Power Lunch - Will Q2 Earnings Deliver? Housing Stocks Breaking Out? 7/23/25

Episode Date: July 23, 2025

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Another day, another record high for stocks. Welcome to Power Lunch. Everybody alongside Kelly Evans, I'm Brian Sullivan. Big Tech getting bigger as the NASDAQ, but even some more old school names like Merck, Boeing, and Caterpillar, they're all higher right now. And the moment of truth for the market awaits as Alphabet reports earnings after the bell. The shares are under little pressure right now, but coming off their 10th straight day of gains, investors will be laser focused on how they're capitalizing on AI across the core businesses, ranging from search to YouTube to the cloud, critical tests, not just for their ambitions, but really for the broader tech trade. Let's start with AI, whether you're a company, a government, the objective is the same. You're trying to win this AI race.

The Trump administration taking that competition pretty serious. and laying out an AI action plan today. Amon Javers is live from the winning the AI race summit, the All-In Summit, Amin Summit, Amin and Washington, where the president is set to speak later this afternoon. Kelly, that's right. We are all-in here at the All-In Summit, the Silicon Valley podcast, are the hosts here of this event.

They've got the vice president and the vice president today talking about the administration's AI agenda. The vice president, J.D. Vance, spoke a short time ago, making a couple of interesting, One is on agriculture, the vice president said, you know, the administration has been getting some criticism about how aggressive it's been on immigration. He thinks the agricultural industry is behind the curve in terms of automation of agriculture. He'd like to see fewer migrant workers and more automation of that sector. He said there's a long way to go and that could increase productivity of agriculture.

And the vice president also talking about tech companies in Silicon Valley, criticizing them in harsh terms of using an effort. expletive, in fact, to criticize firms that are laying off American workers, not hiring American computer science and STEM graduates out of college right now, but also asking the administration for more H-1B visas and more access to foreign workers to code their software. So the vice president calling that a BS argument, but not using the phrase BS there. Meanwhile, the administration is introducing this AI action plan. Take a look at some of the elements here of the plan. They're talking about partnering with industry to deliver AI export packages to push AI around the world under an American brand and then these two bullet points

expediting and modernizing data center permits and removing federal regulations they see as hindering AI development both of those largely around environmental regulations that they see as hindering the building of data centers and other AI infrastructure and then finally upholding free speech in the advanced models and what they're talking about there of course is diversity, equity, and inclusion, they don't want to see DEI baked into AI, so to speak. They say they want to see AI accurate and fair and truthful and not built in with an ideological bias, as they put it here.

So we'll hear from the president tonight around 5 p.m. here at the Milan Auditorium in D.C. He's going to lay out the broad themes. Vice President, as I say, spoke just a short time ago, Kelly. Back over to you. Right. I guess the, you know, if we get workforce development. I don't know. There's going to be a range of different things. Our guests yesterday had a bunch of names, AIM, and a lot of the usual suspects, big tech,

but also names like Duolingo and so forth that he thinks could all benefit from the attention and possible funds that are going to be put behind these announcements. Yeah, I mean, I think you're going to see money. I think you're going to see a lot of regulatory thicket cutback. So I think if you're in the AI data center business or anything adjacent to that or touching it, you're going to see a lot of real runway here coming up,

and that might be an opportunity economically. And I think, you know, generally speaking, AI is just going to be on the receiving end of an enormously light federal touch here as the message from the Trump administration is go, go, go. Don't worry about regulations. Don't worry about a lot of the things that they think the Biden administration was doing that we're holding AI back. All right. Amon for now. Thanks. We appreciate it.

We wait to hear from the president just a little while. Amon Javers. All right. So let's move on because, folks, do you want some new stock ideas? I mean, who doesn't? Well, Piper Sandler is here to help. Craig Johnson and his team doing some great work on the technicals and coming up with some very different stock ideas.

Craig is chief market technician at Piper Sandler. Andy joins us now. And Craig, are you here to attest to vow on national TV that we are not going to start with anything AI-related? We're not going to start with anything AI-related, Brian, at all. We're going to talk about the market itself. We're also going to talk about crypto. we can talk about these cyclical stocks and building.

There's a lot of things happening there, Brian, that are pretty constructive on the charts that I just don't think enough investors are paying attention to. Okay, I would argue that crypto is a little bit AI adjacent in terms of the need for power, but let's move on. Let's start with the macro market, Craig. It's been a heck of a run. We got Dom talking about meme stocks again. I don't know.

