Power Lunch - Wall Street braces for a busy week 7/28/25

Episode Date: July 28, 2025

The S&P 500 slipped on Monday as traders looked past a trade deal announced between the U.S. and the European Union, and a big week of market catalysts — including the Federal Reserve’s rate decision — loomed.Investors are gearing up for a slew of data, including the busiest week of the earnings season so far, the Fed’s interest rate decision and Friday’s jobs report. We’ll tell you all you need to know to be prepared for the week ahead. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

More records again as Wall Street gets ready for a huge week for your money. Welcome to Power Lunch, everybody. I am Brian Sullivan. Kelly is on maternity leave. This is the busiest week for big-time earnings. The Fab 4 set to report Apple, Amazon, Microsoft, and META. The Fed meets midweek on interest rates, and the big monthly jobs number is out on Friday. You can tell there is a lot going on.

But let's start with this. White House power players meeting with their China counterparts, Right now, to resume those trade talks, it's all coming as the president, just perhaps a big trade deal with the European Union. It includes a lower rate of tariffs and some feared and some big-time investments and things like energy. With the risk to big pharma, though, still hanging out there. We've got Michelle Krusikrera, Raring to go on set. But first, let's go down to Stockholm, Sweden.

Amin Jabbers is there. More on the deals that are done. More on the deals we hope to get done. and a meeting that I'm just hearing, Amen, just got done. Yeah, Brian, that's exactly right. Just within the past couple of minutes, we got word from officials that the meetings here in Stockholm have concluded for the day. No word from those same officials, though,

on what exactly was discussed today or whether there was any progress of any kind. The talks are set to continue tomorrow as expected. The possibility is that they could continue a third day into Wednesday as well. So we're going to monitor all that for you. Meanwhile, take a look at this picture. that the Treasury Department sent us from inside the room of both delegations face to face. You see Treasury Secretary Scott Besant there with Jameson Greer, the U.S. Trade Representative, along with He Lifing, who is the Chinese representative here at these talks in his delegation.

Again, no indication from people inside the room what was discussed or whether any progress was made, but we do expect those talks to continue again tomorrow, Brian. Yeah, I think I would imagine that the photograph, they say pictures are worth a thousand words. Is that photograph worth a trillion dollars? Because just the idea they're in the room talking seems like that would be a big deal. Yeah, and clearly Treasury wanted people to see this picture. They sent it to us. They sent it to the rest of the media today.

You know, this is an image they want out there showing the talks are happening, constructive action. is taking place here in Stockholm. And we'll wait for additional word on, you know, what that constructive action is. But clearly in the wake of that EU deal on Sunday, this administration wants to demonstrate that it can get to trade deals. And even perhaps with the biggest and most prickly trade relationship that we have, which is with the Chinese. Yeah, Aman, stick around. Let's also now bring in MCC Global Enterprise, the CEO. Of course, CBC contributor, former anchor Michelle Caruso Cabrero.

No disrespect to the EU. EU's big deal. European Union's big economy. It's not China. That's the deal. No, the EU is the undercard and now we're getting to the main event. Well said. I wish I would have you. And as Eamon said, it's also the most difficult. Huge trade deficit that we have with China, something we've been trying to solve for decades. At the same time, we have issues with our national security. This is constant tension between how much trade do we allow with China and to what degree when we do we do?

do that, are we giving them the tools to threaten us and our national security? That's what makes this one so hard. We had no such issues like that with the EU or with Japan or Indonesia or Vietnam or the other deals that we've heard of. But this one is particularly difficult. Yeah, I was actually talking, the first time I heard the word syphias. First off, I thought it was like a pirate disease that I realized we were talking about national security.

And it was about, you know, remember that deal that got scuttled 30 years ago for like nuclear submarine fuel? I think there was Texaco or something. There was Unicale. Unical. I'm dating myself. The committee on foreign investment into the United States. They decide whether or not a foreign company will be allowed to invest in the U.S. There we go.

