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Tesla Loses its Crown, Tariff Tailwinds & Dow Dogs 1/2/25
00:43:51
A decline in Tesla deliveries allows a rival to become the world's top EV seller. Furniture stocks surge after President Trump delays a tariff hike. Plus, will the Dow stocks with the highest dividend yields continue to outperform in 2026?
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- [00:00]
Julia Boorstin
A rich life isn't a straight line.
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John Ford
To a destination on the horizon.
- [00:05]
Julia Boorstin
Sometimes it takes an unexpected turn with detours, new possibilities, and even another passenger or three. And with 100 years of navigating ups.
- [00:17]
John Ford
And downs, you can count on Edward.
- [00:19]
Julia Boorstin
Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, Member, SIPC what made you.
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Barbara Duran
Confident that you could do something that.
- [00:33]
John Ford
Hadn'T been done before?
- [00:35]
Julia Boorstin
I have no fear of failure.
- [00:37]
John Ford
Trailblazing women, changing the game One of.
- [00:40]
Barbara Duran
My favorite pieces of advice, think about what your boss's boss needs.
- [00:44]
Julia Boorstin
Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [00:49]
Barbara Duran
Life is short and you just gotta.
- [00:50]
Julia Boorstin
Think big to accomplish big things.
- [00:53]
Barbara Duran
Julia Boorstin hosts CNBC Changemakers and Power.
- [00:56]
Julia Boorstin
Players New episodes every Tuesday.
- [00:58]
Barbara Duran
Wherever you get your podcasts, you're listening to the Exchange.
- [01:02]
John Ford
Here's today's show. Thanks, Courtney. The first trading day of the year, Tesla loses its crown and new tariff tailwinds. Welcome to the Exchange. I'm John Ford in for Kelly Evans. Stocks are mixed, trying to break a four day losing streak to start 2026. Small caps are higher, chips and equipment leading the gains. ASML, Micron, intel and Lam Research all up 5% or Tesla in the spotlight with deliveries dropping 16% in the fourth quarter. Tesla nodded to flat to lower numbers last week. The stock is also moving lower on the news. And Bitcoin though is higher, back above $90,000 after closing out 2025 in the red. We begin with stocks. My first guest says the biggest support for the market will come from Mag7 names this year, not from the Fed unless the labor market takes a dive. Joining me now is Barbara Duran, CEO and Chief Investment Officer at BD8 Capital Partners. Barb, it's going to fall to the big guys again?
- [02:01]
Barbara Duran
I think so, John. I mean we have seen like the last four days or three days of the 25 trading year. A lot of them sold off and in fact they haven't done much for a while. But their PS are now cheaper than they were at the beginning of 25. And you're seeing what's happening today. They're all popping up in video because these, these continue to have solid earnings growth and revenue stories and so any there they will get ahead of themselves. Periodically people will take profits, try to rotate into something that's lagged. But investors always come back to this because the earnings growth and revenue growth for the foreseeable future is very real. So I think, and also if you look at the percentage composition in The S&P 530% of these top seven names, it's in terms of profits, it's 40 plus percent. So they at least have to stay, you know, to copace that they don't need big increases in their stock, in their earnings and stocks to maintain their weight here. And that should be for keeping the S&P 500 performance good for 26.
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John Ford
Well, they have to for the S and P sake. But is this Jenga? Are we top heavy with these names? I mean, the valuations are so high and there's so much expectation for smooth results as this AI capital buildout continues. Things hardly ever move in a steady upward trajectory.
- [03:17]
Barbara Duran
No, they don't. And particularly for growth names, you always have periodic freights and we've certainly seen that in spades this past year or in 25 with, you know, deep seek, there'll be constant, you, you know, information innovation coming out. And we're seeing that practically daily, you know, but again, it's like I always look back at Amazon when they kept reinvesting in their business. They didn't make money for years and investors would periodically throw their hands up or Metta Meta sold off again, you know, on a big increase in spending which happened a couple of years ago. And of course that was a great buying opportunity because they do have a gift for turning that spending into productivity and increases in their business. So I think that you have to live with the volatility and a certain, in general where the market is, the P E is pretty high. But so I think that, but earnings will continue to come up. And that's where I think you see the, you know, you see things will.
- [04:08]
John Ford
Hold up in 26 domestic indices pretty heavily dependent on these big stocks still up more than 16% in 2025. But a lot of international markets did even better. They're not dependent on the same stocks. How much stock do you put overseas?
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Barbara Duran
Well, I think diversification here is a good thing because international, as you said, both developed markets and certain emerging markets outperformed our markets, which did pretty well. So I think you can diversify into, you look at Europe, the fiscal stimulus from defense spending, and that's not something that's over in six to nine months. That's going to continue to provide support as they continue to spend there. You look at the emerging markets, the dollar was down just under 10% in this last year. And the question is, do you think it stabilizes here? Because it Go down further. It really dependent on to a great ext on interest rates. But you saw like China and the U.S. we seem to have stabilized in our relationship there. We'll see what the Taiwan is, is it will be of interest this year to see what happens there. But other emerging markets, you've got better earnings growth than we do. There seems to be some stability. And plus they're diversifying. People are trying other countries trying to diverse away, diversify away from us. And you're seeing China do that somewhat successfully in their trades.
