Thoma Bravo Founder, Treasury Bond Auction, Terawulf Exclusive 9/10/26

0:00It's NFL kickoff time exclusive NFL team valuations with sports business expert Michael O'Zania NFL is by far the most popular belief NFL team valuations now on C NBC dot com slash sport. Borrowing cost pop as oil hits a hundred bucks a barrel again. Walk of the power lunch alongside Kelly. I am Brian. We got a huge hour ahead. Noted tech investor. Orlando Bravo is here in the house talking tech investments bonds and more. He will join us in moments for an extended and exclusive conversation. Plus an AI power player. Tara Wolf is making a high stakes stakes bet. She said on the infrastructure powering the AI boom building large scale digital capacity designed for the most demanding high performance compute CEO Paul Prager joins us today. Art is a big hour and there is a lot to get to not the least of which is oil back to a hundred bucks a barrel here in the states. And while that going up is going to impact what you pay at the pump along of course with trucking and shipping costs and diesel.

1:05The bigger economic question maybe whether those prices are going to start impacting the broader economy. On top of higher gasoline prices many of you out there no doubt facing kind of the quadruple whammy. Higher food higher health care higher insurance costs all over the last five years. Through that stocks have held up well yeah they're down a little bit right now but keep in mind just a few percent from all time highs. And now many of the investors looking in next week and the Federal Reserve and at the Wednesday meeting traders now see on nearly 70% chance of at least a quarter point hike from about 64% before the PPI number came out earlier today. The bond market also in focus tenure yield. Look at keeping look at that it's your it's a big story Kelly for 94 we are probably up almost 11 basis points now today and one single day. The two year 456 now across the curve the of so the highest levels since Jan one and in some cases that 30 year auction last hour was auctioned at the highest yield since 2001 it's at 535 right now.

2:08Yeah and we are nearing the highest tenure yield since well two years or three years ago and we are awaiting the results of the Treasury's six billion dollar buyback operation that just actually took place we're going to get those results in moments but let's talk all of this the very special guest. One so special we even put breaking news animation up for your Orlando Bravo. He is founder managing partner at Tomo Bravo Orlando great to have you great to be here in New Jersey with both of you. I actually love it here. Do you really I really do let's switch spots because you're in Miami we're happy to take the show down there. We love the state income tax rate. Come over anytime. It's great. All right so 4.94 percent we're probably going to hit five. You're a professional investor I know you don't trade bonds I get it but will 5% or even a little higher than that will that kill the markets kill the economy kill private equity. We're already getting hit pretty hard because we're in software. So given people's lack of understanding of AI and software we're paying in our companies 80 companies we have to refinance already 20 billion dollars of debt.

3:11In the last year and a half in we're paying rates that are or spreads that are 150 to 200 basis point wider. Does that kill us or kill the economy or kill software absolutely not because as owners of companies and that's how people adjust. We just have to cut more cost or grow the earnings more through innovation. So we we adapt to that environment. Now we all know and this is well documented that we have a P&L problem in the country. Meaning the US government and its deficit because the president was talking about this last night almost saying what what company wouldn't when when it's doing this well issue of $5,000 dividend check. You look at the P&L of the US and you don't think it looks so hot. No the P&L of the US were almost at a $2 trillion deficit. It's expected to increase over the next five years and not only increase but also on a relative basis as a percentage of GDP were almost at 6% on deficit. It's expected to increase to almost 7% so that has to be dealt with.

4:13Now it's really really difficult to fix the spending and tax situation but on the growth and that's what the government is trying to do. China is growing our spare economic growth. But then you have people saying stronger growth which is what we've had 6% nominal past couple of quarters is why bond yields are going up. No they try to spread the growth well I say that a little bit but that doesn't explain the rest of the world then. No it doesn't because they don't have they have higher bond yields than us or at least higher rises and no growth. And what's going on Japan and France I mean look at what's going on but to to that point there's a little bit of a doom loop here. The better that the economy does the more that though that bond yield goes up as a result the bigger the deficit gets. So even trying to grow our way out is a little bit tougher now than it used to be. And that's where we're in software and technology because you the way out of it is through productivity growth. Not wage growth not nominal inflation good old fashioned productivity growth and that's what this AI build out is so critical and so important.