So the first time I heard that now we're talking about NVIDIA chips. And so I think what you're getting at is when we make a deal, it's not just how much we sell them. It's what are we allowed to sell them? Or more importantly, what are they allowed to buy, right? Right. That's the whole notion of export controls. That's why they were imposed. And it was Biden who first imposed.

export controls when it came to chips. It really surprised the Chinese, and then Trump, you know, went even harder at it. And this, this backtracking on the chips and, and the export controls is clearly one of the key signs of detente between the two countries. Yeah, Amon, listen, they're meeting in a room in Stockholm, Sweden, because both parties, everybody wants something. China wants something. We want something. EU wants something. Those are the big ones. Of course, you've got the smaller deals that have already been made. Is it clear what, we have an idea what European Union wants because they made a deal. Do we know what China may want? That's a really good question, Brian, and that's sort of the big unknown here. The U.S.

clearly wants to raise tariffs on Chinese products, and the president is committed to, he said, raising tariffs across the board, 10, 15, 20 percent everywhere, maybe more with China. But from the Chinese perspective, what do they consider a win here as an interesting question? One of the big question marks also hanging over these talks is the question of TikTok. Is that in the mix here? Officials have told me that TikTok is on a separate track, separate conversation entirely, but obviously it's the Chinese government that makes the decision of whether or not they want to sell TikTok. President Trump says he has buyers lined up waiting to go, but Xi Jinping has not, at least to this point,

authorized a sale of TikTok. So maybe that's in the mix. Maybe that's something they want. They want to continue to own that megaphone in the United States. Could the president trade that for the higher tariffs? It's unclear what exactly Xi Jinping would view as a win here in Stockholm. During the first Trump administration, when Trump first tried to ban TikTok, he since reversed that position.

But when he first tried to ban it, the Chinese passed a law that said that the algorithm could not leave the country, right? That the secret sauce that makes TikTok what it is is something that isn't going to allow to be to leave. So if there's some kind of deal, I'm not quite. sure what they're buying. They think that they're going to buy just the users and then recreate something. But there's certainly hurdles there, as Aeman is highlighted. You've been to China many times. I've been there a couple of times. For our viewers and listeners that have not been there, here's some things they may not understand. You can't use Twitter in China. You're not using

Google in China. They have their own, basically almost their own internet. The information flow is controlled. One thing that Scott Besson has said, so we know the U.S. wants machines. is this idea of a rebalancing on the economy. I don't think that just means we buy fewer socks from them or they start to buy some real stuff from a... There's an openness to their economy that doesn't exist. So for years, we've had economists come on CNBC with a really thick layer of morality on top saying

the reason we have a trade deficit with China is because Americans don't save enough. But those same economists know, you can turn that around and say, maybe we have a trade deficit with China because the Chinese don't spend enough. And why don't... They don't buy much...

The dirty secret is they don't buy a lot of our stuff. And that's because the Chinese government has structured everything towards production. And they produce so much now. They call it overcapacity in the rest of the world. You know, you can now buy an EV in the EU for under $25,000. And those are Chinese EVs.

They're very, very cheap. And that's when the EU woke up and said, wow, we are going to face deindustrialization if we don't stop this, if they don't start shipping all this overcapacity because they subsidize so many industries. And they can't sell in their own country because they don't have the demand. Drive that EV for seven years and put it in a landfill. Amon Jabbers, is it, do you think there's, I mean, I'm going to ask you editorialize here because you know some of the players involved.

Is there an opportunity here or a chance that China will open up just a little bit? I know they buy Teslas, they buy some Buicks, they buy a couple of Boeing jets, and then they buy basically scrap metal. So is there a chance they're going to open up a little bit here? Well, to MCC's point, I mean, what Scott Besson has asked the Chinese to do is to radically transform their economy. He wants them to become a consumer-based economy, not a production-based economy. And that is not something we've seen any indication from the Chinese that they necessarily want to do anytime soon. So the question is, is there someplace on the continuum between some token ag purchases and the massive overhaul of their economy that the Treasury Secretary wants to see?

Is there something that they can do to get that relationship transformed in a big, big way that's shy of, you know, an overall transformation of the economy that Scott Besant wants? I don't know if there's that middle ground, though. We'll have to wait and see. Scott Besant isn't just the only one. I mean, economists have been saying this for years, that if China's going to get it right, they really need to start doing things that would allow for more consumption. You know, even emerging market economies are 60 percent. People have to have the money to buy stuff.