How do you and your team read this overall equity market right now? Ryan, if you take a look at the chart of the S&P 500, we've broken out. to all-time new highs. It was just a few months ago that a lot of investors were concerned that we were going to see this market break down, maybe down to 2000, those kind of levels and all the negativity around the tariffs. And that wasn't the case at all. The technicals got really oversold. We bounced back. We've seen all sorts of positive signs from gaps and breakouts and moving back above moving averages and golden crosses. It all confirms to us, Brian, that the trend of this market is still higher. We're on target to get to our 6,600 year end objective, probably sooner

that we previously have thought. But again, the trend is still our friend, Brian, and I think a lot of investors are still fighting it. When you look at the AAI numbers right now, we saw two weeks in a row of down AAI numbers, yet the market's making a new high. This is a very hated market at this point in time. Well, I don't know if it's very hated. So I listen to you, and I think that sounds fine, But then I listened to Bill Smead last hour, Craig, and he's talking about how valuations are, you know, basically at all-time highs. And yes, I understand the arguments for why maybe we don't need to worry about that. But then you look at the sparks coming from the meme stocks and, you know, what's going on a crypto? And you think maybe it is a little frothy.

Well, I mean, valuations ultimately matter. I mean, you got to put all these pieces together. Yes, a technician said that evaluations do matter. But when you look at what has been happening over the last 20 years or so, Kelly, this market has been shrinking. You've got 20%, 25% fewer stocks, big share buybacks have been taking place. I don't know what multiple to put onto this market, right? As you continue to see, it's shrinking. More money chasing fewer number of stocks. Markets got to go up, just plain basic economics.

And I can't fight the historical multiple arguments. It's been 16 and a half times post-World War II. I'm not sure that's quite as relevant given how much this market has shrunk. I love that point, Craig. It's why, by the way, we have you on because you're a pretty smart guy. And, you know, I know you and Kelly are too young to remember, but when I started in this business, there were 8,000 publicly traded stocks in the United States. There are about 3,800 now.

So the pool of available equity has gone down while the amount of capital, i.e. money coming in, has gone up. You don't need to be a Wharton trained economist to figure that one out. Let's go into housing, though. Because all this talk about the Fed, they're meeting next week, by the way, lowering rates. We need lower rates. Well, we had some pretty doggone good housing numbers? How do you read some of the housing stocks?

Well, I mean, if you look at Horton that had some results yesterday, they were certainly better than expected. Certainly the bar was very low coming into that earnings sprint. But you look at that chart, then you start looking at charts like Linar and several of the other home builders. They all look very, very similar. Some of these cyclical stocks have been way out of favor are starting to act a lot better. And then you start looking at some of the building stocks like BLD, BLDR, some of these kind of stocks. Again, they're showing very similar patterns. They're reversing multi-month, multi-quarter downtrends.

As a technician, Brian, I can't ignore that. That's telling me that things are probably better and stronger when the consumer land than what people are thinking at this point in time. And then, Brian, you've looked at charts. You've looked at a lot of these commodities. I mean, copper's breaking out to an all-time new high. Dr. Copper is sending us a signal. The economy's probably okay. And we're starting to see a lot, a meaningful pickup in the industrials.

That's what copper is telling us and put this all together. It's probably a stronger environment than I think a lot of people are giving it credit for. And by the way, we're making new highs. That's bullish. And that's the only way to change negative sentiment is for new highs. Anything else you'd add, Craig, that is kind of more on the cautionary side? Well, on the cautionary side, we've got to keep an eye on what's happening in the bond market. We've got a lot of debt that's got to come do.

This got to get financed. And I keep watching how the bond market is reacting to tariffs on the macro front. And more specifically, if we start seeing 10-year bond yields working their way higher, maybe 475 or 5, which is not my forecast. My forecast is 350 by the end of the year. But if we do see rates go the opposite direction, that would be a problem. And that would not be a positive environment for stocks. and certainly would be a negative for mid and small cap stocks.

And by the way, Kelly, that's where I'm seeing the best charts at this point in time is down in small mid-cap land. And you're watching the Russell outperform the S&P over the last several days. This goes back to it and ongoing, you know, we talked to Michael Cantorwitz about this. He's like, don't fall for it. It's going to be another head fake. It's like the fish admiral from Star Wars. It's a trap.

