Power Lunch - Warren Buffett's Latest Bet, The Future of Transportation 8/12/25

Episode Date: August 12, 2025

CNBC’s Brian Sullivan and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. “Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And we're going to call this Take It Home Tuesday, because we are at more new records for stocks and hopefully your money. Welcome to Power Lunch, everybody. I am Brian Sullivan. More new highs being hit again today, even as the tech trade gets more crowded. Bank of America highlighting how investors keep piling into stocks. Hey, more buyers and sellers. Prices go up. And we're seeing the biggest single stock inflows in two years. Tech seeing near record inflows. All this powering your money higher. But it's also causing a little concern because just a couple of companies seem to be running everything. Don't believe us? Well, let's take a look at this. One stock, NVIDIA, is now a full 8% of the S&P 500. Now, 8%? It may not sound high, but it is the narrowest concentration since at least 1980.

And just two companies have never held more of the markets in their hands, NVIDIA and Microsoft combined. are a staggering 15% of the entire S&P 500. That level of concentration in two names has never occurred. 2008, Exxon of Walmart, about 8%. 1999, remember that year? 9% for Microsoft and old GE. And if you go back to 1982, Return of the Jedi Days, IBM and AT&T were just 11% of the market.

But here's really the multi-trillion dollar question. Does that massive concentration at the top even matter? It's been pushing the market higher and higher. And your first guest today also says it's good, but maybe a little scary as well. There's something else you need to pay attention to. Let's find out what that is. Jim Tierney is CIO of U.S. concentrated growth at Alliance Bernstein. Jim, good to have you on the set.

Thanks for having me. 15%. Two stocks. Does that worry you? It certainly does. when we think about portfolio construction, we want to make sure that we have a diversified portfolio. With the top two or the top 10, which are both at all-time records, the concentration is scary and it's all-around AI. That said, those are the companies that have the earnings growth.

And you came out of second quarter earnings, and every one of those companies beat substantially. So as long as the earnings are there, we're going to keep having a concentrated market. Yeah, I don't know how to feel about it. I've got to be perfectly honest with it, Jim, because as part of me, it's like, well, it's a little scary and makes me nervous. Because if they don't do well, the market cannot do well because they run the market. By the other hand, I'm like, well, to your point, they've been doing great. They're the steak on the dinner plate. Who cares how everything else feels? Let's talk about the two you mentioned. Invidia, every single hyperscaler came out of second quarter earnings,

raising their cap expectations for the next year. That gravy train is not going to end anytime soon. And then you look at Microsoft. And the magic of Microsoft is what chat GPT and OpenAI is spending on Microsoft is huge, driving the Azure growth. But here's what I think is underappreciated. Okay. The benefits that Microsoft is getting on the cost side from AI are huge. Their head count is down year over year.

Who can grow at 15% a year with fewer heads? Not that many companies. And that's the magic of what Microsoft has. So you think the spending on AI, and I know this is, listen, this is not great for the jobs market. That's a separate conversation. We're talking about the stock market right now. The spending on AI, not just Microsoft, but everybody, may supersede some of what you're talking about, the labor costs. So it may seem like a net spend, but it might just fall to the bottom line. The market, and we have been worried about what's the return on AI. A year ago, we didn't see

the return on AI. Today you're seeing that, and Microsoft is the prime example of that. Why aren't we talking more on this network, and myself included, about tariffs? The tariffs are a sensitive topic. Well, destroy it, crush the market. I don't need to remind you. It was probably a few sleepless weeks. In early April, quote, Liberation Day with the higher than expected tariffs, the markets got obliterated.

We lost 20 percent in a matter of days. We've not only gained all of that back, but more. The tariffs have been pushed out, so that has helped. people built inventory, so that's helped, and they haven't been implemented to a wide scale. We're seeing small bits of it in the CPI data. There has to be more over time. When you look at the margin structure of importers, they just don't have enough margin dollars to cover the tariffs. So ultimately, they'll come through.

