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Metals on the Move, Tech on Deck and Another Government Shutdown? 1/26/26
00:44:13
Gold and silver hit record highs, yet again, as the dollar hits a four-month low. The Mag 7 name Clockwise Capital says is the best-positioned to pivot on spending. Plus, how the recent events in Minneapolis could result in a government shutdown.
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- [00:00]
A
Everyone deserves to be connected. That's why T Mobile and US Cellular are joining forces. Switch to T Mobile and save up to 20% versus Verizon by getting built in benefits they leave out. Check the math@t mobile.com switch and now T mobile is in US cellular stores. Savings versus Comparable Verizon plans plus the cost of optional benefits plan features in Texas and fees vary. Savings with three plus lines include third line free via monthly bill credits. Credit stop if you cancel any lines. Qualifying credit required. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update.
- [00:57]
B
Wherever you get your podcasts, you're listening to the Exchange. Here's today's show. Scott, thank you very much. Gold soars, the dollar drops and there's talk of a new world order and a new front runner for Fed Chair. Welcome to the Exchange. I'm Kelly Evans and stocks are higher as we kick off a huge week with The Fed rate decision four of the MAG7 reporting and a potential government shutdown now which is looking more likely. By the way, you can see the Dow up 227points, small caps leading the way. Meta, Apple, core weave, some of tech standouts, the first two getting some analysts love today ahead of their reports. Core weave is higher as Nvidia takes a $2 billion stake in the company. You can see Meta and Apple are also up about two and a half percent. And of course the exclamation point today the metals trade once again. Gold not only topped 5,000 for the first time last night, it then topped 5,100 this morning. It's just a hair below that level now. The dollar hitting a four month low sub 97 and now just above that level. All of this happening amid concerns over market intervention from the bank of Japan and or the US treasury and all of it raising the odds for one Fed chair contender in particular. Let's get Steve Liesman in here to kick things off for us this afternoon. Hi Steve.
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A
Hey Kelly. The US Dollar trading down today against a basket of currencies with the so called DXY trading below 97 for the first time since September a bit signals the US treasury could intervene to devalue the dollar versus the yen. The dollar falling to 154 to the yen from 158 on Friday after traders got wind that the New York Fed was checking around about the appetite in markets to transact in yen. David Zervos from Jefferies, writing this morning, a rate check has historically been the precursor to direct FX market intervention. To say Friday's rate check was unusual would be a serious understatement, in part because the treasury often doesn't do so unilaterally. It was unclear if any act would be coordinated with the bank of Japan. A weaker yen would make US Exports more attractive, raising the cost of Japanese imports to the U.S. that's been a general goal of this administration. The treasury so far has declined to comment. Meanwhile, BlackRock's Rick Reeder, once a dark horse candidate, given no chance of getting the job, now leading the betting for the Fed chair. Post on Kalshi. But it's unclear if there's actually any wisdom or inside knowledge of behind this bet and this big change. Former Fed Governor Kevin Warsh, he was the frontrunner for much of January, now at 29%. Fed Governor Chris Waller, he's at 10%. Kevin Hassett, once the front runner, overall at just 8%. After the president said that's not likely to happen. People I've spoken to say the only only the president knows who we will pick and suggest any surge in the odds of a particular candidate arise mostly on hot air more than actual information. Kelly.
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B
Right. And listen, obviously someone like Rick who has deep in fact, while I was talking to people over the weekend about the Japan situation, they said, you know, you should ask Rick Ritter about that. He's one of the best people at dealing with that situation. That said, if the president's main concern is someone he feels won't kind of change his stripes as Fed chair, I just can't imagine that Rick Reeder would be someone I don't know. It still seems like Hassett could be the surest bet. Are you hearing about anyone else, Steve, who might be beyond the big four, so to speak, right now?
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A
Well, you know, there was an interesting tweet by Jim Bianco who said the idea that we're going back and forth here with all of these lead changes, I was counting up there'd been like three or four of them in January alone suggest maybe the president is not happy with his candidates. I have thought all along that he wants Scott Bessett to do the job. I keep hearing Scott Bessett doesn't want the job, to which I've also heard, Kelly, that it may not be his choice, that if the President says to Scott, you are taking the job, that he will kind of be forced to do so. But my understanding is Scott Bessant wants to stay at treasury and do a lot of the things he's doing over there, including potentially, who knows, the next couple days intervening in the yen market.
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B
Right. But is there anything we're about to dive a little bit more into that, Anything you'd add that you're hearing on that front? Do we here really need to be worried about? You know, I read people's takes that make this sound like if the US is doing anything to help the Japanese yen, that it's going to like the dollar's going to implode and the whole global financial system and it's the most significant thing since 1985. And I'm like, I don't know, is it really? And do we know if it's actually happened?
