Power Lunch - Who will bid for WBD? 10/21/25

Episode Date: October 21, 2025

Warner Bros. Discovery has put itself up for sale. Who are the possible buyers? We have an energy and natural resource portfolio manager join the show and give some picks in the space.  And how do y...ou know when the stock party is going to end? We discuss it all here on Power Lunch Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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Starting point is 00:00:06 Strong earnings from some powerhouse stocks helping the Dow power to a new record, all while General Motors roars and Warner Brothers turns the media landscape on its head. Forget at Power Lunch, everybody. I am Brian. Kelly is off. It is not just the Dow. Small and midcap stocks, they're kind of your stars today. Coke and 3M helping the Dow Index move higher. And yeah, we're going to have more on GM, which is doing something pretty amazing. We're going to show you and another power play for you as. Well, we'll talk with a fund manager on some big energy picks, including that right there.
Starting point is 00:00:42 That is what we call a mystery stock. It's more than doubled this year, the name and the story ahead. We've got all that to do, and welcome to Power Lunch. Everybody, good to see you. We're going to begin some big news in Media Land. Warner Brothers Discovery, the parent company of CNN, HBO, and more, saying it is effectively putting itself up for sale. That's after it recently received, quote, unsolicited interest for multiple parties for the entire company and for Warner Brothers. CNBC's David Faber, reporting Netflix and our parent company Comcast are among those interested buyers.
Starting point is 00:01:20 Now, while Warner Brothers kind of shops itself around, it says it will still go forward with the previously announced split of its cable networks from the streaming and studio business. Warner Brothers Discovery shares, WBD, they're popping up. on the news, as you might expect when a company gets bought, the stocks tends to go up. Your next guest is an industry insider who has seen as fair share of media deals. Joining us now, Ben Silverman Chairman and co-CEO of Propagate Content and former co-chair of NBC entertainment. So, Ben, it's a perfect day to have you on. Welcome back to Power Lunch and CNBC.
Starting point is 00:01:58 First off, this whole unsolicited offers, let's be clear, Warner Brothers' discovery has kind of quietly shopping itself for sale for a while. So I would push back on that characterization. But what's your take on how this whole thing plays out? Well, I mean, the studio assets are unbelievable and incredibly valuable and make a lot of sense for a lot of the other players inside the media ecosystem. I think the big issues are regulatory for a lot of the players looking at it. The scale and control that a Netflix Warner's HBO would have,
Starting point is 00:02:34 is a big separation from everybody else, even a further separation the Netflix already has. Comcast has always, for some reason, been in the crosshairs of the federal government, even, you know, in regards to things like Hulu and other entities that look small in comparison that what came after them and how they were regulated. But I feel it's an amazing asset for Comcast to go after, especially now that they've spun off first and the cable assets. And then you look at Paramount and with Larry Ellison behind them and the capital they can access in great young next generation leadership and David Ellison at the helm, it makes a lot of sense also for them to go after it. But I think that regulatory thing is a large hang over this, whether they sell off the cable assets or not.
Starting point is 00:03:25 and that's something that makes the buyers who want to lean in have to think about it in a multiple, in multiple ways. I feel like, Ben, you just inadvertently created a new type of game show. We're going to call this the billionaire dating game because what you just mentioned is possible suitors. Netflix worth what? Half a trillion dollars. The Ellison family in Paramount worth a couple hundred billion dollars.
Starting point is 00:03:50 Comcast worth a couple hundred billion dollars. This sounds like It could be one of the deepest pocketed runs at a company of all time. Well, you think it used to be you'd buy a newspaper to show your media cloud if you were a billionaire like Dezos in the Post. And then, you know, it's sports teams, right? This is the ultimate asset. And we're watching how much opportunity there is in controlling these assets, how much money is actually still available. You know, everyone's looking at old media.
Starting point is 00:04:23 but at the end of the day, Netflix's new distribution of old media, and their biggest uptick is going to be advertising, which is why the broadcast networks and television was created in the first place. So I think a lot of what's old is new and where these businesses have big opportunity, but scale, programmatic advertising opportunities are major changes, as is global. And what we see with Comcast and Peacock, it's small Peacock, but NBC Universal is an unbelievable studio, but Peacock's a small platform.
