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welcome to "power lunch." deirdre bosa is here. welcome. joining us is sirat sepi is also with us. good to have you with us. the markets are near all-time highs as the fed is in a cutting cycle. tyler, we are chatting this here. i'm here to remind you of these things [ laughter ] >> give me the signpost. >> we're getting into the big bank, but introducing this idea of a no landing scenario, which would be quite something, right? the economy grows? >> i think we're in the between the soft landing and no landing.

at this point, the market is still going to go up. >> it's hovering form at least that's the positive part. >> for now. >> for now. we're going to talk about shares of qualcomm lower today, following reports it will wait until after the election to decide whether to pursue a takeover of intel, plus citigroup with a bearish note on the stock. we'll talk to an analyst about that as well. >> you know about this, i don't really. >> i have a chart i want to put up, the ivg, the software etf. we know what the story has been, chips have been the outperformer, but look at what's happened over the last three months. it's flipped. software is actually outperforming the chips. >> as we have seen, lots of high-profile changes, starbucks, nike, boeing to name a few, in

the ceo suite, we'll talk to the author of a new book called "ceo excellence. vic will be will us to talk about. it's a topic that pass mates me. how do some individuals, whether they are ceos or performers or leaders of sports teams, how do they sustain excellence over decades. that's what vic has looked at. >> how is the different two, three decades ago. i'm ever. >> i'm guessing a lot more. >> a big topic of discussion where i usually am, on the west coast, and founders versus managers. as we mentioned, sentiment seems pretty good. let's got to bob pisani. bob, it reminds me of the saying, if something is too good

to be true, it's too good to be true. >> good point, deirdre, good to see you, as always. highs not surprising, the market sentiment is getting frothy, both retail and professional investors have more bullish in recent weeks. look at this list here. the soft landing remains the paradigm. the fed is cutting rates going into a soft landing, that is very unusual. stock buybacks are at a new record. that's a by support. stocks are entering the seasonally strongest period of the year still there is excited, and then downright frothy. we're starting to get into the frothy territory. the american association of investor sentiment survey says bullish just shy of the highest levels in over a year.

49%, that historically is very high. the average is about 37%. the same with professional investors. the october b of a global survey saw the biggest jump in investor optimist since june of to 20. they are allocating much more money to stocks now, less to bonds and cash. the relent his rise in stocks is also creating overbought conditions. several sectors, like industrials and financials like ba banks. it means simply when stocks and sectors move up this much so fast historically it's difficult to keep advancic in the immediate future. guys, at least with financials and some industrials, we're there already. back to you. our next guest says the goldilocks conditions could lead to more volatility as markets may react or overreact to

perceived threat to that delicate balance why don't you dive in and explain what that introduce characterized your viewpoint, in other words, we're a bit spoiled, i guess, a bit on knife's edge, anything that is seen as adverse to the markets could create an outsized response. >> well, bob's done an amazing jobs laying out the reince why investors are so confident now. consensus has emerged around a soft or even no landing in the economy. i think the question for investors then becomes, is that a no landing, or is it a reacceleration of activity? the market prizing we've been seeing rereally reflax a reaccelerating. i'm skeptical that's likely the case. it's very difficult with profit

margins where they are to expect we'll see much weaker labor market or economic conditions. however, historically when the fed has cut even into soft landing, we haven't seen profits reaccelerate or hiring reacsol rate. we've seen stability. that's good news for the economy, but may mean more average equity returns, average bond returns. that's an environment after the last couple years may not feel so good. >> that's where i was going to go with my next question. what you're saying leads me to believe it is unliablely for the returns that we have seen over the last two years to repeat themselves. >> i think that's the case, not one that investors need to be overly concerned about, but one that requires a pretty certificates call to action for investors. if you have the fed cutting interest rates from here, it creates meaningful reinvestment risk for investors, so we're looking to add interest rate --

open come-generating capacity wherever we can. we like short duration credit for this reason. the equity markets, good profitability, a good place to be invested. we're not necessarily bearish on the semi or chips. that part of the market is performing well, but we see valuations and market conditions as an opportunity to rebalance a bit. like energy, like utilities, these are sectors that benefit from slightly lower interest rates. we seed an opportunity to broaden equity exposure. >> when you look under the hood -- i great with you in terms of where the market is -- what other opportunities? you mentioned utilities, maybe reits in there as well. any other sectors that you think could benefit, especially going into a period where companies will not be raising prices?