And they have to have other things, such as you think, oh, it's a socialist-based economy. So you would think that they have a very good social security system for the elderly or they have a good health insurance for the elderly. They actually don't. People save an enormous amount of money there because they are. often have to pay cash when they go see a doctor. And so they don't have a lot of the safety net there that would help free up consumption where people would be more relaxed and not save as much as they do. So, well, the idea just being that we can sell that if they grow their economy, 1.2 billion people, we can sell more stuff to them. Part of the problem I think it needs

negotiations, Michelle, is that China has a pretty strong hold over, A, minerals that are critical to the new economy, and B, minerals and elements that are critical. to pharmaceuticals, to drugs. A lot of the stuff we take every day has ingredients in it. We can't get anywhere but China. And the critical materials, that was absolutely the leverage that they used with the EU, with the United States as well, to begin detente with the United States. We can, in the immediate term, we can do things about pharmaceuticals.

We can start producing elsewhere. But when it comes to critical materials, that's a longer-term strategy. We have to get much more involved in Africa than we have been for the last. Well, we're watching the trade delegations leave. Amon Javerson in Stockholm. I will say it's interesting that they're driving off in BMW X-5s, not in Volvos. There's one in the background at XC90 that is made right down the road from you in Gothenburg. Brian, we saw some of the Swedish delegation, the Swedish officials driving around in Volvos,

but those are also owned by the Chinese now, right? So I'm not sure, you know, it's a global economy. Everybody buys everybody else's stuff. Yeah, Scott Bessett, just getting into a BMW. X-5, the conversations around cars, hopefully finished. Volvo owned by Gile Motors of China. Michelle, Kruska-Kabera, thank you very much. Pleasure. Amon, Javar, Sun, and Stockholm. Thank you very much. Appreciate that. All right.

From global trade to global bonds here at home, stocks at record highs, but yields are steady as investors getting ready for the Federal Reserve meeting, the interest rate decision, and more importantly, Jay Powell's commentary. Now, abroad, the credit markets are reacting a little more to the trade developments in the EU, the German 10-year yield, trading above 2.7% in early trading. And in France, yields are higher for a third day in a row. If somebody says to you tonight, what are Spanish 10-year bonds yielding? You know what you're going to say? They're holding steady. They're right above 3.2%. All right, we've got a lot more to do it. On deck here on Power Lodge. Why President Trump, now making some big, bold promises on health care. Rally on?

while one strategist says we're going higher regardless of what the Fed does on Wednesday and Tesla, a huge tech deal. The company aims to change its fortunes. But speaking of deals, one thing China does buy a lot of is our energy, the CEO, one of America's biggest energy companies, the massive new deal it just made Venture Global up next. All right, welcome back at some big news in energy natural gas export company Venture Global, getting a huge new boost. Company just closing on a 15 billion. dollar financing project to finalize its latest export terminal.

That terminal is located in Calcasieu Pass, Louisiana. It is known colloquially as CP2. It is already under construction. And when done, it will make Venture Global the largest U.S. exporter of natural gas. It's all comes at a time when President Trump wrapping that trade deal with Europe. It includes $750 billion worth of new and existing

gas sales to Europe. Mike Sable, CEO and co-founder of Venture Global and joins us now from Washington, Mike, congratulations on what they call the FID final investment decision. But CP2 is already under construction. So what does this $15 billion do exactly? Thank you, Brian. Good afternoon.

It's great to be here. The incremental $15 billion, which incidentally is the largest project financing that's ever been done on a standalone basis, is the balance of the capital, along with the $4.5 billion we've invested already in phase one to complete approximately 20 million tons of production capacity for just that phase. That peak capacity, CP2, for the first two phases will be 28 million tons per annum. That's a lot of homes. That's, you know, the math is so funky on LNG because you freeze it, then it becomes gas again.

It's a couple million homes per year. This $750 billion that was announced in the energy deal, Mike, some of that is already sort of committed money. How much of that do we know is new money? What is that going to mean for venture global and the U.S. gas export industry? Sure. Keep in mind the energy contracts typically are long-term contracts in the LNG industry. A 20-year contract is fairly standard for long-term. And so given the size, you aggregate pretty quickly, you know, extremely large dollar values. But those long-term contracts are super valuable for the industry because we need to build enormous infrastructure. And so it's a great combination that allows those investments to be made that brings low-cost, clean energy to our friends in Europe and Asia and elsewhere.

venture global believes we're the lowest cost builder of liquefaction capacity. And so this increased demand is going to allow us to bring more low-cost LNG and natural gas to the global markets to keep prices low and sustainable for decades to come. I know that you just signed some deals with Germany. You signed a deal with Italy as well. You also know that we've been over there. I've been over there a couple of years, a couple times talking about this. I guess the question, I had, Mike, and you're building Calcus you pass to the second terminal. Does the industry

at large have enough capacity to meet $750 billion? Because when I look at the numbers, that's still well above where we are. So there's a big gap to fill. Do we have the capacity to fill that gap? Steel Russian cargoes?