- [05:20]
John Ford
One of the, one of the lessons investors have learned is that it's really risky over the past couple of years to assume, you know, what direction interest rates are going to move in and why. Now we know the President wants lower rates. We know that the President is going to get a new Fed chair in. But do we know necessarily what impact that's going to have on rates and therefore on markets?
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Barbara Duran
Well, I think that's, that's a puzzle people have been trying to figure out. And I guess I take an optimistic view that whoever becomes Fed chair, certainly the, the final people on the running are all have very good credibility and great backgrounds. And I, but I think once you there, you know, it's not just for a couple of years, it is for a longer term. You've got your legacy. You know that you are the most important central bank, you are running the most important central bank in the world. And plus, we also know it's not just one person, man or woman, decided it's a group. And so that Fed chair has to be able to talk and reason and convince people of his or her view. So I think we're going to be fine there. People are worried about Fed independence and even if there are appointees who come in saying they want to lower interest rates, I think you know, when you get the, and you look at what's going on, the economy and the tradeoffs, you don't want to ignite inflation by cutting too much. So I think that, I think it's gonna be fine whoever ends up being Fed Chair.
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John Ford
Okay. And I see you like Broadcom, Boeing, Gold, Alphabet, Goldman Sachs, Netflix, Nvidia, Starbucks, Uber. Barbara Duran, thanks for joining and giving your perspective with BD Capital Partners.
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Barbara Duran
Thanks, John, and happy New Year.
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John Ford
Happy New Year. One of the big questions surrounding the Fed this year is whether Fed Chair Jay Powell will stay on as a governor after his term as chair ends. Steve Liesman is here with me on set. Steve, I've been waiting, pounding the table with bated breath for this and I read your piece this morning. If he does stay on, it might be seen as political.
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Steve Liesman
It could be, John. Fed chair Powell has been pointedly mum about the question of whether he will stay on the board after his term as chair ends in May. Both Bernanke, Ben Bernanke and Janet Yellen, they left with time remaining on their governor terms. Powell could stay on the board for two more years as governor, but he's declined to say what he'll do, raising the question about whether he's considering staying. At stake, the makeup of the rate setting Open Market Committee and the powerful Board of Governors, and whether President Trump will have a majority of appointees on the board. A relatively new grandfather, Powell is thought by Fed observers to be more than ready for civilian life. That's after 13 years of the Fed, including aid as chair, and amid unprecedented and withering criticism from President Trump. But Powell also holds deep loyalty to the institution and likely concern about its fate under the challenge posed to its independence by the president. Three Trump appointees currently sit on the seven member board. Waller, Bowman and Myron. Either Lisa Cook's removal by the Supreme Court or Powell's departure would hand Trump a majority that could vote for ultra low rates or fire District bank presidents who don't vote to cut rates, though there's no guarantee that these three would follow along with the president's wishes on that. For Powell, staying could be labeled a political move by the president's supporters. But staying would also clear the way for unfettered leaving would clear the way for unfettered control by the president. Most Fed observers we talked to think he will leave, though they wouldn't rule out him staying perhaps for a short time.
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John Ford
If he stays, he's kind of a sucker for punishment because I imagine he remains the president's foil on the Fed. The president would blame him for anything that he doesn't get. But if he leaves, I mean, you know, former Fed chairs get all kinds of airtime and time to stroke their chins and there's money there.
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Steve Liesman
Sure, sure, that's true. But your first point, John. Are there things the president could call Jay Powell that he hasn't done so already that would really hurt Jay Powell's feelings at this point? I don't think so.
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John Ford
Yeah, that that hard hat is firmly attached at this point. Steve, stay with us.
- [09:12]
Steve Liesman
Internalized.
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John Ford
Yes, internalized. Despite the drama over the next, our next guest says it will be difficult to cut interest rates with the economy heating up and inflation close to 3% is only expecting one cut in 2026. Joining now is Torsten Slok, chief economist at Apollo Global Management. Thorsten, just one.
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Torsten Slok
Well, the issue is that the winds are really changing for the US economy. Last year in 2025, there were a number of headwinds. Most importantly, of course, the trade war that's now fading more into the background. And instead the one big beautiful bill the Congressional Budget Office is saying that will add 0.9 percentage points to GDP. Remember, GDP normally grows to 2. So that's a very meaningful tailwind also coming to the economy in 2026 combined, together with all the prices going down, the dollar has gone down and we still have relatively easy financial conditions. It is my view looking like more that the tailwinds are beginning to accumulate and making it more difficult for the Fed to cut rates this year.
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John Ford
So we need bad labor market news.
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Torsten Slok
Well, and that's why the discussion around the labor market is so important, because is the weakness that we have seen in the employment report, especially of course in the establishment survey, is the weakness driven mainly by weaker labor demand or is it simply just slower data because of weaker labor supply? In other words, immigration has been slowing down dramatically. The CBO is estimating that immigration, which over the last several years was around 3 million, is now going to slow to around 500,000 a year for the next two years. So therefore, if you simply have a weaker labor market, it may not mean that this is weaker labor demand. It may mean that there's just a slowdown simply because of less immigration. So that's why there's a huge discrepancy between what the labour market data is telling us relative to what the GDP accounts are telling us.