The other side of that, and I don't want to go into some deep dive on tariffs, is that the stuff that's going to be tariffed is only about 12% of what we buy. Most of what we do in America are services. that's largely on tariffs. Yale just had a study where tariffs will add about 1.5% to consumer prices. Listen, Jim, we've had it massive inflation the last four or five years coming off of COVID and stimulus and all this other stuff. Is 1.5% enough to hurt corporate earnings power, or can we get through that? That's a very important point, which is the 1.5 in aggregate is not a problem,

but the companies that have a tariff issue, it's not 1.5 to the cost of their product. It's 10 or 15 or 20%. And so the companies that have pricing power or don't have the tariff issue are better position than those that have it. And we're going to see that play out in the second half of this. Okay. So leave us with a little bit of opportunity. Where do we find opportunity in a market that has boomed? I mean, we're not only at record highs, in some cases we're at record valuations, what is still left to do? I talked about Microsoft. I think the combination of revenue growth and cost control is very powerful and is not fully appreciated. You look at Eaton on the electrical equipment side.

We are going to have more data centers. We are going to have reshoring. We're going to need more electrical infrastructure. And Eaton's at the heart of that. And a U.S. company, so not. I think you're Cleveland, Ohio-based, kind of quiet company. ETN, the ticker.

You love them. Love them. And Amphanol. Up in Wallingford, Connecticut, they make sensors and connectors. When you look at everything that we use today, it has more intelligence in it, and they're right in the middle of everything that's going on. I love this. So Microsoft is sort of the big pick. We have a lot of people that love Microsoft.

The Eaton's and the Amphanols, less known, but you think they're kind of in that AI halo. Without a doubt. You look at the revenue growth that they're showing, the acquisitions that they're able to do. They're incredibly relevant and huge secular trends behind both businesses. Why, I love that. APH for Amphan, ETN for Eaton, Microsoft. everybody knows. Great stuff. A little opportunity on a Tuesday. Jim, thank you very much. Thank you. Jim Tierney, Alliance Burnstreet. All right. Now to another big tech story that we are

following. In sort of a bold move underscoring really the escalating arms race for AI, perplexity has made an unsolicited $34.5 billion offer to buy Google's Chrome internet browser. Now, there's a couple interesting things about the story. Number one, the browser is not for sale. Google has not said this browser is for sale number two. That offer at $34.5 billion is basically double perplexity's own valuation. So what exactly is going on here? Steve Kovac, you were just talking about Apple. You're joining us now to talk about this. Good to see you. Thank you for joining us. Is this just like a bid for attention from perplexity or a real bid? Next time you're going to tell me AOL is buying Time Warner or something like that.

That would be pretty crazy. That would be a great deal. They should do that. They should do that. Someone should look into that. But seriously, what this probably is, one, yes, it gets reflexity, a lot of attention. We're talking about it. We're here talking about it.

It's a really buzzy AI startup, a very popular one. But also keep in mind, Brian, Google is going through his DOJ case right now that they already lost and going through the remedy phase. One of those remedies might be you have to spin off your Chrome business and someone else is either going to have to buy it or has to live as a standalone couple. So what perplexity is trying to do here is kind of say, hey, we're one of these major players who, if it does come to that from the DOJ, we can be there and buy it. By the way, it's a great way. It's the most popular browser by market share in the world.

It's a great way to inject perplexity into the default search engine that most people use are right there in that browser bar on Chrome. So that is, I mean, it's kind of smart. It's a good PR play to say this. But look, they're going to have to literally borrow every penny of that $34.34.5 billion. in order to do that deal. But it seems like what perplexity is thus saying to the market is we think there's a good chance that Google's Chrome, while not for sale now, would have to be. We'll be for sale, even if Google doesn't want it to be for sale.

Correct. And the folks in Mountain View right now, they're probably chortling, right, and having fun with this and saying there's no way this is going to happen. They hope it doesn't happen. But any day now, we're going to hear from the Department of Justice what they think should happen. And it's going to go through an appeals process and so many other things. This is a year's long thing.

Perplexity, even if Google is forced to divest, perplexity wouldn't be owning this company anytime soon. Why is that? Because all the appeals process and so forth. It's not going to happen immediately. Okay. So even if Google were to be forced to spin off Chrome, they would probably appeal to your point in so many years.

I mean, how long did it take Microsoft to resolve it's DOJ issues? Well, I was old enough to remember that case, a matter of fact. Exactly. Let me ask you this, $34.5 billion. That doesn't seem like a lot of money for, for Google's the most used browser in the world. Even if Chrome was for sale, my guess is it's going to be worth a lot more than 30. This actually gets us into an interesting conversation just about Alphabet and Google as a whole.