Well, you know, the market Asia and Europe are both very short on an electricity production capacity. So we believe we're still in the very early days of the deployment of global gas exports. And artificial intelligence demand just layers on top of an already existing shortage. And this is very bullish for the industry. Ultimately, the markets, because this is a commodity market, we'll decide.

But yeah, absolutely we believe that there is capacity in the U.S. built on top of the innovation of the shale gas revolution. Brian, which you've talked a lot about and which the USL and G industry is really built upon. And venture global brings our innovation to lower costs even further on top of the innovation of the gas production. Yeah, because the dirty secret I've tried to highlight, we've tried to highlight in this network, is that Russia is selling a record amount of liquefied natural gas. They're not selling gas through the Nord Stream 2 pipeline. We know that got blown up by somebody.

But they're selling a lot of liquefied natural gas. How fast can you guys ramp up? CP2 is already under construction. You got the FID, by the way. 30 banks bid, I think 10 of those were in Europe. So that shows, to me, some kind of commitment by Europe. How fast can we ramp up? Yeah, no, we, it's a great point.

I think we ended up with 30 banks, which I think is the largest, broadest group of bank participation. We had $34 billion of orders for $15 billion of capital. Europe was extremely strong and supported. of the transaction, well aligned with what European Union wants to do for the long term. We can bring it on very quickly. We're the fastest builder. We have available capacity at large scale.

Ultimately, CP2 over the life of the project will, just CP2, will generate several hundred billion dollars of sales of gas. So with CP2 and our other facilities, we actually can provide a large portion of that. And again, we think we have the lowest long-term contract price available in the U.S. market. $15 billion financing decision there. Stocks up 5% on top of a big deal with the EU today. Big day for the U.S. natural gas industry. Michael Sable, Venture Global. Really appreciate it, Mike. Thank you. Great. Thank you very much. Take care. All right. Coming up, the three worst performers in the S&P 500 lately all have one thing in common.

I'll tell you what that is. ahead. All right, welcome back to Power Lunch. It has been a brutal year for investors in health insurance, one of, if not the worst periods ever to invest in these companies. Don't believe us? Over the past couple of months, United Health Group, Centine, Molina Health Care, and Elevance Health, they've been crushed. They're all down between 32 and 54% in just 90 days. Dow Component United Health, It's wiped out 44% of its investor value this year. Of course, it lost a group CEO as part of a murderer. Its overall CEO resigned abruptly while pulling all the guidance

and hopefully we'll get more information on the company's path forward when it releases earnings tomorrow. So is there any reason right now to invest in these or other health care-related companies? Joining us is Jared Holtz. He is health care sector strategist, Missouri, Jared. And there's a tariff angle on pharma. I'm going to get to that in a second. what do you and your team need to hear, want to hear from United Health tomorrow about a company

that a lot of people have a lot of very strong opinions over right now? Yeah, Brian, this is a big one tomorrow. I think, you know, the street is just trying to come to terms with how the next kind of six, 12, 18 months are going to play out. I'm not so sure that 2025 is necessarily even the focus anymore. I think for tomorrow, we're likely to get a reintroduction of guidance from this company, a new CEO coming on board. You know, a lot of, you know, a lot of firms have written about it.

We have extensively in research and otherwise as well. You know, maybe an $18 to $20 earnings range is good enough for the balance of this year or fiscal 25. But it's really about what the commentary is around next year and over the medium term, I'm just given all the damage that's been done here. 18 to $20 in earnings, that's a pretty big spread, Jared. It's really big, and it's also well below. I mean, I think coming into this year, the expectations were closer to the high 20s for United. And so we're all trying to just figure out what the trough earnings number is going to be.

Is it indeed going to be this year? And then there's going to be a lot of price discovery associated with it. What's the multiple that investors are going to put on that number? what are they going to put on 26, 27, so on and so forth. So that's really the game that we're kind of playing now. All right. Let's talk about pharmaceuticals outside of managed care, health insurers, etc. Because there is a tariff angle to big pharma.