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A
Well, I wouldn't say implode. That's not the word I would, I would use. I would take David Zervos and others I've spoken to at their word that what the New York Fed did on behalf of the treasury is unusual. It's not done all the time, that it is indeed a precursor to potential direct intervention. What it could be, Kelly, at this moment is just sending a signal and the signal is that the treasury wants the dollar weaker versus the yen. What would be more significant is if the BOJ and the treasury were to do a concerted effort together. The textbook on intervention, Kelly, I think you know, is that central banks shouldn't do it on their own. That they it works when it's done in concert. But then again, whether or not Scott Bessen is somebody who follows the textbook, I'm not so sure. He's a hedge fund guy that has maybe made a few dollars. Not following the textbook?
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B
No. Well said. And also I think this administration probably enjoys a lower dollar in pretty much any situation. And any. And look, look, bond yield. His main job is to get the 10 year down as far as I'm concerned. And it is down today. So it worked in that regard. Steve, thanks. There's much more to come, I think, but we'll leave it there for now. Steve, Lisa, pleasure. While markets are focused on this Fed chair issue, my next guest is also watching for potential changes to the Fed statement on Wednesday, particularly around the dual wording mandate. Joining us now is Dean Mackey, the Chief Economist at Point72. Dean, a pleasure to have you here to kick this off this week. So Much up in the air right now. But what are you mostly focused on? What do you think they might change?
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Well, thanks for having me on, Kelly. I think the sentence I'm focused on is whether they take away the sentence saying down downside risks to the labor market have risen. If, if they do take that away, it's sort of giving an all clear signal that the labor market weakness is done. And I don't think they want to do that. So I'm looking for that to stay in the statement, whereas some others are looking for that to be taken away.
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B
If it stays. I'll put it this way, if they stay concerned about labor market weakness, that means rate cuts, that means, you know, lower yield trade or whatever. You kind of wanted to follow on from that. If that language goes away, it would be extremely hawkish development. So I know why financial market participants are obsessed with this point. If they take away that, that question and basically just say we're not so sure it's that weak anymore, it might put the JP Morgan point, no more rate cuts this year, maybe a hike next year.
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A
Yeah, I think it would be read as a hawkish signal that the Fed's not worried, not worried so much about the labor market anymore. And you know, whereas if they keep it in, that will be seen as dovish because a lot of people are expecting that to go away. So, you know, whatever they do, the policy changes in the coming months will depend on what actually happens. As far as the signal they want to send at this meeting, I think that'll be the key signal to watch for.
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B
Yeah, so you're in the camp that they're going to continue to say, you know, it's weak enough that they're going to talk about it basically, it's weak enough that they might err on the side of, of more rate cuts. Where does that leave us? I mean, what do you think about the level that we, the economy's been pretty strong, although maybe a little bit of that is transient. I don't know. Productivity has been strong. What do you think is going to happen with inflation this year? Kind of go higher, say sticky, or does it, does it fall over time? What do you think could happen with, with the Fed?
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A
I think inflation is going to stay sticky. We actually think it's going to jump to 3% quite soon as soon as the December Core PC report and stay pretty much at that level for most of the year. So I don't see a rapid inflation as likely. And that's why I think it is going to limit how much the Fed cuts rates this year. The Fed will respond if the labor market weakens and we are looking for some more of that. We don't think the rise in the unemployment rate is done here. So we are looking for one more rate cut from the Fed in response to that weakness. But I don't see the Fed as being able to cut many times.
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B
And so that said, if you think there's room for about one more rate cut but inflation still sticky, is there risk for you around the Fed chair? In other words, someone who's perceived as being, you know, too quick to go with more cuts or too dovish or anything like that, you know, becomes an inflationary problem down the road.
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A
I think the one thing to remember is that as you know, this is just one vote on the committee and you know, whoever the new Fed chair is, if they do want to cut rates dramatically, they're going to have to convince the other FOMC voters that that's the right thing to do. So I think whoever is named, ultimately the economy is going to be the most important factor in how many rate cuts we get.
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B
Yeah. Although usually they lead the consensus. Any, any parting words, Dean, on what's going on in Japan? I mean, do you, do your clients care?
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Well, I think everybody cares about exchange rates. What, what the thing I would emphasize is, you know, as most models will tell us, when, if the dollar weakens further, that does lead to somewhat higher inflation, somewhat stronger growth, as long as it's not accompanied by a sharp weakening in equity markets or a sharp rise in interest rates. So that's what we'll be watching is what the rates actually do and how that flows into the economy.
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B
Very well said. You know, again, you want the ideal would be it's just good enough for growth without introducing more inflation. And that's going to be a fine edge. So we're watching that chart closely. Dean, thanks so much. We appreciate it today.
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A
Thank you.
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B
Dean mackey with point 72. Now we just had a two year note auction. Let's turn to Rick Santelli for those results. Rick, on a day when bond yields again calm down a little bit, it.