That's a good internal wager we've got here between the small caps and the large caps, Kelly, at this point in time. But I'm still thinking that the small caps and the Russell, I've said it publicly, I'll say it again, that I think the Russell can make a new all-time high by August 15. Don't say it. Don't say it. You want to know why, Craig? You just said it. You want to know why you can't say that? Because I finally, I had some small-cap diversification in like my five, I first was five-twent nineers. And I finally said, forget it. Just get rid of it. And now, of course, of course, so of course it's going to break out. It's going to probably go 50% from here. And Kelly, also, Wall Street has been downsizing small-cap teams across the street. And usually they kind of do it at the wrong time. And they usually add at the tops and sort of subtract at the bottoms, unfortunately. And I think you're going to get a new high on the Russell by August 15th. And I think the S&P 500 will hit my 6,600 target by probably October 15th.

So write those down. We're still optimistic. Oh, they're written down, Craig. In fact, Gino and the team back in the control room, August 16th and October 16th. We're going to have Craig Johnson back on. We've got to look at small caps. But I love the fact, Craig, that you make the call.

There's a lot of people, and I mean this with utmost respect. A lot of people across, you know, respectfully, they're like, well, stocks are going to go up and down. It's going to be very volatile. Vol is another word for, like, I don't know which way things are going to go. So I love it. I also, Craig's got the Maynard's indicator. We go to Maynard's in Lake Minnetonka, Minnesota. It's a restaurant on the lake.

If it's full on a Thursday night, things are pretty good. Come on up, Brian. I'll take you out anytime. Pontoon Boat Fest. Craig Johnson, Piper Sandler. Thank you. Thank you, Brian. Thank you, Kelly. Speaking of rates, U.S. Treasury yields are trending lower this week. That's been helping. Ten-year yield around 430, yeah, kind of bouncing up to 438 today. But the big move of broadest in Japanese yields were the 10-year cross above 1.6% in early trading after that trade deal with the U.S. Highest level since 2008.

Let's bring in Rick Santelli for more. Rick, is this one, you know, is it better prospects? Is it more like Mohamed El-Ary was saying this morning, just more global bond issuance from Japan, Germany, and the rest of it? What do you make? Well, global bond issuance is game number one in terms of treasury yields, as the last guest aptly pointed out.

Absolutely. But that doesn't necessarily mean that interest rates are going to zoom, zoom, zoom, what it may mean is they're just going to stay higher for longer. Where have we heard that before? Now, look at a 20 year. Now, we had the auction today, and granted, it's the odd guy on the curve. It was a reopening.

All the reasons may be to pay less attention. But it was still a terrific auction. As you look at the chart, and that's a three-hour chart, you can barely make out right at 1 o'clock Eastern that rates dip, although now they're coming back and dipping. But the 20-year, it's got the lowest net change of yield. on the curve right now. It's only up a couple of basis points, but the rest of the curve, including the 20 years, still elevated. Now, let's look at it one week of twos and tens.

Kelly, you were right. We've been moving down, but that has changed a bit. And I do think that Japan plays a big deal in being the poster child for debt and along with the UK issuance. So we need to pay very close attention because we're in that game. We might be the leader in the issuance game. Let's look at that JGB, Japanese government, That's a multi-day chart of their tenure. As you pointed out, briefly toying with 1.6%. It closed right around 1.58, very elevated. And you might be asking, well, gee, our tenure is way higher.

Of course, there's something called an interest rate differential with the foreign exchange side. Their currency, of course, is what makes up that difference. And finally, the dollar index. Now, here's a one-week chart. And even interest rates being stubbornly up four or five basis points, most of the session today didn't really help the dollar index. As a matter of fact, keep this in mind again that on the 2nd of July, we had a three and a half year low close at 9678. We're not that far away. You must pay attention to that level.

Technicians will sell into a violation of that important low close. Brian, Kelly, back to you. The setup all ahead of next week's Fed meeting, Rick Santelli, thank you. All right, folks, one block down, but we've got a lot more show to go. First up, a tonic for tariffs. Look at one retailer that's been about 10 years, bringing production back to America, and the story involves Courtney Reagan in like a hard hat. Plus, earnings? Is it a hair net? I think. I listened to the earlier sake. It's a hair net? Wait till you see it. A hair net. I'll watch just for that.

Earnings, your affection, Morgan Stanley, with a list of stocks. They say, could pop into earnings. We have that list for you. An electric shock why 65 million Americans may see another increase in their power bill. Welcome back. All right. It's no secret that reshoring is a top priority for President Trump using tariffs and incentives for companies to bring manufacturing back here to the U.S.