5:14And the government is looking at those yields because that build out is very dependent on a set of rates and a stock market level to continue to fuel it. There's a lot of money going into it. So once again productivity growth is is the key way out of this versus Congress. So we have a guest coming up also in a few minutes Paul Prager of Terrible. He'll talk about building out huge power plants in places like Kentucky right where you don't have private equity executives. And so let's forget about your employee base for a second obviously very well educated probably very well compensated. Is the AI build out and I'm talking about carpenters electricians concrete people whatever everybody built into the build out. Is that inflating incomes enough to overcome the impact of higher rates higher gas prices higher insurance higher health care. Not higher everything. No way know how not yet. I mean the input costs including the massive increase in oil prices are going off through the economy now.

6:15Now we have 80 companies doing about 35 billion in revenues and of course these are knowledge workers right developer sales people support people. But we're not seeing ourselves that massive wage inflation right now that we typically see. We're also not seeing us having the ability to increase prices massively to our customers. And how's economic activity as we see it because software can be quite cyclical. Customers can always wait a quarter or two for productivity gain to to perform a project. Our customers right now are buying a lot of product. We don't see any big decreases in what they're willing to spend. So there's a healthy aspect of the economy now that that we're witnessing. Well let's talk about the unhealthy ones still because we say we just got the results of the treasuries buyback. This is the super sized buyback of 10 and 20 year debt that just was conducted. Rick Santelli brings us those results Rick. Well I'll tell you it's it's different than a regular auction. It's a reverse auction and the amount accepted was 5.19 billion.

7:17They could have gone to 6 billion. There's a couple of metrics that I find very fascinating. When I do regular auctions I look at bid to cover. How many dollars worth of bids compared to how much was available for sale? When you do a reverse auction you call that offer to cover. And in this case it was 10.489 billion were offered for sale. They accepted 5.19 billion. So if you take 10.489 divided by 5.19 you get 2.02. That's the offer to cover. It's weak. Most reverse auctions you're looking at 2.5 to 3 is normal. Which means that the sellers thrown out about 10.5 billion dollars worth. It should have been closer to 15 or 20 billion. They weren't aggressive in that regard. And the fact that they didn't go up to 6 billion probably means that the treasury thought some of that stuff was a bit too expensive to buy. So if I had to grade this auction it would be somewhere around to see.

8:19Maybe even a sea minus. Now it doesn't mean the treasury did anything wrong. I'm looking at it in its entirety. The dealers first one just seemed a little gun shy thrown it out there or or they don't really want to sell it back at these levels. It's a variety of potential reasons. I would value a guess that the next one of these we get. I think on the 24th of September you will see that much more is offered by the sellers. That would be my prediction. Or Rick is it a sign that there's just not that much demand for this. In other words it's actually kind of a good sign, right? People are like ask. Yes, no it's a good sign. If you're much worse, because the country wanted to buy it. Right. You want an IPO. You want a Dubai and the sellers were reluctant. Exactly. A hot IPO you would say it's five or six times over subscribed. This was like that two times. Yeah. Exactly. So when I say it's an average one, we don't need it. It's nothing against the treasury. It's nothing against the present. Right. It's that the whole process wasn't found to be super valuable to those on the sell side.

9:21All right. Sue at Orlando thinks maybe Rick, thanks very much Rick Santelli. Do you have a response or reaction to this? It's kind of new. I mean they've been doing this for a few years, but it's getting more attention as the program. It's getting more attention. It's bigger. And there has been a lot of criticism. It should have been a lot bigger. Oh, it's not going to move the needle. Oh, there's the fiscal problem. Sure, many of those factors could be true. But if you have tools at your disposal to manage the balance sheet, go for it. I think it's a stooot. Lower those long term rates are try to, by short. And there you go. Is there anything the government can do because the bond market is going to? And no disrespect to the Federal Reserve. They've got a meeting next Wednesday. Will be in DC. Could be a shocker. I just don't know what the Federal Reserve can do right now, Orlando. $100 oil because there's conflicts in Russia, Ukraine, and Iran. I have no idea what an interest rate move is going to matter to that. That could be true. I mean, the odds are now. What would you do if you were the Fed chair? Well, I don't, I'm not looking for that job. Leave me in private equity. I really, really love what I do.

