Citadel is one of only a handful of hedge funds that could even even pull something like this off in a very short amount of time, making a bid for the entire portfolio, both the short basket and the longs and getting them out of all of these trades. It's just, you know, you're not going to go many places where you get, maybe millennium. They had a relationship with Jane Street. Was that a possibility?

I don't know. But there aren't many of those firms that would even be capable of doing a trade like this. So, you know, you take advantage of that opportunity with your Ken Griffin, and he did so. The leverage here is fascinating. It always is. You do wonder on the prime broker's side, you know, what were the? they thinking four times, five times levered this guy was. They're not losing money. They're not losing money, but he got sold out, obviously, so his investors are not looking very good anymore.

Not sold to zero. As I said, your sources, I also have a source. The fund still exists. It is still operational. And to your point, it may rise like a Phoenix from the ashes. Do we know how much money they might have left from that $45 billion that you had reported they had? Listen, I had heard 10, that's what kind of I think the firm is sort of trying to get out there. I just don't know if that's a number that can be believed or not. Things are moving so quickly. I mean, I can't even begin to tell you the back and forth that I've gone through around the anthropic negotiations that apparently were taking place yesterday. For a while, I believe that they were moving ahead with that, and then they didn't. They backed away from it. So I want to, you know, you've got to be

careful with all this stuff again because it is a dynamic situation. But what we can say is Citadel now owns all that risk. They're doing really well today, by the way, because the reversals and everything as a result of that. And situational awareness is now a hedge fund, yes, but almost solely a private market investor with, you know, still significant amount of money more than it had when it started the year. So I'm sure Mr. Ashton Brenner, as he goes off to get married, can still feel pretty good about his own bank account. It's not a terrible bank account. It's still massive, maybe less massive than it was. I think this is a massive story. David Fabor, breaking that news earlier today, David, we appreciate.

you're staying for power lunch. Thank you very much. Of course, any time. Thanks, Brian. Let's get to some tech earnings now as we turn our attention to META and Microsoft, which reported last night, Amazon and Apple after the bell today.

Here on set with us, Landsberg Bennett, private wealth management, CIO Michael Landsberg, and New Edge Wealth portfolio, J. Peters. Welcome to you both. Michael, these earnings have been critical throughout the earnings season, but overarching that even has been this momentum trade,

which was horrendous coming into about today. and now has a lot of life to it. So maybe it's positioning related like we were just talking about or maybe it's fundamental, but how do you square these two things? I think a lot of it is the earnings have been good, but I think there's a lot of this talk

about what the CAPX is going to be. And I think there's been a pushback of the more you spend that's not good right now. And I think part of it's because investors are impatient. They want to see return on their CAPX. It's going to take a little while.

And I think what's happened is the companies that haven't pushed the CAPX button that more have actually rallied. And you've seen Apple hold up very well because they don't have a lot of So you think the market has shifted because for the last several quarters, it's always been, we want higher CapEx, we're rewarding the people who are raising that, and then you think this is the quarter in which that flips,

because Google sold off after they raised theirs, Apple on the sidelines is at all-time highs. Look at meta today down 9%. I know if it's too early to tell that. I'm going to look really at what happens with AMD next week and then InVIDIA, because those are ultimately the people that are getting the KAPX money. But I think it's a concern because I think what happens is investors get impatient with how much money can we throw at. And some of these stocks, as we saw with the last story, they've gone up so much that I think people are like, well, I can take some money off the table and not really hurt myself. Jay, how does Microsoft fit into this? Up 17% after what it said last night.

It's got the cloud. It's talking about people using copilot. I'm hearing people in the wild talking about how they've used co-pilot for projects at work now. Yeah. So, I mean, Microsoft has been the hyperscaler that's lagged, the rest of the group. You know, they've seen their valuation reset by more than any other, you know, P.E's down 40% from where it was a year ago. And I think what we got from Microsoft was, yes, a very healthy set of results, especially in the cloud segment. And also just a hint of a little bit more capital discipline going forward, which I think the market was.

