Power Lunch - Treasury Yields Rebound, Crypto’s Comeback, Wall Street’s Biggest Bargains 7/20/26

Episode Date: August 20, 2026

Stocks are falling as treasury yields continue marching higher despite the Treasury Department’s extraordinary debt buyback operation. Kelly Evans and Brian Sullivan speak with SMBC Americas’ Joe Lavorgna and Robinhood’s Stephanie Guild on the state of the markets as the national debt crosses the $40 trillion benchmark. VanEck Head of Digital Assets Research, Matthew Sigel, also joins the show to give his long-term outlook for Bitcoin prices as the Senate gets set to vote on the highly anticipated Clarity Act next month. Later, KKM Financial’s Jeff Kilburg speaks with the anchors on which stocks he believes are the most underpriced compared to their Wall Street price targets. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks are sinking, yields are jumping, and the bond market apparently not buying what the Treasury is selling. Welcome to Power Lunch, everybody with Kelly. I am Brian. The bond sell-off reigniting even as Secretary Besson defending bigger buybacks right on our air. Robin Hood's Stephanie Guild, SMBC's Joe LaVorna, former White House insider, and Pimco's Jerome Schneider, all here to weigh in on what's going on. Plus, crypto comeback, Bitcoin back above 70,000, crypto stock surging, and Trump giving the clarity act. a fresh push. We'll debate where crypto goes from here with Vanek's head of digital assets. And retail earnings are in full swing. Jeff Kilberg is shopping for upside, not getting it in Walmart today. His list of best buys right now. Yeah, so we've got a lot to do today. But let it start right

here in the bond market because yields, they're rising again, reversing yesterday's decline. This despite the U.S. Treasury's bigger than expected buybacks. And if you've been watching or listening to NBC in the last couple of days. You know that our friend Rick Santelli has been fired up. He joins us now. Rick, you've been very, I will say, passionate about what's going on in the bond market. You've pushed back about what some people in the market have been saying. What exactly right now are you so worked up about it that you think maybe others are getting

wrong in the market? I don't know who's getting anything right or wrong. I didn't get that memo. All as I know is that I'm a lot more fired up than the Treasury market is. The Treasury market isn't fired up. Can you see that that change right now, Brian, on crude oil? October. Do you see October, the new lead contract?

How much of a percent is it up today? Do you see? I'm not looking at, there we go. It's up 2.03 percent, Rick. Wouldn't you suspect that that might push yields up a bit? Yes, so you think oil is leading the bond market rather than the other way around off? Oh, absolutely. And I think that to try to push this on a memo that's going to potentially raise the buybacks, and the Treasury Secretary said it much better than I could this morning, it's August and those are thinly traded.

And when he talks thinly traded, there's only three maturities he's earmarking, tens, 20s and 30s. He certainly isn't talking about tens. He's talking about 20s and 30s, and it's hard to disagree with that. He is, after all, the Treasury Secretary. This is in his perfect. view, and I don't mind a more proactive Treasury Secretary compared to the status position of many of his predecessors. But I know that there's some smart people out there, like our friend David Zervos, of Jeffreys and others who would say, well, he's really the only, quote, bond vigilante. I know he don't love that term, but he's the only bond vigilante that really matters

right now. But I think what's catching the market's ears and eyes, Rick, is that this buying announcement by the Treasury came just two weeks after a refunding. And I think the timing of it is what's capturing some people's imagination, for lack of a better term. Yeah, no, once again, it's hard for me to weigh in on a topic where I just don't see that the market's bearing any of this out. Now, to think that you couldn't find Fed officials or you couldn't find traders at trading desks that don't like this or don't like the Fed, absolutely, I'm sure there's boatloads. It doesn't mean their interpretation is the correct one.

And let's draw attention to maybe something nobody's pointing out, but it's always a big deal. I've been doing this for a long time. Midterms are coming up. It's silly season. Rick, we will see you in a moment with a special guest, no less. Let's get a variety of perspectives here on these stories today. Let's bring in two voices to weigh in on this debate over how Treasury, what its moves mean here. Stephanie Gild is the CEO of Robin Hood Markets.

And Joe LaVorne is SMBC America's chief economist. Welcome to both of you. Joe, let me start with you, okay? What is your take on this whole thing? Kelly, thank you. Most of the route, most of the sell-off or rising yields occurred from last October up to May. And that reflects the fact the economy is very healthy. U.S. economy is booming, especially relative to the other industrialized countries. In the last couple of months, we moved up from 450 on 10s to 470. But these are kind of more normal levels, Kelly, and the equity market has performed very well.

I don't disagree. But Joe, here's my point. This is exactly what Neil Hennessy said an hour ago as well. There's no panic except by Treasury. No, I don't think there's a panic. I think that the Treasury market, there's been a desire for some time. It's for private market participants. Why a Treasury to increase buybacks for liquidity purposes?