and probably cost cutting as well. >> just as much others maybe even moreso than valuation/expansion opportunities dividend payers are one of the and then if we look at the u.s. election and the type of sector benefits we may see from just sustained capital investment from the government from the private sector, we see quality brown low-cost in as benefiting. again, these are parts of the market not only seeing that structural investment. >> what do you think the chances are that markets are complacent? the accidental earnings release

from yesterday, that caused nvidia to go down. you mentioned the semiconductor sector, so overbought. what if investors are looking to s sell. >> i think the risk is certainly there. it's one of the bigger risks to the economy, as this expansion has moved on and on, we've seen the u.s. consumer really bifurcate. we're lower ino where low consumers are not. so, if we see that drawdown, it can impact confidence consumption, and can contact business decisions in hiring. typically when we've seen that type of sustained downward trajectory for equities, it's been backed up by weaker

corporate profits across the board, and profits today are quite healthy. that does provide super ballast to get through the chops with ther and the risks through the next few months we might expect to see. >> lauren, thank you. over the past few weeks o. money high sending let's get to rick santelli with more, rick. >> absolutely. the big story, a two-day chart does say it all. yesterday, we started out at 410. today very briefly we traded un4%. on the right side of the chart, much all day think about this. if you look at what has moved the market, nothing moved it more than the big set jobs, jobs reports on october 4th. the nest chart starts on october

4th. it all looks basically the same. we broke to the up side and now we're coming back down. guess what? that jobs report, 254,000 jobs, 4.1% unemployment rate. tomorrow we'll get retail sales and continuing claims. it's very ironic that on a big day of important releases, here we are at that point breakout point? >> retail sales over the last couple months, tomorrow will be september. if you look at july, the core retail sales is up 0.4%. last month 0.3%. these are good numbers, so tomorrow's report will be very key. you talk about outside market response, definitely tomorrow could be that date. it's either going to mirror a moon shot back up, or if we get below it on a closing basis on a friday for the weekly close the following day, that will be very

significant from a technical perspective. tyler, back to you. >> mr. santelli, thank you very much. coming up, qualcomm reportedly waiting until after the election before deciding whether to launch a takeover of intel. at the same time citi slashing the estimates on its name ahead of apple's move away from the chip maker. we'll speak to the analyst behind though call next. what about the six mindsets that separate the best ceos from the rest? co-author of "ceo complex" is here with his take. "power lunch" is back, after this. it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh!

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welcome back to "power lunch." in today's "tech check" citi has a new note with a negative watch on qualcomm, but the firm still remains positive on semi stocks overall. christopher deignly joins you right now. seth just made this point. we've been here before, but year thesis has to do with the fact that apple is going to go away. >> partly, yes. i would say i've answer a lot of investor questions on this today. in my experience following semis for way too long, the semiconductor company can talk about an event in the future that will drive sales up or down, but when that event actually happens, it still impacts the stock, mostly on a multiple perspective. we think -- certainly they'll get ask about it, and apple is finally starting to go away

after, you know, many years of waiting next year supposedly an iphone se version next year. we think the sales could be flat to down for the calendar q4. they're going to a 13-quarter, so these are obstacles in the near term. bigger picture, there's a whole narrative of will they or won't they try toll acquire intel, and there's a new report that they're going to wait until after the election on whether to pursue an offer. what do you make of this? would it really get done? >> i can't imagine it will. we have this top 15 rules of semi investing. one of those rules is we call it

the city slickers rule. successful semiconductor companies are generally good at one thing. if they try to stray from that, the results are mixed at best, or end up destroying shareholder israel. was com is good at has notsets, intel is a totally separate business. qualcomm has never even run a fab facility before. i can't imagine that they would do this. now, i can see them going after parts of intel certainly, but not the whole kit and caboodle, and you would have regulatory issues as well. >> so it sounds like it's a bad deal for both sides. who would it be worse for? >> great question. probably worse for intel. at the top you would have a company running intel that had never done manufacturing before, but i think it will be bad for both companies. i prefer them to stay separate.

i can see qualcomm going after parts of intel, but certainly not the whole thing. >> on the question of intel, would there be a natural buyer, ow just time to break it up because of way their business is running? >> great question. i definitely don't think it's time to break it up. we've got say this for the better part of a decade. they're just not good at the foundry business. they could just shut it down, go away, focus on what they do best, manufacturing microprocessors. if they get out of the foundry business, you have a path, and everyone's a winner. stick with the foundry business, very, very small chance of succeeding. >> here's the question, right? one of the things we're spending as a country is billions on fabs. there's no way we're going to let these fabs go to a foreign buyer. how does that work, then, in terms of an actual buyer for the

fabs? >> then you're just wasting money. what they should do, number one, foundry out there is is the tsmc. they lit really gain share every year. in our opinion, we have written about it, the u.s. government should give it all to tsmc, have them build fabs in the u.s. otherwise you're just spinning wheels. >> christopher, seven the whole point national security, and you don't want a taiwanese company to develop your chip? >> there's no alternative. if you let intel do it, you might as well light the money on fire. in my opinion, it's never going to work -- i can't say never, but very slim chance of working. >> okay. >> just let tsmc do it. maybe samsung is second best. >> a dire realistic viewpoint,