Starting point is 00:04:55 What we see with Paramount and Paramount Plus, it's small. And both of them are really domestic only, as much as they're trying to make inroads internationally. You know, it's only Netflix, who's really the global player alongside Disney and Amazon. So there's a lot here. And if I'm Netflix and I look at Amazon having bought MGM and controlling the rights they have, and I could see an opportunity to own Warner Brothers, the studio assets, while my number one show movie of the season is something that Sony produces, and Sony actually,
Starting point is 00:05:29 I'm sure in that deal, controls the merchandising, licensing, and exploitation of the K-pop movie, you know, you want to start owning that whole funnel. You want to start building new incremental revenue streams. And part of that is that the content makes money in a multiple of ways if you build your own franchise. Here's my, and Ben, I'm totally this, I, I currently, this, I currently, work for CNBC, which is becoming a part of Versant, which is being spun off of NBC Universal, which is part of Comcast. I'm not even sure I followed all that. But you get There's a rich guy named Brian Roberts, and you better say yes when he invites you to Augusta.
Starting point is 00:06:07 That's pretty much it. The answer is always yes. That's my take, Ben. But here's my point. Warner Brothers Discovery owns CNN. Versant, which is our parent company, controls MSNBC, becoming MS Now, those are being spun out. Why would Comcast, still our parent company, make a bid for the owner of CNN when it's spinning out an asset on the news side, like an MS now, like a CNBC? Well, I think Mark Lazarus, who's running Versant now, has a really smart strategy about going deep into the verticals that he's already taken leadership of. But I think it's much less about those, you know, global cable group or whatever they're calling it for their spinoff at Warner's Discovery, then it is about the studio assets and HBO specifically. If you put HBO with
Starting point is 00:07:01 Peacock and you have the power of NBC Universal and Warner Brothers studio assets, you have an unbelievable engine to differentiate and make content for all age groups at a premium level. Yeah, but then would you have to sell off, Ben, would you have to sell off CNN? 100%. A hundred percent. You'd have to. You'd have to sell. You'd have to spin that out of that just as Warner's is one thing that's different, though, if I'm Netflix, one of my big issues is I grow my business is lower cost programming. And one thing David Zazloff did incredibly well during his run at Discovery was he made high volume, low cost programming that drove big audiences.
Starting point is 00:07:40 And you look at HGTV, you look at our show Chopped on the Food Network, those are incredibly valuable at much lower price points. And that will really be a robust addition to the Netflix portfolio if they choose to keep it, or at least just keep the content, even if they get rid of the distribution. And so people aren't looking at that opportunity, which I see with the Netflix ambitions as well. Yeah. And Disney, we take out of the picture because they own the Marvel Studios. Spider-Man is controlled still by Sony, I believe, but you can't merge the DC aspect,
Starting point is 00:08:13 Batman, Superman with Marvel. I assume those have to remain separate, right? But my gosh, would the fans love it? If you could have a brawl. Superman versus the X-Man? Oh, my gosh. Wolverine versus Superman? I mean, come on.
Starting point is 00:08:26 Well, we know who wins that bad. I mean, Superman, just like a- Superman, he breaks them in half, but then Wolverine regrows. It's all very, that's for a different show, but as a comic book guy, I love talking about it. Ben Silverman, great stuff, as always. Thank you very much.
Starting point is 00:08:40 Thank you, Brian. All right, let's move a little more to the stock side because your next guest has insisted at Comcast, Still our parent company should try hard to buy Warner Brothers Discovery as it could fix a lot of the company, including NBC Universal's $30 billion under valuation, his opinion. Joining us now for more, Peter Sapino, he has senior media analyst at Wolf Research. Peter, you just heard that conversation.
Starting point is 00:09:07 Let's kind of follow up from the stock side. Who do you think ultimately ends up with Warner Brothers Discovery, if anybody, and does it ultimately end up being broken up? Well, in our opinion, it's up to Netflix. Netflix has the most powerful currency in the industry with its stock, and Netflix has such a huge share of streaming engagement that they can make the minutes and hours owned in the Warner Library. They can turn that into dollars better than anybody else in Hollywood.
Starting point is 00:09:39 Of course, Amazon is extremely well capitalized, and Paramount Skydance and Comcast. have really powerful arguments for taking a run at these assets before they are never available again. But didn't NBC? Sorry, we'll get to NBC in a second. Netflix's co-CEO Greg Peters recently say, like a couple weeks ago, that they effectively were not interested in Warner Brothers? Yeah, he did say that. And he said in more detail on their last earnings call that it's Netflix's opinion that strategic M&A won't change the competitive landscape significantly in streaming. I'm sure there's truth to what he says, but we need to watch Netflix actions more than their statements because they're inherently, really an innately opportunistic entrepreneurial company, and that's a compliment.