There's one company that's been doing this for over a decade, and it might surprise you unless you saw this earlier already. They've shifted production away from China, Canada, even to make, even, even from Mexico, back to the home state of Ohio, with some success in doing so. And that company is Bath and Body Works. And that's where Courtney Reagan joins us from their new production. But is it a hair knit. And New Albany, Ohio.

Hi, Cort. Hi, guys. It's good to see you. Yeah, so I'm here at a Bath and Body Works vendor facility that is producing those famous foaming a hand soap. So right behind me, bottles that are also made nearby get put into the machine, and then automation fills that. bottle, adds the pump, screws it on and slaps a label on. It goes by a rate of 270 bottles per minute. There is a Cuban employee here for quality control. And all of this makes it possible

for Bath and Body Orks to produce everything that it sells in U.S. stores right here in the United States. It's become a competitive advantage, particularly during the global pandemic, when supply chains were snarled. And right now, as we face import tariffs on almost everything, every country. We had factories really all over the world. Pieces and parts of the foaming hand soap would travel 13,000 miles before it entered the stores. Now with Beauty Park, the product travels a distance of about 13 miles from factory inter-distribution centers. So lead times back in the day were about three to four months to market. Now we can chase into this product in as little as three to four weeks from purchase order into store. The shortened production time from

D-S-Store shelves allows Bath & Body Works to chase its winners and minimize losses for less productive products. A key reason it's able to develop up to 8,000 and new SKUs a year. So more than 80% of Bath and Body Works total manufacturing is U.S.-based, half of it right here in Central Ohio, what it calls its Beauty Park Campus, which is also located about 10 miles from its headquarters. Around 12 vendors contribute to the finished product from the lab to the batching, the filling, the packaging, and the distribution. But as you mentioned, the idea for Beauty Park came about in 2010. It took a couple more years to really get manufacturing up and running.

And that was thanks to hundreds of millions of dollars, ultimately, in investment from its vendors as well as from state and local and even federal government. So these vendors are a baddenbody works as their main client, but it's not their exclusive client. So they had to kind of come along on this ride to pull this off and do so profitably. But so far, it has been a winning proposition. Kelly and Brian? Courtney, when this first came up, it was during the pandemic because the shares of the company were doing great, not just because everyone was trying to buy their hand sanitizer,

but because they were one of the few companies, they had a domestic supply chain and could actually respond and be ready with that product. Absolutely, Kelly. I think their salesman from something like $4 billion before the pandemic to around $7 billion. And this vendor, it's called KDC1. They actually had to develop in, entire new facility located just a little bit away from Beauty Park to be able to fill that extra capacity. So that got up and running in 2021. So as the domestic manufacturing has grown, as the company has grown, the vendor base has had to grow with it. It's really quite a sight to see. But again, automation makes a lot of this possible, but there is a big human component. We were in a lab yesterday watching chemists sort of mixed together the different lotions and test the viscosity.

I mean, it was great for geeks like us, Kelly. You would have loved it. Yeah, and you know, and I know some of the haters are going to be like, wow, there's not a lot of jobs. It's mostly computers. That's not the point, is it? I mean, in 2009, Courtney, GE shut down the last incandescent light bulb factory in the United States. Now, a factory happened to be in Winchester, Virginia, where I went to high school and my parents

still live. And we lived in around some of the people that lost their, about 280 people lost their jobs, and that was shut down. So it's not just that there's X, not. of jobs. It's the women and men that we're seeing behind you that are working. Yeah, there's automation. But for them, that matters. So it doesn't matter to me if it's 1,000 people or 10 people. That's a job. That's in Ohio and not 11 or 13,000 miles away in the center of China having to spew carbon to put on a train, a ship, and then another train to get it here.

Right. And I think, you know, some of these companies would argue that a lot of those factory jobs that were around in maybe the 80s or 90s didn't have the degree of automation that we have today that takes out some of the repetitive tasks. I mean, I mentioned that this machine can fill the bottles. I think most of us would rather have a machine fill a bottle than a human hand having to fill a bottle so that that human hand can do something else. That potentially has a higher skill

and then maybe even a higher level of pay. So look, it's just sort of what happens when economies advance, right? The skill sets and the dog change. It doesn't mean that there aren't jobs. They just may be different jobs. All right. Courtney, how far are you from Dayton right now?

Not bad. Commutable, no. Not bad. Can I get a go Oakwood lumberjacks on the show? No, never. E.P&D. Elfride never dies, but I will give you a big. Oh, wait.