So you saw a hint of capital discipline, which again, is that supposed to be the death knell for the AI infrastructure trades, which they've sold off hard coming into this. But now today they're all levitating again. They are. I think one of the takeaways is that Microsoft did not say we're reducing CAPEX. They just reiterated their fiscal year CAPEX numbers. They did say they're probably going to fund a little bit more of that from our. operating income as opposed to debt equity market issuance. I think that, you know, gives investors a little bit more of, you know,

comfort with the spending levels. And I think, you know, if it is a more disciplined cap-back cycle, maybe it's a little bit longer. That gives a little bit of clarity to all the beneficiaries as well. You can kind of model some of their earnings growth. We have, meanwhile, Michael, equal weight S&P, more or less at all-time high. So normally when we get corrections like this and whatever the market leadership area has been, you expect a broader sell-off, markets and turmoil. Instead, it's like a party.

And maybe it doesn't feel that way if you're Leopold. Colts Fund. But if you're in something, I mean, what was up? Coca-Cola was up 7% after earnings this week. I think part of it is there's a difference between the, we talk about diversification. I think there's to some extent, like the death of diversification from a sector standpoint. Now it's AI or non-AI diversification. A lot of people have bought AI tech stocks, but everything else they bought, industrials, utilities, have all been AI levered. I think that's why you're seeing the equal weight do well because it's got more of the stuff. So in other words, even the the industrials and those areas that benefit from this halo effect, the market saying, no, I still

want to go elsewhere. I want to be in the staples. I want to be in health care. And a legitimate non-AI is for diversification. If you really want to lower the risk, because we see risk management is a pretty important thing, as having things that are not, even the health care, don't buy AI-related health care if you want diversification. If you want to have a levered bet like situational awareness, yeah, buy everything that's AI, buy your cereal that's AI. But when you look for diversification, you need to find something that's going to really give you that. Hearing from folks in the market today, they say they would take what's happened with situational as an entry point, right? There's been a huge correction from the

highs. Now here's a big player that's being forced to the sidelines. Would you think about it the same way in terms of those narrow areas of leadership? Depends on the names. Okay. And when I look at our biggest hold, our biggest holdings in Vindia, we own 2%, 2 and 1⁄2% of Nvidia. I don't have 8%. You own 2% of a video? Yeah. Well, 2% is a portfolio. Not 2% the whole thing. I was going to say, wow, thanks for making the time. Be the richest man in the universe. It'd be Leopold Oshunds. I got his wedding in my check. Can I follow up on that?

Because, you know, we adjust. By the way, fantastic job by our entire show team and David Faber doing everything kind of, we're throwing stuff up on the fly here. I'm not going to ask you to comment on this story in particular guys and jump in, talk. But would the implosion or partial implosion of a hedge fund of that size and magnitude be enough to rattle these markets like we saw yesterday? So, I mean, I think of it as more is, you know, is this enough of a wash? out, an event that might be the one that really resets the positioning, that resets the sentiment. We've seen the incredible unwinding momentum over the last six weeks. I do think we're getting to a point where that positioning starts to look a little bit more normalized,

valuations on the stocks. As, for example, down to 19 times earnings in the last couple days. Let me follow up on that. I don't want to put you guys in the spot and go tell me to pound sand, if you want. I'm not offended. I've been told worse, yesterday, between yesterday and today, nothing's changed. Kevin Warsh's statement and Kevin Warsh's criticism around him. is the same as it was now as it was last night.

But the markets didn't tank yesterday, but they were down. It was a bad day, right? Worst day for the Dow in a long time. Tech sold off. Today we're rallying one of the best days of the year. Nothing has changed except for Microsoft's numbers. I don't think Microsoft's numbers are big, as big as they are, big enough to do what's happening today.

And I wonder how much this situational awareness story has moved the entire market in 48 hours. This is why I get told to pound sand. I think it's a great point. It's tough to know what's going to happen, given the fact that it was only 48 hours. And obviously, I was under the understanding with Warsh, I didn't think there was any chance that he was going to raise rates yesterday. I looked at a four and a quarter CPI a month ago to three and a half and got 35% of people thought he's going to raise rates. With the 75, it's a monumental drop.