Starting point is 00:10:26 And historically, they've said they would never do advertising, and now they're a massive advertiser growing at 100% annually. And they said that they would never do sports. And they went out and licensed multiple sports properties over the last few years. So things are true at Netflix until they're not. I'm going to kind of quote Peter Sapino back to Peter Sapino because this stuff, this stuff is not only in my world, but it's a little bit above my world. Also, if that makes sense, Peter. So as you know, in our audience, I think knows, CNBC is being spun out with other assets,
Starting point is 00:10:59 part of a new company called Versa. What's left of NBC Universal will remain with Comcast. You believe that it's possible. Comcast thus spins off NBC. NBC Universal, not Verset. We're already going, VRST, the new ticker, spins off the remainder of NBC Universal, creates a new stock, and then that stock is used to buy Warner Brothers Discovery. In that scenario, what happens to WBD's debt? Because the issue is not the quality of their assets. It's how much they owe. Great question. And yes, we think that
Starting point is 00:11:36 there's a strategic opportunity paired with a financial opportunity in the transaction that you just described that we've been writing about for about a year or more in some senses. There's a huge valuation unlock opportunity at Comcast because NBC Universal trades within Comcast at five and a half times EBITDA and seven times earnings, which is really stunning considering Disney, which is not an unrelated asset, trades for close to 12 times EBITDA and a much higher earnings multiple. So in that Contacts, yes, the debt at Warner Discovery is a big deal. Warner announced last December that it had begun a process to restructure its corporation and its debts in order to maximize optionality and prepare itself for the possibility of an auction or a breakup like it seems to be
Starting point is 00:12:25 beginning. And so we think that they're in a position to move the debts around in whatever way serve their purposes. A lot of our viewers right now are watching on, we would in the industry call linear television. That's good old-fashioned cable TV and throwing some satellite on there as well. We know that those numbers have come down and come down fairly dramatically, Peter. And I'm probably talking for the home team here. But I think there's a cap. There's a bottom level at which there's going to be millions of people that don't cut the cord
Starting point is 00:12:56 because cable is still. It's easy and it works and it looks good. And you can find stuff. Am I, like, drunk? or is that a reality in this situation, Peter, where there is going to be a bottom to linear TV? Because that goes in to all the thinking and the calculus that's being done in boardrooms right now.
Starting point is 00:13:18 The decline of linear TV has changed in the last few years from a rapid consumer behavior shift to more of a age cohort driven shift. And the only real thing that's changing dynamically within today's age cohorts is the availability of sports. ESPN launched its direct-to-consumer app in August. Fox did the same thing. The regional sports networks are gradually finding their way into streaming environments.
Starting point is 00:13:45 And with that, the last case for the differentiation of linear TV is starting to crumble. Having said that, I mentioned age cohorts. Our surveys show that people over the age of 55 are inclined to keep linear pay TV for the foreseeable future. And in that way, we think of linear pay TV as Coke and Diet Coke, and streaming is more like Monster Red Bull and pick your enthusiast variety of energy drinks. That's well said. I was thinking Celsius. I'm more of a spin drift guy, but I kind of appreciate the analogy and the metaphor. I've been known to venture into ghost. Into what? Ghost energy drinks.
Starting point is 00:14:25 What is that? Let's keep going. I don't even know what ghost energy drink is, but now I'm curious. I'm ghost curious. Peter Sapino, really appreciate the view. Great stuff. Thank you very much. My pleasure.
Starting point is 00:14:37 All right. Speaking of energy drinks, after the break, we're going to bring you more good energy. On the other side, your next guest has some power picks for your portfolio. I'm going to Google Ghost Energy and then be back right after this. All right, welcome back. Let's talk energy, not energy drinks, and how to make some money. Joining us now is Tyler Rosenlicht.
Starting point is 00:15:10 He is fund manager and head of natural resource equities. at Cohen and Steers. Now I know what ghost energy drink is. Not a promotion, by the way. Tyler, it's great to have you on. Thanks so much for having me. Okay. So energy I do know something about. Let's talk first off about uranium, the nuclear renaissance. Everybody's talking about it. But let's, I want to dial it back a bit. Okay. We're building exactly zero nuclear power plants in the United States right now. That number zero. Why is a chemico such a big opportunity for you and your clients? So let's start with. We're big believers in the need to produce. more energy because we think energy demand is going up a lot. Yep. And then it's about we want
Starting point is 00:15:46 predictable energy and we want it to be clean if it can be clean. You know, nuclear is really a resource that can provide both of those things. Now, if you think about the regulatory environment, a couple of years ago, we had a NIMBY world, which was, hey, I don't want to build anything in my backyard, not in my backyard, right? We think a couple years ago that acronym actually shifted to a banana's world. That's build absolutely nothing anywhere near anything. That world feels like it's actually changing. We're going to go back to a place where we're going to be able to start to build the assets that you need to power the global economy. Again, nuclear is this resource that runs 24-7-365, very high capacity factors, very low variable costs. It's the resource
Starting point is 00:16:24 that we want. It's going to take a while, but we think we're going to be shutting down nuclear. Yeah, so phase one. Right. Indian Point in Westchester, New York, three-mile Island, for different reasons a number of years ago. One of the two, likely to be restarted. I don't think it's going to going to be both of them. But again, go back to Cameco, which is a uranium producer. Yep. Where do they fall into this? Yeah, so let's start with how the uranium buildout's going to happen. It's going to be four phases. First is let's not shut down the things that are actively operating. We think that's happening. Phase two is let's turn some stuff back on. That's going to be the next few years. Phase three is going to be, hey, let's actually increase the capacity
Starting point is 00:17:01 of existing facilities, build new nuclear reactors inside the fence. Phase four is the small modular stuff, the new technologies. That's really a 2035 story. When you talk about something like Camaco, they're a producer of uranium. Demand for uranium is going up a lot. It's really hard to mine uranium. So we think that that's a really good environment. And they also own Westinghouse. That's the company that helps.