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Was an auction that by definition, if you're looking for a stencil of what makes an auction great, today's your day. Yes, we had 69 billion, first of a three part offering from the US Treasury. 69 billion, two years. They hit the streets at a yield of 3.58. That was about one and a half basis points below the when issued market, lower yield, higher price, government was a seller. This was a fabulous A plus auction. And if you look at all the internals, everything was terrific. 2.75 bid to cover. That is about 15 cents more chasing every dollar's worth of securities available versus the 10 auction average. That's the best bid to cover since Thanksgiving of 24. And if you look at all the metrics, they're solid one. Another one that jumps out at me is 7.3% dealer takedown which means the buffet table is pretty much already empty by investors and that's the most the least amount taken by dealers since Feb of 25. So you know, not quite, but almost a year ago, everything about this auction was solid. And just briefly to weigh in on what's going on with the dollar folks, if you want to know what's going on with the dollar, look up fiat currency. And then after you do that, get a chart of gold and overlay that on a chart of what's going on with the dollar, yen and what's going on with Japanese interest rates and it all makes sense. Back to you.
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B
Wait, give me the three syllable bring it all together for me.
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A
The dollar is basically the dollar is the yen trade, okay? The dollar is the yen trade. The dollar is the interest rate trade. In Japan what's going on is a rebellion, okay? Fiat currencies, the paper that we have, central banks may have finally stepped a little too far into the pond of over dramatic monetization. Too much printing of currencies and I think that with the stimulus in Japan where it's already 250% of debt to GDP, I just think that it basically puts all of the advanced economies with fiat currencies in the box.
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B
It's actually echoing a point a longtime Japan observer said to me over the weekend. He said look if it just reminds western governments that they can't follow the same path. That's why everyone should know it matters how this story ends because all the other western governments are going to use that playbook. Rick, thanks appreciate it for now. Rick Santelli the Fed decision, the bank of Japan. These aren't the only things that could move the markets. This week we've also got big tech results with four of the Mag 7 reporting. That includes Microsoft, Metta, Tesla on Wednesday and Apple on Thursday. Metta might have the most approve as the stock keeps falling amid their massive AI spending. But my next guest is says out of all of them they can pull out the pull out the pivot to pullback spend. James, come in. Save me here. James Chuckmuk is The clockwise capital cio. Why do you like Metta? You think they're going to come out with earnings and say we're pulling way back on CapEx.
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A
Interesting. In your prior segment I was listening to that. You know, if there's systemic risk actually surfaces in Japan, you know, all these earnings are going to be moot as that trade unwinds. But yeah, with Metta, you know, we've seen this with Zuckerberg in prior periods where he does have the ability to focus on efficiency and focus on the short term at the expense of the long term. Whereas the other companies within the hyperscalers are much more long term oriented, stubbornly long term oriented. So we just think that potentially Meta could outperform the group.
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B
It's interesting there seem to be kind of the case with Meta is either people want to own it because they think they're going to pull back or don't want to own it because they think they won't. Is there anyone who wants to own it even if they keep investing like this? I mean maybe Zuckerberg has this long term vision. They got this nice upgrade last week a little bit to that point of saying these investments are going to pay off.
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Yeah, I would lump them in with the rest of the hyperscalers. I think the real question is are you even going to start to get return on spend? What are the synergies associated with the spend and are we going to be able to see the time timing of when these margins are going to re ramp the free cash flow margin? So a lot of question marks on the hyperscalers more broadly speaking and I don't think Meta is immune to that really. It's just the point that Zuckerberg could be much more short term oriented if he chose to. But that's not why we own the stock. We own the stock because it's in the index. One, two, the risk reward is relatively cheap versus some of the other names like a Microsoft and three, that these, the big ad platforms are only likely to get bigger at the expense of the smaller niche ones.
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B
All right, you like Apple. I think maybe they can remind people what they're good at that remains the top weight. You don't really like Tesla. You're a bit, I mean I'm saying that you're a bit underweight. What about Alphabet? They're not this week but I feel like they're kind of the fulcrum point here. Best performing of the Mag 7 over the past year. They've got Gemini, they've got their own chips. Powering it. What is your expectation there?
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Yeah, I mean Google is our top weight in the entire portfolio. So you know, we think that this one, even though it's had a remarkable run, you know, we just let it run. I mean it's one, it's the, one of the only stocks that we really haven't trimmed. You know, we think that, you know, the assets there continue to be underappreciated, the AI efforts continue to be underappreciated and the relative multiple is cheap. You know, when you look at some of the other names so you know, from the mega cap companies, you know, we think Google rather offers the most favorable risk reward. But I'd say, you know, we talk about all these tech earnings, but really the portfolio positioning is for us as we look into 2026, still tremendously long commodities. I don't think that trade is over whatsoever the road. You don't think it's Europe.
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B
It's up 15% today. Silver was up 10% this morning, 15% by the afternoon. I'm like, I don't care what the long term case is. At some point it just can't keep acting like this.
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Just to give you a sense of how bullish we are, 30% of our portfolio in our private fund is silver, bitcoin and gold. 10% each, roughly. That's how we're putting our money, where our mouth is really. I think the commodity squeeze is going to continue. I think Japan is not just kind of a weekend kind of phenomenon. I think that they're stuck between a rock and a hard place right now. And they really don't have that many options. Doing the only option.