So that's not to me unusual. The secretary was clear today in his comments that given the outlook and trajectory for revenues, especially from the tariffs and the fact that the expensing related to one big, beautiful bill, has cost money technically, but these are investments in the future. I wouldn't get worried about yields at these levels, Kelly. It was out of the ordinary. I'm not. I'm not worried about yields at these levels.

Again, the stock markets at all-time highs. It's notable that they're at these levels. It's notable that on Wednesday we hit a two-decade high on 30-year. The next day they come out with this announcement, usually these announcements are made during a refunding. We just had that two weeks ago. No, they are, but I think, yes, but here's a thing. The market has sold off to reflect a much better economic outlook. And I think that is really the key point that one has to look at.

And, you know, we've been at these yields before. Yes, you say that the highest in 20 years. But again, we had a period of zero rates and forward guidance for the better part of a decade and a half. So we're going back to a more normal regime, a regime that is much healthier for the U.S. economy, where you get some wage growth tied to productivity. Those are all positive. So I think that, you know, we have to put it in the context of more rates work for the better part of the last decade and a half. We're going back to more normal levels.

I don't know. I don't know how issuing more bills is taking us back to more normal levels. But if you're looking at the bills, Kelly, we've historically issued between 20 and 25% of net marketable issuance has been in bills. That's where the Treasury is going to go back to. Now, if it turns out the deficit is much worse, then, yes, the Treasury will have to increase more supply in the coupon side. But we're going back to bill issuance levels that are normal in line with historical average. To your point, Joe, listen, the 10 year, and let's focus on 10 because there's no new 30s. They're kind of their own thing.

the 10-year has been the most stable, really it's been in a range for 20 years. I mean, the last time that we saw a four-year period where yields were less than 1% of a swing was, I think, the mid-2000s. Now, maybe that's a bad reference given what happened at the end of the 2000s, but you get my point. But let me ask you this more directly, Joe, do you think Treasury is stepping in and doing what they're doing? Don't call it QE. It's sort of a twist version. they're doing it because they're afraid 10-year yields will hit 5%.

And if yields hit 5%, that will hit and hurt the stock market. No, I don't believe that. No, I don't believe that, Brian. I believe the secretary is very forthright and honest with what he's saying. And when you look at the sell-off in yields, it happened, or this sell-off from last October, we hit our allow during the height of the government shutdown, and it's been a very orderly rise in yields since then. And again, that largely reflects much better growth prospects.

Because as Secretary mentioned today, you look at real yields, that's what's been driving most of this sell-off of the rise in rates. Tips, break even inflation expectations have been stable. So it's been a real, almost a monotonic rise over the past seven, eight months. And therefore, I don't think there's any panic or worry on Treasury's behalf. They're trying to make sure the market liquidity conditions are healthy. August typically is a very quiet month. this August may be more quiet than normal. I don't see anything in Congress here.

Joe LeVornis, why we have you on, though. We're trying to clear up exactly what's going on. There's a lot of headlines out there. But Joe, we help you. My headlines, and I think, Brian, people are getting a little bit too worked up over things. They probably shouldn't get worked up over. Fair enough, but Rick was worked up on this show yesterday. Kind of yelled at Kelly this morning on Squarckbox.

Rick gets worked up over a lot of things. There we go. It's mid-August. It's hot. It's going to rain again. I'm going to get worked up. Joe LaVorna, thank you very much. All right.

We've got it. Stephanie Gild's CIO of Robin Hood. And we're not going to ask you on the machinations of the treasury market. Stephanie, don't worry. I know you can. It's part of the market. It is. And let me ask you, because I know you've also got like the cool list of what your clients are buying.

But let me ask you as the CIO. Do you see the Robin Hood clientele worrying about bond yields right now? And if so, how would you measure that? What would you look at as a CIO to know how the bond market may be impacting this? stock market? I think a couple things. One is I think the bond market is now like the stock market in that in the short term, it's a voting machine and long term. It's a weighing machine. And what that means to me is that you can't necessarily control. Like when you see the five year, five year inflation measures, not really moving, but the 10 year going up, that means real yields are rising.

And it's really hard to control. Yes, we are in a seasonally, you know, kind of quiet period. Everyone's on vacation. But I do think that the signaling from the treasuries that they aren't comfortable with higher yields, and they can't be when you have $40 trillion of debt. I would say doing what, I will editorialize and say that what the Treasury Secretary is doing, and I don't want to put words certainly in his mouth. But I asked Joe, is he worried? Do you think he's worried? And Joe's a former White House insider that yields will hit 5%.

He said, Joe said no. I think Treasury Secretary would probably say no as well, but are you? Because there have been people on the show that have said 5% might be sort of the breaking point for that weighing machine. Any continued rise is going to be a negative on the fact that you have bond issuance rising. You have doubled the amount of corporate bond issuance this year than you had last year. Most of it is coming for the AI buildout.