Now, I think three, four months from now, if we see inflation start to peak up, I think you could see that. I think there's some lack of confidence in him. and he did talk sideways. I don't know what he was saying. It was like he was very circled for talking. Warsh. And that did put some concerns with the market. Today's rally, obviously, I think he had some people going and say,

listen, these things fell off a lot. You know, I'm going to buy those. But they are still up a lot. A lot of these names are certainly there. And it's a concentration where I think diversification is going to benefit some folks to look at other places. All right. Guys, stay right there.

Let's bring in McKenzie Segalis. We'll talk a little bit more about this Apple reporting after the bell today. In the period of Tim Cook's tenure from August 2011, the shares were up more than 2,000%. They do tell earnings after the bell, and it will be his last call as CEO. McKenzie joins us from Apple headquarters in Cooper Tino, as, again, it might seem obvious to some

that they stayed out of the whole AI race, but a younger CEO or somebody with less, Mac, they might have just said, you know what, everyone else is doing this? I better go spend $500 billion, too, and so far they haven't done that. No, they've had the exact opposite, You've got Tim Cook's final quarter as CEO coming as the company now trades at 35 times forward earnings,

which is a massive premium to the rest of mega-cap tech. But it comes as investors reward this decision not to build an AI lab in house. Baird saying that Wall Street is finally valuing the free cash flow that it once overlooked. Apple is still spending more on AI. R&D grew more than twice as fast as revenue last quarter. But its partner for a revamped Siri, Alphabet, is on track to spend $800 billion plus on models, and on data centers, while Apple spends just 11 billion this fiscal year, licensing whichever model works best in keeping the iPhone and Siri as the front end. Now, that helps Apple

maintain a cash pile that's upwards of $100 billion, which the company then returns almost all of to shareholders rather than pouring it into GPUs to chase the frontier labs. But there's a lot riding on the product side. A redesigned Siri, iPhone 18 Pro, and potentially a foldable phone all expected this fall. And after the bell, investors will also be listening to see if we hear from incoming CEO John Turnus, not just for strategy, but to take a measure of the man poised to lead the most valuable company in the world right now.

Guys? I think that's a great point. Mack, thanks. We just turned to Jay and Michael here for some reaction. Jay, what are your thoughts? Apple, in a weird way, has kind of come through this whole period as maybe a barometer of the whole markets again, not for the AI thing, but just as a reminder

that there's a lot of companies making a lot of money who can be a little bit aside from that trade. Absolutely, Kelly. And, you know, they have really been rewarded this year for being the more capital discipline company that they are known to be. Obviously, a big couple of years coming up for Apple with a lot of new products. I think some of that has been priced in here recently with, you know, as you see, this premium valuation.

I don't think the expectations for this quarter are actually that high, kind of on parable what we've seen in prior quarters. I think, you know, obviously the iPhone and success in China are going to be key to delivering, you know, a healthy set of results. But, you know, for us, a lot of what McKenzie pointed out is why it's so hard to be, you know, way underweight Apple. They're great at sort of managing through cycles, continuing to produce steady earnings growth. And, you know, ultimately they have this incredible, you know, customer lock-in and user base,

which they can always, you know, monetize. And then, Jay, can I pivot to another company that I love that you just have bought? Because I've been talking for two years about Howmet Aerospace. They won't come on TV, Howmet in Pittsburgh. We're here. We're nice. We should come on the show. They're very quiet.

This stock has been a quiet killer. This is like the Apple of Aerospace. How am I mean, that's actually a great analogy. You're welcome. They really do dominate the aerospace defense and turbine markets. This is a company known for capital efficiency, you know, incredibly resilient products. They're found in nearly 90% of aircraft around the world. And, you know, why we like it, not only is it a very well-run business, ultimately benefiting

from two real secular drivers, it's the aircraft kind of refresh cycle. We're seeing, you know, huge travel demand. The record orders for Boeing and Airbus are supporting. a massive cycle of equipment and parts, but also the turbine business. This is, Brian, as you well know, natural gas is becoming such a huge, you know, component of powering data centers, and these turbines are sold out for seven years. There's 100 gigawatts of backlog, and how that makes the most advanced turbine blades, which go into those G-Evenover turbines. And so we think there's a real secular growth story here. Yes, it is on the more expensive side at around 50 times

earnings, but, you know, that's a valuation we think has been earned by the competitive advantages in the secular story. All right. Gentlemen, it's been great to have you here. Thanks. Appreciate it. Michael Lansberg, Jay Peters of New Edgewell. All right.