Are the parts more valuable than the sum of them altogether? The YouTube business, for example, the Android business, for example, the Chrome business, for example, so many of what I just rattled off right there are things that are on the table right now for the DOJ to say, hey, Google, you've got to get rid of this stuff because we deemed you an illegal monopoly. So it's in the realm of possibility that this, that one day, and it might be worth more than 34. I mean, we'll see what the bidding war looks like if it comes to it. I'm going to put you on the spot. Oh, boy, I can't wait. Sorry, it's what I'd love to do, Steve. All right. We have any idea what YouTube would be worth? I mean, YouTube is becoming TV.

It's bigger than Netflix. It's like 12% of all viewing time, which doesn't sound like a lot, but that's a huge number. And look at the ad revenue. I can't remember off the top of my heads what the ad revenue was, but I mean, it just eclipses what we see from traditional broadcast networks. It is, it's a behemoth. And I think they bought it for like a billion dollars? One and a half, I think it was. So way back in the day. We'll leave it there, but it's fair to say that if it's not at the top, it's in the

conversation of the best deals of all time. AOL time word you're talking about. Of course. Well, that's number one by far. And then Google buying YouTube. I think that would be right. Would be a close second. Facebook buying Instagram too.

It's pretty good. That's still below AOL Time Warner. That combination would work. And what Time Warner then should do is build a giant building right in the heart, right next to... M&A Baker's watching really need to get on that. They should get on that. Steve Kovac, thank you very much. Obviously, a little sideways humor there.

All right. Or a lot. We just talked about tariffs. One big question is how much the tariffs are actually raising money for the federal government. The president, of course, optimistic the tariffs are going to generate tons, billions and billions in revenue. But though it is early and some have been delayed, are we seeing any things? sign of that money coming in. Well, there's some new numbers from Treasury, and Megan Cassella has them. Brian, that's right. This report always is our best look at the tariff revenue. But first,

top line here, it was a big deficit month for the U.S. Treasury. The government ran a $291 billion deficit in July. That compares with about $183 billion deficit that was expected among economists surveyed by Dow Jones. Now, July is almost always a deficit month. There aren't any big tax due dates for either corporations or individuals, but that is still a big miss there compared to expectations. It's also significantly worse than last July when the deficit was $244 billion. Now, these bigger deficits being fueled by higher spending. That hit an all-time record for the month of July last month. Spending was up 10 percent, the Treasury said, versus the same month last year.

Now, fiscal year to date, the deficit is at $1.6 trillion, only slightly outpacing where it was this time last year. And then, as you mentioned, the other key figure we're looking at here, the U.S. took in $28 billion in customs revenue last month. That category does include more than just Trump's tariffs. It's a little bit broader. But you can, of course, see here how it's been growing this year as the president's tariffs have kicked into effect. But it is still far less than the administration generally says is coming in from the tariffs. If you add these numbers together so far this calendar year, Treasury has taken in about $115 billion in customs duties, not exactly the trillions of that the president spoke about this morning. Brian? Yeah, not yet. We're going to see,

but the monthly number certainly really the only take we get on these tariffs and those figures. Megan Kassela, thank you very much. All right, folks, the market stocks at session highs across the board. The Dow is up 5001 point. It is led higher by Goldman Sachs. Goldman at a new record high. Technologies up about a percent and a half, small caps up 2 percent. There is a big market rally. going on right now. We are just getting started on Power Lunch. Here's what's ahead why some lithium stocks in particular have been up the last couple of days. Plus, an FYI on the CPI. We're going to lay out, show you exactly how much some prices for things you buy have been up in the last five years. And finally, leaving a little money on the table is Berkshire Hathaway's cash pile

getting a little bit too big, all that and more on a market rally day. right after this. All right, everybody, welcome back to Power Lunch. Let's Talk Lithium, what some people call the gasoline of the future, because lithium helps make batteries for things like electric cars. The biggest lithium miner in America is Charlotte, North Carolina-based Albumarrow. Now, it had a nice pop on Monday after news broke that China-based battery maker, C-A-T-L, the biggest in the world, suspended production at one of its lithium mines. Now, it was only because of a permit expiring, but it did bring buyers. back in to U.S. miners.