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B
But you think they're going to, they're just going to buy gold and silver? I mean, just connect the dots for me.
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Well, I think they have to get the yen to reverse. And the way they do that is they sell dollars to do that. Now they're talking about US intervention into that. How do you get that money to pay for it? So it's just debasement across the board no matter what.
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You look at, look at the agricultural commodities, right? Look at, I don't know, real estate has been kind of. Not everything priced in dollars is going parabolic. It's only the metals.
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Look at oil. Yeah, that's true. But I think that the broader commodities will follow. You know, I think copper continue. Can continue to go. Aluminum really hasn't had its move. You know, I think that that can go. Rare earths are still, we think in some, in some cases in the infancy stages. So I think all roads, no matter what, lead to inflation. I mean, I think that's the crux of the takeaway and no matter what because every economy globally is facing some hurdles and they have to keep the momentum going. And the only way you do that is through stimulus. And we're in a midterm election year. You have to keep pumping and pumping in liquidity. We're at all time highs roughly and that's the only way you can do it. So all roads lead to inflation debasement. But from the tech sector, we like the large gaps were there. Obviously they're in the index. But we've been pivoting towards smaller cap tech stocks. With the exception, one exception of Micron, we're tremendously overweight. That remains a top weight for us in the, in the large gap.
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B
Well, you put your money, look, you guys have had incredible positioning. So we just will revisit this maybe in month, two months, three months time and see if there's been a reshuffling or not. But I appreciate making the case either way. James, thank you. Really appreciate you. James Chuckmuk of Clockwise Capital, going to take a quick break. This weekend's winter storm has been wreaking havoc across the country. Coming up, we'll speak exclusively with the CEO of PG and E about that and their new partnership with Lockheed Martin, Martin and others. That's ahead. But first, the odds of a government shutdown this week are on the rise as tensions flare in Minneapolis over another deadly shooting involving federal officers. We've got full coverage from Washington to Wall Street. Next on the Exchange.
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A
This is the exchange on cnbc. Everyone deserves to be connected. That's why T Mobile and US Cellular are joining forces. Switch to T Mobile and save up to 20% versus Verizon by getting built in benefits they leave out. Check the math@t mobile.com Switch and now T Mobile is in US cellular stores. Savings versus Comparable Verizon plans plus the cost of optional benefits. Plan features in taxes and fees vary. Savings with three plus lines include third line free via monthly bill credits. Credit stop if you cancel any lines. Qualifying credit required. Thy ticket lady Jennifer of Coolidge.
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B
Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Getith with the Times. With the Times. You're playing the loot. Yeah. And it sounds pretty good, right?
- [20:47]
A
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts.
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B
This month's second deadly shooting involving federal agents in Minneapolis is touching off strong reactions from Main street to Wall street in Washington. Washington. Eamon Javors has the latest on the administration's response and Stifel's chief Washington policy strategist Brian Gardner has more on what it could mean for a potential government shutdown. Welcome to both of you. Eamonn, let's start with you and what do we know at this hour?
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A
Well, Kelly, take a live look into the White House press briefing room where Press Secretary Caroline Levitt has just begun briefing reporters. We'll bring any news from there as it comes through the afternoon. Meanwhile, President Trump is signaling something of a change in tone after ICE agents killed 37 year old protester Alex Preddy this weekend in Minnesota and video of the shooting shocked the world. The president said he's going to send border czar Tom Holman to the state to represent Trump directly, seeming to provide new management for the other Trump officials who are in the state right now. And the president posted upbeat comments about Minnesota Governor Tim Walz on social media this afternoon, a dramatic shift of tone on a man that the president has called corrupt, incompetent and a fool in the past. Today the president said that Waltz had called him. He said it was a very good call and we actually seem to be on a similar wavelength. I told Governor Walz that I would have Tom Homan call him and that what we are looking for are any and all criminals that they have in their possession. The governor very respectfully understood that and I will be speaking to him in the near future. Now, we'll monitor this briefing now, Kelly, to see if we get any new details on who's going to be running point for the administration in Minnesota now that Homan has been sent out there. But I can tell you that Caroline Levitt just opened the briefing. One of the points she was making is she said that Walz, quote, shamefully was encouraging local police officers to resist federal law enforcement operations in terms of immigration. So the tone shift, maybe not at the podium in the White House briefing room, but certainly evident in that social Media posting by the president.
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B
All right, Eamonn, thank you for now. Eamon Javers As a result of Saturday's shooting, a growing number of Democratic senators say they will not vote to fund the government if it includes funding for the Department of Homeland Security and its immigration enforcement, which could put us about a week away from another shutdown. Brian Gardner is chief Washington policy strategist at Stiefel. Brian, welcome. And how are you sort of thinking about the days to come?