10:22Grinding with these companies that are great and software. This is super, super complicated. But look, we'd probably have a rate hike. And those are the odds right now. Europe just had a rate hike. But yeah, it's a supply problem. People talk about dollar to basement and all the rest of it. I will say that technology is the one thing that has helped imagine if Chatshipy hadn't come along four years ago. I mean, truly, where would we be in this economy and the stock market? We had a horrible stock market year in 2022. So yes, it's been disruptive. But this has also been one of the biggest, I mean, you talk about productivity. You would say AI has it, no? 100%. Look at the massive AI build out. Look at the productivity that's coming. That hasn't really even started in corporations. Look at these awesome IPOs. Trillions and trillions of dollars. That is a big boost to the economy. Yeah. All right. We'll get more into it. The software has been on a very good run lately. This is a well-timed. I'm so happy I'm here with that timing. I know. One of them, well, that's the next block. So we got the whole next block with you sticking around to talk about this. Orlando Bravo of Toma Bravo.

11:22We'll see him again in just a moment. We're also just getting started here on the show. Still ahead, Terrible CEO Paul Prager on the Davis Center build out. We'll talk to him about hyper-scaler demand and what $100 oil means for AI's power hungry future. But after the break, as mentioned, we'll have Mr. Bravo back to discuss AI, maybe some risk, software, and the biggest opportunities in tech right now. Don't go anywhere. Here's our products business expert, Michael O'Zanean. ENFL is by far the most profitable lead in FL-T valuations. Now on cnbc.com slash sport. Welcome back Orlando Bravo. The founder and managing partner of Toma Bravo is here on set with us. We want to talk about your core expertise, of course, which is in tech. Your company's one of the largest software focused funds, $170 billion. I think we talked about assets under management. 80 some different businesses and a tough moment for software as a service with AI coming

12:27on the scene. You're quite positive about AI, but it has been disruptive. So what's the state of play for all of these companies in your portfolio? The first state of play, which is really important and you see it out of the big cap companies. Those great companies sales for service now and some others with great leadership. The fundamentals are excellent. We just had this meeting yesterday with all of our key investors and one page after the other, 500 million of EBITDAG, growing at 20 percent, high retention rates, high net retention rates. Now, that is only part of the story what's happening today. But when you look at these companies now versus two years ago, they're now AI-centric companies. We have a public position in sales point. They reported earnings yesterday. It's all public. 30 percent of their new ARR was all AI. AI is one of the biggest, most positive things that ever happened in the software. So the market got it exactly wrong. No question. Exactly wrong. It's going to destroy software your take is and what investors appear to have discovered

13:29the last couple of weeks is done and don't know. Software will benefit from it. Some. Not all of them. There are still names that are down 20 more percent from the highs and you know more about these businesses than I do. It still seems like there's a separating game that's happening where they want to say who is well positioned to actually benefit and deploy AI and who's still at risk of dissent or mediation. There are a couple of things that put you in a really, really good position. What is your solution? What are you selling? Are you selling apps? Are you selling code? Are you selling a system that runs your enterprise or your processes? That's the number one thing to look at. The second big thing to look at is what is your degree of domain expertise? Do you bring to your customer the ability to run manufacturing intelligence in a way that very few people can? What are you bringing? What is your solution to your customer? Now overarching all this, this is where leadership today has a premium.

14:29You could have all those attributes and they could look great, but if you don't have entrepreneurial leadership, usually founders that are willing to move very quickly and go to the future and invest and make the right choices, you're still going to be left behind. And then you can look at Airbnb. That's a way softer has always been. Do you know Mark Reneoff? I do. Like well. Pretty well. Well enough to deliver a message for me. 100% of the next time I'm right down. So two to three weeks ago, whenever it was, he sat with Daria Amade of Anthropic in like a podcast format. And they were all friends and friends and friends. Whoever set that up for Salesforce deserves a gigantic bonus because it added about 20 billion in market cap to Salesforce that day because did it not correct me if I'm wrong? Did it not show the investing world that AI, least Anthropic and Salesforce, which I think is a company or time I'm building sort of that domain system, can be friends and not

15:31enemies. That was a huge moment, I thought. Well that combination or that partnership is about making this software system, now an intelligent software system. And both partners will win and people get a lot more value from both sides of it. So I think that was terrific and it's still undervalued. I think I really want to set the record straight with your viewers, with investors because this software thing is once again, AI is the most positive thing that I've ever seen happen in software systems. And it works as follows. Software companies and many venture capitalists misunderstand this are not selling you code. Let me give you a specific easy example, take payroll. We all get our payroll check every two weeks. A payroll software company does not charge 100,000 employee customer, $10 million for code. They charge them for, I will take care of paying all your employees on time with the right deductions and the amount will rewrite.