And it's been an odd time for Albumaro and lithium. The stock and price of lithium and Albumarl kind of all over the map as prices for each rise and fall. So what, if any, is the longer-term trend? Joining us now is BMO Capital Markets Equity Research Analyst, Joel Jackson. He has an outperform rating and $125 target on Albumaro. Joel, welcome 125 is about 50% higher than Albumarl Marl. is now why the optimism around the company? Look, if you take a mid-cycle kind of assessment,

and most investors we talked to when we survey them are willing to give lithium miners, I've seen producers, a Aetanephtine EBITDA multiple, you apply that to a decent mid-cycle price, about $15,000 a ton, a few thousand more than today. You get about $125. So we think that's a good mid-cycle number. It's enough to encourage the right amount of new supply to come on,

but nothing to oversupply the market. tomorrow will move, not entirely, but largely on the price of lithium itself. So what are the trends for lithium, the mineral? Yeah, lithium has been an oversupply. We have a surplus. We have too much production come out of places like China. We did not see supply rationalization. Prices fell and fell and fell, got down to about 60,000 R&B a ton or $8,000 US a ton. And we finally started to see a little bit of movement now in China. Assets have been running underwater, losing money, are starting to now shut down or be shut down and might see more. That's what's caused the excitement of lithium price to bounce off the bottoms, that we might

get some supply-side rationalization and maybe a more rational industry. Is that because there's too much supply or not enough demand? Did companies and the world really overstate the rapidity of the rise of lithium? I mean, that's a complicated question. demand's been fine. Demands are running about 20% demand cager for lithium. I think that may go down the mid-teens as we get more mature at EB markets. But I think supply has just outstripped demand. We're running 100,000, 150,000 ton surplus right now. New capacity showed up for mines in Zimbabwe, other parts of Africa and China. I just think supply got ahead of what was really strong demand.

And assets, again, we're running underwater and that just can't continue forever. You know, Albumar, it's easy to make the bull case for Albumarl, right? This is the largest lithium producer in the United States, one of the biggest of the world. We're going to the electrification of a lot of things. Lithium's in almost every battery, at least right now. And the stock was well above $100 about a year ago. What is the problem, if any, with Albumar? They just replaced their C-O-O.

How is the company itself executed? I think what happened was more supply came in places like China after than expected. And Alba-Mah has done a good job in this environment. couple years of circling the wagons. They've cut costs, they've cut growth CAPEX, they've got leaner. They've made some organizational changes. You mentioned one of them recently. But I think that for them, they just have to sort of ride by here, let the industry rationalize a bit better, and it should be fine. You know, they're not doing anything crazy. They have cut costs, and I think they're doing the right thing. The risk is that lithium prices stable, low

marginal cost for a long time, and then you've got to cut more CAPEX and more growth projects. And then, yes, EV's a growing market, but the risk of the albumel's got a balance sheet problem, or maybe they can't invest in growth anymore. It's in a growth industry. They have no more volume growth, after, say, 2027. And then you don't deserve a higher multiple. We deserve a lower mining multiple with no growth in a growth industry. That would be what's really made the bears and the shorts on the stock, you know, win the game for the last year or two.

That's fascinating. And you know what? You gave me an idea, Joel. Maybe we should put lithium up on the screen like we show oil and natural gas, because lithium is such a critical part of the world's critical minerals. Joel Jackson, Bimo Capital Markets, Jill, thank you. Thank you. You're very welcome.

All right, before the break, we're going to bring your attention back to BitMine immersion technologies. Don't worry. We did not forget. We flagged this yesterday. The stock is up, what, 80% in just five days. It's soared more than 600% this year. The company is basically an Ethereum treasury. It's board, the executive chairman, his well-known investor, Tom Lee.

Bitmine Emergent Technologies just announced they're planning to issue 20 billion potentially, 20 billion worth of stock to buy more Ethereum. That should dilute the stock. Theoretically, when I saw the news, I thought, okay, BMNR is going to fall. I was wrong. The stock's up 12% right now. Nothing, at least right now, has been able to stop BMNR. And Tom, yes, I got your note, and you are welcome to come on.

any time to talk about BMNR. All right, up next, it is no longer just countries racing each other to space. Now companies are battling out for space dominance. We'll explain and show you opportunity in market navigate. How could we not show you the stock market right now? If you're driving it on the radio and you can't see anything, don't worry, we're going to tell you the Dow, the S&B and NASDAQ all at record highs. The NASDAX is up 1.3%, 273 points, small cap. the little companies out there performing in a big way today, they're up 2.7%. Dominic Chu is joining us for Market Navigator. Before we get to that, I don't know those stats off the top of my head, but a 2.7% gain

for small caps. I would venture to guess, Dom, it's got to be one of the best days of the year. It's got to be one of the best. But it's that catch-up trade, right? This idea that you are seeing now parts of the market catch up to that magnificent seven large-cap technology trade that has been driving things for arguably the better part of the last So if you are seeing that, whether or not it stays that way is going to be the big issue. If we have that broadening out trade, it could be the catalyst for more upside down the line.