Starting point is 00:17:22 The big nuclear builder. There we go. Yeah. Used to be part of GE. There's a lot of stuff going on there. When we talk about copper, we tend to talk about Freeport McMoran and to a lesser extent southern copper, which is based in Arizona. But ostensibly a Peruvian company.
Starting point is 00:17:39 like a third date. It's called tech, trades here, but is based in Canada. Copper company, who and why? Yeah, so they're a Canadian-listed copper company. They've actually gone through a big sort of corporate restructuring, getting rid of some of their old coal assets. They're currently going through an M&A transaction with another major miner. We're really bullish copper. We think copper prices have to go up a lot to incentivize new supply to come into the market. Demand for copper is really robust. It's kind of a company in transition. We think there's a lot of commercial and revenue and operational synergies from their transactions. So if you like copper, if you believe in the sort of long-term case for that commodity, we do. We think it's an under,
Starting point is 00:18:17 yeah, we definitely do. We think copper prices have to go up quite a bit. And that's a kind of underlooked place to find copper exposure. Okay. Let's talk about the atomic number 51. This is not alimony, which is what you pay a spouse who you've separated from, but antimony, which has the chemical element SB. There is a company called U.S.S.S. There is a company called U.S. U.S. antimony. It's been red hot lately, by the way. That is not who we're talking about today. We're talking about perpetual P-P-T-A. They're trying to restart a gold mine, but the gold mine also has anemone, the deposit in it. But, Tyler, you know it is hard to restart a closed mine. It's very hard. Not impossible. Yep. But it's really hard. Very hard. So one thing that we've
Starting point is 00:19:04 seen happen over the course of the last six to 12 months has been the U.S. government is directly investing in the resource economy, right? Other companies have gotten direct equity investments, advantage debt, they've gotten advantage off-take agreements. You know, critical resources, we think, are really imperative to get mined here in the U.S. We think it's going to be important to restart the entire supply chains, and we think the government is going to step in to really help it. So perpetua, PPPTA, they do own a large domestic antimony deposit.
Starting point is 00:19:33 Antimony is critical. It's in the gold mine. It's in the gold mine. It's sort of part. Yeah, there's a lot of stuff that kind of gets mush together and then these companies take it and they separate it out. The stock's down 12% today, but I want to be clear that was our mystery chart. It's more than doubled this year. Even if somebody that loves the price going up, Tyler, is there any part of you as a fund manager just like, okay, listen, we need some, we want prices to go up.
Starting point is 00:19:57 But there's a certain level where you're like, this is getting a little crazy. Yep. You don't want this to become a meme stock, I don't think. Totally agree. And we think that there's definitely situations in the market. where you've gone to the meme stock, even in the resource economy. So we're actually looking and say, hey, where do you have good value for the gold deposits and where do you get sort of less expensive upside to the extent they're able to be successful
Starting point is 00:20:19 restarting the mine and they're able to get some sort of transaction with the government? So this is one where we still see relative value to the extent that they're able to be successful with what is a very challenging restart plan that they're trying to do. Camaco, Tech Perpetua. Mining is the new not mining. Tyler, thank you very much. that. Cohen and Steers, head of natural resource equity and fund manager, Tyler Rosenlichter. All right up next, your market
Starting point is 00:20:43 navigator will reveal the one key metric that could help you unlock more market gains. All right, welcome back to Power Lunch. I'm Dominic Chu. Time now for the market navigator where traders are always looking to get more return on their investment. Now, that's
Starting point is 00:21:10 not new. But our next guest is looking at what he thinks is a key metric when it comes to getting the most out of those regular investment pay and capital appreciation as well. Joining us now as Matt Powers, managing partner at Powers Advisory Group. Matt, this is an interesting story
Starting point is 00:21:26 and one that is, of course, secular in nature. Demographically, we all are getting older. We're looking for income generation, but you're looking specifically at one metric that kind of blends a lot of those income generation and capital appreciation themes in one. What are you looking at? Yeah, first of all, thanks for having me, Dom.