And the fact that you have the AI build out, which is fueling the growth, you know, the strong growth that we have, you have to make sure that things are going to keep moving that way. Otherwise, you're going to lose the growth too. And that's not a good idea. But in terms of our customer base, you do see them being a little bit more careful about the longer duration stocks, the things that, like, don't necessarily show debt today, right?

And they step into things that go down a lot. So, like, you know, Broadcom was down a lot because of the semi-analysis piece. Like, they were stepping into that. They were buying SpaceX when it was down a lot. Like, those are the longer-duration names that when they sell off enough, they use that as an opportunity. Where else would you be looking?

You know, I think it feels like we're already moving on to get ready for Anthropic. Could be in a month. We're still digesting SpaceX. and it's going to be anthropic. I mean, this is where I think a lot of the Robin Hood users are, although we were talking to Steve Cork the other day, who said, they were kind of in Google and Apple, like you said, broadcoming things that almost have a little bit more of a value meant to them. They were selling stocks over the summer. It's kind of unusual.

Yeah, they were, especially in July when things were just feeling like a little bit more nervous-making for everyone, I think. I think the most important thing is like when you look at the, you know, when you look at kind of options market, skewed being very low, I think Vicks being really low. low. These are all signs to kind of be a little bit more cautious. And while buying is back in our customer base, you're not seeing it as strongly as you were maybe earlier in the summer. And they are like today, you know, Walmart's down, not earnings that were a little bit more to-down 9%. That's a big move for Walmart. This is this kind of- They're rolling back prices.

It's the kind of opportunity that our customer base actually looks for. So tomorrow, you might, you might see action in Walmart on Robin Hood. You might. As people, you might, are you winking? Like, what's happening, right? I'm just saying these are the, like, we see big sell-offs. That's when they make their moves on the buying side. And then when things are up a lot, they take profits. All right.

Stephanie Guild of Robin, I really appreciate your insight. Thank you. Appreciate it. All right, now let's get back out to Rick Santelli. He's got more action in the bond market. He's also got a special guest. I don't know if you heard anything that we just talked about. You might want to jump in on that as well, Rick.

Absolutely. Thank you, Sully. This is Jerome Snyder, managing director of Tim Cohen. the way, you know, every Monday, Tuesday and Wednesday, when we see all those humongous-sized tebowl auctions, you know who the biggest player is? Right here. This is him, right here. All right, Jerome. Sullivan and the world want to know what you think about the buyback announcement yesterday. That memo, not really an intervention. No actual bonds were bought yesterday. But what do you think?

It's a signaling effect simply that the Treasury is paying attention to what the bond market is doing. It's their job. It's also their job to issue debt. So we should be focused on the macro of what's going on in the economy, number one. And number two, what's really creating this upward momentum and rates? It's a fulcrum of several different things. Number one, lingering inflationary concerns that are participating into the economy for the war. Number two, we have a competition for capital that's evolving. Huge. Not only from the private side, which we know from the AI demands on the equity and debt side, but globally on the fiscally public side. Not just the United States, but globally there's a demand for this. And so when we think about these two things

together, the term premium, which is the third element, is really pointing and pushing rates higher across the yoker. Look at the 30s to 10 spread. These spreads are all widening. It is widening, but in context, again, Rick, is very important. Rates have only increased across the curve 10 to 12 basis points over the past three months. So having a calm and methodical approach to all the signals and discussions that's going on in the Fed, in the marketplace with traders, it's a rational discussion. Now, that's a good place to start our second tour of question here. What do you think of the war is fed near-term versus medium to long term. Well, near-term, everybody's expecting more volatility because the lack of discovery, et cetera.

The longer term is probably a lower volatility environment. Well, why is that? You're going to have a methodology that tackles the two main points, inflation and growth. And at the same time, you're going to have a more flexible Fed that probably has some opaque optionality to it, but ultimately leads to an environment where they can react quicker if they do need to react. Okay, now, bills, as I pointed out, you make the bid to cover in these.

auctions, you create where the one-issued market is ultimately traded. What do you think this massive issue of T-bills in the big picture means in terms of how the Fed and the Treasury look at the yield curve? So I think ultimately it's a fiscal issue where they have to think about an even issuance across the yield curve. And they've done that with the three funding announcements. They're also, it had the incremental needs and financing, which clearly come in the T-bill issuance. We've had over $450 billion in incremental T-bills within the past three months and another $200 billion over the next few months. It's more important, though, as an investor is recognize, investors want an optionality.

They want to make money on their cash. They can do that in bonds and fixed income in not only notional returns, but real inflation-adjusted returns. And so while all this uncertainty is happening in the marketplace, it's very easy to earn on your cash 5 to 6% in short-duration-duration-type of strategies, and more importantly, broadly derive income in a real inflation-adjusted returns across fixed income. That's a lot of a more rational approach to take and not necessarily react to the next Fed meeting, the next announcement that comes, or even traitor discussions that happen on a day to day. Okay, we're out of time. So I'm going to ask you one question, short answer.