16:31And there's a mistake, I face the liability for it. That is a highly, highly complex system of commerce. When you have an agentic world come in, the agents are going to use that system many, many times over, more than humans. My only point would be look at a Monday.com, right? A $200 stock that's now $84. So you feel passionate that this is going to help software, but you have to admit, it's not as broad as saying that everybody in the software, and you already said you've got to look for the founder CEOs and the ones who are doing, you know, they have a real business. But there are many companies in software that would have been disrupted anyway, that don't have those franchise market positions. That's why it's important in the public markets and the dead markets and the private equity market to be a specialist. When you walk up the stack, because I want to talk about something people claim, those system vendors also sell you applications. In payroll you have your recruiting app, you have your time and attendance app, to help humans do their work in an automated way or make decisions.

17:33People say, well, those apps are going to get replaced because now the customer can build them with AI. That is right. But software companies, the system vendors are not standing still. They're building platforms to let the customer go crazy and build apps in milliseconds and you're going to have an explosion of software and those platforms are worth a lot more than the static apps and the final layer you have is agents. Who is going to bring agents that have better outcomes and then cut your cost that the domain experts that have 30 years of experience in that domain? Salesforce has it. Sounds like it. Sail Point. What's your company? I assume you believe they have it. The numbers are there. Who else? Service now. Service now. Not a company. What? Bill McDermott, former CEO of SAP, SAP. What? What a just a terrific company. And here's where leadership comes in. Well, we're finding because we buy companies with, say, $10 billion market caps, $20 billion market caps, is what we're finding in the public markets is that the large software vendors

18:36really have it together and they're already in the future. That lower-demand market is very, very mixed in terms of leadership and the area of strategy. I had my partner hold and spade. He had a meeting with about 10 of these last week and he came out of it a bit underwhelmed. Versus what we're doing with our companies because we're private equity. We're so aligned that we have no choice if we want liquidity to really send them to the AR future. So Workday is a 45 billion market cap and there were those rumors about Silver like a month or so ago. Would you look at bigger-sized companies, even publicly traded ones, like a Workday or others where they might be down 50%, but you see all these positives you've talked about? Those bigger opportunities are excellent. I can't comment on that specific one. We own day-fours in partnership with a founder, a terrific company. He's known as the best innovator in the payroll and human capital management business. But doing bigger deals is going to be a thing going forward because now these stocks are trading at levels where the large caps are more comfortable and it's much better in this

19:39environment to build a much broader platform. Can I wrap this up with a very light-hearted question just to kind of... We had a pretty meaty. I had like five more hard-hitting ones. Well, I think... We can just talk. We can just talk. The future of private equity, institutional investors, the asset classes underperformed, private credits still has all these questions. I mean, Ray, how much pressure? But I look at him and I go, I think he's been through some cycles. Well, I think he's going to have... I guess it's... Let's get him to agree right now to come back. We have to wrap it. Can I ask a very short, light-hearted question? Please. Is AI going to kill us all? AI is going to be awesome. I can't believe that blog. Leftware and a predictive model is all the sun is going to hurt us. It's been unfortunate that that was posted. Why? because... Well, 10% chance going to kill us? Moons in 90% chance! It's not being killed. So, that's good. That's the good news takeaway that I'm being a math guy, I guess. I love that it was light-hearted because I know how you handle that thing. You know I'm being so cool, squats.

20:39Of course you are. But, you know what? The interesting thing is, it just... It does not help the data center build. When people that are working and have good jobs and are not in technology are reading this stuff that this is really harmful. When it's just software and a great math predictive model working on our behalf. Orlando, we really appreciate it. Do come back. Thank you. We'd love to continue the conversation. All those hard-hitting, smart questions you just had. But there are all these people that we ask these every three months and then he'd still sit in here going, yeah. Will you come back? I would love to come back here in New Jersey. You're willing to come back to New Jersey? 100% straight from Miami. Straight from Miami. Well, Titor Burles is close. Coming up, speaking of AI, power player Paul Prager, the CEO of Terrell Wolf on AI, the data center boom, hyper-scaler-demanded, maybe even a little bit, but don't tell him about oil. He's also on set. He ventured to the wilds of New Jersey. We've got him here next. It's NFL Kickoff Time.