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welcome back to "power lunch." could the better trade be in the smaller regional-sized banks? joining us now is jay woods, the chief global strategist, a man who likes to look at the charts and look for patterns. jay, take us through whether or not those big bank earnings are something to pay attention to, or are the regional banking the better trade in the coming months? >> well, i think you always have to look at the leadership. that would be in the big banks

these stocks continue to make 52-week highs, continue to break out, continue to lead. when i look at the overall picture of financials, i like to look at it more from a basket and then break down that basket. i look at the btx, it takes into effect some of the large-cap banks, plus some regionals. >> and an mmt. the bkx is a major breakout. we're talking about a major breakout. what you want to do is put it in perspective. look at 2023, a three-year daily chart. we are just breaking above that march 23rd regional banking

level. if this was the pull back, because it has gotten on the a little far rite right now i would buy more on your pullback where the regionals are starting to come back, a clear path toward new highs around 145, 150 is in the cards. jay, bess ate go through the koo components. if it pulls back to if 185 level, i think that's a good opportunity to buy.

and watch 202. we're seeing new highs every day in this market. pnc hasn't gotten to the all-time new high just above 200. i think pnc has room to run. then there's first horizon, another stock with a tremendous run-up this year, up about 20%, just reported solid earnings, broke above $16, $17. the all-time high high is 24, 25, so i think the path is set from a risk/reward point of view. my favorite, m & t bank. they're based in buffalo, major breakout in m & t. a pull back to 180 should be your new floor. i see you have the chart there. thank you very much. these are stocks you want to own. they churn for a long way. what we have now are takewinds.

there's going to be more letting. look for more m&a activity to pick up after the election. mortgage rates have stabilized. but this is all the fuel needed for these regional banks to finally catch up to the big brothers in the major banks. there's the big bank versus the smaller banks jay, thank you very much. we'll see you soon, sir. >> thank you. serat, let's talk about a portfolio manager's perspective v. an analyst perspective. do you like the regional banks versus the big brothers? >> i prefer the bigger banks. i'll tell you why. when we went through the march period with the regionals, the biggest question is what do the balance sheets look like? when you look at the big banks,

a lot more transparency, and the earnings that have come out. what they also have is huge tailwinds. it's not the tailwinds of an interest rate cut potential coming down. capital markets activity is where they start to pick up. >> it was a big theme of jpmorgan, citi and bank of america. wealth management businesses have done well, and you get interest rates coming down, so more allocations into equities, alternatives, et cetera, and you've got earnings growth and great balance sheets with high dividends. you have all of that and i think a much more diversified business. not to say the regionals are bad. i think the opportunity in the bigger banks, that's where the capital will flow. >> quickly, do you own the regional banks? >> i do not. deirdre, ty, there's a case to be made for some.

>> mackenzie's senior manner has a w okutnebo o. after the break, we will get his take on what makes an excellent ceo. "power lunch" is right back. (cheerful music) (phone ringing) [narrator] not all multi-millionaires built their wealth the same way, you have... the fearless investor. the type a cpa. the bootstrapper. the bootmaker. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth.

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we've seen some high-profile c-suite changes, facing numerous challenges. according to our next guest, exceeding the role in ceo is key to driving substantial growth. he has a new book with a couple co-authors, vik is co-author of the book. great to do you here with us. thank you. what do great leaders do or have that the merely average don't? >> they do a number of things well. the first is, in dealing with

their responsibilities they do all things related to leadership at an excellent level. i always had the presumption you would sea great leaders fabulous at setting the direction, but perhaps less good at managing the board or engaging with the board. great leaders highlight all the -- but they're more like ashton eaten and a little less like michael jordan, singularly great at one sport. >> maybe springers and javelin thrower, but everything at a elite level. what are those six attributes that you highlighted there? >> the six responsibilities are setting the direction, aligning the organization, mobilizing through leaders, engaging the board, connecting with stakeholders, internal and external, and finally your

personal operating as a leader. nothing earth shatter there, but doing all six well -- >> keeps them spinning. >> right. in doing it they have audacious vision, truly audacious vision, and amazing at really being great be grailors, something that ellis said to us in his interview for the book, he said, it's an information asymmetry problem. as a ceo you see more than anyone else in the organization, you certainly see more than the 10 or 12 people on the board you report to. therefore, if you're going to pursue an audacious vision, you have to be a good integrators. >> how important are efficient workforces. there's founders mode verse manager mode. if you're a founders, you know the business and product better than anyone else, show you