In fact, we have a soundbite. President Trump actually commenting about tariffs and pharma today, I believe it was. Listen in. We'll be announcing on pharmaceuticals sometime in the very near future. We have a very big plan on pharmaceuticals. We want to bring a lot of the pharmaceuticals back to America will, you know, the way they should be. So, Jared, do you have an idea of what that might mean? What are we thinking might happen from Washington with Big Pharma?

Yeah, I think the street is sort of bracing for, you know, anywhere between a 15, 20, 25% tariff rate across the board for large cap pharma. This has sort of been the range that's been discussed over the past month or two. We've heard a sector-wide tariff is coming now for probably six to eight weeks, maybe a little bit more, and nothing has really surfaced in any concrete way. So I think, you know, as far as the stocks go, you know, maybe we're in a position where they actually rally a little bit once we get clarity. Yeah, and you think we'll get clarity? I mean, I have no idea of a question. Like, what's going to happen?

Agree. I mean, with this administration, I'm not sure there's ever going to be clarity. But let's just assume that there's a rate that's placed on the pharmaceutical sector at large here, you know, in terms of getting drugs back to the U.S. and what those rates are going to be. At least we can put pen to paper and come up with some sort of like assumptions for what the group is going to be, you know, dealing. with, but then on the flip side, you've most favorite nations. There's losses of exclusivity, which have been very well documented. So I think it's just one variable of many. Yeah, a lot to do, a lot to learn, lot to still know. And United Health, I think you're right, Jared. It's going to be a biggie tomorrow. What are they going to say to calm investors' nerves, if anything? Jared Holtz, thank you. Thanks, Brian. All right, folks, we've got new details on an upcoming IPO.

This one in the rocket industry. Rocket Man, Dom Choo. What do we know? The Rocket Man here for sure. Firefly Aerospace, a lot of listeners and viewers may recognize the name. The company did disclose plans to go public earlier this month. Well, now it has set an IPO range that comes in at $35 to $39 a piece for its upcoming IPO. It plans to sell around 16.2 million shares, so that offering could raise around $632 million and value the company overall at roughly $5.5 billion, if that's $1,000.

range kind of comes to fruition. So all of this is happening, of course, as deal chatter and deal activities starts to pick up a little bit and there is a kind of renewed emphasis or at least focus on space travel and whatnot. So Brian, an interesting development here, one we've anticipated, but also a big one here because the likes of some defense contractors have been tied to this name before. And Northrop Grumman specifically announced that they had made a $50 million investment in Firefly earlier this spring. So interesting one to watch there. The ticker will be FLY on the NASDAQ.

I'll send things back over to you. And we will see you in a few minutes on some big market moves. And what's ahead this week? Domchu, thank you. All right, trade deals, earnings and the Fed. Yeah, oh my, it's all happening. But your next guy says no matter what happens, he's bullish. We'll find out why.

Coming up. All right, just a quick note of the macro markets. The NASDAQ is higher right now, but not by much. the S&B just turned negative stocks, they are around session lows. Again, NASDAQ is still up, and we hit new record highs earlier today. By the way, we're less than 48 hours away from the Fed's decision on interest rates, and while your next guest thinks the Fed should start cutting rates on Wednesday, it likely won't, and it may not happen until September or maybe even later.

But regardless of what happens, he thinks there is nothing stopping this market rally. Michael O'Roney is chief investment strategist at States Street Investment Management. They have a cool $5 trillion in assets under management. Why, Michael, is nothing stopping this market? So I think there's a few things. Certainly, you're going to see improvement on trade. So more trade deals keep getting announced. I think USMCA will be negotiated later this year.

And Canada and Mexico are in great shape on trade deals. So that's improving. You get a free cash flow windfall from the one big beautiful bill. That's going to also be a tail win for many companies, particularly those that spend a lot on R&D. And you have the dollar weakness. More than 40% of the S&P 500 revenues come from outside the U.S. That's working as a tailwind, especially for technology companies. The Fed's going to be cutting rates, and we've never had a recession when earnings have been growing year over year, and they will grow year over year.

