The Exchange 8/12/26

Summary

Podcast Summary: The Exchange (CNBC) – August 12, 2026

Main Theme

This episode of The Exchange centers on today’s critical business and market movers, with a sharp focus on the state of inflation, Federal Reserve policy, liquidity in the U.S. economy, the AI trade’s explosive momentum, and a record-shattering sports franchise acquisition. The program features expert roundtables, original market reporting, and interviews with economists, strategists, and industry leaders.

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Key Segments & Insights

1. Inflation Report & Federal Reserve Policy

• (00:33 – 10:41)
• Guest Experts:
  • Nancy Lazar (Chief Global Economist, Piper Sandler)
  • Steve Liesman (CNBC Senior Economics Reporter)

Major Points:

• July CPI Came in “As Expected” and Slightly Soft
  • Could ease pressure on the Fed to hike rates in September.
  • Markets react positively; hints of optimism for an economic “soft landing.”
• Sticky Inflation Concerns
  • Nancy Lazar warns: “You are seeing inflation become more sticky... almost 50% of the CPI components are posting greater than 0.3% growth.” (03:42)
  • Argues that cherry-picking data omits the underlying liquidity-driven inflation risk.
  • Growth in bank lending, government spending, and easy financial conditions signal risk for renewed inflation, especially into 2027.
• Headlining Metrics Challenge the Soft Narrative
  • Discrepancy in BLS vs. real-world prices: (e.g. “Health insurance down 8% YoY? Who’s experiencing that?” – Kelly Evans, 05:03)
  • Steve Liesman counterpoints that headline and core numbers are trending in the right direction but acknowledges Nancy’s concern: “Maybe I have to rethink a little.” (10:47)

Notable Quotes:

• Nancy Lazar: “Absolutely. I am a believer with strong productivity growth you can have strong underlying trend in economic activity. But monetary and fiscal policy and bank lending are leading indicators of the path of inflation.” (07:57)
• Steve Liesman: “The Fed may not care how we get to lower inflation... I looked for example, that services less energy up just 0.2%. That’s soft and it’s all headed in the right direction.” (06:46)
• Nancy Lazar: "Right now, I agree the inflation data are fine, but I don’t forecast based on where we are. We try to focus on leading indicators.” (09:08)

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2. Treasury Auction & Market Reaction

• (11:14 – 14:02)
• Guest: Rick Santelli (CNBC)

Highlights:

• 10-year Treasury auction “went pretty well” — “B as in boy” grade, with demand and pricing as expected.
• Indicators point to “downward pressure after CPI” — CME probabilities for a Fed hike have dropped from 70% to 40%.
• Perspective on macro environment: much market movement seen as a result of war (Iran), not just economic fundamentals.

Quote:

• Rick Santelli: “We could talk about fundamentals til the cows come home... That snowball is called market trading, monitor trading. That’s what the Fed will do. They’re not going to surprise.” (12:50)

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3. Peak Inflation? The Bullish Investment Case

• (14:02 – 19:21)
• Guest: Phil Camp Boreali (Chief Investment Strategist, J.P. Morgan Wealth Management)

Bullish Sentiment:

• Peak inflation “behind us”; CPI back to pre-Iran war levels at 2.5% (core).
• Fed’s “patient approach” is credited with cooling inflation; labor market data is “not screaming overheating.”
• Investment outlook remains robust on strong earnings, especially in large-cap US growth, financials, and industrials.
• Liquidity and strong earnings support the market’s momentum, with little concern about overvaluation in the near term.

Quotes:

• Phil Camp Boreali: “A negative payroll report with negative revisions and negative real wage growth doesn’t scream... wage-price spiral.” (14:45)
• “When I rank things that kind of keep you up at night, it’s the Iran war. It’s the Federal Reserve losing credibility—or earnings. But the earnings story is one of the most fundamental.” (17:14)
• “Their [tech/energy companies’] valuation is not running ahead of earnings growth.” (18:09)

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4. Record-Breaking Lakers Acquisition

• (21:54 – 27:07)
• Guest: Sal Galatioto (President, Galatioto Sports Partners)

Story:

• Bob Iger & Josh Kushner’s consortium bought the L.A. Lakers for $12–12.5 billion (up from $10 billion just a year ago).
• The deal is notable for:
  • No public auction—“I have never seen a team trade in less than a year” (Sal Galatioto, 21:58).
  • Concerns over source of funding and underlying motivations (including the seller under federal investigation).
  • Reflects high demand in sports franchise ownership; “never seen this kind of demand” (Sal, 25:43).

Quote:

• Sal Galatioto: “When I started in this business, you could buy an NBA team for $80 million. People have been telling me... that we’re in a bubble—and I guess we’re not.” (22:57)

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5. Capital Gains Tax Cut Proposal

• (28:27 – 30:03)
• Guest: Megan Casella (CNBC)

Key Points:

• President Trump considering a capital gains tax cut as a mid-term campaign issue.
• Ideas include indexing cap gains for inflation and a larger exemption.
• Legislative prospects are dim before the midterms; any administration action would likely face legal challenges.
• The market's strong performance means many investors have gains—but might not want to liquidate in this environment.

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6. AI as an Asset Class: Compute Futures

• (31:29 – 39:17)
• Guest: Bob Greifeld (Former NASDAQ CEO)

Major Discussion:

• Nvidia’s “compute financing deal” and the CME’s new futures contracts for AI compute (GPU rental) mark the rise of computing power as a tradable asset.
• Benefits: Reduces company risk; introduces market-based rate-setting.
• Risks: Leverage and rapid change in AI efficiency could make long-term valuations tricky.
• Longevity of GPUs: Despite quick tech cycles, today's GPUs may remain useful longer than anticipated.
• AI innovation: Bob’s “hundredfold” prediction—“the compute power required to do a given LLM task will go down 100-fold in a decade.” (32:57 & 35:03)
• Edge computing: Growth in phone/device intelligence could challenge data center dominance.