should be in the details. where do you stand on that? >> yeah. one of the things we talk about in the book, and again we come back to the six, there are six mind defend sets that differentiate what we see as the excellent ceos from those that are fine, but not that level of excellent. the leadership model, do what only you can do, right? this is not about do everything. it is about do only what you can do and understand what you as the ceo can add uniquely well to the institution. you also have to mobilize through leaders. which mean you need to solve for getting a great team in place that provides you not just with great leverage, but the able to get things done that normally you may dive into. so we have come to the appointed of view that the great ceos and great leader so officiallying

that time, their energy and how they think about the way they lead, right? personally i think you have to get that balance right between knowing enough about the details, but also elevate yourself and work through others. let me ask a dumb ass question. is a ceo being a good job or horrible job? and do they love it or do they go, i can't wait for this to be over? >> you get both types. you get people who love it and absolutely committed to it, and there are some that love it in the initial phases, but they do hit a wall at some point. >> some go through cycles where they're efficient in years 1 and 2, maybe a sophomore slump, and then they come back. >> but can you get good at it if you don't like it? >> the answer is the ones that do last longer, the ones who excel, contribute to society in many ways.

they love it, and they do it really well. but the cliche is accurate. it's a famously hard and lonely job. it is absolutely getting harder. >> if you're the head of americas, whatever you are at mackenzie, you have peers, but a ceo has no peers. >> how does it work when you're see the activism and succession? the six things they're really good at, is is that what you incorporate, you're so good that you know when it's time to leave? >> yeah. so, what we found is that the truly excellent ceos, by and large -- this is obviously a generalization, will be in place for seven to nine years. there are clearly exceptions. jamie dimon is one, who we think is an excellent ceo and has clearly gone a long, long time,

but in general to the six or seven-year point, they know when it's time, and the succession planning begins. >> can we talk about the red flags? as you mentioned, there's a lot of activism, talking about succession plans at major companies, what do you think some of these investors are saying that they don't like? >> you know, i think some of the red flags that clearly are evident, the stock's performance. they can see the lagging performance. >> it might take a while. >> yes, it can, but they see that as a marker. they will clearly -- they look beyond the ceo often into the team. is the team truly excellent? one thing we discovered in this notion of mobilizing through leaders is great ceos focus

intensely on building a star team, not a team of stars. i think the activist in the investment community are good at understanding that. are they being a star team that will help lead the organization. >> how much, if any, of ceo performance, of how we think of ceos is simply accident. in other words, guy or woman was in the right place at the right time, or in the wrong place at the wrong time. jensen huang is a brilliant man, but he's also benefited from the fact that he happens to be at a company in the right place at the right time. >> right. we should differentiate between founders and people who have grown up in corporations and become ceos. the once that have grown up or come into the institution laterally, i personally think

they have learned a lot of the skills along the way. they have learned to have bold vision and direction. they have learned to be excellent? resource allocation. they learned how to shape culture, how to mobilize teams. they learned things on the job, engaging the board, managic stakeholders, so i think it's more people actually grow up and hopefully are groomed for the role rather than just landed in it by accident. >> really quick last question, one of the most controversial ceos is sam altman, what grade would you give him? someone who was kicked out just to return a few days later? >> i would love to be able to answer that question. i just don't have enough insight to give you an honest answer on that one. >> fair enough. i don't think anyone does, actually. >> vik, thank you very much. here's the book.

there you go. "ceo excellence." thank you very much for being with us. >> thank you for having me. i appreciate it. now to pippa stevens for a cnbc news update. president biden will travel to germany tomorrow after he postponed the initial visit last week to monitor hurricane milton in florida. the president will not immediate with volodymyr zelenskyy on the rescheduled trip. the white house says they will speak by phone today instead. it comes after zelenskyy unveiled his victory plan, calling for an uncondition at invitation to join nato. a former las vegas official was sentenced to 28 years in prison for killing a journalist who wrote critical articles about his work and exposed an inappropriate relationship. he waited outside of the reporter's home and stabbed him to death. he claims he was framed.

two aviators' plane crashed yet afternoon. they say the growler jet went down east of immunity rainier. it's not clear in they ejected before the crash. coming up. amazon is increasing its investment in the nuclear industry, direct are more than half a billion in projects ace cross the country. "power lunch" it back after this. when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change.