Put that all together, Brian, and I'm optimistic about the balance of this year. So do we need the Fed to even indicate, sort of hint, whatever, on Wednesday it might start cutting rates? Or does that even matter anymore? I don't know if we need it, but I think we're going to get it. You're certainly likely to get a dissent from both Waller and Bowman. It's the first time you'll have two Fed governors dissenting on our interest rate decision in more than 30 years, way back in 1993. So you're going to have this additional pressure. I think Powell has an off ramp here.

I think what it is is he was saying that trade policy was uncertain. And now all of a sudden you have deals with the UK, Vietnam, Indonesia, Japan, Philippines, and EU. They're promising a breakthrough with China. And as I mentioned, I think you're going to get USMCA negotiations later in the year. And I think that provides the clarity the Fed needed to begin or resume cutting rates again. I think that's what they're going to tell you this week. We're going to talk about, I don't want to steal Dominic Chuse Thunder. We're going to talk about it a little bit later on on the show.

But on Thursday, it's not getting any attention at all. An appeals court will hear hearings, oral arguments, about the legality of these trade deals. It's not getting a lot of attention, Michael, but there is a small chance that these deals that the market loves will be invalidated as being illegal if that were to happen. Is there a market risk? Well, there may be a risk if we go backwards on trade, Brian, but here's the thing. The reason no one's paying attention to it is the Trump administration has a number of other tools available to it to pass tariffs. So you'll remember the Court of International Trade in May said these things were illegal. Ultimately, you could see a similar agreement or a decision here in the courts.

That would make it difficult for the Supreme Court to kind of overturn those two courts. But, Brian, the Trump administration has Section 122 and the balance of payments authority. They have Section 322 and a different kind of part of the law. And both of those will give Trump administration wiggle room to continue on their tariff reign, so to speak, or their tariff methodology. So what then would be the risk to the market, Michael? There's always risk out there. Absolutely. I think one of the things we are seeing is we're entering a seasonally week period.

So we know August through October is difficult. you will see as the Treasury rebuilds the Treasury General account, that takes liquidity out of the system. It'll be a little bit of a drain. So, Brian, well, I think what's being a little bit overlooked this week is you're going to get an announcement today at 3 o'clock about how much they're going to borrow. It's going to be a lot.

They're going to increase the third quarter. And then on Wednesday at 830, you're going to get, how are they going to borrow it? And so from that perspective, you could see interest rates move at a time when the Fed maybe isn't cutting, and that could cause upward pressure on rates. I think that may be the biggest risk to this market going forward. Yeah, there is a lot.

It's a big week, the Fed, earnings, whatever, but the path of least resistance certainly does seem to be up. Michael O'Roney, a state's treat investment management, Michael, thank you. Have a great day. Thanks, Brian. Folks, speaking of the Fed, do not miss our coverage of that Fed decision. It will be on Wednesday, 2 p.m. Eastern Time, 11 a.m. Pacific. All-Star panel.

Got Jim Karen and Morgan Stanley, David Kelly of JPMorgan, Francis Donald of RBC Capital Markets, and Kyle Bass of Hayman Capital Management. Maybe some surprise guess. In the meantime, let's get now over to Courtney Reagan for a CNBC news update. Courtney. Hi, Brian. Spirit Airlines will furlough 270 pilots later this year as the carrier prepares for a smaller off-season schedule to find its financial footing. Another 140 will be demoted. The furloughs will take effect in November. Spirit said that it's all part of an effort to return to profitability. The airline just emerged from bankruptcy in March months after its failed merger with JetBlue.

A man hunt is underway in Arkansas for the man who over the weekend attacked and killed a couple walking with their young daughters on a wooded walking trail known as Devil's Den. Clinton and Kristen Brink were found dead Saturday. Their seven and nine-year-old daughters were not hurt. There is no information yet on a possible motive. And the Cleveland Guardian's All-Star Closer, Emmanuel Class A, has been put on a non-disciplinary paid leave as Major League Baseball conducts a sports betting probe. Class A is now the second Guardian's pitcher to be placed on leave in connection with the investigation. The Guardian said in a statement, they've been informed there will be no additional players or club personnel impacted. Brian, back over to you.

All right. Courtney, thank you very much. All right, folks, could the answer to the world's clean energy problem actually be a technology that's not only existed forever, but is literally right beneath your feet? CryptoWatch is sponsored by Crypto.com. Crypto.com is America's premier crypto platform. All right, welcome back. In the age of artificial intelligence, energy creation, you might have heard this, is a priority. So companies are looking for some outside-the-box solutions.