It's like waiting for Guffman, waiting for Godot, the waiting is the hardest part. We've been waiting for that broadening out forever. Yes. And it's finally starting to play out a little bit. The question now becomes whether or not other companies can see some of those same types of gains. And we are going to bring that conversation point into the navigator. I see what you just did.

Because there are, yes, brought it back. Yes, I'm going to wrangle it right back in here. The life was showman. Yes, a lot of the names that we've been seeing in the headlines lately with regards to things like aerospace, autonomous vehicles, transportation, that sort of thing. And most recently last week with the IPO of Firefly Aerospace, which soared more than 34% of its debut. But our next guest says he likes the successful established companies, the reliable, more household names when it comes to the future of transportation. So joining us now is Jet Ellerbrook, the portfolio manager over at Argent

Capital Management. And Jed, we have a lot of these hot names coming out here. Brian and I were just talking about this broadening out aspect. It's not all necessarily Mag 7, but they're important. But other names in the mix for the future of transportation are ones we should be paying attention to. Yeah, absolutely. It's an enthusiastic market these days. We're seeing a lot of IPO activity. and of course small caps would really benefit and love to see lower interest rates, which seems to be on the horizon here over the next year. But in terms of autonomy and mobility, I think Google, Tesla, and Amazon are doing really incredible things to develop autonomous driving.

They're trying to roll it out city by city across the country. Google seems to be moving the quickest in that regard, but Tesla is racing to catch up, and they have a cost advantage with their vehicles right now as well. So as you look as a portfolio manager, when it comes towards allocating and picking certain types of stocks, why would you gravitate towards certain parts of that kind of market in a red hot space where there's high beta, high, maybe even alpha in some of these types of names that are not the ones necessarily that you would want to pick for your portfolio? Yeah, sure. At Arjun Capital, we're focused on enduring businesses. And for us, that means a durable competitive advantage. That means a management team that has a track record of allocating capital and shareholders' best interests,

and it also means a secular growth opportunity. All three of those are obviously present with Google and Amazon. I think that mobility and autonomy and robotics is a really big part of the investment case for those two stocks over the next five years. If and when robotics takes off, we will see a bunch of small-cap companies benefit as well, and we'll see a bunch of huge winners in that space. But I think Amazon and Google are the highest likelihood winners, and their scale advantages are really meaningful. And Jed, just so that we're clear, we know that those big established names are the ones that you want to pick. But at what point would some of these types of names, hypothetically, like a Firefly,

hypothetically like some of these other smaller cap names with regard to aerospace and transportation, make it to your screens in order for you to say, I'm going to make an investment in them? Yeah, consistent profitability is probably the biggest thing that they could accomplish. And all those businesses are in early stages. They're investing really aggressively to prove out their technology, get a dedicated customer base, and then scale from there. And so if that process is successful, consistent profits are generated, and that growth runway remains available, that would be exciting to us. All right, exciting in that context. Anyway, Jed Ellerbrook at Arjun Capital.

very much. We'll see you soon, sir. Have a good day. I'll tell you what, it's not for me. I'm not like analyzing a stock. I'm not offering a recommendation, but I'll say this. If Tesla's humanoid robots, those sort of creepy man-looking things, if they work, they work, I've seen numbers where their cost of execution compared to humans is so much lower. They don't take breaks. This is science fiction, by the way. They don't stop working. This is Terminator and Skynet. This is Wally. This is all kinds of things with regard to out.

It's a little scary. It's exciting. And then you layer in artificial intelligence, a thinking machine on top of that, and all bets are off. All we need to do is add in some like lasers and machine guns and everything will be just fine. Laser beams. Laser beams. On sharks. Sharks with lasers. Still to come.