Do you think the Fed's going to raise rates at set meeting? Well, unlikely we think they're on hold for the remainder of the year, but it's obviously dotted. That's it. Stop. Remain on home for the rest of the year. Gee, I've heard that somewhere before, like at home, 20 times a day coming out of my mouth. Back to you guys.

Who are you telling that to at home? Like, Rick, who are you talking to when you're, who's asking you? My kids, the generation that's getting, you know, not, not. getting treated well with the generational theft going on. They're the ones I talk to. He almost said something else. He said they're the ones getting worked over. I think it would be the polite way to say it.

Yeah, you did. Almost. Almost. But the lawyer in my brain worked. I saw it. I know I could see it even from here, even though you're in Chicago. Rick and Jerome Banks, appreciate it. We have a lot more plan this hour. Crude oil prices are creeping back up again.

How high are they headed? We almost touch 90 today on WTI. And a big question of the moment, can the market handle more mega-cap? tech IPOs. We have a banker and a tech insider here to weigh in. And some discount shopping. Our trader has some bargain picks for you. But first, crypto prices are surging again. Is it time to buy back in? That's next. Here's something we haven't said in a while. Crypto is rallying again. Bitcoin is back above $72,000. After the Treasury Department surprise announcement yesterday,

boosted risk assets, you could say to basement assets. Anyway, that isn't the only catalyst. for crypto. Coinbase CEO Brian Armstrong joined CNBC this morning, sounding confident about next month's Clarity Act vote. I'm pretty optimistic. It'll get over 60 votes. And I think both sides got 90% or so of what they want, which in any deal I've been a part of, that you say yes to that deal. Well, prediction markets aren't sharing his optimism. Calci is pricing in just a 23% chance that clarity becomes law by year end. Joining us now as Vanek Funds, head of digital assets, recent search Matthew Siegel. Matthew, good to see you.

What odds would you give it? You've been prescient. I noted when Bitcoin started rally again, I remember you telling us to maybe look for a little bit of that upside. But what would you say about clarity at this point? I don't think this move is about clarity at all. I think this is all about what the Treasury has done, and it is reigniting these fears of fiscal dominance.

I heard your last guest say that, key bills as a percentage of the marketable debt is is normal range i disagree with that the treasury's own advisory committee recommends t bills around 15 to 20 percent of marketable debt we're at 23 percent and going higher so as the treasury finances more of that debt on the short end it hits the fiscal balance immediately it makes keeping rates high increasingly expensive something has to absorb that pressure. The market's telling you it's the dollar. And over the last 15 years, the only persistent correlation that Bitcoin has shown is a negative one with the dollar. So, you know, we think this ultimately means lower real rates, a structurally weaker dollar.

And Bitcoin is one of the best hedges you can find on that dynamic. So I don't think the market's looking at clarity right now. I think you just said it perfectly. I think you just perfectly encapsulated why we've seen the move the last day and a half that we have from the Treasury's announcement. Everybody else says that people like me are overreacting. I don't think so. I think it's a big deal what they're doing. Now, we might disagree about whether that's expressed in Bitcoin or in gold or what have you. We should show the dollar as well, the DXY maybe. And this is why you look at Japan and what happens. They're capping, what can happen with rates? And so people are shorting the currency. They're pushing it lower. I don't want the

same thing to happen here, but you're positioning for it. I mean, you know what I mean? We sort of feel like that's the path that we're on. Is that right? Yeah, I think it's easy for policymakers to handle a slightly weaker dollar and a little bit higher inflation than it is an exploding budget deficit. So I think it caps rates and that's where Bitcoin shines. And the interesting thing about it is for Bitcoin is that it came at a time when given the four-year cycle, Bitcoin was already looking very late in its correction. The average bare market is about 12 months. We're 10 months in. We look at a lot of metrics around the average cost basis and what the derivatives market is saying. So we've got these 12 capitulation indicators. They've all fired a positive

for Bitcoin in the last three months, eight out of the 12 are positive right now. Volatility was at an all-time low. So it was a coiled spring and I think it goes higher. So where does it go quickly running short on time? But that's what most people care about is 100K now, later in the future. I mean, could it go high? But in all seriousness, what do you see as likely to be the next move? How high when?

Well, so far, the move is all short covering. You know, there's been $3 billion of short liquidations in the last 24 hours. It's an all-time record. So, you know, it feels like if we get the real money stepping in, maybe we go higher. Nothing is in a straight line. I told you guys, $100K would be next year. Still believe that. And then, you know, long-term, 2029, say we can hit $500K if the cycle plays out as usual.

Well, I think you got our attention. Matthew, thanks so much. Really good to see you. Matthew Siegel with Bannack funds, head of digital assets research. All right, crude oil is on the rise. Again, is oil heading back to $100 a barrel, or will the mystery crude coming out of the Middle East save the day? We'll get into it with Josh Young, a bison interest. Next.