And geothermal energy has been used for literally thousands of years, powering heating systems as early as the 14th century. Now innovations in the field are taking it to the next level. Diana Oleg has more in her continued series on climate startups. One would hope the technology is better now than in the 14th century. Well, would you believe, Brian, it actually is. Look, there's geothermal, and then there is super hot geothermal, which uses ultra-deep drilling to access extremely hot rocks.

By doing that, you get five to ten times more power per well. This is an electromagnetic beam that vaporizes rock. It's being developed by Quays Energy, a Massachusetts-based startup that's using this technology to reach super-hot geothermal energy up to 12 miles below the surface of the Earth. Temperatures that deep can reach 500 degrees Celsius. The oil industry routinely drills to depths of 2 to 3 miles, and maybe no more than 150 to 200 degrees Fahrenheit. We need to double or triple that to actually start to get the right resource.

Others, like Mazama Energy, are experimenting with different methods, but Kwayze's technology was invented at MIT in 2007. Quays is working to scale it for commercial use and demonstrated its technology with oil and gas company Neighbors Industries in June. While the drilling itself is costlier, the energy output is so much higher that you actually net a lower cost for the heat. We intend to build the first in the world super hot or super critical geo-therbaltower plan to show exactly that 10x output that you get by going hotter.

Quay's plans to pilot this near Bend, Oregon and hopes to have it ready by 2028. Neighbors sees it as a very timely play. The potential of the market, the size of the market, the fact that today's world with data centers, with AI, with the electrification of everything, we require so much power. In addition to neighbors industries, Quays is backed by Prelude Ventures, Engine Ventures, Sapphire Partners, Mitsubishi, and Collab Fund. Total VC funding to date, $103 million.

Sierra said this technology could also help repurpose a significant portion of the labor force that's working on oil and gas assets. And while the Trump administration has made cuts to support for other forms of clean energy, it appears to still support geothermal. Brian. It is estimated the core of this fine planet

is 11,000 degrees Fahrenheit. You could tap a little bit of that, Diana, you know? I knew you'd have that stat. I knew you would have that. Well, it's the internet. It helps. Diana, oh, look, you could boil pasta like that. Diana, thank you.

All right, still ahead. The multi-billion dollar deal is shaking up the semi-conductor sector. All right, welcome back. We've got a big deal in the semiconductor space. And believe it or not, it doesn't involve Nvidia. It's Tesla signing a $16.5 billion supply deal with Samsung, which is a big win for the South Korean company,

which has been losing market share in the AI chip race. Tracking this story is Christina Hart-Senevolous. And Christina, I will admit, I will admit, I did not even know that Samsung made semiconductors for AI. Yeah, well, Samsung really does focus on more of the lagging chips that would go into cars. They also do high bandwidth memory, but they've been, you know, falling behind the likes of S.K. Hynix as well as Micron. In this contract, though, that you had up on the screen, it's $16.5 billion, Tesla and

Samsung over the next eight years. So when you average it out, it's about $2 billion a year, which in the grand scheme of things is a lot smaller than some of these other massive chip deals. But what would Samsung would be doing is creating these more advanced chips that would go into these self-driving cars Elon Musk saying that perhaps it'll eventually go into humanoid robots these chips as well as It may be even data centers more specifically data centers that are geared to Gather all the information from those self-driving cars so it's seen as a a strong wing for the foundry business here in Texas on American soil in the United States, but there's still Brian so many unanswered questions you know the time

line, the construction, what are these chips going to be done? Did Samsung give Tesla a big discount? Because right now, TSM is the manufacturer of these chips and the fact that Tesla is now going to Samsung. Why? Is it because Samsung's so great? Or is it because Samsung is giving them an epic deal that they can't refuse? And then why did they bypass Intel, right? You've got Intel's battery business. I was just going to say, where's Intel? Why, we talked last week about Intel's woes. Wouldn't we like to see, you know, no disrespect to Samsung, but, you know, hey, Tesla doing a huge deal with Intel, right? Yeah, no doubt.