We have already done a lot, but we have a lot more still to do. Meta doubling down on its massive AI bet. And we're going to get more on its key data center project called Hyperion in Louisiana. The CEO of the company that is powering. That massive data center, energy, will join us exclusively. But after the break, the great. rate debate. Ed Jardinney says Fed chair, Kevin Warsh, failed his first credibility test. Talk more about that with Ed coming up.

Welcome back, and the bond vigilantes seem to be back. The 30-year treasury yield is at 521 today, near its highest since 2007. And by the way, isn't that when the data is, I don't know. The Fed held rate steady. Double-line CEO Jeffrey Gunlock says the Fed may soon have no choice now, but to start hiking. Listen. I think that the inflation rate is not going to go to two unless they start raising interest rates and not by 25 basis points. And he is committed to that so forcefully that I wonder if he'll be able to keep rate stable in September. Gunlock isn't alone. Your next guest also believes the Fed may have to hike. Joining us now is Ed Yardini, president of Yardini Research. Ed, welcome.

Thank you. And you're saying in some ways, Warsh failed. Yes. his first credibility test with the markets here. So explain. Well, it's clear that the bond market is looking for the Fed to be more vigilant about inflation. And so the bond market, I think, initially, was very pleased when in June and again in July at the FMC minute showed, the FMC statement showed that there's a commitment to price stability. And Warsh stressed that in its press conference in June and did it again. yesterday, but at what point is he going to actually act?

That's what the bond market's looking for. Otherwise, the bombagelani's have the view that, well, if he's going to talk hawkish but not actually act hawkish, then they're going to have to continue to raise rates. The two-year note right now says that the Fed funds rate should be raised three times. I mean, that's quite something. This is the mirror image of what happened in the first meeting. The first meeting, it was, you know, he talked hawkish and, you know, the market seemed to kind of take that at face value.

now they're looking for more clarity. And again, when asked multiple times, does this mean rate hikes? He seemed to not want to say, yes. So what's happening here is not that people are saying you're being vague. They're saying, we don't think that you actually want to raise rates. Now we don't believe that you're actually going to do it.

And as a Trump appointee with the midterms coming up, they're putting him to the test. The only thing I can possibly imagine is that he did want to raise rates, but he didn't want to be a dissenter and he couldn't get enough votes for a majority. But I don't know that for sure. But he certainly has talked tough.

And if you pivot in June from easing to tightening as a stance, then I think by July you have to deliver. And the other thing, he's made it very clear that he acknowledged that the Fed has just been above its inflation target of 2% for, you know, he quibble over 63 months versus 64 months. So he knows that. So the statement was very definitive. We need price stability, but there was no follow through. Can I ask a question, which I hope isn't as dumb as it sounds? I'm almost reluctant to ask it because I just be nice. Just be nice on your answer.

I'll be nice. Is there a scenario? You referenced the two-year basically saying we've already raised rates. Yes. Is there a scenario where the Fed raises its Fed funds rate, it's overnight lending rate, and bond yields vis-a-vis the bond market go down? That's my view. Definitely.

Okay, so hopefully it's not, if it's dumb, then we're both. Right, right, exactly. Because we just associate the Fed with higher interest rates. Correct. But if they were to raise, is the bond market saying, come into the light, Caroland, the poltergeist reference? Remember what happened in 2024? They lowered the Fed funds rate four times, 25 basis points each time, 100 basis point.

And yields went up. I was against it because I didn't think the economy needed it. And the bond market agreed with me, my friends of bond vigilantes, took bond yields up. Took bond yields up 100 basis points. So did the Fed really ease? Can I bring Rick in here? Because I think he has a very different point of view on this. Let's hear it.

Rick Santelli, standing by. We often have you grading bond auctions, Rick. But today you're grading Kevin Warsh. And unlike virtually everybody else, A plus, why do you give him an A plus? Look at what's happening with the long end. Yeah, what's happening with the long end? Exactly.