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amazon is making a big investment in the hopes of powering its ai ambitions. diana, i was just talking about google, and it feels like a revival. a lot of investment into the technology here. >> yeah, exactly.

amazon web services is investing more than hall a billion in nuclear energy across three different projects. here in virginia, home to nearly half of the data centers here, they signed an agreement for small mod ullr nuclear reactor. i asked matt garmin why the push to nuclear. >> we're looking forward, and we seed the need for gigawatts of power in the coming year, and there's not enough projects to meet the needs. the technology is advance to get a place with smrs where there's a new technology that would be safe, easy to manufacture, at a much smaller form factor. >> reporter: the kind of nuclear reactor with a smaller footprint, allowing them to be built closer to the grid, and

faster build times. amazon also announced an agreement with energy northwest to invest in the development of smrs in washington state. as part of that, amazon's climate pledge fund announced it's the lead anchor in a dollar 500 million financing round for x energy, which will provide the parts and nuclear fuel for that project. at the presser this morning, energy senior jennifer granholm announced $900 million in d.o.e. funding is available. >> we want them build in the united states for a variety of reasons, including national security reasons. we know we need additional power to be able to to do that. we want that power to be clean power. >> reporter: as we said, amazon is just the latest in a line of big-tech companies investing in

nuclear energy. >> i'm so fascinated with this story. like we mentioned, it was google last week. there's an important distinction. this is developing the technology to get nuclear energy in a different way. that's going to take time, right? and this isn't a sure bet? >> reporter: i wouldn't say it's it's not a sure bet. they say it would take five to ten years on this particular project. the difference is amazon is actually investing in that lard ware, in those small nuclear reactors to get them built. they already have agreements with and google is buying, not invested in buying units. they will come on line at some point. again, five to ten years. >> could lead to another group of nuclear stocks, too, in the technology side rising. thank you so much. and speaking of dominion energy, dominion hitting the

highest level in nearly two years on the back of the deal with amazon. next we'll take a technical look at that name in "three stock lunch." (♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this?

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it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out?

don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! welcome back. time for today's "three stock lunch." we are looking at some of today's biggest movers. here with our trades is tom martin, senior portfolio manager at global investments. first up, we've got morgan stanley higher after beating earnings estimates. what is your trade here? >> well, we own this stock in our strategies, and we continue to like it. we're overweighted. it's important to look at how we look at stocks, and we want companies that are showing good earnings trends and also have good technicals in the here and now. we like concepts, and we like stories. but we've got -- it's got to be backed up by fundamentals that are actually happening, not that are on the common. that's what you're getting with morgan stanley as this company

has been doing that for a while all year. the company was a market performer up until the rotation started happening in july. and this earnings report was just really putting an emphasis on how they're able to beat with the good fundamentals. really across the board in wealth management, particularly in stock trading, and in investment banking. >> we know you like the stock. how much do you like it? >> i like it a lot. it's one of our top holdings. what i liked also on this call was the new ceo. you know, when you hand off -- and we talked before it before -- when you hand off to the new ceo there's under certainty. he did a great job. all his team has done well, and you can feel comfortable that it's in good hands. and you still have james gorman as chairman for a while, but the new ceo has done a great job. this will attracts new capital to a stock -- it was a show-me stock, it wasn't the jpmorgans where blue chip we should put money, i think this will attracts more capital.

>> let's move to cisco moving hire after citi moved it from neutral to buy. a.i. is going to be baring part of the -- be a bigger part of the system over time. do you agree? >> it's possible. they're in those businesses, and they -- they seem to have gotten a trough in the most recent quarter. here's a company that's been under performing for some time. they haven't been able to execute as well. that's been the problem. it looks as though they have the opportunity to do that with their networking and with their exposure to the data centers, et cetera. but they really have to be able to come through with that. so we think that that's a show-me stock and continues to be that way. >> finally we've got dominion energy, as we mentioned, teaming up with amazon to develop small scale nuclear reactors in virginia, hitting a 19-month high. tom, what's your ftake here? >> you did a great job of talking that earlier today.

and you know, although they are in one of the best areas for data centers and they have been putting in nine data centers so far this first half and probably 15 by the end of the year, and they do have nuclear, and they do have all the hookups that they need to have, again, this is a story that is still in the future, and in the meantime they're going to grow earnings by 5% to 7%, which is in line with your average utility. so the stock may be a bit ahead of itself. >> the final thought on dominion? >> i think he's right. it is ahead of itself. you get this halo effect of a.i. and nuclear now. so these stocks like just jump like cisco. you're adding billions of market cap with no earnings. >> thanks for watching "power lunch." "closing bell" starts right now. welcome to "closing bell." i'm mike santoli in for scott wapner. this make-or-break hour be