Why wouldn't we want to hear about an American company? Intel, even last week in their 10Q had their 14A, which is the most advanced process in it, it said that if they don't find an external customer, they're willing, and I'm paraphrasing here, because I know some people read it down to the last word, they're willing to just, you know, be gone with that manufacturing process. And then some are saying, if that's the case in the 10Q, is that a signal that Liputan, the CEO of Intel is willing to become a fact? chip company in the near future. So there is red flags from the last earnings report with

Intel. It's a big wing for Samsung. Sampum's still struggling on the smartphone side, so it's not going to turn everything around. But you could see shares reacting quite positively because the bar, I should say the bar, expectations were quite low for Samsung. So this is a surprise win. And it could be also a benefit for KLA lamb. Those are equipment makers. Their earnings are out on Wednesday, as well as ASML. Because if Samsung moves a head, with more advanced chip technology here on U.S. soil. They're going to need to buy ASML chip equipment manufacturing stuff, and they would stand to benefit, Brian.

Tesla stock up nearly 4%. KLA up 2.8%. Don't have time to run through the other names. But a fascinating story and maybe a big win for Samsung. Christina Parts of Nvelas, thank you. Thanks. All right. So folks, we already mentioned what a huge week it is for your money. Well, we're going to help you do your homework on everything that really matters coming up.

And as we head to break, be sure to follow and download the Power Lunch podcast. You can catch audio only versions of the show anytime you want. You can listen. We promise. We're back right up for this. Can't reiterate this enough. It's a critical week for the markets. You got earnings.

You got the Fed on Wednesday. You got court cases. Let's blast through what everything is and what you care about. Who better to do that than the aforementioned and referenced Dominic Chu? All right. So let's talk about this because macro, microcatalysts are all. over the bucket in the corporate front these days. This is going to be, of course, the busiest week of earning season.

160 companies, roughly, in the S&P 500, are set to report quarterly results, including four of the so-called magnificent seven stocks. You got Microsoft and meta-platforms coming up on Wednesday, and then you got Apple and Amazon, which are coming up on Thursday. Then there's that three, those are three Dow components, right? Four of them total, but three of them are Dow components. Six more are on deck and Dow components as well. you've got Boeing, United Health, and Chevron, amongst others.

Then there's the macro side of things. It's hard to pick which headliner would be the biggest one, but one of the most important data points each month gets released on Friday, and that is the monthly non-farm payrolls report. But even ahead of that, there's a two-day Fed policy meeting going off, culminating in a rate decision, or indecision perhaps, on Wednesday. And, oh, by the way, Friday is also August 1st, the deadline for many of those countries to reach some sort.

sort of a trade deal. And amidst all of that, Brian points out, big court decision coming up that's going to kick off later on this week on Thursday when the U.S. appeals court for the federal circuit will begin hearing arguments on whether or not the president's tariff policies violate constitutional law. Now, it's pretty much anything but a sleepy season for the news market overall. So, Brian, I can't emphasize this enough because you can't emphasize it enough. This could be a week that's potentially chockful of market-moving type of event. including probably arguably the biggest economic report each month, the non-form payrolls. How much does the Fed matter?

I mean, I don't want to build up our coverage, not tear it down like I normally do, but like how much does the Fed really matter because nobody expects him to cut, but if he indicates a cut or no cut, maybe that matters more? It's been that Fed regime for a while now, and I think Steve Leesman's been reporting on this for quite some time. This is all about what the context and color around the press. conference that's going to be given will be. If there's any kind of an indication that there could be a rate cut on the horizon. A lot of the markets right now are pricing in what? What could be a

September cut and then one more before the end of the year. So if there's anything that changes that calculus, assumptions. Is anybody going to ask about that? Or are they going to ask about Trump? And I was doing this with the paper. It's the most important. Here's the new cost of the Fed building, right? And Powell's like, no, no, no, no. It's the most important Fed rate decision since the last Fed rate decision, and it's the most important non-farm payrolls report since the last non-farm payrolls report. But if we don't get an indication of a cut, first off, I don't think the jobs numbers. I mean, honestly, it hasn't moved markets in a while, but you never know. Not to be whatever. Right. Right. The Fed, though, if he indicates no cut, I think that could be a market mover.

It could be, but that data all flows into it as, by the way, I mean, the corporate earnings front is not going to be all about what's going to influence the Fed. But it could be anecdotally interesting to hear what CEOs and many of these companies say about what the future looks like. It's going to be a big one, but the show's over. So we'll let another show pick it up. Dom Chu, thank you. Thanks for watching. Power Lunch closing bell begins right now.