- [10:58]
Steve Liesman
Torsten, disabuse me of the following pessimistic scenario. Okay, are you ready? One is that we've only had like a half a year of tariffs, not even at the full rate. Two is that companies don't shut down immediately. They more wither away than they do close immediately. Which is to say we have not yet seen the negative effects of a 15% increase or so on our imports of tariffs. And 3. Am I on 3 or 4 now?
- [11:25]
John Ford
3. 3.
- [11:26]
Steve Liesman
Thank you, sir. 3 is that the AI investment boom is covering up this weakness in the manufacturing sector and other parts of the economy that if you took that away, what's underneath it is pretty weak.
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Torsten Slok
And that is to some degree correct. A very significant share of growth in 2025 was indeed the data center build out and associated energy build out. So indeed, if it is the case that the story begins to roll Lower. And this could be as simple as the Magnificent Seven simply have weaker earnings. It could also be discussions around that maybe we are converging towards one last language model. So if that were to happen, then we would begin to see some more weakness. And they would indeed begin, as you're saying, Steve, to reveal that some other parts of the economy, the manufacturing sector in particular, manufacturing employment and also the ESM, has been weak now for the last nine, 10 months. So you're right that there is quite a discrepancy. It's not only a K shaped economy for the consumer where some countries are doing well and others are not doing well. It is exactly also a key shape.
- [12:27]
Steve Liesman
I mean for the corporates, which manufacturing has lost 59,000 jobs so far this year and small businesses in the ADP data size 1 to 49 employees have lost a quarter million jobs since Liberation Day. So I'm not saying I agree with that scenario and I like Torsten's outlook much better. I'm just saying there's some other data that points to a kind of weakness underneath what's happening at the top.
- [12:51]
John Ford
Well, given that, Steve, I mean, I don't think certainly in my lifetime we've ever seen a president, an executive get off to the kind of muscular start that President Trump did in 2025. And probably part of that is because it was a second term separated by somebody else's term in the middle. He already knew where the gear shift is on the car and whatnot and had some scores he wanted to settle. But then we've also got midterms coming up at the end of the year. We've got some economic realities setting in that Torstens mentioned early on.
- [13:22]
Steve Liesman
So I will tell you that there's another list of good things that could happen in the economy. One is that companies wake up. And I'll get Torsten's comment on a second one. Companies wake up and they find that there's this depreciation thing they didn't realize was in the big beautiful bill. Two is that you have the big refunds come along and three, that there really is meaningful deregulation in the economy that allows things like housing and things we built. Those are three potentially really good ones to offset the three bad ones I had Thorsten.
- [13:47]
John Ford
A lot of those affect the top half of the K. Absolutely.
- [13:51]
Torsten Slok
And those tailwinds, indeed, as you're listening, Steve, could also become things that could potentially be important. Especially as you say that companies now with the one big beautiful bill, they can do immediate expensing Normally if I'm a business and I invest and build a new factory, I have to write that down over several years now in the one big beautiful bill. Now I can write that down immediately 100% right away and deduct that from my taxes. So this could also create hopefully also some tailwinds to the manufacturing sector. So that is not only concentrated in the AI and data center, but also so that it broadens out to be a broader manufacturing recovery torsion.
- [14:24]
Steve Liesman
Look at the markets and everything looks peachy keen. But then you look at a couple of things out there that I've been always a little wary of making macro calls from certain especially commodity markets. But the gold, the silver and the dollar all look like a debasement trade. Are you taking a macro signal from the trade in these markets?
- [14:44]
Torsten Slok
Not really. I think that this is basically positioning that a lot of people feel that the P E ratio for the magnificent seven, which is now more than 30 and of course some magnificent seven companies have ratio of more than 300. I mean, these valuations are looking very expensive on a number of different fronts. So purely from a portfolio construction perspective, it begins to make sense to look at other things such as gold, such as commodity markets, even look at private markets where you also get diversification away from the story. So I do don't view that as a debasement trade because if it were a debasement trade, the dollar would go down a lot more. And that's simply just not what we're seeing.
- [15:21]
John Ford
Well, we're going to have to leave it there. Even gold's expensive. Lots is expensive right now. Torsten, thank you. Steve Liesman, thank you as well. Coming up, furniture trade sharply higher today after the latest tariff announcement from the president. Our next guest says it creates some welcome breathing room for one name in particular. He joins us ahead. Plus, Tesla prepared investors for lackluster delivery numbers and the narrative has been it's all about robots anyway. So why then are shares under pressure today? That is next as well. The exchange will be right back. This is the exchange on cnbc.
- [16:05]
Julia Boorstin
What made you confident that you could.
- [16:08]
Barbara Duran
Do something that hadn't been done before?
- [16:10]
Julia Boorstin
I have no fear of failure.
- [16:12]
John Ford
Trailblazing women, changing the game.
- [16:14]
Barbara Duran
One of my favorite pieces of advice.
- [16:16]
John Ford
Think about what your boss's boss needs.
- [16:19]
Julia Boorstin
Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [16:24]
Barbara Duran
Life is short and you just got to think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players.
- [16:32]
Julia Boorstin
New episodes every Tuesday.
- [16:33]
Barbara Duran
Wherever you get your podcasts.
- [16:39]
John Ford
Welcome back to the Exchange. President Trump shifting course yet again on tariffs, this time delaying planned increases on lumber based products like furniture and kitchen cabinets by a year. Eamon Jabers has been following the story in Washington. Eamon.