Starting point is 00:21:45 Appreciate being here. You know, it's almost every day you're seeing this move upward in the mega cap space, and we don't foresee this continuing at this rate. And we need to just start thinking, you know, where do you find quality that actually holds up when this turns? And one place to start is yield. And you don't really have to stretch to find it. You also don't have to chase high dividend stocks. I mean, buybacks are the other side of shareholder yield. So we're looking at companies right now that use free cash flow, not debt, to return capital to investors. And when you think about total return, it really comes from two places. It comes
Starting point is 00:22:17 from growth, and then it comes from shareholder return of capital, which is dividends and buybacks. You know, most investors, they stop at the dividend. You see the yield, you see the quarterly payout. But the quieter part of total shareholder yield comes from sherry purchases, and we're seeing record numbers on these, about $940 billion last year from U.S. stocks, and that's on pace to top $1.2 trillion this year, which is an all-time high. And roughly 430 S&P companies are buying back stock. And again, that's an all-time high. So this really isn't a one-off story here. All right, Matt, are there specific places in the market that you are looking towards specific sectors or even stocks themselves that kind of fit the bill, so to speak, for this
Starting point is 00:22:56 shareholder yield plus capital appreciation? Yeah, we like companies that have raised dividends for a decade or more. They've kept these buyback steady and consistently reduce share count. You know, you can't perfectly quantify it since the index it reconstitutes quarterly, but the S&P, about 200 of the 500 companies have increased dividends for 10 plus years, and only around 50 of those have maintained regular buybacks over that same stretch. The overlap's small, but that's the sweet spot. So all three of these announced earnings next week. We're not looking for home runs on this or sector specific.
Starting point is 00:23:26 It's just mainly consistency and a commitment to return a capital. So you start with Visa, $5.6 billion to shareholders last quarter, four and a half billion of that through buybacks, and they just approved another $30 billion repurchase plan. The dividend looks modest only at about 0.6%, but they've grown at 18%. And when you include buybacks, the total shareholder yields, closer to 4%. So that's all funded from free cash flow. And over the past decade, Visa's cut its share count by about 16%. And then another good example here is Mondalese. They announced a $9
Starting point is 00:23:57 billion buyback through 2027. And they've already returned $3 billion to shareholders in the first half of this year through dividends, which they've grown double digits the past decade. And with buybacks and so the current shareholder yield there is over 9%. It's just a steady defensive compounder. And lastly, Chevron, it's been one of the most consistent. 16 billion in buybacks. over the past year, roughly 5% of its market cap, you know, with plans to reach up to 20 billion through 2026. You know, add a 4.5% dividend yield and they've raised it 37 straight years. You know, they're returning close to it's around 10% of market cap annually. So, you know, that's a real, real capital discipline. All right. Matt Powers with those picks involving shareholder
Starting point is 00:24:38 yield. Thank you very much. Brian. We'll send things back over to you. All right, Dom Chu, thank you very much. And as we had to break the incredible turnaround happening at GM. And if any of it has to do with round wheel wells, we'll explain next. All right, let's talk about two Gs. The first one is gold. We'll get the GM in just a minute, but I want to first take a look at gold. And we can do silver as well. Gold is actually having one of its worst days of the year. Gold finally coming down. I mean, gold's been going up pretty much every day for the last number of months. The gold mining stocks have gone up as well. So, maybe a little sell-off, not only welcome but healthy, time will tell, but still gold right now,
Starting point is 00:25:31 down 5.17%. Meantime, the number one stock in the S&P 500 right now, by far, is another G, General Motors. That stock up 15%. In fact, GM is having its single best day today since the pandemic turn in March of 2020. Now, if you do remember last week, GM wrote off over a billion dollars from EVs, but today's earnings numbers show a big beat and Mary Barra's company raising full-year guidance. Stock also has done an amazing four-year round trip. Getting back today to the stock price it was in early 2021, it's kind of when it was not forced to shift to a more electric future, but certainly changed the business outlook. Let's bring in Phil Abo now to talk about GM and Mary Barr and what they may be doing.