First of all, we shouldn't call him bond vigilantes anymore. I know they're a bunch of old guys, but we should call them note vigilantes. Forget the 30-year bond. Peter Fisher got rid of it in 01, and he's on a task force, and he got rid of it because they thought we're going to be in surplus years. No, it's the 10-year note. That's what mortgages. That's where the money ball is.

And I'll tell you why. Fiscal dominance. We know what fiscal dominance is. It's when the administrations of every president, the last four, spends way more money than they take in. We're currently 6% debt to GDP right now. now when the average over 50 years, and Ed knows this is 3.8%. The vigilantes are watching out for our grandkids. Why do I have a problem? It's a great thing that rates went up on the long

end and they went down on the short end. That, to me, screams that Kevin Warsh is on the right track. To me, budget deficits, fiscal dominance, where money just, we just printed at random with every other country, debt issuance. This is. about debt and deficits. And to see the long end firm to me is a very good thing. And why would we want to raise rates, okay? To make the short end go up, we mostly been borrowing in T bills, slow down the economy that will exaggerate the size of the deficits. My grandkids probably gave me an eight triple plus. So Rick, let me just, let's, if we can show again everybody, the two-year chart and then the two's tens, maybe the two-year came down a little bit, but it's still,

it's still high. I mean, it's still pricing in a couple of of hikes. This reads to me like a classic bond. We've gone from 24 basis points to 44 basis points in a month on the 2's 10s. That screams to me that the market likes what's going on. Well, because classically a steepening would be a good sign for the economy, but if it's steepening because the long end's worried about debt and deficits, wouldn't that be a bad sign? Why is it a bad sign? Do you want us to keep spending like we're drunken sailors? Somebody needs to be the adult in the room, and it's the note vigilantes. I don't think they had a problem yesterday. They're doing their job. Now, today, the market's got a bull steepening going on where all rates are going down. The two years going

down much more dramatically. But these are good things. I hope it continues. And I'm, go on. Listen, this is an area that it does not, you know, I bring this up. We talk about this all the time. What's going on with the deficit? And everybody just glosses it over and shrugs it off. And we say, could this be why the economy is strong? Not anymore. Not with wars. It's not getting enough attention. In other words, you think, by refusing to commit to rate hikes, but still saying they take responsibility. He refused to commit to rate hikes. No, no, no, no, no, no, no, no, no, no, no, no, no. The market said 30%.

He went along with exactly what the market wants. Yesterday, the September meeting was over 70%. What is it today? About 60%. I have no problem before us, and the data look like we need to raise rates. But I think hire for longer is a very good objective at this point, especially with all these supply shocks unsettled as to whether they're going to metastasize or not. To me, the bigger worry isn't the mid-east.

The bigger worry is AI and corporate issuance, and I think the vigilantes priced that in better yesterday as well. And I'd love for your response on this, but is it possible that what he's trying to pull off to Rick's point is saying the Fed's not the one causing this inflation can't fix it, it's the fiscal deficit, and trying to push that over to, I guess, the president to deal with. But he's the one himself who keeps saying the Fed has to take responsibility for inflation. I think Rick makes a lot of very good points. My view of the deficit and the debt is it's generational theft. So I agree with Rick. We're basically passing on all this debt.

As long as we can get away with it, we're going to continue to do it. I don't think a 4.6% bond yield is going to convince politicians that we've got to do something about the deficit. And I think, you know, I have to focus on what Warsh is actually saying. And what he's actually saying is that he wants price stability. He's adamant about that. And the question is, what's it going to take? I guess, you know, he could say, well, we got, he didn't even say that the June number was pretty good because he said, we're not going to take any individual number, which is, makes a lot of sense. But he stressed price stability and he stressed that we've been over the 2% price stability level of inflation for five years.