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Eamon Javers
Hey there, John. That's right. President Trump spent part of his New Year's Eve delaying tariffs that were set to go into place on New Year's Day on upholstered furniture, kitchen cabinets and vanities as well. The move will keep in place a 25% tariff that the president imposed in September, but it's going to delay a 30% tariff on upholstered furniture and a 50% tariff on tariff on cabinets and vanities. Now shares of furniture retailers climbed this morning with stocks like RH Williams, Sonoma and Wayfair all rising in early trading today. In a separate move, the Foreign Ministry of Italy said Thursday that the United States is slashing tariffs on Italian pasta makers. Now those were slated to go up by 92%, but the Italian government said those levels would now be set at just over two and a quarter percent for one particular pasta maker in just under 14% for another one. Now the president's about faces on these tariffs come as the administration has sought ways to blunt the price impact for consumers of the tariffs that the president has imposed in his first year in office. In November, the president signed an executive order to roll back tariffs on beef, coffee and bananas in order to blunt price increases that were seen by consumers in those commodities. And in an interview with Politico at the end of December, the president acknowledged that the key campaign issue for the 2026 midterm elections will be pricing. But he sought to blame Democrats for continued affordability issues facing voters, saying they raised prices and we're doing what we can to lower them. John, back over to you.
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John Ford
Yeah, Eamonn, that is the puzzle here is the president's message seemed to be from the beginning, yeah, these tariffs are coming in, but consumers aren't going to pay them. It will really enhance domestic producers. Is there some acknowledgment here that there really is pricing and affordability issue and so perhaps the administration is trying to take the edge off of that to start the year.
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Eamon Javers
I mean, I think that the policy changes are the acknowledgement to the extent that you might get one. I mean, the president insists that affordability is not an issue. He blames Democrats for making up that word. He doesn't like talking about it. But he clearly in that Politico interview said that he knows that the issue is going to be pricing in the midterm elections in 26. So you've now got maybe this election and the last election, two elections in a row where inflation was the key political dynamic. The President campaigned against inflation under the Joe Biden administration, said he was going to be the one to fix it. But then his signature policy initiative of 2025 and his entire second term is tariffs, which tend to push prices higher. So what they're doing is looking for spots where the tariffs are having a particular effect, particularly on products that are not necessarily going to be made in the United States or commodities that have to be imported for a variety of reasons, and trying to spotlight those and lower the tariffs on those to try to do something about affordability. When you think about pasta, John, like that is the ultimate dinner table issue, right?
- [19:50]
John Ford
I mean, that is the. I do think about pasta a lot, Eamon. I also wonder, especially this time of day. Yes. I also wonder, is there any argument that the administration is making or could make that this is an adjustment they're making based on a concession that was made on the other side? Because that was the move in the beginning. Hey, we're using this as a lever to force the other side to give us stuff that we want. In the case of the furniture, in the case of the pasta, was there something that led to this other than trying to keep prices lower?
- [20:20]
Eamon Javers
Yeah. I mean, the President said in the case of furniture in particular, that because of ongoing trade negotiations, he's going to push these out another year to see if they can get better deals on some of these trade negotiations. So that is, you know, the leverage that the President's been talking about. And he has said that the tariffs, the threat of them and the actual impact of them have brought a lot of countries to the table to do these trade deals that we've seen throughout the course of the year. And that's another reason why the President is so focused on this upcoming Supreme Court decision that we're expecting maybe this month, maybe in February, where they're going to rule on whether or not the President actually had the authority to do a big chunk of the tariffs that he did in 2025. The President's concerned that if that authority gets pulled away from him, he's going to lose that kind of leverage to force countries to the table.
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John Ford
Okay, Eamon, thank you.
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Eamon Javers
You bet.
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John Ford
My next guest says these delays give names like Wayfair some breathing room for 2026, especially as the home furnishing space remains challenged. Joining me now to discuss is David Ballinger, Senior analyst at Mizuho David. I imagine this also makes it really difficult to forecast what these companies are up against because if the President says something different in a day or a week or a month, I guess the stock has the opposite reaction.
- [21:35]
David Ballinger
Hey John, thanks for having me. And yeah, this has been an incredibly dynamic operating environment for any retailer, let alone this home furnishing space and the broader home space that's seen a lot of moving pieces with tariffs, with, with interest rates. It's definitely a lot to digest here, but we think that not pushing these tariffs through yesterday as they were supposed to, we think that this signals maybe a broader change from the, from the Trump administration that they know how important the housing market is for the US Economy. Maybe there are some levers at play, push back some of these tariffs. We've heard of rumblings about 50 year mortgages. Maybe there's some other levers that they can pull to get the housing market going again. And that really opens up a gateway to spending. Right? You buy a house, you furnish it, you buy appliances, you might have kids, you buy a car. It's, it really opens up a much wider aperture for spending. We think the administration has this in.
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John Ford
Mind here, but sure is hard to forecast or to invest based on a maybe. What more information can you get that will give you a four firmer sense of what the rules of the road are going to continue to be under this administration?