Oh, no. Here we go. I owe from the peanut gallery. I heard that. Thank you. Courtney and my wife went to rival high school's date. Ooh. So there's like this thing.

We have like a fun. Elfried never dies. See, this is what I get. Courtney, nice air net. Yeah. Courtney, thank you. All right, great piece on a big part of America. All right, what is best for your portfolio's health?

Some investors ditching health care stocks at exchange for big tech, but is that the right move? Buy low, sell high. We'll talk about it coming up. All right, welcome back to Power Lunch. A number of big companies set to report their quarterly results over the next couple of days. and weeks. And Morgan Stanley is out with a list of stocks that they say they've got extra conviction in going into earnings. Stocks that they highlight ahead of earnings, Chewy, CVS, Draft Kings, Eaton, Eli Lilly, oh yeah, NVIDIA, you knew that Nvidia was going to be on the name. Southwest Airlines,

Valley National Bank, Western Digital, F5, and a couple of others. Screenshot that, write those names down. By the way, speaking of Valley National Bank, we're going to be speaking with the CEO, Ira Robbins, here on Friday following their earnings. That is an exclusive interview. Ask him how the consumer and corporate America are really doing. The SMP 500, meantime, is hitting another record high. The president announcing the U.S. has reached a trade deal with Japan. Now we're hearing reports that the EU could be next. But despite all this optimism, our next guest is taking a more defensive approach on equities, focusing on sectors like health care and utility. while still recommending some tech, communication services, financials.

Joining us now on set is Ali McCartney. She's managing director of UBS private wealth management. You know what's so funny about market sentiment is literally yesterday it was like, health care's dead, just forget it, you know? And then today, look at thermo, look at some of these results, and suddenly, and now I feel like I've missed the trade. It's been one day, right? That's where this market is.

You have institutions that are pretty much resigned to staying where they are, seem to have very little conviction to buy, very little conviction to sell. And then you've got this retail fomo thing back. You can see it in the meme stocks. You can see it in retail numbers. And so it's this really strange point in time where we are at the first percentile in history in terms of valuations. You had an individual one that said we've seen that twice in my lifetime. One was a week during the pandemic and the other was the internet boom. So there's certainly reason to be cautious. But then at the same time, that list you gave from Morgan Stanley, that was a very varied list, right?

Yeah, tall food, invidia, a bank? Exactly. So that's what I'm saying. So breadth is definitely coming back. And we have entered a stock-specific environment that probably, it's still going to be driven by the MAG-7, right? The MAG-6 right now are 25% of earnings, downshifting, maturing, moderating, but still, you know, making up a quarter.

of that number. So I think there is a broader opportunity, and I think there is a point right now where we can both be bullish and mind the downside. Well, Kelly made, as usual, great point earlier in the show. When we had a guest on us talking about small caps, and you sort of alluded to the

fact that people get burned by, every time we hear small caps are back. Yes, yes, yes. It's like the Cleveland Browns are going to be good this year, and then they're not. Right? No offense. I love Cleveland. But it's You get the idea if these sort of unloved stocks, we always hear their back, and then it kind of feels like the economic rug gets pulled out. And you know this from energy, another marquee space where that's been the case over and over again.

So energy, health care, these space, how do you know if it's not a value trap? I think one of the problems with is that there's the should of investing. This should. Small caps should have had a great run during all of the trade issues. They're largely domestic. They largely sell domestically and sourced domestic. So they should have behaved differently during the lows after Liberation Day than they have. Healthcare, we spend more on health care than any other developed nation. We just, you know, in the Big Beautiful Bill, made clear that we're taking Medicare away from some of the medical social safety nets, which should be a boon for some of the health care companies.

That's a dirty word, though, the S word, should. That's what I'm saying. What's the movie? Please help me somebody getting old. Deserving got nothing to do with it. Yeah. Right. And that's the cruel reality of the stock market or any stock market is that things that should make sense or that should or I deserve to do. No. So let's take away from should and let's talk about where the earnings are. Right. The issue that everybody's talking about with this market is the only way that we can sustain and grow from the 6330 that we're at now is for earnings to get bigger, right? Earnings to grow. And so how does that happen? That.

doesn't happen because of tariffs, right? That's going to, in some way, harm the consumer at some point and harm the producer. So what do we have, and you've been talking about them? Automation, AI, spending on the big, beautiful bill. Those things can grow earnings. And the areas in which I see earnings growing are financials, are health care, largely because of what you and I were just talking about in terms of what AI and biotech have done to the drug development cycle, to potential profitability. And so, yes, there may be in certain areas more risk, but I think there's also more opportunity than playing the areas that have always and traditionally worked, whether they should or not. See how she did there? Brought it back to the should. By the way, it was

unforgiven. Clinise would kill Gene Hackman, and his Gene Hackman's character is dying. He goes, I don't deserve to die like this. And he goes, deserve ain't got nothing to do with it. You deserve someone who's seen as many movies as you have to fill in these blanks for you. I've got nothing. My mind is a hamster wheel of garbage. I'm trying, Allie.