Quotes:

• Bob Greifeld: “If you’re lending for two to three years you can kind of see the end point...but if you’re lending for seven years, who can predict what this technology is going to be like in seven years?” (37:13)
• “When does this kind of investing converge with gambling?... If you have a same-day option, how is that not sports gambling?” (39:09)

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7. Device Wars: New Google Pixel AI Phones

• (39:39 – 41:54)
• Guest: Mackenzie Segalos (CNBC)

Highlights:

• New Pixel phone lineup with Gemini AI as the headlining feature.
• Agentic AI—Gemini acts as a personal agent across apps, aiming to leapfrog Apple in AI device utility.
• Despite Pixel’s modest market share, the real story is how Android’s reach magnifies Gemini’s influence.

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8. Energy Drinks: A Generational, High-Margin Shift

• (42:51 – 46:51)
• Guest: Filippo Filoni (Citigroup Analyst)

Key Trends:

• U.S. energy drink market surges, driven by Gen Z’s preference for caffeinated “refreshers” over coffee.
• Monster and Celsius spotlighted as leaders capturing new (especially female) customers.
• Private label (Costco’s Kirkland) beginning to make inroads, but major brands retain dominance thanks to strong innovation pipelines and international expansion.

Quotes:

• Filippo Filoni: “Consumers between 16 and 24... 30% use energy drinks as their primary caffeine source, versus 27% for coffee.” (42:51)

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Notable Quotes & Memorable Moments (with Timestamps)

• Nancy Lazar: “Almost 50% of the components [of CPI] are posting greater than 0.3%... way above the Fed’s target.” (03:42)
• Steve Liesman: “I didn’t know I was coming on this segment into a hawk’s nest.” (06:33)
• Kelly Evans: “Health insurance down 8% YoY? Who’s experiencing that?” (05:03)
• Rick Santelli: “We could talk about fundamentals til the cows come home... That snowball is called market trading, monitor trading.” (12:50)
• Sal Galatioto: “I’ve never seen a team trade in less than a year.” (21:58)
• Bob Greifeld: “If you’re lending for two to three years you can kind of see the end point... but if you’re lending for seven years, who can predict what this technology is going to be like?” (37:13)
• Filippo Filoni: “Energy drinks as a category have 8% annual growth... and are capturing a new, younger, female demographic.” (44:57)

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Timestamps for Key Segments

• 00:33 – 10:41: Inflation, Interest Rates, Fed Policy Roundtable
• 11:14 – 14:02: Treasury Auction & Market Moves (Rick Santelli)
• 14:02 – 19:21: Peak Inflation & Market Outlook (Phil Camp Boreali)
• 21:54 – 27:07: LA Lakers $12B+ Sale Reaction (Sal Galatioto)
• 28:27 – 30:03: Capital Gains Tax Cut Discussion (Megan Casella)
• 31:29 – 39:17: Computing Power as an Asset Class – Nvidia/CME (Bob Greifeld)
• 39:39 – 41:54: Google Pixel AI Device Launch
• 42:51 – 46:51: Energy Drink Market Analysis (Filippo Filoni)

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Conclusion

This episode provides a comprehensive view of the day’s financial pulse points: measured optimism on U.S. inflation, warnings about excess liquidity, the bullish trajectory for tech and earnings, and the blurring lines between finance and tech as “compute” becomes an asset class. Sports valuations reach historical highs, generational trends are remaking beverage markets, and the next AI-enabled device war is underway. For investors, analysts emphasized the prudence of watching key indicators—but also not overthinking a market enjoying a robust earnings cycle and financial conditions.

Transcript

[Narrator/Announcer]

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[Adopt Us Kids Spokesperson]

Courage.

[Nancy Lazar]

I learned it from my adoptive mom.

[Adopt Us Kids Spokesperson]

Hold my hand.

[Kelly Evans]

You hold my hand. Learn about adopting a teen from foster [e-mail] you can't imagine the reward Brought to you by Adopt Us Kids, the U.S. department of Health and Human Services and the Ad Council. Thank you very much, Scott. The AI trade is absolutely roaring today. I'm Kelly Evans and welcome to the Exchange. Everywhere you look, the AI suppliers are soaring. From Supermicro and Coreweave, which are jumping out after their strong results last night, to Lumentum and Nebby's group, which is now up 27%. It's even reviving the memory trade today with the DRAM ETF up about 7 and a half percent. A trade Victoria Green just told us on this show should not be left for dead. Nvidia up 3% as well. And we'll talk to former Nasdaq CEO Bob Greifeld about the company's massive compute financing deal and whether he believes in compute as an asset class plus $12 billion or is it 12 and a half for the Los Angeles Lakers and the buy? Bob Iger and Josh Kushner's group will have the latest on this stunning turn of events. But let's begin with the inflation data. We got the all important consumer price index this morning. It came in basically as expected and just soft enough that economists say it could take the pressure for a September rate hike off of the Fed. This is also giving the markets a little boost today. Let's discuss it in our opening exchange. Nancy Lazar is the chief global Economist at Piper Sandler and Steve Liesman is CNBC's CEO, senior economics reporter. Welcome to both of you. Steve, I know you've been over this a couple of times already, but lay it out. What are the big headline numbers and takeaways?

[Steve Liesman]

Take away from me is it's two out of three, which is Meatloaf Sang, which you're too young to remember. Meat bad ain't bad, right? So we have three reports before the last, before the Next meeting. Well, we had June, which was negative and surprised to the downside. This number reasonably well contained. I looked at it for one reason, which is trying to look at the way the Fed looks at it, which I know Kevin Warsh doesn't want me to do, but I'm gonna do it anyway. Look for spreading inflation from the headline to the core. I didn't really see it there. Maybe an airline fares, maybe further. And this is the road to the September meeting. Okay, tomorrow PPE, tune in at 8:30. Where else are you going to be? August 26, July PC you think going to be on vacation. Turn on the television, watch our coverage of PC. Somebody said, yeah, it's sort of any PC Easy is what they said anyway. And by the way, after the report, 830 tomorrow, I'll get, I'll get Wall street estimates for the PC because we have both components. Okay, August jobs report. August. If we can do three out of three on the way in there, September I think would be gone as a rate hike. We're going to inch down and we'll be on the right road to lower.

[Kelly Evans]

Now I'm using you to set up Nancy, because I think you're going to, I think you're going to find this quite provocative. Nancy, come on in here because you have been on hold for your call for the Fed this year which was out of consensus. Maybe we're coming around to that point of view. But you also looked at the report and saw some signs of stickiness in inflation and tell us where you're seeing that and what you think it means. I mean, how big of a deal is this?