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A
So, you know, I think we're looking for the tone that, you know and how that evolves, what Eamon was just talking about, the tone coming from the White House, the tone coming from the president. But for Democrats whose votes are needed to pass the spending bill in the Senate, I think they're in a very difficult spot. We're in an election year. We have primaries coming up. And I think there are a lot of Democrats who do not want to face their primary voters with having voted for ICE and DHS funding without getting something for it. So, you know, if we were having this conversation a week ago, I would have said government's probably going to stay open. Maybe there's a short term funding bill to bridge the gap if they don't have an agreement. But the weekend changed the dynamics. And so I think we have to see how it plays out over the week. We still have a couple of days to go. It's not a guarantee that the government is going to shut down, but a partial shutdown does seem to be the base case at this point.
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B
And you said because the one of these appropriations bill hasn't passed the Senate yet, the SEC would shut down again, is that right?
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A
Yes. So, you know, about half of the appropriations bills are passed and signed into law. The other half, which are substantial, are not. And that includes the financial services and general government spending bill, that includes the sec. So, you know, we'd be going back to what we saw in October and November, which is very limited capital markets activity. The IPO market, it doesn't technically close. But you know, for various reasons we get in and get into. It's very difficult to unless you're already through the process and ready to go with an offering. It's very difficult to do an IPO when the SEC is shut down.
- [25:29]
B
And also just to connect the dots back to some of the geopolitical sort of developments we've had, you know, there are some speculating in order to deflect attention from this issue, perhaps the administration would choose the next few days to make a move on Cuba or something significant like that. You know, it's no use speculating. But, you know, that's what traders in the market always think about is, you know, is there a strategy to do something different that could push up the price of metals or whatever have you, or create some disturbance in the market, maybe momentarily as an effort to kind of shift attention away from this issue?
- [26:02]
A
It heightens the risk, there's no doubt about that. But I think the administration and the Republicans biggest vulnerability, political vulnerability, is domestic politics in the economy. And we can debate the strength of the economy, we can debate how affordable things are and where inflation is heading. But a pretty good percentage of American voters are having problems economically and financially. And so to do another pivot to another foreign policy issue, I don't know that that's in the best interest of the administration. So I would downplay the Cuba angle a little bit. I think the administration is going to lean other domestic policies. The president's going to Iowa this week, or at least he was scheduled to. We'll see what the weather says about that. But I think we're going to see more of an economic policy message, less on foreign policy from the administration.
- [26:54]
B
Right. If they can get that message out amid the outcry. Brian, thanks. Appreciate it.
- [26:59]
A
Thank you, Kelly.
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B
Brian Gardner of Stifel. Meantime, some pressure is increasing on the tech industry to speak out about the events in Minnesota. Deirdre Bosa has more. Deirdre. Hey, Kelly. So the silence from major tech leaders in the wake of that fatal shooting in Minneapolis, it underscores how much the sector has shifted over the last half decade or so. On the same day as the shooting, the CEOs of Apple, Amazon and AMD, they were reportedly at the White House for a private screening of the new Melania documentary that Amazon acquired the rights to for about $40 million. Now compare that to text action after the January 6 riot when Facebook, YouTube and Twitter under different ownership, suspended Trump's accounts, or in his first administration when CEOs openly spoke against him. Now, in the wake of the killing over the weekend, we haven't heard from any of the big tech CEOs, but we have heard from a few high profile AI leaders like Google's Jeff Dean, who called it, quote, absolutely shameful, and Yann Lecun, a prestigious researcher who recently left Metta. He said simply murderers. In his post at the VC level, there's been more open debate. It's played out publicly over the last few days among senior leaders at Khosla Ventures. The firm brought on Keith Raboy as a partner in 2024. And over the weekend he posted that quote, no law enforcement has shot an innocent person. Another partner, Ethan Choi, he replied that Keith doesn't represent everyone's views at Khosla, which Vinod Khosla himself backed with his own post denouncing ice. Now the takeaway, Kelly, is that for the last year, tech has been content to get along, to go along, but the cracks are now starting to show. And I will mention this was just flagged to me, Dario Amodei, the anthropic CEO, he also just posted about this. He posted an ess called the Adolescence of Technology. And he said that he's been working on the essay for a while. It's mainly about AI in the future, but he says given the horror we're seeing in Minnesota, its emphasis on the importance of preserving democratic values and rights at home is particularly relevant. And Kelly, he is really emerging as, you know, a very, you know, a loud voice in tech and AI in particular. And I think it's interesting that you're seeing more people on the side come out and sort of make these ideological or principled stands as the big tech CEOs take a back seat. All right, Deirdre, thank you very much. Deirdre Bosa Coming up, gold and silver are at all time highs. Every time you look, they're going up again. And natural gas prices are spiking as well. After their biggest weekly gain on record, we'll get another take on whether those runs can keep going next on the exchange.
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Everyone deserves to be connected. That's why T Mobile and US Cellular are joining forces. Switch to T Mobile and save up to 20 versus Verizon by getting built in benefits they leave out. Check the math@t mobile.com switch and now T mobile is in US cellular stores. Savings versus Comparable Verizon plans plus the cost of optional bags, benefits plan features and taxes and fees vary. Savings with three plus lines include third line free via monthly bill credits. Credit stop if you cancel any lines.