- [22:46]
David Ballinger
You know, look, we take this day by day just like you guys. But what I'd say for a company like a Wayfair, as we dig deeper and try to find some of these fundamental trends that are happening under the surface here, you've had a home furnishings category that's really had all this pent up demand. It seems like the sector has been stabilizing lately, but it's been choppy at best. And what we've looked at is the 2020 pandemic influx and the stimulus influx and all the activity in the category that was a long time ago, five plus years out from that, there is some type of refresh cycle that we think is taking place that affects Wayfair, Home Depot, Lowe's, all these home connected companies and sort of this digestion period we think is near the end, if not over. And if you just look at wayfairs last quarter U.S. revenues grew about 9%. That that's a pretty big number for them. Taking a lot of share speaks a lot to what they've done and drive engagement through their app drive great selectivity, speed of delivery. So yeah, it's coming together, but under the surface there are other helpers.
- [23:51]
John Ford
I'm looking at Ethan Allen, which if I recall had a significant North American supply chain. It's actually down 17% over the past year. And so I wonder to what degree companies have already retooled their supply chains and whether these shifts policy wise in the short term have much of an effect operationally on these companies.
- [24:16]
David Ballinger
Yeah, that's right. I mean, a lot of this has happened very quickly. Sourcing product away from China, moving to Vietnam, other Southeast Asian countries, that, that definitely helped markets. I'm not as familiar with Ethan Allen, but for, for Wayfair, for example, they function much more like a marketplace. So they don't actually take on inventory risk. That allows them to flex sourcing up and down country to country and allows them to move a lot more quickly. We've seen they haven't pushed price as much as others. We think that's part of this whole accelerating share angle for Wayfair. This, it's this marketplace like model that allows them to avoid some of these issues.
- [24:54]
John Ford
All right, David Ballinger of Mizuho, thank you.
- [24:57]
David Ballinger
Thank you.
- [24:58]
John Ford
Now coming up, this name has not had an impressive performance in 2025, but our trader says this year could be different. She tells us why and what other names she's buying to start 2026. And as we head to break, a quick check on commodities. Gold is lower, well off its best levels, pacing for a 4 1/2% decline for the week. But platinum and silver keeping the metals momentum going for bathroom two. The holidays mean more travel, more shopping, more time online and more personal info.
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Get more holiday fun and less holiday work with LifeLock. Save up to 40% your first year. Visit LifeLock.com SpecialOffer terms apply. What made you confident that you could.
- [25:58]
Barbara Duran
Do something that hadn't been done before?
- [26:00]
Julia Boorstin
I have no fear of failure.
- [26:02]
John Ford
Trailblazing women, changing the game.
- [26:04]
Barbara Duran
One of my favorite pieces of advice.
- [26:06]
John Ford
Think about what your boss's boss needs.
- [26:09]
Julia Boorstin
Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [26:14]
Barbara Duran
Life is short and you just gotta.
- [26:16]
Julia Boorstin
Think big to accomplish big things.
- [26:18]
Barbara Duran
Julia Boorstin hosts CNBC Changemakers and Power.
- [26:21]
Julia Boorstin
Players New episodes every Tuesday, wherever you get your podcasts.
- [26:30]
John Ford
Welcome back to the Exchange Markets right now still mixed. The dow was up 212 points at the high, down 210 at the low. Right now it's up a little more than 70. The S& P and the Nasdaq are both lower. The Russell continues to be higher. Here are some of the movers this hour. Shares of Baidu jumping after its AI chip unit confidentially filed to list on the Hong Kong Stock Exchange. Baidu did not provide details about the size of the offering, but analysts at Jefferies estimate the unit is likely to be valued between 16 and 23 billion dollars. Now speaking of chips, they're leading the gains today. Sandisk, Micron, Intel, Western Digital, Super Microsoft, the top performers on the S&P 500. Some data center equipment mixed in there as well. Speaking of Vertiv, shares jumping after Barclays upgraded the name to overweight from equal weight, saying it will likely beat expectations and raise guidance when it reports earnings in February. The analyst raising its target on the stock to 200 bucks a share from 181. Invertive makes cooling solutions for data centers. Now coming up, Tesla's vehicle shipments falling 9% in 2025. But Kenacord says 2026 is, quote, shaping up to be a bountiful year for the company. We'll look at what's coming down the pike and whether Tesla can regain its EV throw next.
- [27:56]
Julia Boorstin
Welcome back to the Exchange. I'm Christina Parts Napolis let's start with a federal judge ordering the Virginia man accused of planting pipe bombs in Washington, D.C. back in 2021 to remain in custody. Brian Cole's legal team is fighting to have him released from detention before his trial, citing his autism diagnosis. Cole has not yet entered a plea over allegations he placed pipe bombs at the Republican and Democratic national headquarters back in 2021. The night before rioters swarmed the U.S. capitol. Nigerian police say they charged the driver behind the wheel in a crash last week that injured British former world heavyweight champion Anthony Joshua and also killed two of his close friends. The man is charged with four counts, including causing death by dangerous driving. He has denied wrongdoing. Joshua was released from the hospital just earlier this week. And according to Variety, the finale of Stranger Things earned roughly between 25 million and $28 million at the box office. Netflix wrapped up the hit series, which is five season run by screening the two hour finale in hundreds of theaters on New Year's Eve and New Year's Day while simultaneously releasing it on the streaming platform. Are you a Strangers thing fan?
- [29:09]
Barbara Duran
John?
- [29:10]
John Ford
In a way. The wife and kids Watched it on New Year's Eve. I hadn't caught up, so I didn't watch it, but I'll get there eventually.