[Nancy Lazar]

So looking at the individual, individual pieces, I think you missed the bigger picture. We do a diffusion index of the core CPI and in the month of July and on average for the past six months over almost 50% of the components, 46 to be precise. But almost 50% of the components are posting greater than 0.3%. That tells me indeed you're way above the Fed's target if that's where the bulk of the components are coming in. And there are actually less than 0.1% readings. So I would, I would agree with what Steve suggests. You are seeing inflation become more sticky. I don't think it's because of, of energy prices. I think it's because there's too much liquidity. Just listening to your intro. Yes, massive amount of liquidity in the stock market. Credit markets are wide open, apparently sport sports leagues are wide open as far as also sourcing a lot of liquidity but more basic money Supply is growing 7%. Bank loan growth is 8% and we just heard earlier this week that banks are easing lending standards last week and so bank loans are going to continue to continue to accelerate. Government spending is accelerating at 7%. So absolutely cherry picking the CPI. You're missing the bigger picture. You are seeing stickiness and there's fundamental reason for it.

[Kelly Evans]

I also wanted to point this out. It comes from Peter Bogvar, a couple of things. I know this will be frustrating to our audience but it is true and it kind of builds into the point that you're making. He said, you know, a couple of other factors that were down kind of have your head scratching. Health insurance down 2% month on month and down 8% year on year. I don't think anybody is experiencing that energy. The BLS of gasoline prices fell 3% last month but according to Triple A they were up 6%. So Nancy, my point is there are even a couple of outliers to the downside that make you wonder about that. And the reason why I wanted you in particular to highlight this is because you're not somebody who's been super, super hawkish. You're not somebody who said for years that's higher than expected, we have to hike. You're, you're still thinking the Fed was going to be on hold. So do you, do you still believe that the way that the data are coming in here, My colleague Kurt Lewis,

[Nancy Lazar]

who's in charge of our Fed call still does think the Fed is, the Fed is on hold. And that makes me even more bullish on the economy if that's to be the case because of all of this liquidity continue to drive corporate earnings growth which is now spreading from 500 to the 600 all at record highs, growing double, growing double digits. So for now, yes, we do think the Fed is, is on hold. I personally I think the rate structure is too low given how fast nominal activity is growing six and a half percent. Corporate revenues in the S&P 500 are growing 12 and a half percent. I think the Fed is further fueling this growth and that would make me more worri about a bigger inflation issue in 2027.

[Steve Liesman]

I didn't know I was coming on this segment into a hawk's nest. What I appear to have stumbled into

[Kelly Evans]

because we were just, you and I were talking about the three month annualized the other day look and how it's been lower and how the trend point 3.

[Steve Liesman]

I always appreciate Nancy's analysis and I think it's a Fabulous and interesting one. I would just say that David Bromberg wrote a song I might take a train, I might take a plane. If I have to do a God bleep boogaloo, I'll get there just the same. And the reason I bring up that song is because the Fed may not care how we get to lower inflation and it may not. I look this morning, Nancy, tell me I'm crazy about this. I look for example, that services less energy up just 0.2%. Now I get that if you keep doing zero twos but it was, it was pretty well contained. It was one area I looked at, I saw what was it shelter was, was up 0.1. So when I saw those, I'm like that that's soft and it's all headed down in the right direction. And that if I think I know what the Fed wants to do, I don't think they want to as a group necessarily hike. And if they feel like they're on the road there, that they'll be okay with it. But I don't want to, I don't want to disparage Nancy's house, which I think is excellent.

[Kelly Evans]

Nancy, respond to that, if you could. And also this idea coming from the Fed itself, they don't believe kind of higher than expected growth is a driver of inflation. It sounds like you feel a little bit differently.

[Nancy Lazar]

No, no, no. It's not just higher than expected growth. It's that is how much liquidity is in the system. And looking at current data is always looking behind. If troughs and recessions, if you forecast based on where you were, you missed the upturn. And I would say the same is true because growth is always weak at the trough in a business cycle. And I think the same is true when you look at inflation. You can't look at coincident indicators. You look at long term drivers. You can have strong growth as we did in the 1990s, 4% GDP growth with low inflation. But you didn't have a sticky inflation problem in the 1990s. Inflation from the get go slowed through pretty much throughout the cycle until Chair Greenspan eased too aggressively in 1998. And I would argue the Fed eased too aggressively. And 24, 25, particularly the last 50 basis points was too much given that the economy was already starting to accelerate. They always seem to make this mistake. So absolutely. I am a believer with strong productivity growth you can have strong underlying trend in economic activity. But monetary and fiscal policy and bank lending are leading indicators of, of the path of inflation.

[Kelly Evans]

All right.

[Nancy Lazar]

And right Now I agree the inflation data are fine, but I don't forecast based on where we are. We try to focus on leading indicators. Steve, to your point on services, look at the ESM Service Price index. It's still very elevated. Of course it correlates really nicely with the super core measure of, of, of the seat of the cpi. Of the cpi. So I think it's way too complacent to get comfortable with inflation staying low. The bond market is not complacent. Bond Yields are for 70. If, if this was indeed an environment where inflationary pressure premium bond yields lower.

[Kelly Evans]

Steve, it's term.

[Steve Liesman]

I just got to ask her. It's people say it's term premium, which is growth and if the economy wants to grow and people want to invest, I don't know, should the Fed stand in the way of that? I'm not, it's not entirely clear to me if it's not an inflationary growth that is taxing resources and to the extent to which the essential resources that are fueling the AI boom are coming from overseas, it's kind of self correcting.

[Nancy Lazar]

Now, if inflation is indeed still a risk and to get complacent on inflation of five years of having higher than expected inflation, I think it's way too, too early to get complacent. There is nothing worse for the economy. There's nothing worse for the lower end consumer. To have an inflationary backdrop, all you have to do is look at the 70s. All you have to do is look at 20, 23, 2020 and 20 and 24. So squashing inflation on a sustained basis should be the goal of the Fed. I think it is the goal of the Fed.

[Kelly Evans]

That chart is the perfect one to have up right now. You can see how we were coming over that bend. Point 2.1 negative.

[Steve Liesman]

And now I changed Nancy's mind, but she might have changed mine, I think. I don't know. I got to rethink a little.