Allie, great to have you. Good to see it. Allie McCartney. Artificial intelligence is bringing some real costs, and you could see it on your future electric bills. We just got our bill for last month. Okay. I've got some details, friends. and we're going to get into this story next.

All right, welcome back to Power Lunch. By now you know our RBI, random but interesting. But we're going to call this one WBI, wonky but important. And it's a story you may not hear anywhere else. Your home electricity prices may rise again next year. It's because the grid operator for the entire Mid-Atlantic and Midwestern area, basically DC to Ohio and a little bit of Chicago, just had a record high energy price auction.

Now, the whole process, super. complicated. But basically, it's what power generators are willing to pay to make sure they produce enough power for you. Some of these numbers are stunning. Listen to this. Now, last year, the auction rate was $28.92 per megawatt day. This year, that number soared to nearly $270, and the auction for the coming year just hit a record high of $329.000. per megawatt day. By the way, that number could have gone even higher, but the rate was capped by a deal made with the state of Pennsylvania

and its governor, Josh Shapiro. So why are electricity rates surging so much across America the past couple of years? Well, it's really a combination of a lot of factors. You got old power plants being shut down. You got data center and EV demand raising the need for more electrical power. And there was a huge backlog of new power plants

that are not being built for a whole whole. host of reasons, which include lawsuits, permitting issues, financing, Kelly, good old-fashioned, nimbism. We want that built, just not in my backyard. Now, the goodish news is that the 65 million or so people on this power grid called PJM, Pennsylvania, Jersey, Maryland, will not see huge jumps in their bills. I bet to differ. Okay. Keep going. No. Well, it's going to be about 5%, according to PJM. But you've got to remember, we're already up. That's on. top of what has been increases over the last couple of years. So even another one to five percent is still kind of a punch of the gut. And people expect prices to keep rising? Yeah, because there's

another auction in December, which could go even higher. The governor, it's gotten so bad, the governor of New Jersey, Phil Murphy, and Governor Murphy, you're our governor. You're welcome on the show anytime. He sent a letter, a nasty letter to PGM back in April, basically blaming them for market manipulation. So now everyone's starting to do this because it's become a political issue. Anecdotally, we got our bill today for June. The bill was up 20 percent. Electricity bill. We thought, you know, maybe we're using more power. No, no, no. Our usage was down 10 percent year on year. The bill was up 20 percent. The unit cost is up 30 percent. And the water bill,

same thing. Usage down, price of it up 20 to 30 percent. That's today. I'm telling you, you are on the right issue. We are about to hear. hear a whole lot more about these energy bills and how people are going to deal with that. And there are some stocks by Morgan Stanley had a no doubt saying some stocks that are associated with this, Tallinn, Vistra, NRG and Constellation. They're all higher today. One thing, I am going to defend PJM a little bit because they don't make the power. They're just the grid operator. If power is being taken offline, we don't want that old natural gas plant, remove it. I get it. Climate reasons. Shut it down. Something has to replace it. And the problem is that the shutdowns

are not being replaced as fast as they're being taken off line. Yeah, these are really long-term projects, too. It's scary, actually, to think about. Let's get to Julia Borson for the CNBC News Update. Julia. Kelly, the man who brutally murdered four University of Idaho students in the middle of the night at their off-campus home in 2022 received four life sentences this afternoon.

The judge ordered Brian Coburger to serve his sentences consecutively and said there would be no opportunity for parole. Coberger also gave up his right to appeal. as part of a deal to avoid the death penalty. The decision came after roughly two hours of emotional victim impact statements from friends and family of the four victims. Madison Mogan, Kaeli Gunncalves, Zana Kurnodal and Ethan Chapin. A doctor charged in the death of Matthew Perry pleaded guilty today to giving the friend's actor ketamine in the month leading up to his overdose death. In exchange for a Dr. Salvador Placencia's plea, prosecutors agreed to drop three additional

counts of ketamine distribution and two counts of falsifying records. And Stevie Nix and Lindsay Buckingham's pre-Fleetwood Mac album, Buckingham Nix, will have its first ever reissue. The duo announced today that the new edition will be out on September 19th and will come to digital streaming platforms. Kelly, back over to you. I wish this was a toss back to Brian. Well, that album, you can't find it.