So when are we going to get around to it? Rick, I do wonder, does all of this go to this idea, this general sort of thought that the Federal Reserve is going to come to the rescue? Like they're going to solve all of our problems because they're going to raise your lower rates and fix everything. The house was on fire. It was set on fire in large part by supply side disruptions, COVID, and then trillions of stimulus, another trillion-dollar plus stimulus package in 2021.

when we were coming out of COVID when most of the U.S. economy was running full steam, surprise and sort of weird rate cuts in the fall of 2024. And now we're looking for Kevin Warsh and the Fed to kind of put the fire out. It's like they're running up with buckets of water. I just wonder if we're overstating the Federal Reserve's role in what we can do. Why should 17 guys be the firemen? Why should 17 men be the firemen, men and women? You know who the firemen are?

all the people that have capital at trade every day and put the money at risk. And to see the risk parameters go higher in this time is a good thing, not a bad thing. And when I see a little extra volatility, that's fine. To me, the Fed smoothing things out isn't necessarily a good thing. And maybe if we had to take our medicine better in the credit crisis or the tech wreck, we wouldn't have sidelined so many houses where nobody could sell their house because they can't get a mortgage, but is it really about rates? You know what it was about? It's about the price of a house by keeping rates too low for too long. All the money went into real estate because anybody and their brother could buy houses. But the damage is done. I don't know what they're going to do.

Is my point, Rick, I think we're agreeing what are they going to do? So we're going to keep, we're going to keep the same flawed people in charge some more, give them more power. The central bank was never meant to do this. They were never meant to do this. The monster from Jekyll Island It's supposed to be a central bank. They're supposed to nudge rates. They're supposed to monitor crisis issues. They're supposed to do things when things get, the gears start to grind. The gears aren't grinding right now.

Everything is going pretty well. I think let the market do the heavy lifting. That's what Warsh wants. And ultimately, when all the hissy fits end, because people like to be led, like to have things easy, then you'll see how much better off in the long run we all are. A quick final word, a coda on all of this, Ed, if you could. Well, look, I think Warsh has made it clear that he would like to provide much less forward guidance so that the markets can provide the guidance to the Fed.

And you can't kind of have it both ways. You can't say, well, we're going to let the market be more data dependent without being distorted by what we at the Fed think. And we're going to take our message from the market. And yesterday you say, well, maybe not so much. But then not take your message from the market. I mean, I'm not going to take the message from the market. And right now the message from the market is pretty clear that the Fed funds should be raised.

And it's really all the market. No, I disagree. Why do you say that, Ed? Ed, why do you say that? What if two in your note rates continue to drop at their current pace? Well, we're still, what, at 4.2, 4.25 percent? Yeah. I don't think it's out of the realm of possibility to get another 25 or 30 basis points lower.

We're 75 basis points above the Fed funds rate. And basically, I think what the – Right. I think what the two-year note is saying. So term premiums are expanding. Is that not impossible? Well, I think what the market is saying, that the three rate cuts last year were a mistake. Last year, we had three rate cuts.

I wouldn't disagree with that at all. I was totally against them because, look, in 2024, I said, don't lower rates. The economy doesn't need it. And the bond market went up 100 basis points. So they didn't listen to me. And the bond vigilantes offset the easy. in 2025. They did the same thing.

I didn't think we needed the three rates. What was the 10-year one week ago? It's about exactly where it is right now. I don't see what the big hissie fits about. No, I think that you're right about that. But I think Bonneals are where they should be, by the way. I think that they're kind of normal. But I'm just looking at the two-year note of vigilantes, as you call them.

and they clearly are saying, you know, put up with your hawkish talk or no talk. And plus, you know, the spread between Fed funds in two years is distorted because of all the manipulation. How do we know what smoke signals are with the markets anymore? It's worked really well in the past. You know what? It's a smoke signal. We're seeing the markets actually come alive and ultimately they'll tell us and they'll tell the Fed what to do. Sometimes smoke signals are the right way to go.

They're going to have a variety of ways to communicate. They're going to have a variety of ways to communicate without forward guidance. Gentlemen, thanks. Thank you. This, honestly, it's, this kind of debate, maybe without the grading, but is exactly what everyone's talking about. Rick, thanks. Appreciate it, Rick Santell. By the way, the NASDAQ 100 is up 3%, so everything's fine.