An economic D-Day. That is how President Trump describing the pressure, he is preparing to put on Iran. And on those comments, as well as continued concern about oil flows from the Middle East, and more risk around the Russia and Ukraine region, oil prices are rising again. And as we just said, it's not just about Iran. Today, Romania scrambling 2F-16 fighter jets to destroy an explosive-laden marine drone near a major gas platform in the Black Sea. The video you're seeing right now shows the moment it happened.

Romania's defense minister said the drone threatened the lives of hundreds of people working on the deep water platform. The Romanian government says it was told the drone was not Ukrainian, but it has not said whether or not it was launched by Russia. This just another example and key risk in the oil and energy markets right now as Iran has been rather quietly shifting its people in power to more hardliners who might be willing to extend or even expand the fight with the United States. Talk about it all what it might mean for crude oil. Joining us, Josh Young, he is CIO at Bison interest. Josh, glad you're coming on. I want to talk about Russia and Ukraine in just a second, but there's this huge push pull in the market right now, the U.S. government, they've told us

for a while, there's some new stories out, whatever, that they're able to get more oil out of Hormuz than maybe is being picked up by some of the firms that track this stuff because of transponders being off, et cetera. What do you believe is the true state of oil flows in that region right now? That's a great question. Thanks for having me on. So I think it's pretty clear we saw a similar story in May. And immediately after hearing repeat assurances that oil was transiting through the Strait of Hormuz, we saw this MOU and ceasefire signed, which seemed like capitulation by the U.S. And so it seems hard to believe that this time is different. And I think that the tanker trackers, for example, and, you know, literally that name as well as various other firms that track these things, I think they're great at it. And I think the number is probably closer to five than 10 million barrels a day coming out of the Strait of Hormuz. And I think we see that in the inventory data, too, in addition to just seeing it in these reports from these analytics firms.

Because it's very easy to make the case for a hundred or over $100 a barrel oil, if you just say, not you, but the market says collectively, all right, well, the flow. are closer to 5 million than 10 million. You have to admit, I mean, it has been confusing when you actually just kind of look at the available supply demand numbers. I thought oil would be higher than it is right now. Kelly, I think my coach, we made a sort of a friendly wager with our friend Rick Santelli about this.

And we were wrong. The market, even though we're up today, Josh, it is a little vexing. Why oil is at 86 and not 106? Yeah, it's a great. question. I think it starts to go down. You have to try to avoid the tinfoil hat on this one because there's not a lot of great explanations. I wouldn't call it vexing. I mean, we're doing extremely well this year. Energy stocks are up a lot. So it's been very profitable to be long

this trade generally. And we have seen historically, we were looking back at different historical instances of mispricings like what you're describing. And they do happen sometimes in line with public statements of the sort like we've been hearing about more oil coming through the Strait of Hormuz. You could go back 20 years to 2007 where you saw similar sorts of mispricings. And when you see oil go a lot below where it should be on a fundamental basis, historically, it's then risen a lot higher than maybe it should be on a fundamental basis. In the commercial break, Kelly and I were talking about energy stocks. So the energy sector today is at a record high.

So, Kelly, your point is what? That the market is pricing in more gains. That the wallet share is so we all think, well, oil's off the highs. So therefore, the financial pain is off of consumers. No, it's not. The energy sector at all-time highs tells you, why? Because the refiners, look at the spreads there, look at what people are paying on diesel, gasoline. Those prices are still high, even if the barrel, the dollars per barrel, is down from where it was.

I'm just curious, Josh, if you have kind of a thought on that, that how do we get a sense of the total impact this? is having, not just by looking at the price of WTI? Yeah, it's a great question, and it's a great point. That's the other big factor, I think, for oil is that the price at the pump, and then especially the price for diesel, for trucks and so on, is quite high. And in some places, it's actually at or near record highs. And so as we see these sort of excess profits on the diesel and gasoline side, a lot because of the disruptions in Russia for Russian oil refineries as well,

as well as Chinese oil exports, we are seeing unusual high refining margins. I think over the next couple of months, as we go into shoulder season, where refineries in the U.S. used to run at, let's say, 85% utilization. As they go towards 95% utilization likely because of these high margins, I think you'll see higher oil prices potentially coinciding actually with lower prices at the pump. And so I think there's an extra, let's say, $20 to $30 a barrel potential higher for oil and lower for refined products. Yeah, you mentioned Russia. We obviously showed the Romania stuff.

It's really heating up around the Russia side. Maybe a story that's not getting the attention. It should be. One thing, though, Josh, I want to leave it with this, is that, you know, I know it's a couple years out, but we've talked extensively. I wrote about it two weeks ago. All the different money and pipelines that are being built. You've got UAE, a second pipeline.