It was before they joined Fleetwood Mac. You can get it online, like an LP, buy it in Japan. It's like $300. but the album has never been issued. It's cool. Frozen Love would be the biggest song on that album. Good to know. There you have it.

After the break, a token gesture, Goldman Sachs looking to capitalize on the Genius Act by making a multi-trillion dollar bet on digital tokens. We'll have the details next. Welcome back yet more signs of crypto-going mainstream. Goldman and Bank of New York Mellon announcing today they are teaming up for a tokenized money product that could potentially transform the $7 trillion money market industry. This is interesting because stable coins are kind of like money market. Anyway, joining us for more CNBC banking reporter, Houston, who broke this story.

Hughes, so tell us about it. Great to be with you, Kelly. Yeah, so lots of excitement over stable coins because of what just passed last week, the Genius Act. And so notably, you know, Citigroup Bank of America, JPMorgan, talking about issuing their own stable coin. But what stable coins can't do and they don't do is actually offer a yield. So part of the solution and that B&Y and Goldman's,

sex, the reason why they're so excited about this innovation is that, you know, if they have a future in which all these assets reside in the blockchain, they're going to be institutional players now. We're talking about head funds. We're talking about pensions. We're talking about corporate treasurers who are going to want to have a yield. And so it's essentially taking the money market industry, which is $7.1 trillion, bringing it to the blockchain and making it transferable in a way.

So help me understand this. How is this then different than a dollar, cash, or a short-term treasury bill, T-bill? Yeah. What is this, why do we need this? I'm still, I know I'm dense. I'm struggling. Yeah, it's good to talk about, Ryan. So there is the idea, and it's not supported by everybody, that essentially you're going to have a stable coin with a yield as a result of this.

And actually, some people are proponents of that? They think that's a good thing. But how are they getting a yield? They're buying cheap. It's just a money market. You've got money markets when you're in, you know, so the yield's going to be like one cent, infinitesimal, effectively. I'm getting close to 3.8, 4%. Yeah, if you go for a, you know, money market with a high yield, you can do that, yeah.

And so there is a decent yield on this. Corporate treasurers would want to put their cash instead of having it 0%, you know, actually earning a yield close to 3 or 4%. That's the reason why they would want to do it. And so this is, you know, this is taking this asset, which is well trusted. it's gained maybe $2 trillion in the last two or three years, you know, the rate hiking cycle, and turning it into a token. Why would you want that? You might ask, I mean, ultimately, the thinking is from these guys is that, you know,

if you want, if a cash management situation, they actually want to raise funds. They want to sell this, you know, the money market fund. Instead of doing that, they're just going to exchange their token. In other words, you've cut a couple of the steps out of this process, Brian. But again, the tokenization. of it allows what exactly, you know, that's what I think is super interesting about this. Yeah, it's essentially cutting out the steps. So, you know, a company wants to raise capital, or they have a collateral call, right?

Margin requirement. They need to actually give their counterparty money, essentially. What are they going to do? They're going to take the money market fund, liquidate it. It takes a day or two. They're going to have to wait a day or two. And then get that cash, send them the cash. Now, instead of doing that, if there's a ecosystem,

ecosystem in which everybody agrees that this token is good and is safe, they accept the token. Instead of selling and waiting for it, they actually have the yield for a little bit more time because they're not waiting T1. Exactly. No, exactly. It's instantaneous, really. And if that's true, that's why people are so excited about its usage there and, you know, throughout the financial system.

And it's all sort of, I don't want to say justifying Bitcoin, but it's adding a layer of adulthood. I don't know what the right term is. Well, this is part of... Why Bitcoin's the $120,000. This is the theme of taking all these traditional assets and putting a crypto wrapper around it. And then you have 24-7 settlement. You don't have to wait for...

It's, you know, 4 o'clock. We can't close this money market fund. It's available right away. Hugh, thanks. For now. We appreciate it. Hugh, son. All right.