- [29:19]
Julia Boorstin
Oh, ok. So you are cool?
- [29:20]
John Ford
Yeah, yeah, for sure. Watched all the rest of it. All right. Tesla starting the new year in the red after announcing it delivered 1.64 million vehicles in 2025, down 9% from a year earlier. The company losing its crown as the world's top EV seller for the first time to Chinese rival byd. Joining me now is George Genericus, senior analyst at Canaccord Genuity. George, I don't see Tesla getting the crown back anytime soon because, I mean, there's a lot of volume coming out of China, Right?
- [29:50]
George Giannarikis
Look, Chinese competition has been incredibly robust for years. They do a really good job not only in their domestic market, but in other markets as well, especially Europe. But when you think about Tesla, it's really about growing other products in the next several years, including the robots and also the cybercab. If you listen to what Elon Musk said on the last quarterly earnings call, thought is super interesting because he said for the first time in a while he was actually more confident in building capacity for EVs based on what's happening with Autonomy. So Autonomy Robotics and to a certain extent, energy storage are the future of the company.
- [30:32]
John Ford
Waymo's way ahead of Tesla in this, so why should investors bet on it?
- [30:40]
George Giannarikis
Well, Tesla has a completely different approach. Right, so both obviously want to build robotaxis. Waymo uses multiple sensor sets and Tesla famously uses only cameras. Now, as soon as Elon Musk feels comfortable with unsupervised FSD in each successive market, they could just enable the vehicles on the road. So in theory, Tesla could build millions of robo taxis a quarter if it wanted to, or even every year. So they have the essential intelligence and sensor set on the vehicles already in the road and could produce them en masse, while Waymo has thousand thousands at a time, as opposed to Tesla, which could do it very quickly.
- [31:19]
John Ford
I get that, but a few days ago we just had that headline out of San Francisco with the power outage, where the traffic lights went out and all the waymos stopped. And Waymo, you know, Google Alphabet has been doing this for years and years and years. It's relatively politically neutral in the eyes of people. Elon Musk and Tesla are not, as we experienced over the past year especially. Do we really think and should investors really bet that Elon Musk, when he is ready, is going to be able to spread robotoxis across the country, in the world.
- [31:50]
George Giannarikis
That's what he's been planning for years. So Waymo went for the extremely safe but hard to scale product, and Tesla went for the not as safe but extremely easy to scale product. So as soon as he feels ready, he can launch these in particular markets because the vehicles, like I said, are already on the road where his spend really is robust.
- [32:14]
John Ford
He can fly, right, George? But I mean, if these are really going to be unsupervised, Tesla's driving around, there's regulatory issues and burdens, but certainly country by country, if not state by state, how easy a time should investors reckon that's going to be?
- [32:30]
George Giannarikis
You bring up a really, really good point. And so part of the bet earlier last year was that the federal government would have federal rules and not do it on a state by state basis. We're still waiting to see how robust those federal rules will be. But you bring up a good point like it's going to have to be state by state, city by city. And that's what we've seen far in Austin and San Francisco, that that service area expands at an incremental rate as opposed to having happening all at the same time.
- [32:57]
John Ford
And how much money do you model that Tesla can make on an operating basis if it continues to own the vehicles to get this robot robotaxi service up and running? It's one thing to sell or lease a vehicle outright. It's another thing to continue to own the vehicle and just take a fee on the usage of it. That I imagine requires a lot of a different kind of work.
- [33:20]
George Giannarikis
It's a really, really good question. And the way we think about is that in the United states there are 24 billion ride hat ride hailing miles across the country per year. That includes like the Uber and the Lyft mile. So if you assume that Tesla gets to about a dollar a mile, which is what we assume by 2030 in the United States alone, they have a 24 billion mile addressable market. We have a little bit less than 5 billion. But then if you extend that to other markets across the world, that balloons significantly. The goal long term, right, is that robotaxis can disrupt not just ride hailing, but transport at large. But for that to happen, we have to make that dollar move to about 25 cents per mile. And in our opinion, that's going to take a really, really long time.
- [34:03]
John Ford
Okay, and what percentage of the market do you model that Tesla takes?
- [34:07]
George Giannarikis
Well, we have them about, you know, 5 billion miles in 2030. So that's about you know, call it 20% of the entire ride hailing market, which is a pretty big number if you assume that that's not going to grow significantly between now and then. So that's, you know, it'll take five years, but we have about 20, 25%.
- [34:23]
John Ford
Okay, everybody can pencil that in to their models. Thank you, George. George Giannarikis with canaccore Genuity coming up. It is a tale of two AI models. Anthropic casting itself as the foil to open AI, focusing on efficiency, whether that can win against brute force scale. The exchange comes right back. Welcome back to the Exchange. Anthropic is one of the key AI names eyeing a potential IPO this year. And it's looking to outmaneuver big spending rivals by showing you don't need the most chips to win. Mackenzie Seagalo is back on the east coast with more in today's tech check. Mac.