Saudis running full steam across the east-west. You've got talk of new pipelines in Iraq going through Turkey and Syria. I know that's a ways out. out. How do you factor in this potential? Because a lot of this stuff is either not built or needs to be rebuilt or reconstructed or whatever. Do you factor in any of this into your longer term thinking about the risk profile around oil? Yeah, I think it's a great question. I think unfortunately, these pipelines out of the region are a red herring. And unfortunately, even if there were those pipelines, there would still be a lot of risk to these energy production and processing facilities,

water purification, which is necessary for sustaining oil production in Saudi Arabia, for example, in Kuwait. And so, unfortunately, that may be a good story, but I don't think it really addresses the root of the problem, which is Iran, the IRGC, and their affiliates, attacking energy infrastructure and transportation. So I don't know that that really would fully solve the problem, unfortunately, and I think that energy security is at risk, like Secretary Besson said earlier today, as long as the IRGC regime is in control. And it's actually gotten worse because a lot of the names have quietly shifted, as we said at the top, Josh, the more hardline IRGC people from even the people that existed two

or three weeks ago. Josh Young, bison interest. Really appreciate it, Josh. Thank you. Just one comment to you, Kelly, very quickly, is that I want our viewers and listeners to note that if you start to see, you know how we've been arguing for a couple months now that There's really no Iran. There's like a bunch of different collective.

If you look now, some of the names are consolidating. There's some new names. Some of these are even more aggressive, shall we say, warlord types. It seems like Iran is consolidating more to the hardliners than the moderate's just something to be mindful of. Well, look, any little insight we can get might help explain why the negotiations are or aren't going the way they are and the price of oil concordantly. One of the guys who's been elevated is wanted for war crimes by Interpol for, I think, a 1994-2004 bombing in Argentina.

Yeah, I've heard about him. Like, these are bad people that are now being elevated by whoever is purporting to run Iran. Stocks are at session lows across the board as well. Take a quick look. That was down about 629 points. Russell 2000s down 1.4%. And coming up, when will Anthropic and Open AI go public? And can the market handle it when they do?

We've got a panel to discuss that from all angles next. Welcome back. We have already had several big IPOs this year, the likes of SpaceX, which is down 5% today and Cerebrus. A couple more massive ones look to be coming soon, Anthropic, and maybe Open AI. Both of those companies have valuations in the nearly trillion-dollar range. Can the market handle them? We have a banker here with us who worked on both the SpaceX and Cerebrus IPOs. Berkeley's head of technology and communications equity capital markets.

Jamie Tertarici, such a fun name to say, Jamie, welcome. And someone with a direct line to the tech C-suite, Daniel Newman, the CEO of the Futurum Group. It's great to have you both here on set. Jamie, do you want to just give us, here's what we think we're hearing. And you can kind of wink or nod or whatever you feel comfortable saying. That Anthropics coming soon. I mean, we're talking about maybe end of September, early October. Open AI, I don't know.

Feel free to chime in however you'd like. Well, what I will tell you is, regardless of the timing of either of those, specifically, there's a lot of anticipation about both of those companies coming to market. There's a lot of excitement. They're growing at levels and scale that we really haven't seen in the past. Here's an interesting thing I'm just going to throw into this mix. Up until about yesterday, this all looked like a wonderful story. Now all of a sudden you're getting into the time of year.

Seasonally very difficult. We always know that. Look at today. Look at the bond yields, all the anxiety. if the markets whip up in the next two, three, four weeks, is that going to delay Anthropics offering? Look, I think there's, our pipeline is very strong as it relates to companies coming public. That includes the AI ecosystem. However, look, there's always a little bit market dependency, right? Right now we have the VIX is at 16. We're not that far off of the lows for the

year. 75% of IPOs the last 25 years have happened when the VIX is below 20. We're still in a pretty constructive market. We're seeing a lot of rotation in the market. So, look, fast forward a bit to the extent that things are relatively stable in the market, those companies can really come public whenever they choose. Dan, and I know, don't worry, Jamie, we're not going to ask you about the price of SpaceX because your firm worked on it. So I'm going to go to Daniel on this one. We're looking at SpaceX, $132.

Stock was a lot higher. It's basically back sort of at the IPO price. But a lot of people have still gotten very rich. Do you view SpaceX as a successful IPO? SpaceX did exactly. Oh, he's sweet mustache, by the way. Thank you. Thank you.

I'm so glad you called that out. Brian, we sat down on SpaceX IPO Day. We talked about this. And I actually told you. Not a random question. I told you what was going to happen. I said it will absolutely shoot up immediately. And then you have the unlocks.

You have... It'll land like a rocket. The reality, the gravity. And it's come back. But meanwhile, it's been executing. So SpaceX, as I said to you that day, and I'm going to continue and maintain my belief. It's been a good IPO.

it's a company that if you're a long-term-minded investor, you look at what they're doing in AI. More than even the space and the communications, you look at what they're doing in AI. Impressive, $40 million per megawatt, best in class. Is it performing well enough? Sorry to jump in. No, it's good.

Is it performing well enough to keep the pipeline Jamie just talked about open and strong? I think so. I think SpaceX continues to be a bellwether for what the market can handle, for the enthusiasm for AI, and, of course, for the enthusiasm for companies that are breaking into uncharted territories. It's a very exciting company, and I think there is unfettered demand for Anthropic.