Starting point is 00:26:28 Phil, great day for GM. Do we know what may be behind the turn I kind of only half joked, you know, that we got round wheel wells because they have those square wheel wells for a long time on the Silverado, which I didn't like. But how much of this is just cars are selling? It's some of it, Brian. I mean, look, the bottom line is this. This stock is up today to a record high because GM, GM. reported far better numbers than analysts were expecting. And I mean far better numbers. Take a look to Q3 EPS. Coming in at 280 a share, the street was at 231. Then the guidance for the
Starting point is 00:27:04 full year, $9.75 to $10. That's the new guidance from GM. The street was at 947. And then they topped it off on the analyst call by saying, you know what? Next year, the earnings will be better than they are for this year. Now, let's be clear. Tariffs have taken a bite out of the bottom line for General Motors. North American profit was down 37% in the third quarter relative to last year. The margin for North America, 6.2%. A year ago, it was 9.7%. But GM has a couple of headwinds here, and this goes to what you were talking about, Brian, in terms of selling more vehicles. Not only did their market share go up to 17%, average transaction price, $51,000. That's greater than the industry overall, and they are also increasing their U.S. production. Mary Barr and her team, they're
Starting point is 00:27:50 dummies, they realize that the ice market is going to be strong, will be for some time to come, and they've got some capacity. So what are they doing? They're moving things like the Chevy Equinox into production in the United States. In fact, today they said they're going to double the announced plan for Equinox production in terms of what they ultimately will build here. Bottom line is this. Take a look at GM versus the S&P 500 and that 2025 EPS guide of 975 to 1050, look, they previously were at $825 to $10. Any way you look at it, Brian, this is a clear example of General Motors doing the pivot towards internal combustion engine vehicle sales, not giving up completely on EVs, but realizing we have the strength, we have the supply chain that we can move things around as much as possible. Let's take advantage of it. Yeah, is there an acknowledgement, either on or off the record, Phil, I know you talk to people a lot behind the scenes as well. Is there an acknowledgement across Detroit? I mean, GM, Ford, Stalantleant.
Starting point is 00:28:49 and maybe some others, that the way things will probably look in the future is you're going to have a lot of gas powered engines, you're going to have a lot of hybrids, and you're going to have your EV mix as well. You're going to be able to provide the customer with a choice for whatever he or she wants. You're going to have that vehicle at that price point. Yep. Yep. It's going to look a lot like it did before you saw a massive investment in electric vehicles. And again, EVs aren't going away. They're just going to be a. smaller part of the market for the foreseeable future. By that, I mean the next two, three, four years. And who knows? You get a new administration. You may see it swing back the other way.
Starting point is 00:29:28 But for the time being, this is what we see now. Meet the new boss. Same as the old boss. Was it, okay, so you said it. I kind of alluded to it. We talked about it on my previous show last call a lot. How much this was forced on these companies, Phil? Well, the Trump administration made it very clear. Cafe standards, they're going away. Also, EV mandate, that's going. going away. I mean, if you're General Motors, you sit there and say, look, we've got a real benefit with CAFE standards. We no longer have to buy zero emission vehicle credits, which was a lot of money they had to spend in order to meet the CAFE standards. We can now focus on building the vehicles people want. You've got cheap gas, internal combustion engine vehicles are strong.
Starting point is 00:30:11 And don't forget, about a third of GM sales are pickup trucks. I know everybody says, Ford, the F-150 best-selling vehicle in the United States. And yes, it is. But you add all the pickup trucks that General Motors makes, they outsell Ford. The new Silverado is attractive, and they fix the wheel wells. And in this, in my humble view, that made a big difference. That's just my own one consumer's view. Philibault, thank you very much.
Starting point is 00:30:38 Round wheel wells. Getting out of Kate Rogers for a C&BC news update. Brian, Vice President J.D. Vance warned Hamas, it would be obliterated if it does not cooperate with President Trump's 20-point ceasefire plan, which calls for the group's disarmament. He made the comments today while visiting a military base in southern Israel where U.S. troops are monitoring the truce. Now, Vance is due to meet with Israeli Prime Minister Benjamin Netanyahu tomorrow. Paris's top prosecutor says the crown jewel stolen in a weekend heist at the Louvre worth around $102 million. He says that price tag,
Starting point is 00:31:12 however, does not include their historical value to France. Officials say 100 investigators are now involved in the hunt for the perpetrators. And Netflix is teaming up with Mattel and Hasbro to turn its blockbuster, K-pop demon hunters, into a line of toys. The film, which was Netflix's most watched original movie, and a number one hit at the box office in August will inspire toys, collectibles, and role-play products. Mattel will launch dolls and action figures in 2026, while Hasbro will make plush toys, youth electronics, and a monopoly card game, all based on the movie, Brian.