- [35:02]
Julia Boorstin
Hey, good to see you, John. So there is a growing split and how the biggest AI labs are approaching the race. And Anthropic is making what might be the most contrarian bet in tech. OpenAI Xi. And hyperscalers like Meta and Alphabet are going all in on scale. $1.4 trillion in headline commitments made by OpenAI alone. A massive data centers rising across west Texas is a thesis that means more compute, better models. Anthropic president Daniela Amade telling me in an exclusive interview that they are taking a different path. Different players have sort of different approaches to how we kind of think about compute and capital in general pretty consistently. Anthropic has had again a fraction of.
- [35:44]
Barbara Duran
The resources of our competitors, and yet.
- [35:46]
Julia Boorstin
We'Ve been able to do more with less. This goes to the heart of AI's biggest debate, the scaling laws, the idea that more commute compute automatically means better models. Now, her brother and the company's CEO Dario Amadei helped pioneer that research. But Anthropic is proving you can get gains through smarter algorithms, better training data and techniques that make models reason better, not just bigger pre training runs. And the market is validating it. Revenue is 10x every year for three straight years. Anthropic is now the first LM offered across all three major clouds. Amazon, Microsoft and Google and even their Jenny rival, Alphabet is distributing their product.
- [36:24]
John Ford
John Mack, I think the legacy perhaps of the deep seek moment that we got, I forget that was sometime last year, right, is the shift to attention to efficiency. So at us they've got this project Rainier that's based on their homegrown chips. Anthropic is one of the big partners on that. And I think one of the big questions stretching throughout AI tech right now is how much do you need in video its latest and greatest? And are you seeking out AGI versus how much do you just need the most efficient, best model that you can wring out of the most efficient chips in order to get value for your customers? Is Anthropic a key company to watch to see whether that's playing out?
- [37:10]
Julia Boorstin
They absolutely are in Project Rainier and near South Bend, Indiana. I was there earlier this year, and Amazon was specifically training the next generations of their chips with Anthropic in mind in order to optimize for compute. And Anthropic was an early adopter of training. We now see two more generations coming from that collaboration. And what's really fascinating is kind of going inside of these complexes and how they are able to optimize the models. And this is an inference run. Right. So you've got training facilities, but then you also have compute that is meant to just run the models for their business customers, and that's where they're really looking to get to more quickly.
- [37:45]
John Ford
I always love to try to look at some simpler technologies and things that people can wrap their heads around, and I think the iPhone is a great example. Apple made this controversial decision more than a decade ago to do its own homegrown chips with the idea that, okay, if we have more control over the chips in each area of the stack and the operating system and the applications, we can build a system that's more efficient and more powerful. They seem to have figured it out. Can somebody do it on the data center side with AI as well?
- [38:16]
Julia Boorstin
Well, we're seeing OpenAI team up with Broadcom to design their own chips. And part of this narrative around Gemini's comeback story this year has to do with Alphabet's vertical stack and the fact that the tpu, a chip that they've been working on in House for 10 years, is competitive, has an excellent reputation on the street and with people who know this tech intimately well. And that's part of why Gemini has been coming back. They're able to undercut on price. And I mean, Amazon that we were just talking about a minute ago, Andy Jassy loves to talk about the fact that training is 40% less expensive than in video. And so they're winning on cost there.
- [38:47]
David Ballinger
Yeah.
- [38:48]
John Ford
And I just, I think that it's so, so easy to look at horsepower. We did it with PC chips a couple decades ago and think that whoever revs the hardest is going to win. But we see Nvidia and AMD as well focusing on systems saying hey, we're not just about the high horsepower chips. We've got a whole software ecosystem here that makes it all work better and makes it work together generationally.
- [39:11]
Julia Boorstin
And really Anthropic has become this litmus test as to whether that works at scale. Right. And so more than 50% of the revenue is coming through API sales where you have businesses like Novo Nordisk building on top of Claude for critical work workloads internally, critical workflows that they're doing. And the fact that they have seen this 10x year over year revenue jump for three straight years really speaks to the fact that at this point less compute, they're able to do more with these efficient models.
- [39:36]
John Ford
That's why it's so important. You talked to Danielle at Mac. Thanks. Well, coming up, 2025 went to the dogs, the dogs of the Dow that is the 10 largest dividend payers having their best year since 2019 according to Bespoke. Can the momentum continue this year? We'll get the trade next. Foreign. Welcome back to the Exchange. The so called dogs of the Dow, the 10 stocks with the highest dividend yields outperforming the Dow 30 in 2025, first time in three years. And with the Fed expected to lower rates further, will 2026 deliver a repeat performance? Joining me now with her trades is Victoria Green, Chief investment officer at G Squared Private wealth and a CNBC contributor. Victoria, happy New year. You like two of the dogs and sending one to the kennel?
- [40:50]
Victoria Green
Yeah, yeah. One of them is going to be banished outside. Don't touch it. But yeah, I think there's a lot of opportunity here. We're expecting value to do a little bit better, we think apply to quality. Good strong cash flow is going to be a really good place to be in 2026. Midterm years typically have a lot of volatility. So one stock I don't think investors should overlook would be Verizon. Right. The number one dog of the Dow, the highest yielding almost 7% dividend yield has done nothing for investors on the performance side. But a new CEO. Right. So is great.
- [41:20]
John Ford
How do you, how do you play that though? Because I mean he's, he's coming in slashing and whatnot. But that suggests that there's work to do which could mean he finds for the downside before he finds the upside.