And I think Open AI is actually getting a bit of an unfair look right now. I think people have written it off too soon. They didn't even think about Anthropic until they did. Open AI was going to win without question. Now all of a sudden, Anthropic has done very well. But guess what? Open AI's actually seeing its growth accelerate past Anthropic this quarter. So, you know, it's going to be great.

It's going to be exciting. and the demand will be there when they go public. That's what I was going to ask you, Jamie, is about, would you kind of, should we think about anthropic and open AI is just they're kind of lumped together? Or do we need to start thinking about them differently? Because to Daniel's point, it's maybe we lump them together, but Open AI seems like it wants to wait a little bit. It has different, maybe internal dynamics.

Look, I think there is so much excitement about this space in general, right? The LLMs are one part of the category of the AI ecosystem. I think you look at that spans multiple areas, power, right, compute. There's a lot to come to market and compute. Obviously, the LLMs, data center, infrastructure, and even the application layer is now starting to, there's lots of opportunities that are emerging as a result of AI. And so these companies, I think, are a subset, albeit very large, right, but a subset of the AI ecosystem that we're going to see come to market next couple years. But who else would be, I mean, can you give us some examples? Because

it is a little weird. Like here we have this incredible new technology, and most of the companies or betting on or can invest in already are worth a trillion dollars. Are there newer, smaller, more nimble players that you think are coming or no? There absolutely are. I mean, if you look at a lot of the workloads are moving to inference, right? You have cloud inference companies that are private that are growing, you know, multiples of themselves year on year that are opportunities. You have actually application software type companies that have very sound,

large customer bases that are actually using AI to basically solidify that competitive moat that they have that are using newer technology even in the SaaS space. And so there's lots of opportunities the next couple of years I think about it. And if I think about how much high growth is there in the public markets, there's literally 19 tech companies that have grown 30% in the last year that are going to grow at least 25% this year out of 6,175 publicly traded companies, right? So there's a real scarcity of high growth in the market. And the next couple years, we're tracking 250 tech companies that we think. It's 250 tech companies.

And I'm going to say something, Dan, that I won't assure the audience I've not been drinking, which is are we understating the amount of money going to the AI build? And I bring this up because we always throw around the $700 billion, $800 billion a year number. The journal just had a piece a couple days ago, come up maybe $3 trillion off balance sheet type mechanisms. And maybe the numbers as gigantic. as they are are actually bigger than we're even making them to be on television. Well, let me give you the... And people always come out the media like, oh, you're overstating everything, right?

Maybe we're not. I think we like hyperbole. It makes for a great story. But I also think there's a lot of truth behind it. You know, we have a cumulative CAPEX forecast at Future. I'm of a bull case for 2030 of $14 trillion now. Over how much time? Between now, cumulatively, between now and 2030.

14 plus trillion. So in the next three years... Four and a half years. 26 to 30. Got it. So that would get to about two and a half to three billion a year effectively. Trillion. Yeah, not billions.

Yeah. So when you talk about the mechanisms that are being used, of course, the way these companies are going to be creative and how they think about doing financing. When, you know, that newest opening ideal that got a lot of skepticism with NVIDIA, where NVIDIA is going to pull out and only do five gigawatts. Actually, that deal could end up being $350 billion, not $250. But the headline, of course, said, oh, they cut it in half. The truth is there's going to be more infrastructure bought. And of course, Nvidia, with their credit default swaps and how that's being looked at in the marketplace,

they don't want to take on and backstop as many guarantees as they have to. So they're getting creative. Their recent $500 billion partnership with KKR and Blackstone, that's all very creative in terms of how they can make sure the buildout continues because the demand is there. And the thing is, these are smart companies with great leaders that understand that underinvestment is a bigger risk than overinvestment. It's existential that they invest enough, but they have to do it the right way because this isn't.

Fascinating to watch this all play out. Because we don't know how it's going. Maybe it ends great, but maybe it did. But I watch everybody going, yeah, we have to be in the race. Do you have a quick final comment on that, Jamie? Like, do these companies have to go public, get this capital? Is it going to be all the public market investor to hopefully not be left, you know, I'm not trying to say holding the back. I believe in these companies.

But in this case, it's a lot of cap-backs for a product that is in some danger of being commoditized. It's a lot of CAP-X, but they're building for demand that's already here, right? It's so different from the dot-com days where we were building out dark fiber and then hoping the demand shows up, right? And it did, but it took decades. It took a long time, right? And companies were bashed, as you know, Global Crossing, right? The companies that laid that fiber that we now rely on today went bust doing it. But the quality of the companies backstopping this revolution, the balance sheets of these companies, the hyper-scalers,