Starting point is 00:31:45 over to you. Finally getting around to watching Stranger Things, Kate, and I got to say, it's really good. It's really good. It is really good. You're a few years late, though. My son's now 11, so I think he's old enough now that we, you know, he was a little young, but now we're right in there and he doesn't want to go to bed. Kate Rogers, thank you very much. Thank you. Thank you. It's a whole different issue. All right, coming up as stocks mostly keep rocking. Is it time to start thinking about leaving the party? Well, your next guest is a take on that and more. Stick around. All right, let's get back now to the markets. The Dow, so the NASDAQ's not doing anything. That's basically flat. We'll call it slightly down, but it's flat. But the Dow, Dow's at a new
Starting point is 00:32:34 intraday record high, boosted by strong earnings from Coca-Cola and 3M. Earnings still rolling over the next couple of weeks. So how big of a deal are earnings going to be to the markets and your investments? Jim Tierney is Alliance Bernstein, CIO of U.S. concentrated growth and joins us on set. Jim, welcome. Thank you. Still early-ish, overall, have you been happy with the earnings numbers? Really good earnings number. And something important happened between the second quarter and the third quarter. Estimates actually went up.
Starting point is 00:33:03 So it's not like we're setting a low bar and we're jumping over the low bar. Estimates went up over the last three months. And the bank results were fantastic. We're starting to see some health care results that are good. And Koch's numbers and GM's numbers, as you talked about, really good. Are you surprised by how strong some of these numbers and guidance has been? Yes. And it shows you that there's more to the U.S. economy than just the AI trade, which I think is important.
Starting point is 00:33:28 It's amazing. Are we allowed to say that? But it's an excellent point. AI is getting all the headlines, deservedly so, or at least getting most of the headlines. But guess what? 3M and Coke today, General Motors, we just talked about, proves that maybe this is economy doing better here and abroad than something. Absolutely.
Starting point is 00:33:48 And I think that will allow the market to broaden out and allow the markets to go higher. Does that economy, does that spending benefit a MasterCard? Absolutely. The U.S. consumer continues to be incredibly strong. The interesting thing about MasterCard is when the banks report earnings last week, they show you the card spending data. So we know that spending accelerated in the third quarter versus the second quarter, which means that MasterCard probably has good numbers. And MasterCard Visa and MX, for the most part, are taking a little bit of a, I think they would call a VIG. Exactly. In some circles. Are you bullish on Visa and Amex also? is MasterCard its own thing? I think both Visa and MasterCard are in a really good spot. You look at
Starting point is 00:34:28 the services that they're providing both companies. It's becoming a bigger and bigger mix of their business, and that is growing in the high teens for both companies. You also are bullish on Schwab. Interesting. Schwab does have a bank. By the way, Schwab is a bank. They've obviously got the trading platform, asset management, wealth management. This is a multi-trillion dollar company. Yes. Swab. It's huge. More than $10 trillion. What do you like about it? Besides, the 10 trillion. assets. So the retail investor is incredibly engaged. That means more trading activity, which Schwab monetizes. It means more margin borrowing, which they monetize. The cash sorting, which was a
Starting point is 00:35:04 big issue a year ago, is now behind them. They're under 15 billion of borrowings, and that's about the stable level that they want, which means that they can return cash to shareholders via buybacks. With the stock at 18 times next year's earnings, those buybacks are going to be incredibly accretive. And then finally, and nobody's really talking about this, they're getting into crypto trading, cryptocurrency on their platform, and look at what it costs you to get in and out. It's a very high margin business for the players today. They are going to disintermediate that market like they always do, and it's going to be very profitable for Schwab. And yesterday's outage of Amazon Web Services, which affected trading, it affected people's ability to pay for lunch,
Starting point is 00:35:42 whatever, not affecting your ability to recommend Amazon. I think there are two things going on at Amazon that people are underappreciating. They've been capacity constrained on. on the AWS side. They're bringing more capacity on in early 2026. That will drive accelerating growth at AWS. And then on the retail side, the robotic stuff that they're working on is unbelievably powerful. They're going to lower their cost to deliver each and every package, which either drops to the bottom line or lets them cut prices and become even that much more competitive. And Amazon is flat year to date, whereas most of the rest of the Meg 7 is up a whole lot at a mid to high 20s multiple. That's just way too cheap for the growth that they're providing.
Starting point is 00:36:21 There you go. Mastercard, Schwab, Amazon, Jim Tierney, Alliance Burdenstein. Really appreciate your views, Jim. Thanks for coming in. Thank you. All right. So let's get a quick check on bonds. No, Rick, today. We're going to quickly blast through the bond report here because the 10-year yield, if you're buying a home, maybe if you're borrowing money to buy a car, you care about these bond yields at 5, 10, and 30 years even. Five-year yields at 3.56, the 10-year, staying under 4%. It's at 3.96%, which means hopefully, mortgage rates. might start to tick down very soon. All right, coming up, maybe the most scary part of the market that you are not hearing enough about, but you will. Next. Buying stocks on borrowed money, it kind of sounds like an odd concept, but it's not, and it's growing.