Some shocking numbers on inflation that you probably have not seen. But we'll after this. All right, welcome, but welcome back. Let's do a quick RBI on inflation because we don't need to tell you how much prices for nearly everything if spiked since COVID. But we're going to show and tell you anyway. Charlie Bellalo at Creative Planning put out this eye-opening data showing price increases over the past five years. And it's just, yeah, wow. Over the past five years, auto insurance on average, up 60%. Home prices up 52%. Electricity, up 38%. And all, wager to bet, that number is only going to go higher. Use cars, good luck, up 33% in five years. If you dine out, it's 24% gains if you dine in. Out is 30% and is 24%. Ellen, by the way, your health insurance is only, and I'm doing air quotes sarcastically, only up 24%. All that, folks,

in just five years. Now, the reason for these spikes are large, Differently different. They could be the same too. But it probably doesn't matter to you because you got to pay for them regardless, and they are likely not going down outside of some major economic slowdown or recession. That is safe to say. We'll call that as an RBI random but irritating. But do any of these inflation numbers change the thinking of the Federal Reserve or its path on interest rates? Let's talk about it all with Mike Kudzel. He is a senior portfolio manager at PIMCO. Mike. Pleasure to get you on the show. The market vis-a-vis the CME, Fed funds, futures, et cetera, pricing in basically 100% chance of a rate cut at the September meeting. Are you at 100%? Yeah, thanks for having me, Brian. And pleasure to be here. We do think recalibration 2.0 starts again in September. The Fed most likely, you know, resumes cutting rates. Most likely 25 basis points. The data will dictate just, you know, kind of how far and at the pace at which they go. But the inflation data was sort of as expected and didn't really give the Fed any new information they didn't already

have. The new information was the unemployment report we got last week. And that certainly gave us all a bit of new information as it relates to the velocity of the labor market and a number of jobs that we've put together the last couple months. So given how much the labor market has slowed from what was just reported and the fact that inflation is moving, but the pass-through from tariffs hasn't been as, as onerous as some might have thought. Yeah, we do think the Fed does get underway. That recalibration that was hibernating comes out of hibernation and they begin cutting in September again. Are they behind the curve already, Mike? I think that depends on who you talk to. I think there's a couple camps at the Fed. I think there's one.

who believes they should have gone already. Obviously, we had two dissents from Board of Governors, the most since 1993. So, yeah, there's a camp that believes maybe we're a bit late. Maybe some other folks might use the term late as well. And then there's others who believe that, you know, the economy is still fairly resilient, and inflation is still well above target and still, you know, a pace, a slow adjustment lower makes the most sense. I think the proof will be in the details in the coming months, whether or not the Fed is behind, whether they need to go faster or whether or not some pace of quarterly adjustments or slower makes more sense.

Well, you are a member of the PIMCO Investment Committee. I don't know if you guys meet it like Gulfstream at Fashion Island across the way. Who knows? It's a Newport Beach joke. Come join us. So, yeah, I'm happy to come out there. Trust me, anytime, Mike. So what does the Investment Committee think?

Then where do we make opportunities in the bond market when you, you've got a 10-year, which, let's be frank, has not moved in a year. It is not. We're right at the one-year average, 430, 10-year note, right at the two-year average, 430, 10-year note. We settled in a, you know, in a pretty narrow range in yields. But, look, starting yields are a good indicator of returns in fixed income. You interdate the ags up about 5 percent with active management. You're up more than that in fixed income today. You don't really have to do a whole lot. Yields don't have to move in order for you to make,

you know, make a decent return in fixed income. And so, you know, we like owning fixed income, you know, relative to risky assets. There's a good return on offer. And then, you know, if the economy does do things that are unexpected, you're going to get the Fed to respond probably very forcefully, certainly more than markets are priced. And you can get, you know, yourself in a situation where you have fixed income up double digits pretty quickly. So, yeah, the yields on offer make a lot of sense just to sit sit and wait and clip your clip your coupon. And there's obviously that tail scenario where fixed income does quite well when the rest of your portfolio may may not be doing so well. Yeah, it's been an interesting year. We had a couple weeks there in

April where yields fell down. But overall, pretty much back to where we were one year ago. Mike Cudzel of Pimco, glad to have you on the program. Welcome back anytime, Mike. Thank you very much. Thanks, Brian. Good to see you. Welcome. All right, let's get out of Courtney Reagan for a C&BC News update. Hi, Brian. Well, the White House suggested today, President Trump may travel to Russia soon and called Friday's summit between Trump and Russian President Vladimir Putin a listening exercise. The White House press secretary said the purpose of the talks is to get a better understanding of how to bring the war with Ukraine to an end. The comments come as Russian soldiers made a sudden advance into eastern Ukraine today ahead of the meeting. Texas Attorney General and Senate candidate Ken Paxson sued Eli Lilly today for allegedly bribing providers to prescribe its drugs, including its popular weight loss, medications, Monjarro and Zepbound. The AG claims Lilly offered illegal incentives to maximize

its profits. CNBC has reached out to Eli Lilly for comment. And former Ohio Senator Sherrod Brown will launch a run to return to the Senate in 2026. He will compete against John Hustah, the former Ohio lieutenant governor appointed to fill the seat left by J.D. Vance when he became the vice president. Brown lost his seat to GOP Senator Bernie Moreno in the 2024 election. Ryan, back over to you. Oh, wow. Big news. Ohio by a big friend from Ohio. Courtney, thank you. Thanks.