- [41:30]
Victoria Green
No, I think investors are very forward looking and I think the combination with Frontier is great. There's like 29 million subscribers, they're going to be able to cross sell to. I think his focus is very much on how do we make incremental gains, how do we slow the churn, how do we provide and show the value to the consumers. They really feel like Verizon is providing such a great product and they're doing a terrible job explaining to their customers why they should stay with Verizon. I do see a lot of hope there. I think investors might be optimistic. Obviously they need to control, turn and have some good net subscriber ads here in the Q4. We'll see that under the hood here in late January. But I also think they may be willing to give him a little bit of grace if he lays out his vision very well for where he wants to take the company.
- [42:09]
John Ford
Is there a carrier play in AI?
- [42:13]
Victoria Green
Well, I should very much help them reduce headcount. Right? And they've seen that. I think they're laying off about 1300 people and that will help them with cost control, which is a huge part if Verizon can have better cost control, better customer service. Nobody really enjoys interacting with their cell phone provider. Honest. Does anybody enjoy it when they have to go in and deal with a network problem or a phone problem or a bill problem? And so if they can improve their customer service without improving costs by utilizing AI, that could be a huge uptick for their overall gross, gross margins.
- [42:44]
John Ford
Unless somebody's serving me yummy food in general, customer service is not something I look forward to. Okay, Merck, how do you feel about it?
- [42:52]
Victoria Green
I love Merck. I think they've got a fantastic pipeline. I know all of us know Krita is coming off their, their exclusivity ends in 2028. It's a huge cancer drug for them. But they have deep pipeline. There's a lot to like here. There's a 3.3% yield. It's only like a 13% or 13 times P E. And they've got about 80 things in their pipeline, like 80 solid phase two, phase three. They recently just bought and did an acquisition that's putting them in the flu prevention and enough flu prevention. Everybody's like, oh whatever, we have our flu shot. It's a different flu shot. It's something that's actually long life. It does both A and B strains. It's a huge push for them. Massive 6 to 8 million billion dollar a year market for them. I love how forward this company is. I think we've got a lot of bad news out there. The H feed a Gardacel, all of that is known. And if you look at their forward pipeline and please don't make me pronounce any of those drugs because that gets a little bit difficult. But their actual pipeline is phenomenal. When you look across both oncology, ophthalmology, they even play a little bit in animal health which has grown 9% a year even if it's only about 10% of revenues. A lot to like in a diversified pharma. And again health is a good place I think investors want to be. As you enter 2026 and the dog.
- [44:00]
John Ford
You don't like CVX here but don't go Christine on us. Why not?
- [44:07]
Victoria Green
I just don't like energy, period. I think they're facing a huge uphill battle. I don't see WTI being able to break out from 60. I think there's risk of 40s. I think we're in an oversupplied world. We're having to depend a lot on OPEC to go back from taking market share to playing market balancer. I mean short of a major geopolitical desktop which I know Iran and Venezuela are both looking a little spicy these days, the world is just oversupplied. IEA says probably 3.8 million barrels a day. Even OPEC had made it's lower surplus. But they're even saying hey, the market might be in surplus. You have this administration pressuring for loyal lower energy costs which is just a really tough place to be as an integrated energy company. I think Chevron is a quality company. I just think if you're looking around as a stock to buy energy is really just not a stock I like. I'd rather be in those health companies. I'd rather be in the staples next year over, over an energy company. So it's not that Chevron's a horribly operated company. I just think they're going to struggle to actually achieve their goals with their dividend growth and their buybacks they want to do if WTI hangs around 50 or God forbid, heads to 40.
- [45:07]
John Ford
Tim Cook likes Nike, but you don't know.
- [45:11]
Victoria Green
I think Nike still finding his bottom. I know they've had a little bit of uptick here, uptick here. And Tim Cook obviously I think that was the big impetus of the small rally we've seen. I just think they're still finding their way. How do they improve direct to consumer? How do they improve sales? What new releases are really people getting excited about? They fall behind on competition. Like HOKA started kicking their butt on the running market. You've got the on shoes. You got everything else coming down the pipeline from Adidas and Under Armour. So it's a very crowded market and they kind of lost a little bit of their cool and people started chopping around based on price and not just, I really want a pair of Nikes for sure.
- [45:46]
John Ford
All right. Victoria Green of G Squared Private wealth, thank you for kicking off the new year with me. Checking the major averages haven't wiggled around that much. The Dow is still higher now by about 65 points, losing about 10 from the beginning of the show. The S and P and Nasdaq still fractionally lower, and the small cap's doing the best. That's it for us. Thanks for watching the Exchange. I'll see you back here at four for overtime. Power lunch is after this break.
- [46:14]
Victoria Green
You've been listening to the Exchange.
- [46:16]
Barbara Duran
Make sure you're subscribed to get each.
- [46:18]
Julia Boorstin
Episode every day, same time, same place.
- [46:22]
John Ford
A rich life isn't a straight line to a destination on the horizon.
- [46:27]
Julia Boorstin
Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger or three. And with 100 years of navigating ups.
- [46:38]
Barbara Duran
And downs, you can count on Edward.
- [46:41]
Julia Boorstin
Jones to help guide you through it all. Because life is a winding path made.
- [46:45]
John Ford
Rich by the people you walk it with. Let's find your rich together.
- [46:50]
Julia Boorstin
Edward Jones Member, SIPC.