Everything's fine. Please note sarcasm. I'm not, I don't mean that sincere. The economy is doing great. The economy is doing well, by the way. Thank you for saying that. findings are great. The AI trade is volatile, but the AI spending is huge. And by the way, the cloud computing revenues are huge. And finally, the backlogs are huge. The hyperscalers wish they had the compute right now to deliver the demand. So I think the economy's fine. But the Fed? Well, we'll wait and see. Ed, thanks. Ed Yardinney. Still ahead, our exclusive interview with EnterGies.

CEO on powering Meta's AI buildout like we were just talking about at this data center boom. But first, today's top headlines right after the break. Welcome back. I'm Deerbosa with the CNBC News Update. Investigators reportedly think cyber attacks this week on dozens of water systems across Minnesota were likely the work of Iranian hackers. But according to the New York Times officials caution, this is just a preliminary determination that could change and that there's no indication any water supply was rendered unsublished. safe to drink. Elon Musk is reportedly planning to spend between $100 and $120 million in the

midterms to help Republicans win in at least eight states. Axios first reported the news on the New York Times says the super PAC run by the world's richest man will initially target Senate races in Alaska, Iowa, Maine, Michigan, and Ohio and likely expand to North Carolina, Georgia, and Texas. And Health Secretary Robert F. Kennedy Jr. today announced he is launching a new cooking show with celebrity chefs where they will promote, quote, real food at affordable prices. HHS says the show will primarily feature meals that can be made for $5 a serving. More power lunch right after the break. All right, welcome back.

Let's turn now to one of the companies helping power the AI revolution. That is Entergy. It is a utility, and it's at the center of the AI buildout. It will help power META's massive new data center campus under construction in northeast Louisiana. So can the grid handle it? And will everyday customers benefit from this AI boom? And what about the public pushback? Joining us now on another Power Lunch exclusive is Intergy, CEO, Drew Marsh.

Drew, welcome. Glad to have you on the show. Listen, there's a lot of public pushback, a lot of criticism about how this deal may have come out. I know Richland Parrish. I've been in Natchez, Mississippi. It's kind of up against the border there. Wonderful people. The economy needs help.

I think you would agree with that. What is this going to do to the local? economy, there was some money given to teachers, how much will this matter to the people of an area where literally the reservoir is called Poverty Point? Oh, Brian, thanks for having me on. It's great to see you all again. It's going to be a massive, massive improvement in the local economy there. Already they're seeing the effects of it. Richland Parish sales tax collections are up triple digits over last year. And as you mentioned, that's given rise to things like the teachers getting up to $50,000 bonuses this year.

And that's taking them from some of the lowest paid teachers in the state of Louisiana to the highest paid teachers in the state of Louisiana. So it's a massive impact. And it's not just in Richland Parish. You know, the surrounding parishes are seeing tax collections going up 20, 30, 40 percent over last year because of the metadata center. So it's a big impact. And the planet isn't even there yet.

it's just getting started in the construction. Yeah, can you give us an idea of where this is in construction, Drew, because also there have been a couple, not many, but a couple of data centers that have wobbled a bit. There was one in Wyoming, which was canceled. Do you see any wobbling on this deal, or is this going to definitely be built? Oh, yeah. It's well under construction steel coming out of the ground. And, you know, it's a very, very.

large site. As META has said, it's 5 gigawatts of compute. It's a massive site, and there are thousands of people on the ground today helping make it happen. Drew, in the PJM area, the New York Times reported recently that people had paid billions of dollars more in power bills because of the data centers. You're saying that data centers will save $7 billion for energy customers in Arkansas, Louisiana, and Mississippi. What's the difference? Well, we are still vertically integrated, and so we are providing all the generation for our customers, all the transmission and the distribution. In the case of the data centers, they are taking generation and transmission, and they are paying for all of the incremental costs associated with serving them. In fact, we have a name for, we're calling it the fair share plus pledge that we have.

And the fair share is that they pay all their incremental costs, and they pay their fair share of fixed cost. that our existing customers are picking up every day. Things like storm costs, resilience costs, overhead costs. And that adds up across Louisiana, Mississippi, Arkansas, to the tune of $7 billion over the life of the contract. But this sounds great, but I want these savings. I live in New Jersey, and I don't understand what's the difference between your approach and theirs because they have the Pennsylvania governor suing them.