- [29:59]
B
Qualifying credit required.
- [30:00]
A
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update. Wherever you get your podcasts, close your eyes. Listen to Monday.com feel the sensation of an AI work platform so flexible and intuitive, it feels like it was built just for you. Now open your eyes. Go to Monday.com, start for free, and finally breathe.
- [30:45]
B
The big action again today is in the metals as gold and silver are soaring. Natgas too, by the way, up a whopping 120% in a week. It's over seven Pipa Stevens, who's looking at all these moves for us? Yeah, that's a tease, Kelly, because let's start here with the metals. Gold is surging above 5,000 for the first time ever, silver crossing into the triple digits. And despite gold's monster gain, firms including Morgan Stanley say the run might not be over. They're raising their bull case target to 5,700 for the second half, even with prices up 82% for the year.
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A
And while gold's move has been big.
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B
Silver'S has been expanding extreme. So much so that the gold to silver ratio, which falls when silver is outperforming, is now at the lowest going back to 2011. But the big mover today is nat gas, up another nearly 30% here as that contract does near expiration on Wednesday. The spread between the Fed and March now about $3 with one trader telling me he doesn't recall it ever being that wide. Now the benchmark Nat Gas is at right above seven bucks here. But regionally we're seeing much higher prices. Algonquin, which is the delivery point for the Northeast at 125 Transco Zone 6, that's New York City, 175. Appalachia, 150. Ventura in Iowa, 55 and Henry Hub in southern Louisiana at 45. So Kelly, people are paying a lot more in the spot market. That's a huge gap. I mean it's as extraordinary as it over. I mean it tells people say it's going to pass in a day, I guess. Pippa, thanks very much Pippa Stevens. Let's get over to Kate Rogers now for the CNBC news update. Hi, Kate. Hi, Kelly. U.S. officials say the aircraft carrier USS Abraham Lincoln and several guided missile destroyers have arrived in the Middle East. They were deployed from the Asia Pacific region earlier this month as tensions between the US And Iran escalated as a result of Tehran's deadly crackdown on anti government protests. President Trump said last week the US had an armada heading toward Iran, but he hoped it would not have to use it. It the European Union launched an investigation into Elon Musk's X following concerns that its Grok chatbot was creating sexualized images, including of minors. The probe will look into whether Grok violated the Digital Services act, which requires Big Tech to do more to tackle legal and harmful online content. And actress Jennifer Garner looking to take her children's organic food company public. Once Upon a Farm, targeting a valuation of $764 million in its IPO as optimism grows about consumer related IPOs in 2026. The Berkeley, California based company had planned an IPO last year, but delayed it due to the government shutdown. Kelly, back over to you. They sell groceries. Is that what it is? I'm trying to. It's children's pouches. We know a lot about them in our house. My kids love them. The pouches, you know, after I snacks, pouches, et cetera. I once checked out with so many pouches, the lady behind me said, how many kids do you have? But at the time I only had one. Sorry, I got to go. Thank you, Kate. Kate Rogers, our market guest, says stick with the trade, but be careful where you put your money. We'll talk about the under the radar space where he sees the biggest value ahead. Stocks are starting the week back on more solid footing. Perhaps we'll try to make another run at some key round numbers that are looming. 7,000 for the S&P, 50,000 for the Dow as Greenland fades from the headlines for now. Joining us is Scott Wren, senior global market strategist at Wells Fargo Investment Institute. Scott, are we whistling past the graveyard? You know, stocks making new highs while the dollar collapses? You know, that's the narrative that's making the rounds.
- [34:18]
A
Well, it is. And I don't think the dollar is going to collapse, Kelly, but that is, that is the narrative long, you know, sell American, all that kind of thing. But you know, we've got a 7,500 target out there for the end of this year. You're moving into a modest growth, moderating inflation environment. You've got plenty of AI Capex. You've got big tax rebates the Fed will probably cut a couple of times and you got deregulation. So for us, I can think of a lot of things, why people should like America and assets in America.
- [34:48]
B
Such as? I mean, and what do you sort of make of this earnings season? Is it going to remind us of the fundamental earnings power of these companies?
- [34:56]
A
I think, I think it is. You know, Kelly, it was funny every, every quarter last year and of course we're hearing fourth quarter now, but people were concerned about is this Capex spend AI related, are these firms going to cut back or whatever? And every quarter they said at the very least we're going to keep spending what we told you. And in most cases they bumped it up. So I think that's a key ingredient why we're here in the s and P500, why we've set some record highs along with just consumer spending has been, you know, certainly better than we thought it would be a year ago. And it's continued. And with these tax rebates coming, I don't think you're going to see much slowdown from the consumer.
- [35:36]
B
So you think there's a good earning, a good kind of fundamental story to tell which then goes back a little bit back to the a block discussion about inflation. Dean Mackey saying 3% could be the case for much of the year.