[Kelly Evans]

No, I'm sympathetic to the three month annualized, the low. I know, but I have to, I

[Steve Liesman]

have to, I might have to rethink it.

[Kelly Evans]

Nancy Banks, really appreciate it. Nancy Lazar. Steve, thanks as well. While all this is happening, the 10 year treasury yield has been on the rise over the past month. Let's see if that's bringing in the buyers because Rick Santelli is here with the results of the 1pm auction today. How to go, Rick?

[Rick Santelli]

Yes, it went pretty well. I gave it a B as in boy, let's go through it, shall we? 42 billion, 10 year notes. This of course doesn't include non comps and all the other ups and extras that can be included. The yield at this auction 4.683 which was pretty much exactly where the when issued market was right before bidding ended at 1 Eastern. So be as in boy, if you look at all the metrics they're all very close if not slightly better than the 10 auction average. But considering pricing was spot on, I think the best variable was dealers took less than 9%. 10 auction average of dealer takedown is 10%. And the reason that's important it's because what investors don't want dealers end up with. I notice that when we look at the yields right now we see that they're coming down just a little bit. We're down about three and a half basis points in a 10 year and do consider that tomorrow we'll wrap up 125 billion and treasury coupon supply with 25 billion 30 year bonds. And I would like to stress the notion that we continue to see downward pressure after CPI as the probabilities at the CME are approaching 40%. And of course we all know that at one point they were in the 70 percentile. So it certainly seems though investors listening to the new chairman of the Fed doing their mental homework, trading markets based on data and it is what it is.

[Kelly Evans]

Back to you, do you mean by that Rick, you had no, no follow up to Nancy's case just now. You saw that super core down, down, down and then a pop up.

[Rick Santelli]

Listen, we could talk about fundamentals till the cows come home. I could slice and dice it a million different ways. We could argue whether seasonality or just the accuracy of the inflation numbers is correct. We have panels and panels of people working on it. PBI, we can only have a 12 year history because they changed it so dramatically not that long ago. In my opinion. I would like to push all that together in a snowball and that snowball is called market trading, monitor trading. That's what the Fed will do. They're not going to surprise. And even with our last guest saying that most of the inflation we see really was around prior to this Fed chairman and much of the increase in interest rates could be directly attributable to what happened on February 28, meaning the

[Kelly Evans]

start of the Iran war. All right Rick, thanks. With our next guest, look at a chart.

[Rick Santelli]

It goes up 45 degree angle on that exact day and the day before the war we're under 4%. Okay. So really I don't think that all of a Sudden they woke up on Saturday and decided, wow, we got to start selling. It was the war. And my guess is when the war ends, the inflation we're left with will be AI related. And that really does open up a new chapter sector.

[Kelly Evans]

You said you acknowledge there's another. Anyway, like I said, Phil is sitting right here. We're going to talk about it. Not LeBeau Camp Ore. Rick, thank you very much. Our next guest is also in the camp that thinks peak inflation is behind us. Phil Camp Boreali is the chief investment strategist at J.P. morgan Wealth Management. Phil, it's good to see you again. All right, jump in here. Yeah, the water's warm. The I'm very sympathetic to the cases we've been talking about for a long time now that core inflation was coming down.

[Phil Camp Boreali]

Yep.

[Kelly Evans]

This report I think is worth saying it's not not a great data point in that direction though there's a few worrisome parts. So what gives you conviction? Peak inflation is behind us. Fed doesn't need to hike in September.

[Phil Camp Boreali]

So two things and they happened in the last four trading days. Right. That, that payroll report that we got on Friday as part of this. Right. So when the Federal Reserve is sitting in this data dependent world, a negative payroll report with negative revisions and negative real wage growth doesn't scream to us overheating economy and wage price spiral. Right. Which is what they were so worried about a couple of years ago in 2022. And the core inflation this morning. I mean I just look at core CPI at two and a half percent. Kelly, that was exactly where we were pre Iran and the Fed hasn't done anything. Right. They just patiently waited for this thing to come down. And we'll see what happens with with headline CPI. Right. Still sitting at 3.4%. So not back to where we were pre Iran because energy prices were high. But the bottom line is neither the labor market is showing signs of inflation nor are we seeing any evidence that the increase in energy prices from Iran are feeding into the rest.

[Kelly Evans]

Although the consumer was very resilient during this period. Even look at bank of America's data, the low income consumer, the low income spending is where we saw accelerations even throughout the spike in oil prices. Do you think like Nancy said, there's too much liquidity out there. Let's show some of the S and P leaders again to maybe the NASDAQ leaders. Nebulous is up 28%. Core weave these other lumentum was up 8 or 9 last check. There's coherent. Sienna's up 13 supermicro. Again, that had been a tough stock coming into this. Is there too much liquidity? And are these market signals telling us that as a leading indicator of inflation there's going to be a problem?

[Phil Camp Boreali]

That's to be determined. But that's not why the Federal Reserve would either hike or hold in September. That might be a 2027 issue, but not for the September meeting. Probably not even for the December meeting meeting. So still a close call. We still have a couple of data points to go as Steve was pointing out before that September 16th meeting. But they're not going to hike rates in September because of a capex story. They wanted to see, I think more evidence that the spike in energy prices are feeding into broader goods. And Kelly, we're just not seeing that again. Two and a half core CPI is where we were before the war. That's where we are today.

[Kelly Evans]

So let's. We can put your investment hat on which is the hat you're wearing anyway. But as we've been talking a little bit about the data then you have the market which has been rip roaring incredible. At a friend the other day go, are we at 7700? I mean it's. If you haven't been watching every day you might wake up and go, wow, it has been really strong.

[Phil Camp Boreali]

Yeah.

[Kelly Evans]

Is that going to last? Is there anything here that worries you or are you getting good confirming signs from some of the earnings last?

[Phil Camp Boreali]

I think the latter confirming signs. So when I rank things that kind of keep you up at night, right? It's the Iran war. It's the Federal Reserve either losing independence like people were talking about after the last press conference or losing credibility more than independence or earnings. I think the earnings story, Kelly, is one of the most fundamental stories that you have to then offset all of the emotion that can come from is this euphoric market trading at all time highs. We've seen 25 all time highs this year already. I think we saw 39 last year. I think that this, you know, financial condition story that we're in right now, Federal Reserve again, maybe hiking once it's already priced in. I don't even know why we worried about the.