Starting point is 00:37:20 In fact, as the Kobasi letter reports, the number of so-called leveraged ETFs, ones that give you two, three, ten or more times, The leverage off every dollar you spend are soaring. And the number of leverage ETFs just hit a new record high. Adam Kobasey is the founder, an editor-in-chief of the Kobasey letter, always putting out really interesting data that kind of makes you think. And this Adam made me think, I should be nervous because leverage ETFs by themselves, I got no issue with it. But when there's 700 of them, 200 created in the last couple of months, it feels like a sales.
Starting point is 00:37:59 semi gold rush and not in the good way. What am I missing? So I think, you know, it's an interesting craze that's happening. You know, if you look back to 20 and 20, there was around 200 levered ETFs. Now you're at a record 700. But I think it's also even just beyond levered ETFs. There's just an ETF craze in general. There's over 4,500, or ETFs listed right now on the market. That's a record high, up 800 this year alone, year to date. But, you know, I think the lever side of things is really a reflection of, and particularly retail investors, are looking for as much exposure to a lot of these risky assets like stocks, the AI revolution, to the record run that we've seen since the April lows, or one of the best six-month runs in history.
Starting point is 00:38:47 But the question is, you know, these products are a little bit more sophisticated than they appear on the surface. And if retail, is retail positioned or do they understand the risks of investing in these products. So explain a little bit about the risks. Okay. And just to be, I'm going to be super, super generic here because all these products, some of them may be different. I'm not going to be exact. You get my point at them. You bet $100 to win $100. That's called investing, right? Buy a stock. It goes to zero. That's investing. Well, if you buy a $100 stock and you can get $200 off it, $3 to one leverage, but if it goes down, you're hurt the other way. So how does this,
Starting point is 00:39:27 how does this all work and how do they have enough stock to manage all these leverage ETFs? Exactly. So, yeah, so the dangerous part about the ETS becomes when you're applying multiples of leverage. So, you know, it used to be a few years ago, two to three times was crazy. And now you're seeing ETS proposed with five times leverage. And this is, this could be even on a single stock. Like, for example, one of the proposed ones is on Nvidia. So if Vindia fell 10%, you would lose 50%. This exposes you to decay, you know, decay,
Starting point is 00:39:57 which is pretty high in these products. And even in April 2020, I'm sure you remember when oil prices turned negative for the first time ever, the triple levered ETS were actually delisted. They literally went to zero. They should have gone negative,
Starting point is 00:40:11 but it basically broke the ETF. And there was a big pushback. Now it's starting to return. I don't necessarily think this is something that can derail the market long term. I think it's more of a product of just how strong risk appetite and momentum is. And I think it's rightfully so. It is, it should be strong because we are. I think, Adam, and I'm sorry to jump in. I want to get this in.
Starting point is 00:40:34 Doing this for almost 30 years, I do believe that this will exacerbate any downside moves. If markets turn down, this is going to make them turn down faster and more aggressively. Not a bad thing necessarily, but people need to be aware of those risks. Right. And that's exactly what I was getting to. So I think my long-term thesis, is still bullish, but I think over the short term, this will drive more volatility. And we already saw it. I mean, take a look at what happened on October 10th when Trump tweeted about the China tariffs. Leverage, even beyond equities, look at crypto. We saw the biggest single day liquidation in history, $20 billion, 1.6 million traders were liquidated in under 24 hours. That was almost
Starting point is 00:41:13 10 times the previous record. So I think what the product here is, as you said, you know, when we have violent swings and the market has incredibly reactive now, because basically, basically any tweet or any headline at any given minute can move trillions of dollars in market cap. I think these ETFs will only exacerbate these moves, as you said. And as an investor, you have to position accordingly because I don't see these products really going away anytime soon based on the trajectory that they're on right now. Yep. And maybe this is one big reason, Adam, and we appreciate you bringing the data forward, both online and here, this is maybe one reason that markets do move so aggressively on a tweet or a social media post or even just kind of a
Starting point is 00:41:52 word. Adam Kobasey founder, the Kobasey letter. Really good stuff. Important information, Adam. Thank you. Thank you, Brian. Always great to be on with you. All right. Thank you very much. We're on deck. We're not quite done yet. We'll tell you about the big numbers due out tonight. All right. Before we go, Netflix numbers. They are out tonight. Now, if you're counting at home, the street is looking for a 17 and 29% increase in revenue and EPS, respectively. But the analyst questions will also likely be just as hot and heavy around whether Netflix might make a bid for Warner Brothers Discovery and maybe it's a movie studio or anything else. Either way, Netflix numbers out in just over an hour.
Starting point is 00:42:40 I'm sure closing bell and fast money and overtime we'll have them all because we're done. We'll see you tomorrow. Closing bell starts right now.

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