We can't build. Over what happened. Is that the difference? We're buying power from Pennsylvania. But so, Drew, can you explain this? Because I think people in different parts of the country are having dramatically different experiences with this. That's right. We still are a rate regulated and vertically integrated company. Up in the PJM market, Generation is a different market. It's split off from the transmission and distribution. And so that's really the difference.

We can have a completely integrated conversation on generation and transmission technical needs to serve these data centers and ensure that all these costs are, met by the data centers and also move very rapidly to help them get up and online. Can you, listen, general media has been some reports that come out. They don't like how this, people go after how these decisions are made. We're C&BC. We focus on different things. But how do these decisions come down to a utility like you? They go through the governor, local officials, state officials. I would imagine this thing, everybody's involved, right? A deal this big is not like two people in a back room chomping on a cigar making a decision. Because that's some of these calls are getting painted in parts of the media like that.

Like it's a couple like a monopoly guys in a back room with Professor Plum and a candlestick. That's correct. I mean, I don't know the exact number, but my guess would be hundreds of people were involved in various parts of making the decision. And, of course, for our part, we're, as I mentioned, we're regulated. And so there's a public service commission review, and people are part of that intervener process. And they can see the documentation and everything that goes along with the power part of it, at least. And so there is a lot of transparency in the power and the energy portion of this from our side. Drew Marsh of Energy, and I got to apologize, Professor Plum.

It's usually Colonel Mustard, who's fact. I found guilty, but, Drew, we do appreciate your time clearing it up. And I know for the folks in Richland Parish, a lot of these jobs are going to mean a whole lot for them and their family because there's not a huge amount of economy up there. Drew, thank you very much. Thank you. Insightful. Up next, sticking with the AI buildout, our market navigators top pick is an infrastructure play, trading at a discount. We'll reveal it after this.

All right, welcome back. Just like in the last segment, the debate over data center. and AI continues. Our next guest says that rising equipment demand will continue to benefit one stock in particular. We're speaking with Jed Ellerbrook, portfolio manager over at Argent Capital Management. So, Jed, we just heard a whole segment about powering the AI revolution. Now, there are companies building the infrastructure. Your pick is one of them. Take us through the reasons why. Hey, Dom, thanks for having me. Yeah, we think United Rentals is an outstanding business. They're gaining market share in their industry, which is equipment rental, and demand.

is expanding thanks to mega projects across the United States. So semiconductor manufacturing facilities, data centers, battery, you know, manufacturing, etc. How exactly do you reconcile that particular thesis against the analyst downgrade that we saw from Baird yesterday over Caterpillar because of the moratorium in New York State and what it might do to other jurisdictions thinking about data centers or fab equipment type plants? Yeah, there's no doubt that.

that the cost to build a data center is going up and the hurdles to getting it permitted and approved are growing as well. But these are problems that money solves, I think in many cases and the big tech companies that are building these data centers like Google, Amazon, et cetera, are willing to pay higher costs to get these data centers built.

All right, so United Rentals, your thesis. Jed Ellerbrook and Arjun Capital, thank you guys very much. And we got more power lunch ahead, so keep it right here. We're back after this commercial break. All right, it's a monster day for big tech. I know closing bell is going to have a lot more in moments,

but don't forget Apple and Amazon, those earnings are out tonight. Amazon's up 5% apples down a bit, but we'll see what happens. The NASDAQ 100, Kelly, one of its best days of the year. Incredible to see these. Microsoft up 17%. You know who's not popping? Maybe the way they had hoped was Jersey mics. Take a quick look at this. Again, aficionado here, not just because I'm hungry right now,

but I am daydreaming. I used to do the chicken cheese steak or do the little Jersey mics with the extra the EVO. Anyway, the shares are down 6%. It priced at 23. It's at 21 and change. Still marks one of the largest restaurant IPOs we've seen. I think the focus is going to be on maybe deliveries and iPhones,

not subs at least for now. But guess what? Folks, huge day for Big Tech. I know the closing bell, Scott, the whole team's going to have a lot more on these numbers. Big day. Thanks for watching. Power Lunch, everybody. 6.06.

Closing bell starts right now.