[Kelly Evans]

But David Katz was on this program yesterday and he while acknowledging the strong earnings growth that obviously is the underpinning of everything going on here. But he said we often don't see the strongest market stretches at the same time that we're seeing kind of peak level of earnings growth.

[Phil Camp Boreali]

Yeah, I think I'd be more worried though if the multiples were stressed. So when you look at those Mag 7 versus 493 multiples, that valuation story, we're kind of decade kind of tights on that valuation premium. And I also think like if you just look at the stocks index, stocks index up 19% since July 29, that SOX index, even like the price to earnings growth, that story you're still cheaper over than the 25 year average. So I think I'd be more worried if the valuation was running ahead. But it's, it's not, it's not keeping up with the, with the earnings growth and that 5% 10 year treasury that I think would really make us worried either driven by Fed credibility or by spiking energy prices. That just seems like a low probability event in the near term which I think pushes the market to all time highs.

[Kelly Evans]

The other thing that happened at the end of July was 475 on the 10 year. So as we've come down a little bit, that has underpinned what you're talking about. You're still in large cap US growth.

[Phil Camp Boreali]

Still large cap financials are another incredible big story for us. You know, based on deregulation, loan growth, earnings growth. Right. Repurchases. I think financials make a lot of sense for us along with the tech trade and along with things like industrials. Kelly, I think this is just a really good time to invest.

[Kelly Evans]

You make it seem so easy, you know, don't overthink it. Phil says thank you. Really appreciate it. JP Morgan's Phil Camp rally coming up. It's the deal of the day. Bob Iger and Josh Kushner buying a controlling stake in the Los Angeles Lakers at what we are Reporting is a 12 and a half billion dollar valuation. We'll have the details, the impact on the sports and maybe political landscape next. Plus former Nasdaq CEO Bob Greifeld. He's back to weigh in on the CME's new compute futures contracts. Look forward to hearing his point of view. The exchange is back after this.

[Narrator/Announcer]

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 [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

[Kelly Evans]

When you partner with cdw you get more from technology. With AI powered devices that turn complexity into clarity. CDW experts are modernizing workplaces with Microsoft Surface, empowering your teams with innovative accessibility, delivering repairability for your IT staff and protecting your data with built in security. Make amazing happen. Learn [e-mail] Surface

[Adopt Us Kids Spokesperson]

Courage.

[Nancy Lazar]

I learned it from my adoptive mom.

[Adopt Us Kids Spokesperson]

Hold my hand.

[Kelly Evans]

You hold my hand. Learn about adopting a teen from foster care@adoption us kids.org you can't imagine the reward brought to you by Adopt Us Kids, the U.S. department of Health and Human Services and the Ad Council. Welcome back. A stunning turn of events in the sports world today as Bob Iger and Jared Kushner's group has announced it's purchasing the Los Angeles Lakers for a record breaking 12 or maybe 12 and a half billion dollars. This is just months after the team was pursuing, well, the team, I mean, Iger and Kushner, they were pursuing a Las Vegas NBA expansion team. It also comes less than a year after the Lakers were previously sold at a price of $10 billion. With us to discuss is Sal Gala Tiotto. He's the president of Galatiotto Sports Partners, which has acted as a financial advisor, underwriter and agent for more than 135 sports transactions and orchestrated one of the largest deals ever for an NHL team two years ago. Sal, it's great to have you here.

[Sal Galatioto]

It's my pleasure.

[Kelly Evans]

There's a few unusual things about this deal, wouldn't you say?

[Sal Galatioto]

Well, look, I've been doing this since 1995 and I have never seen a team trade in less than a year. So that's unusual in and of itself. The Lakers, as we all know, is an iconic brand. It's incredible. And it's a little unusual that it will be sold without an auction, but the price is very robust. I mean, 12.55 billion, if that's the price that's being reported, is a very strong price. The team was only sold about a year ago for 10 billion. And that reflects the strength, I think, of sports valuations across the leagues in general and in the NBA in particular. I mean, the level of demand is extraordinary right now.

[Kelly Evans]

Sal, you mentioned, and I've heard from people in the industry the same idea, which is it's extremely unusual for a team of this magnitude to be sold without an auction.

[Sal Galatioto]

Yes. I mean, look, I've never seen it and like, as you said, I've done many, many, many transactions. It's usual to have an auction and, you know, to get interested parties in the market to create competitive tension, to drive price. But that wasn't the case in this one. Still, a very strong price well over $12 billion is an incredible number. When I started in this business, you could buy an NBA team for $80 million. And people have been telling me since 2002, 2003, that we're in a bubble and I guess we're not. I mean, I see the valuations continuing to go up.

[Kelly Evans]

So do you know where this consortium is getting the money? Because the previous buyer, who is under some federal investigation over his tax issues, that was, that money was said to be coming from the Saudis. Again, I don't know. Do you know in this case who is actually bringing the 12 and a half billion to the table?

[Sal Galatioto]

That I don't know. The deal's just been announced then. Look, I mean, Bob Iger is a legendary figure. Josh Kushner is a very successful young entrepreneur. I know they were putting money together to get ahead of the bid in Las Vegas, potentially for an NBA expansion franchise. They must have numerous other investors, I would assume. But to give you details about where they're getting the money, that's above my pay grade.

[Kelly Evans]

I ask because there are some conspiracy theories about the unusual nature of this. You know, here's a seller who is under some pressure selling to the president's son in law's brother, if I have that right. And you know, who was now going to be the face of the league. Do you think that that buys him some goodwill from those who are currently investigating him?

[Sal Galatioto]

That's impossible for me to say that, that, that that question is not a sports valuation question or sports question. That, that's a, that's way beyond my purview. I mean, I understood, I have no idea.

[Kelly Evans]

Understood. So this now being the case, Sal, I guess the, the. I don't know if there's any other questions you would have about the deal. You know, it is a two and a half billion dollars more than it was sold for last year. That was all already seen to be a rich valuation. But again, people, they want to sell to whoever they want to sell to. And it looks in this case like Iger and Kushner not going to pursue a Vegas expansion team. Perhaps. Again, this is undeniably a trophy asset. LeBron or no LeBron.