Coming up, do the ends justify the means? Or all these red-hot, small-capped stocks just end in tears. Maybe your tiers. Watch is sponsored by crypto.com. Crypto.com is America's premier crypto platform. It's not only welcome back, it's that the meme trade is back and in a big way, from donuts to real estate websites.

The Wall Street bets crowd is fired up and they have been buying. Let's talk more about it with the meme master himself. Dom Chu, I just gave you that title. When did I become the meme master, Brian Kelly? All right. So let's talk about this. GameStop AMC costs back of the day. This is the latest round is open door, crispy cream, and even Coles department stores.

So that stock-focused Internet messaging board phenomenon is moving fast and furious with all the mentions here. So where could the next batch of potential meme stocks be? Will the team at CNBC Pro put together a stock screener, try to identify potential other meme stocks, and they took a look at the factors that many meme stocks have in common? The latest screen that we have looked at stocks that have a high amount of short interest, this case, 30% or more short interest as a percent of a company's float. The market cap ranges from 50 million up to $2 billion, and they've also got share prices that are below 20 bucks a piece. So Fluence Energy is on that list. It's a market cap of $1.8 billion, share price of roughly

$10,000, 32% short interest. It's already up 69% in just the last one month alone. Also on that list is Novavax, right? Just about a $1.2 billion market cap. The stock, price is just below $8, 32% short interest, and 24% gains over the last month. And then our final sample, if you will, here is Indy Semiconductor, a $900 million market cap company, share price roughly $4.5.00. Short interest, 31%. It's already up about 21% over the course of the last month as well. So as we talk about some of the names that we focus on here, the meme stock phenomenon on has often been about high short interest, low stock price, and stocks that can be easily moved around based upon internet messaging forums. Some of those names aren't household names,

but if you go to the story for subscribers, CNBCpro.com slash pro, all right, CNBC.com slash What's that website again, Dom? CNBC.com slash slash or a forward slash? It's a backslash. I know. It's a forward slash. But take a look at this, because if you go there, what you'll see is the color and context and what the screen was and then how they came up with the names. But what's interesting about the story is what we didn't show you are some of the smaller names that have some brand recognition over the years. For instance, remember when Beyond Meat was a big thing. That stock has fallen way off where it was in the past, but also fits the mold for a potential meme stock.

other names, children's place fell upon some hard financial times, but it's still publicly traded, high short interest. Some of those types of names are the ones that potentially pass these screens. You also have to have like the funny factor and like the throwback factor.

It feels like some of this is just purely, you know, and you never know. You never know who's going to latch on to what or what particular stock it is. What I find fascinating about this whole discussion right now about meme stocks, including the last version. And this one, 10 years ago,

people talked about market manipulation, called for investigations about this kind of thing. You don't get that anymore. Well, have they yet decided if, I mean, if you're colluding in public on a message board in the manipulation, if it's in private, maybe a different story. But a lot of this, like you said, and Hugh was just talking about this, too, just load up Wall Street bets and half at it. Who knows? Yeah, Don't banks.

You got it for happening beyond me. That's a good question. It's still there. Don't ask the holders. By the way, a lot of these companies do have market caps under $500 million? Correct. We didn't mention those ones. So we normally don't talk about that.

but they used to be huge and have a lot of stock out. So the ones we showed you right here all have market caps of roughly $1 billion or higher, the ones that we featured on here. All right. Don, thank you very much. You got it. Final thoughts are next. Before we go, we have Tesla earnings coming up after the bell.

And the only interesting thing, Brian, of thinking about in light of this is we're having this energy bill discussion is how many people are going to look at those bills and think to themselves, you know what? Solar would be a nice alternative. We are, you know, already seeing that kind of chatter and feedback. I'm not talking about some of the really hard hit names that have been trading very, very poorly in the market.

But just some of the, I mean, Tesla makes the power wall at some point if you ever go solar, you got to store it. It's hard to, you know, PowerWalk makes it too. Do they? The power wall can only store like four hours worth. That's the problem. And they're expensive. And you need a couple of that. If you bought a house today and we're going to live in it for 20 years, it makes a lot of sense.

If you buy it, can you get the money back? I don't know. It's expensive. And California just changed the net metering rules on how much money you can, which is the dumbest thing you can do if you want people to move to solar power. Why am I yelling? Because they're losing money. Real quickly, by the way, META is also unveiling a wristband now. This is from the New York Times that would control computers with hand gestures. Watch meta in the hardware space. They're doing more and more on that front. What's next? Google Glass. Thanks for watching. Power Lunch, everybody. Closing Bell starts right now.