and then, of course, the picks and shovels, the invidias, their balance sheets look completely different than 2000. on. All right. Gentlemen, thanks. Really appreciate it. Jamie Turterichie and Daniel Newman. All right, let's get on out of Contessa Brewer. Would they see NBC News Update? Brian, the Justice Department is now asking a judge not to schedule an emergency hearing on Disney's lawsuit over ABC's license renewal, according to a new filing. On Tuesday, Disney owned ABC filed a First Amendment lawsuit against the agency calling its investigation into the company a retaliatory campaign over the nature of its news coverage. says it began an early broadcast license renewal in April over Disney's diversity, equity, and

inclusion practices. The Democratic National Committee has narrowed down potential host cities for its 2028 convention, Boston, Denver, and Philadelphia. The finalists now vying to host that event. A final decision on where the convention will be is expected later this year. And Hawaii is bracing for the potential of a new tropical storm to hit the island. Look, these folks just cannot catch a break. A few days ago, you had destructive flooding and wind from Hurricane Lala ravaging the island. Now officials are warning people about the possibility of life-threatening flash floods, but also, of course, landslides.

All of that water destabilizes the hillsides. Brian, that's the news. We'll continue to follow that. Scary stuff, Contessa, thank you very much. All right. We'll take a short break right back after this. Time now for our market navigator segment, and boy, do we need it today. Our next guest says options can offer some down.

downside protection in a market like this. The financials and utilities in particular come to mind. John Borrello is Senior Portfolio Manager for Global Strategies at Investco. John, what are you thinking? Well, look, the winds are swirling right now. There's a lot of uncertainty in the markets, both the bond market and equities. We've got the AI trade crowded and getting choppier. I think there's a real opportunity for investors that are over-exposed to this trade to hedge their downside risk, but not necessarily with the broad markets like the S&P 500 or the NASDAQ. I think it makes sense to break the market into pieces and look at the sectors as opportunities to hedge broad market risk. So, you know, as you pointed out, I think

financials are a good way to go with XLF to buy put options, maybe six months out, roughly 5 to 10 percent out of the money. Also, utilities. You know, utilities used to be kind of a safe haven trade, but they're much more linked to AI with data centers, et cetera. So that's a good place to look to reduce downside risk as well. With consumer discretionary, you get exposure to both Amazon and Tesla, you know, big bellwethers that have been driving the market higher for, you know, recent past. And then you also have communications, which, you know, that sector is dominated by Google and meta. So you get a lot of the big names that have been driving higher than that seem to be, you know, a bit crowded and susceptible to downside risk.

So really what we're screening for is sectors that are both relatively cheap. in terms of the protection of their options, but also vulnerable to a pullback. And if you create a basket of hedges with those four sectors, you end up with the ability to have better bang for your buck. It's a cheaper way to hedge and could end up paying off really well if you get a broad-based sell-off, especially if correlations start to go to one. Financials, utilities, even consumer discretionary community. Just the whole thing.

No, I don't see energy in there. John, thanks. We'll check back in. Appreciate your time today. John Borrello there from Invesco. All right, coming up, we're going to head down Wall Street's discount aisle. Jeff Kilberger's here to tell you which beaten up stocks you may want to buy or may not. All right, let's wrap it up by digging a little bit inside the discount bin

because some big-name stocks are now way below their average analyst target price. Here are the five S of B 500 stocks trading the most below their targets, Oracle, 76% below. You've got App Lovin, NRG, Micron, and Vistrar. all more than 60% from where analysts say they should be. Let's bring in Jeff Kilberg, founder, CEO of KKM Financial, also a CNBC contributor. Listen, analysts do often cut their targets, so the targets we reference, Jeff, may get cut.

But right now, those are huge gaps in big names, any of them catching your eye. Well, Seller, you're absolutely right. To see those targets, it is a little despairing to see. But even Oracle is a name. And we actually have that in our essential 40 portfolio. We still believe it's an essential name, so despite the fact it's down 67% from targets. It's only down 27% year to date after a pretty significant bounce recently. But think about Oracle.

It is essentially the database and ERP system, central nervous system for all the Fortune 500 companies, major banks, airlines, and even the US government to a certain extent. So we look at Oracle as an opportunity called value and growth. But what's happened when you've seen this haircut and Oracle, which we owned, by the way, equal weighted, so it was 2.5%. Now it's 1.5% as it has been kneecapped. But what we are seeing so like in Oracle is the fact of matter, they have $638 billion. And this is RPOs. We're not talking football. You know I'm all fired up for football.

It's not run past option. This is remaining performance obligations. And that's $638 billion. It's a race for them. And I know since June, when it was trained about $250, we've seen a $100 drop, more than $100 drop. And that's kind of in the open AI fears or jitters. But where I want to tell folks is that, you know, If we don't see Open AI commit and execute on those contracts, there are people lining up to buy compute.

Think about the open checkbooks at XAI with Elon Musk or over at Meta. Good argument on Oracle, Nate. Sort of an argument that we have not heard a lot about and a stock that just continues to go down. But Jeff Koeberg may be making a little bit of the optimistic case. Jeff, always appreciate your time. Jeff, thank you very much. And thanks for watching, Power Lunch, everyone. Dowstale right near session lows down 655 today.