[Sal Galatioto]

Look, the Lakers are a legendary franchise. I mean, they're one of the top four or five franchises in sports, not just North Americans. Sports. The level of demand right now that we're seeing for sports assets is incredible. As I said, I've been doing this since the mid-90s. I've never seen this kind of demand. We're in the market selling limited partnership stakes in two NBA teams. Right now in NASCAR team. We've just sold a piece of a major league baseball team. We just closed on the a very successful capital raise for the A's for their new building in Las Vegas and I can tell you that the level of demand is not slowing down.

[Kelly Evans]

Do you last question sell. Do you think if it had gone to an auction it would have sold for even more?

[Sal Galatioto]

Look, I'm a big proponent of having auctions always because it creates competitive tension. I would be speculating do I think it could have. Maybe I can give you a firm

[Kelly Evans]

non committal on that or maybe you know someone who could, you know who could be part of that sales process. No Sal really appreciate. I know. Look it's a busy day, a last minute story. It's great to talk to you. Thanks for making the time.

[Sal Galatioto]

My pleasure. Thank you for having me.

[Kelly Evans]

Sell Galatioto joining us there. Coming up, cuts to the capital gains tax could be back on the table, at least according to the President. Will the proposal give the GOP a boost or not ahead of the midterms? We'll talk about the details and impact next.

[Narrator/Announcer]

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 [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

[Adopt Us Kids Spokesperson]

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[Nancy Lazar]

I learned it from my adoptive mom.

[Adopt Us Kids Spokesperson]

Hold my hand.

[Kelly Evans]

You hold my hand. Learn about adopting a team from foster [e-mail] you can't imagine the reward brought to you by Adopt Us Kids, the U.S. department of Health and Human Services and the Ag Council. President Trump is reportedly considering a push for a capital gains tax cut in hopes of gaining a boost for Republicans in the midterms. Megan Casella joins us from D.C. with the latest. Hi Megan.

[Adopt Us Kids Spokesperson]

Hey Kelly. So this came about because National Economic Council Director Kevin Hassett was discussing various ways of cutting capital gains taxes with former NEC Director Larry Kudlow on Fox Business on Tuesday. Hassett said that President Trump is looking for promises to make to voters that of what the administration would do if Republicans have power in the future. So he said you could expect a lot more policy between now and the midterms. And Kudlow then replied that he had spoken to the president and he says the president likes the idea of indexing capital gains taxes to inflation and of a bigger exemption. Now, I asked the White House about this and a spokesman told me any policy announcements will come from the administration directly. So still some gray area here, but a couple of things to note on the proposal. This is very preliminary, something that the president is considering asking Congress to do. Congress, though, is not likely to tackle something like this ahead of the midterms, especially because the calendar just isn't in their favor. Lawmakers are only in town for about three weeks between now and November. And because it's really costly, possibly carrying a trillion dollar price tag. According to Yale Budget Lab, Some conservative senators and analysts have argued in the past that treasury could take some action without Congress to index capital gains to inflation, but that would be on shaky legal grounds and would very quickly, Kelly, end up in the courts.

[Kelly Evans]

People have a lot of capital gains because the markets have done well. No doubt a tax code, but then you'd have to sell and I don't know if anyone wants to sell right now. Megan. Thanks, Megan Cassell, Appreciate it. Let's get to Brandon Gomez now for the CNBC news update. Brandon.

[Phil Camp Boreali]

Hey there, Kelly. The World Health Organization warns Congo's Ebola outbreak could become the deadliest in history, surpassing the West African epidemic from 2014 to 2016 that killed more than 11,000 people. The Congo has recorded over 4,300 cases and 2,000 deaths. Officials say the rare strain has no approved vaccine or treatment. While conflict and misinformation are slowing containment efforts, New Jersey just joined a growing push to curb social media addiction among children. Governor Mikey Sherrill signed a law requiring platforms to Give users under 18 max maximum privacy settings and limited targeted ads, infinite scrolling and excessive notifications. At least 20 states have proposed or enacted similar restrictions. And tonight's power pole jackpot has reached an estimated $1 billion after another drawing produced no grand prize winner. A winner could choose the full amount through a 30 year annuity or take roughly $433 million in cash before taxes. The odds are about 1 in 292 million. I don't know if you're feeling lucky.

[Kelly Evans]

I can't let this pass without comment. Don't do it. People I know don't do it.

[Phil Camp Boreali]

I never have any luck either, you know, don't.

[Kelly Evans]

Just don't do it. Don't do it. Even if you win. It's a curse anyway. Brandon, thanks.

[Filippo Filoni]

Thanks.

[Kelly Evans]

Coming up, we'll talk to former NASDAQ CEO Bob Greifeld. About the lottery? No, about computing power becoming a tradable asset class. The CME is set to introduce introduced futures contracts allowing traders to bet on the rental costs of Nvidia's GPUs. We've got details on that next. Welcome back. And look at shares of Nvidia, up another 3% today. That probably puts them around 20% year to date. Gain territory after their big announcement this week that they are lining up half a trillion dollars in funding commitments to help drive the adoption of compute as an asset class. Does our next guest think this is a good idea? Let's bring in Bob Greifeld, the former NASDAQ CEO who is the co founder of Cornerstone Financial Tech Management and a CNBC contributor. Bob, it's great to see you again. What are your thoughts?

[Bob Greifeld]

Well, I have a few. So one, when you think about it, the stock should go up because in a certain way they've lessened their risk. Right. So they started with a situation where they're providing product to the customer, customers paying for it. Then they're in the business of vendor financing. They have widened the circle where there's more people involved with this financing. And what I like about it is the third parties involved probably will do a market rate setting in terms of what this, you know, this asset should price at, should it be 11%, interest rate, 12, you know, things like that. There are things about it I don't like, but certainly I think from the company's point of view, it's a good thing.

[Kelly Evans]

What are the things you don't like about it?