All right. So if prices have climbed so dramatically over the last five years, how has that impacted the consumer? We're going to get a power check on you, the American shopper. Next. Crypto watch is sponsored by crypto.com. Crypto.com is America's premier crypto platform. All right.

Time now for a power check on the state of consumer stocks, while the major averages are soaring today, new record highs across the board. Some of the consumer-related stocks are kind of, eh. But that doesn't tell the story over the past week. In fact, many of the consumer sector stocks are kind of quietly outperforming the macro markets. And your next guest is bullish on a few of these consumer-y-type companies. Names like Costco and Spotify and Netflix. Each of these names are among the top holdings in his Rational Dynamic Brands Fund. Join us now is Eric Clark, AccuVest, Global Advisors, Chief Investment Officer and Fund Manager. Eric, welcome Costco. I mean, is there anything that can hold this company back?

Nice to see you, Brian. No, I don't think so. I mean, consumers are looking for value. I love that image you put up in your last segment talking about inflation over the last five years. So don't buy the, there's no inflation narrative. We feel it across most of the categories. So that drives behavior changes. And when you have a good experience, you keep doing it. So Costco is a clear beneficiary in that category for drawing merchandise and food. Thank you, by the way, Eric. I would never insult our audience, the smartest and most well-informed of the world by saying,

well, inflation's flat. Everybody's been paying more for everything the last four or five years, right? So we can argue about why, but let's just, that's the reality. And when I drive by my local Costco, Eric, doesn't matter with time. Parking lot is packed. I mean, packed. Every time, every time. And it'll continue, too.

I mean, they keep adding new things to keep us coming back. So, you know, there's definitely a theme in our portfolio of, you know, who are, where is the first place you go when you need a value and when you need a, you know, an in demand item or an in demand service. That's definitely a theme with all these names. Okay. We're showing a couple other names. You got Netflix and Spotify. Uber is on there as well. and TJX. Let's quickly start with Uber. Listen, I've taken hundreds. I think over a thousand,

who knows, Uber rides. It's getting a little expensive, Eric. It makes me nervous. It is getting a little expensive, but they are adding a lot of different services to the flywheel in this kind of super app to try to give you some value and get you more connected on a more regular basis, hint, recurring revenue. So it's just the first place we go for more and more of our ride share and our food delivery. And it's just really cheap when you use DoorDash as a comp. It is. Okay. And then TJX. It's interesting. T.J. Max, some people say it's a recession play. Others say it's a downfall of other retail play. What is it? I think it's just if you like branded apparel in particular, and most people do, and you're looking for value, this is a great place to go.

I mean, I personally don't love that treasure hunt concept, but I see the value, particularly when everything is more expensive. And they get the best inventory with more and more brands. So it just will become that place that people turn to when they're looking to save a buck. Yeah. Costco, TGX, Uber, Spotify, Netflix, by the way, all that massive week. So congrats to you and your investors. Eric Clark, AccuVest, Gold Investors, CIO. Thank you. Thanks, Brian. Oh, you're very welcome. All right, coming up, nearly $350 billion. That's how much cash Berkshire Hathaway is sitting on.

The question is why. Well, the Oracle of Omaha's latest big bet may be revealed soon. Barrage crunching the numbers of Berkshire Hathaway's first and second quarter filings and found that it made a significant investment into a mystery stock. We may find out that name on Thursday. Stay tuned. But even if so, that new holding would only total about $5 billion. It's a lot of money to you and me, but it's not a lot of money compared to the nearly $350 billion.

that Berkshire Hathaway is sitting on right now. Your next guest is a longtime shareholder and close follower of the company. Joining us Bill Stone, CIO of the Glenview Trust Company. I think $350 billion, Bill, even for you, is a lot of money. Like, it makes me wonder, what are they waiting for, or maybe what do they know? Yeah, and I know some people speculate that he's, you know, that Buffett might be taking some sort of a macroeconomic bet. And it could be.