- [35:48]
A
Yeah, you know, we're in our official numbers 2.8 and, you know, so pretty close to 3%. But I think the bias, if I talk to our economists, which I do all the time, I think their bias is that if we're wrong, it might be a little bit lower, not higher. So we're not, we're not big fans of, of, of fearing that inflation is going to go higher, might not drift a lot lower, but it's certainly above where the Fed wants to see it, that's for sure.
- [36:14]
B
All right, some calming and reassuring words reminding us of what is working here. Scott, thanks. We appreciate it for now.
- [36:21]
A
All right, thanks, Kelly.
- [36:22]
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Scott Wren with Wells Fargo Investment Institute. Coming up, more than 6,16,000 homes and businesses were destroyed in those devastating Los Angeles wildfires last January. Just a year later, four California business giants have teamed up to help detect, prevent and fight future fires. The CEOs of Lockheed Martin and utility company PG&E join us to discuss next. Welcome back. Bitcoin is moving higher today a little bit as it tries to find its footing after falling 6,6% in the past week. Mackenzie Scallos keeping an eye on some signs that may suggest the recent selling isn't done. Mackenzie, what can you tell us? Hey, Kelly. So bitcoin is bouncing off Sunday's one month low near 86,000. But the real question is whether this is stabilization or just a pause before the next leg. Lower now. Options have gotten a bit more upbeat into Friday's options expiration. The most concentrated interest is up at that $100,000 call. And 90k is the key floor that traders are watching into the end of the week. But zoom out. And the crypto trade is still very fragile. Bitcoin is on track for a fourth straight negative monthly close, a stretch that we have not seen since the 2018 bear market. Now, part of that is institutional money heading for the exits. We have seen close to $2 billion of net outflows from spot Bitcoin ETFs over the past five straight trading days. So that's not exactly putting a floor under this bounce. And then there's the macro setup. You've got a Fed decision coming on Wednesday, a Friday deadline to avoid a partial government shutdown. And then Japan is back in focus after officials warned about abnormal yen moves with the currency making some of its biggest price gyrations in months, which has historically been a tough backdrop for bitcoin. And this is the safe haven story getting tested in real time. You've got gold just hitting a record above 5,000. Well, Bitcoin is still trading like a risk asset. So really, Kelly, traders are using Bitcoin as a pressure sensor for risk appetite with price action, tracking liquidity rates and increasingly affects. I was struck, you know, they asked Steve Sosnik this morning, the science team, what he thought about bitcoin and he basically said the behavior, Tim, almost seemed like interested parties might be propping it up. You know, he referenced some of the bitcoin mining companies who have a much bigger economic stake and whether the price stays higher than maybe the average person who bought in at, you know, 20k or whatever. Those bitcoin miners have actually been moving down today. That has more to do with the Nvidia investment into core weave. That's seen as a net negative for some of those smaller players. But it speaks to the fact that a lot of these bitcoin holding companies, whether they're bitcoin miners like Amera holdings, that keeps bitcoin on their balance sheet or strategy are very much tied into this trade. And you actually saw finally strategy add to its position in the last few days, adding a quarter of a billion dollars to do exactly that. It's really the corporate buyers, the institutional money that's provided a floor under this price historically in 2025. Really interesting, Mackenzie, for now, thanks very much. Appreciate it. Mackenzie Seagallos. Coming up, we'll speak exclusively with the CEOs of PG&E and Lockheed Martin about their new venture using AI to tackle the spread of deadly wildfires. Those details are next. On a day where Mother Nature is wreaking havoc across half of the Country, Lockheed Martin, PG&E Salesforce and Wells Fargo are teaming up to fight a different kind of disaster, namely wildfires. The four companies announcing a joint venture just earlier this hour that will help first responders detect fires earlier prevent their spread and enhance coordination for mitigation efforts. Joining us now to discuss is James Teiglett, the CEO of Lockheed, along with PGE CEO CEO Patty Poppy and of course our very own Morgan Brennan. Welcome to all of you. Morgan, kick things off. All right, Kelly, thank you. And Jim and Patty, it's great to speak with you. Jim, I'll kick this off with you. Amber points. This is the venture that you guys are announcing today. How did this come together and why did this come together?
- [40:19]
A
The way it came together was Patty and I, along with a number of other utilities in the Western United States, their CEOs, we've been discussing the risk of fires for their industry and for the country at large. And basically we teamed up together, Patty and I to co lead this with our friend Marc Benioff at Salesforce and also Charlie Scharf at Wells Fargo. As you said earlier, you know, all California based companies, you know, we've got thousands of employees in the state, as do those other businesses. And we've all got technology or access to capital markets and can really elevate what we can do together way more than any single entity could do on its own. And so we banded together, made a commitment upwards of $100 million already committed by these four companies to solve this problem on a national basis.
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And Patty, we have seen some devastating fires over the years, including some that have been linked to PGE, most notably the 2018 campfire. So how does a venture like this help to mitigate the risk of such events in the future? Patty? All right, I think we might be. Hi.
- [41:34]
A
There we go.