[Bob Greifeld]

So one, there's more people in the circle and there's points of leverage in every part of the circle. So we don't really know how much leverage is in the system as we go through that. But I also think when we see the risk, I haven't heard people talking about this. We think about lms and they're a phenomenal advance. Right. For society. But when they came out with the alarms, it's obvious they were trying to be effective first and not efficient. So I would think that the compute power required to do a given task and An LLM is going to go down 100 fold. And what always stays with me, when I was in grad school taking, you know, computer programming class, the, the professor had us write a program and we first wrote it and it really took a supercomputer to run it. And he said, your job, if you want to get an A, you have to make this program run on a TRS 80, the Trash 80, the Radio Shack computer back in the day. And we weren't that talented, but most of us got the ability to take it from a supercomputer use of resources down to a microcomputer. So I think over the next decade might have a hundredfold decrease in the amount compute power they required to get a task that's hard to put in a model when you're lending on equipment over that period of time.

[Kelly Evans]

And speaking of the equipment and some have raised concerns about how valuable can it continue to be. Here's what the CEO of CORE we've said about that very question on our air earlier. One of the debates that has followed

[Rick Santelli]

this industry has been on older generations GPUs.

[Kelly Evans]

And what we have I hope put to bed here is that those older

[Rick Santelli]

generations of GPUs are going to have

[Kelly Evans]

a longer useful life than, than anyone anticipated. They are going to to contract for

[Phil Camp Boreali]

a longer term and they are going

[Kelly Evans]

to contract at a higher price. And we already are seeing that flow through our platform. And that's something, Bob, that Srini Pajori of RBC told us yesterday that these A1 hundreds Nvidia introduced in 2020 are still being used today. So does that help to allay some of those concerns you talked about?

[Bob Greifeld]

It does. I'm in violent agreement with that. I believe the useful life of these computers be longer than people were talking about, you know, just a couple of months ago. But the two other factors I want to highlight, one is obviously the cost of doing that running that software will go down dramatically over the next decade. I'll make a prediction a hundredfold decrease. The second thing is LMS today are strictly about the data center. But each of us have one of these phones in our hand is 7.6 billion of them out there that has a lot of of compute power. So over the next decade you're going to see edge computing be a real play in the AI race. So certainly in the next number of years we'll see phones come out that are AI native, that can do a lot of the lens or slams, whatever you want to call at that point in time on the device itself. So when I think about lending to data center based right today it's only game in town. So you have two fundamental drivers. Over the next decade the software gets more efficient, reducing dramatically the use of hardware per given operation. And second, the devices in your hand will become an effective compute. There is a lot of computing power in these devices today and that's going to be nothing but increase in the time to come.

[Kelly Evans]

Finally then, you know, we're probably going to now see and there have already been these deals in the market. It's not as if it's that new. But the asset backed finance space, this is kind of what we're talking about. There's everything from you know, airline lease agreements to I think credit card points and there's lots of different types of things in this category. It has a long track record and so forth. Maybe this is just the sign of the times that compute kind of has a place in the asset backed finance space. I mean especially if it's only two or three year deal backed by rentals. I guess the real risk would be if the, if the party on the other side of that defaults. Otherwise they're probably going to meet their obligations. Maybe it depends again if you're going to be an investor and investors will be pitched on this retail, pension, institutional, you know, to make sure that the person on the other side is someone that you think is not in danger of failing to make those payments.

[Bob Greifeld]

Well, let's say the company executes properly. I'm saying let's say we all have all good actors in the space. The leverage is not an issue. I certainly think the computers can live a long period of time. It's just hard to predict what happens over the next decade. And others GPUs that are sitting in data centers today, are they as important 10 years from now? I'm giving you two reasons why they could maybe not be. One is the compute required for a basic LLM goes down by 100 fold. I would feel pretty strongly that the brilliant programmers can do more than we did in our course back 30 years ago. The second is they're going to have competitors. The competitors are going to be in your hand where you can run a lot of these functions. So if you're lending today on the datacenter piece, I agree the computers will last. The question is the world will change so much over the next decade. So if you're lending for two to three years you can kind of see the end point of that. But if you're lending for seven years, who can predict what this technology is going to be like in seven years.

[Kelly Evans]

All right, finally, are you a lotto player or not?

[Narrator/Announcer]

What's that?

[Bob Greifeld]

I am not.

[Kelly Evans]

There's only one right answer to that question. And if you thought launching COMPUTE as an asset class is crazy, did you know the CME is launching hockey futures as well?

[Bob Greifeld]

I am keenly aware of that. And you have to understand CME is a derivatives exchange and they can put a derivative on anything. Right. They don't actually deal with corn. They deal with something representing corn. So they can certainly deal with an expansive view of the cftc, which they have today, something related to that. And I think the bigger question for today is when does this kind of investing converge with gambling? And to me, the tip of the spear is not so much the hockey piece, but if you have a same day option. Right. A same day option, Kelly. Right. That day and expires either worthless or worth money, you know, how is that investing and how is that not, you know, sports gambling?

[Kelly Evans]

I think that is an excellent point. In fact, the very place that we should pick this up, because that is a question hanging over the markets. Bob, it's great to see you as always. Thanks.

[Bob Greifeld]

Thank you, Kelly.

[Kelly Evans]

Bob Greifeld. Coming up, Google, speaking of strong, powerful phones, they're unveiling their latest lineup of Pixel phones today. And they're showcasing the AI capabilities Bob was just talking about. Of course, it comes ahead of Apple's new phone launch next month. We'll have all those details next. Google is launching a new Pixel phone lineup today. Let's see if I'm going to make the switch. Mackenzie Segalos has more in New York City. Mackenzie.

[Nancy Lazar]

Hey, Kelly.

[Mackenzie Segalos]

So Google's new Pixel lineup includes its latest foldable, sticking with a taller design as Samsung moves toward a shorter, wider shape similar to what Apple is expected to introduce this year. But overall, Google isn't making dramatic hardware changes. There are upgrades, including a more efficient chip and new camera features. But software is really the headline, making the Pixel 11 a litmus test for whether Gemini Intelligence can drive upgrades. Now, the biggest change is Gemini becoming this sort of agentic layer on top of the operating system, working between apps in the background to call a lift while it orders dinner for you. Google's devices chief, Rick Osterloh, telling me exclusively that Google sees its edge over Apple in the Gemini ecosystem, really controlling the model Android and the services underneath it. And Google gets to make that case first, ahead of Apple's September hardware event.

[Kelly Evans]

It's not necessarily the top yet.