He mostly talks about not thinking about that and just focusing in on owning stocks at a, you know, attractive valuation. And I'll add on within his circle of competence. So I do think that's part of it. You know, he's just not, I'm going to say not likely to own any significant amount of technology stocks. And as you know, that's been where the action has been for quite some time here. You know, yes, he owns a ton of Apple.

But he says Apple is a consumer company, not a technology. company, or at least that's the way he looks at it. So, you know, I think he's just, again, it's as simple as saying he's not finding enough opportunities to buy. Yeah, and when I see that, I do wonder, are they waiting for like a major pullback? Maybe they sense a recession is coming, which would then probably necessitate a stock pullback. Or maybe they just, again, they're looking, but they're not finding anything. Yeah, and he always denies really looking at, you know, again, making some sort of of bet on a recession. I do think it's probably fair to say when you look underneath the numbers,

most companies now, the valuations, have very little chance of recession built into them. So while you can say you're not making an explicit bet, it's kind of underneath the surface. You have that bet on, so to speak, if you own really stocks in general right now, that there's not likely to be recession here, you know, anytime here in the short run. So I don't know how you parse that, but I think that it may be some of it. And that's part of what's keeping valuations up. Yeah, and he owns a massive stake in oil and gas producer Occidental. There's been some chatter. You know, does he take over that company? What do you, if you had to his guess, right, let's have some fun, Bill. Markets at a record high. It's Tuesday, worst day of the week.

What would you do? Well, I mean, I think, you know, he's, we know at least, or we have a good idea of the category that he at least has bought in this last quarter. And that's his, and commercial, industrial, and quote, unquote, other. As I kind of look at it, I'm thinking maybe a defense stock. I kind of throw out there, Lockheed Martin. It got hit pretty hard on some of cost. Well, got hit earlier in the year, but then again, here in the second quarter, on cost overruns.

We know that he was buying or someone in Berkshire was buying in both the first and the second quarter. So that's kind of my one idea. Well, there you go. Maybe we'll find more out on Thursday with the 13F SEC 5. this mystery stock might be revealed. Me, thanks, Bill, if it's a new name, that stock will go up, not down. Wild speculation. It's a good bad. Bill Stone. Thank you very much. Appreciate it. Thank you. All right. Still to come, the largest wind farm developer in the world in trouble. Final thoughts next. All right, folks, before we wrap up, we got to go back to the macro markets.

We are at record highs. Can't reiterate this enough. Dow, S&P, and NASDAQ, all at new highs. the small cap stocks, which have not done well. The Russell 2000, they've been lagging for the last year. They're the biggest winners of the day, 2.6%. Our friend Bill Stone, kind enough to sit in the chair for about another two minutes to the commercial break bill. And we do appreciate it. We just got specific on Berkshire Hathaway,

but what do you make of these macro markets been a heck of a day? You're not kidding. I mean, I think it's just been that continuing move from, you know, I'll say the post-tariff, you know, liberation day, worries about recession, to suddenly, you know, obviously very little worries about recession and throw in at the fact that the artificial intelligence, I'll say trade or spending and also usage just continues to go up so it's driven, particularly in that, you know, the tech and I'll say tech adjacent, AI adjacent names just continue to really be the primary driver. Probably not saying anything

anybody doesn't know, but I think that's the answer. Yeah, and it has been, and by the way, not just the U.S. phenomena, as we've pointed out many times in this show, the German markets, the Spanish market, the Austrian markets. Throw a dart at a wall, and that stock market also is probably up. Bill Stone, really appreciate your patience. Thank you. Thank you. sticking around with us. Bill Stone, goodbye again. All right. Before we go, we have to watch Orsted. Orsted's only down 1.5% right now. It's the biggest wind developer in the world, but while it's not moving a lot today, it fell 30% yesterday. This comes after Orsted's announcement that it needs to raise about 9% of 9%.

billion American dollars to help fund some U.S. projects. The company struggling in recent years, things like soaring costs, logistical problems, but really a big hit back in January when President Trump took office and suspended some new licensing for offshore wind projects. We did reach out to Orsted. I invited him myself on. The CEO, Rasmus Aribo, kind of new, only been in the office for a couple of months. He can join us any time for an interview. Hopefully, we'll get him on soon to see exactly where this company and this industry are headed orsted down a little bit today but down over 30% this week folks thanks for watching power lunch closing bell begins right now