- [41:35]
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Can you hear me now? Yes. Okay, great, great. Can you repeat the question? I'm sorry, I had a glitch there. Yeah, so I was just saying we've seen some devastating fires and some of them linked to PG and E, most notably the campfire back in 2018. So how does a venture like this help to mitigate. Mitigate those risks for the utility moving forward? Yeah, look, we have since that time invested significantly in new technology to predict where the risk will come and then prevent those ignitions. We've had significant improvement in our performance, have really learned a lot that we now can share with others both to make our own system safer and our technologies just complement the Lockheed technology so beautifully. We have the opportunity to bring those two technologies together to both make our system safer, allow us to operate our grid more safely, but then teach others, enable at scale the deployment of this technology so everybody doesn't have to invest what we've invested they can in fact benefit from the investments we've made already. And we with Lockheed can then enable our customers, with our regulators approval, we're able to then share the benefits back to our customers and actually create a return on investment for them as we move forward. When you talk about that benefit back to customers, does that mean potentially lower electricity rates? Yeah, you bet. And in fact, we've lowered rates 11% since 2025 or since 2024. And we're actually bucking the trend of lowering our customers prices. And this is just one more potential enabler that with our regulators approval, we could return to our customers what they've invested and make the world safer, make California safer and make our own grid safer. Yeah, Jim, it's interesting because Lockheed Martin, largest defense contractor, weapons maker in the world, we've had these conversations before, especially as the Pentagon and the government leans into this idea of more commercial capabilities too. So what does that mean in terms of this venture for Lockheed Martin and the types of technology and the types of hardware that you're going to supply?
- [43:46]
A
Yes, Morgan, So for our company, you know, we are expert in a number of defense related technologies all the way from space down to some submarine level and everything in between. And it occurred to myself and my executive team one day, why don't we just apply all those technologies to another national security problem, which is wildfires. And we started on this journey about four or five years ago and we put together all those technologies into a firefighting intelligence product and system that uses artificial intelligence to fuse and merge data sources from space, from aerial and also from ground. And that's where Patty's company comes in in a big way. A lot of ground sensors, including on her territory. And we want to go beyond those territories and really show that this can mitigate fire risk by enabling us to predict, detect and then address and respond to fires in ways that have never been thought of before. Taking the fire detection from hours to minutes, the perimeter, mapping the perimeter, predicting, keeping the firefighters safer. What it means for us is essentially the wildfire is just another enemy. We know how to sense enemies. We know how to find out where they're at, where they're going, and how we can mitigate or defend against those, those threats. And this is exactly the kind of business we do every day.
- [45:16]
B
Yeah. And Jim, I realize Lockheed's in a quiet period right now. You actually report earnings later this week. But I do want to get your thoughts on what I will call disruption in defense. Right now. Just today we saw USA Rare Earth strike an equity and debt deal with the US Government. I know Lockheed just earlier this month announced a new framework agreement around PAC3 missile production with a Pentagon as well. So how is contracting and deal making with the government changing and what does it mean for the business model of Lockheed?
- [45:45]
A
It's changing for the better. We've been advocating for more commercial practices and defense contracting for years. And I would like to think that this Patriot missile deal that we created with the Department of War leadership is the groundbreaking first real commercial long term agreement, more of a SAS model, if you will, on having upfront investment by the companies having a long term agreement, in this case seven years at least, and then being able to use the financial markets and our own cash flow to, to really accelerate the ability to ramp up production and meet the needs of the department and meet the needs of our national defense. So I think this is great news. We wanted to be a pioneer in this area. The administration's joined with us. We plan to do more and I do think it's great for the company and it's great for the national defense of the country.
- [46:37]
B
Yeah. We have less than 30 seconds left here. But Patty, quickly just your outlook on power demand, especially as we do talk about things like AI data centers. We do talk things about things like mitigating fire risk and the possibility of bringing rate rates down even as demand increases. Increases. Yeah. Look, this is a time for growth in our industry. Unprecedented growth that can actually lower prices for customers. This is a great era for the electric utilities. We can answer the call of our nation and lower rates while we do it. So load growth is probably one of the best things could happen to our grid in California. We obviously serve Silicon Valley and the entire Bay Area. We're proud to power AI and we're proud that that growth will then lower cost for all of our customers. May it be. It sounds so easy. No problem. We're fixing, fixing it all together here. We thank you both so much for your time, Patty and Jim and Morgan as well. Morgan, Brennan, congrats on worldwide Exchange today. And I'll go join Dom Chu for Power Lunch right after this break. Brian Sullivan has an exclusive interview with Barbara Humpton. She the CEO of USA Rare Earths. And we're looking forward to that. With the shares surging more than 20% on the government's new stakes. Stay with us. You've been listening to the Exchange. Make sure you're subscribed to get each episode every day, same time, same place. Hey, Fidelity, what's it cost to invest with the Fidelity app start with as little as $1 with no account fees or trade commissions on US stocks and ETFs. Hmm, that's music to my ears. I can only talk.
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