[Phil Camp Boreali]

However, we think that's really going to change as these devices become much more simple to use because of the agenta capabilities. We think that it's going to grow in importance and perhaps someday become the primary way that people use their phones, their laptops, laptops and other devices.

[Mackenzie Segalos]

And the scale here is much bigger than Pixel. Android runs two thirds of smartphones globally and Gemini already has more than a billion monthly users.

[Kelly Evans]

Kel, some of those features are, they sound enticing. The photo selection one, some of the other. So it's a reminder of some of the innovation out there in places other than Apple. There you go. There's a look at the full. So wait, Mac, show me real quick.

[Adopt Us Kids Spokesperson]

Does it.

[Kelly Evans]

It folds open and there's the screen. How does it work? Yeah, so when you have it closed, you can see the screen here and

[Mackenzie Segalos]

then when you open it up, it kind of gives you that widescreen experience. But it's just, I mean, Gemini Intelligence, it does give us a preview of what we're expecting to see with Siri AI, of course, that will be powered by Gemini, but Rick Osterloh, their devices chief, really talking up some of the more bespoke elements that you'll get through a Gemini Intelligence experience. And of course the Pixel sales, not as big as the overall Android ecosystem. So a really large installed base there.

[Kelly Evans]

I look at it, I'm like, I don't know if I'd ever. But I also didn't think much of the iPad, so don't listen to me. Mackenzie. Thank you very much, Mackenzie. Seagallos. Coming up, if your portfolio is running out of steam, you may want to consider adding some energy. That's a hint. And we're not talking fossil fuels or renewables. It's a segment of the market that's seen consistent growth and momentum that our next guest says will continue. You're looking at one of his top picks in the space, up 19% this year. The reveal is next. Move over tea, coffee and even iced coffee. The hot new beverage trend is refreshers. If you're not familiar, these are often cold, fruity beverages with a kick of caffeine in them. And it's helped the energy drink category get some new life and a new cohort of female fans. Our next guest has some ideas of how investors can play this trend. Let's bring in Citigroup analyst Filippo Filoni. Filippo, it's great to see you. How do we get here?

[Filippo Filoni]

Hi, Kelly, thanks for, thanks for having me on. Yes, look, we've been long term bulls on the energy drink category. It's had consistent growth in the U.S. but more recently, what you're seeing is really a generational shift in caffeine consumption. We did a recent survey of 2400 US consumers and what you're seeing is that consumers between the ages of 16 and 24 years old, they're using energy drinks as their primary source of caffeine. In 30% of respondents, if you look at coffee is only 27%. And that's compared to consumers 50 years old and older where coffee is 60% of their caffeine consumption. So pretty material generational shift that to us bodes pretty well for the category.

[Kelly Evans]

Yeah, I mean, to me it's a sign of the end times. I just, you know, I, I, I respect the choice, but who doesn't want the. It's fine. My siblings. Everyone's jumped the shark here. So you have some great data that shows new consumers that started energy drinks in the past year. 58% female. And these are high margin drinks. Right. Here's what Starbucks was saying. Brian Nichols said we're seeing the refresher business play a really nice role morning to afternoon. The other officials there are talking about a great quarter, great occasion for the afternoon beverage. You're approaching this more from the packaged goods side. Monster was our mystery chart. Why is Monster a good investment for you? Who else could benefit from this trend?

[Filippo Filoni]

Absolutely, Monster. Look, it's been one of our topics for many years. Consistent growth Both in the US and internationally. Their business is about 60% US, 40% international. In the US they've done a phenomenal job at taking share from Red Bull, which used to be the market share leader. And now Monster Rebel are neck to neck at 35% percent market share. And internationally they are distributed by the Coke distribution system. So they have a wide reach in international markets. And they continue to gain share in many markets around around the world. So their innovation capabilities are probably some of the best in my coverage. And again, the market share opportunities both in the US and international remains pretty wide.

[Kelly Evans]

This is also a stock that's doubled over the past two years, outpacing the S and P. The category is putting up 8% annual growth. Keurig, Dr. Pepper, are they trying to get in on this?

[Filippo Filoni]

Yeah. Cure Dr. Pepper has a growing energy portfolio so far is still pretty small as a percent of the total company, but they're getting to about 9% share. They built a lot of different brands. Some of them are owned like Ghost, which they acquired a year and a half ago. And some of them are partner brands. Like C4 Bloom and Black Rifle Energy. So right now There are about 9% market share in the US energy drink category. They continue to grow, but importantly, they're about to separate their business between a coffee company and a beverage company. And the energy drink piece will become a very important driver of the beverage company going forward.

[Kelly Evans]

You like Celsius as well? I mean, again, I do say this is is the category I assumed was going to be a trend, kind of a fad, and they found new ways to make it work. And maybe Costco could be a beneficiary. My producer AJ walked by and grabbed a Kirkland refresher out of the fridge. He probably is a different term for it before beginning this show. So they know when they see a strong trend, they're jumping on it too.

[Filippo Filoni]

Yeah, absolutely. I mean, look, we've seen a lot of different Challenger brands. Celsius is probably over the last five years has been probably the most successful of the Challenger brands. They now acquired Alani New as well. So they have the Celsius brand and Alani New, which skews younger female consumers. They're now going through some transition in distribution from announcer Busch to PepsiCo. So they've had some mis execution from the distribution standpoint, but from a branding standpoint, it really is positioned very well. You mentioned Kirkland. Private label has never really been able to get significant share within the energy drink category. But obviously Costco has significant reach and significant appeal. So we've seen in our survey increased interest in energy drink.

[Kelly Evans]

I can see why the coffee and tea companies are in this if this is where people are getting their caffeine now. Philippa Banks, Filippo Filorny Powerland is up next. Thanks for watching.

[Bob Greifeld]

Hey, listen. Can you hear that? That silence is the sound of a $3,000 vet bill because you don't have Lemonade Pet insurance. Your dog just snuck away to swallow your phone charger, which will land him at the vet. Thankfully, Lemonade Pet could save you up to 90% on vet bills. And the earlier you sign up, the more it could cover for your puppy or kitten.

[Kelly Evans]

But in the meantime, if you hear

[Bob Greifeld]

this, you should probably go check on what your puppy is up to. Get a'@lemonade.com pet.