21:46Exclusive NFL team valuations with sports business expert, Michael O'Sanius. NFL is by far the most profitable league. NFL team valuations now on CNBC.com slash sport. All right, welcome back to Rise at Oil Price is showing no sign of slowing down. In fact, it's accelerating. WTI crude right now here in America. It's nearly $103 a barrel. It's the first time since May. In fact, US benchmark on pace for its eighth straight higher day. The last time that oil rose eight sessions in a row was three years ago. And these are some of the highest oil prices we have seen since 2022, four years ago, least the last five years. But one important thing to remember is this. It is very easy to forget, especially in the era of the short attention span. From 2007 to 2014, a barrel of oil was largely over $100. The subprime crisis, sparking an economic crisis, which also hit oil investments.

22:47That said oil prices higher. In fact, when you factor in inflation, $100 oil in 2008, basically the same as $130 or $140 oil today, making any comparison to the time in America, of course, that time and not a good one. But this is also important. Even in the recovery period after that, oil prices were a lot higher than they are now. And still, the US economy clawed its way out of recession. In fact, one reason the economy did get better was that higher oil led to higher investments in energy. We told some of these stories firsthand back then. And so maybe the bottom line is this, while higher oil and gas and diesel and heating oil prices, they are painful for millions of families and companies. Could this actually lead to more investments in energy, maybe more investments that also help power our AI revolution, which is right now, Kelly's point earlier, powering the entire economy. And that maybe is the perfect segue to your next guest.

23:47He is a real power player. He is the chair and CEO of Terrible of Paul Prager. Also began his current Wall Street as an oil trader in the turbulent markets of the 80s and a former naval officer Paul Great to have you on set. Thanks very much. I want to get to oil more in a second. You just heard our wide interview with Orlando Bravo. What he wants to do, your company in Kentucky, big deal, you just announced Lake Baron in New York, you're looking to make happen. Straight question we've asked you before. Any sign from your, where you sit, of a slowdown in AI investing? No. No, demand is robust. We've got a site that, we've got the most active data room we've ever had, six major players in there. Terms are increasingly better. Duration on these deals is increasingly longer. Their investment grade back stops for the right deals, well structured. Demand is extremely strong right now.

24:48So there is, we just heard about this from Orlando Bravo as well. I mean, these headlines about AI killing humanity could really slow down data center development, need to more political backlash, more Torians and all the rest of it. But you don't think we're seeing that? Or is it that you have found a way to navigate? And is it that people in the industry understand that the politics are one thing, but the way to get it done is kind of another? Hi-powered compute, AI is not going away. And we're at the very beginning of an uphill climb towards fulfillment where these people have the access to power that they need. Near term power access is everything. And we're a long way to go before the customer's appetite is fulfilled. I think you have to focus on power availability between now through 30, because that's what our customers are looking at. And they're very, very keen. Through 2030, you mean? Yes. So the next three or four years.

25:49Demand is huge. Yeah. Is the power there? So the power is there, but you've got to know where to look for it. I mean, I think terrible expertise is in looking at former industrial sites, sites that have stranded energy infrastructure, sites where we already have connections to the grid, sites where we, if necessary, can marry a new generation facility so that we could become surplus generators contribute to the grid, which is something that a lot of states want. And the ratepayers want, because they want to make sure that their rates are protected. If anything, we think rates will go down as a result of our participation. Go down. Yeah. As a result, we're taking advantage of stranded electricity. We're giving the utility a customer for revenue that they didn't have before, and we're willing to bring new power online to create new generation at certain sites. And a lot of that generation is coming from natural gas. Now, I do want to call on your former expertise as an oil

26:49guy, price of oil at 103. I'd love for you to comment on that as a former naval officer of what's going on in Iran. But you care more about the price of natural gas. Natural gas is still below $3. It hasn't really moved for a number of years. What's going on with oil, but more importantly, what's not going on with natural gas? Why is natural gas not moving, even as the price of oil, of which natural gas extraction is a byproduct, soaring? I've been in the execution of data centers and power plants for a long time. I've been out of the trading business. But oil is well known as an event-risk commodity. Natural gas much less so. It drives here in the United States the price of electricity on the margins. Our facilities are taking generation from sustainable sources, hydro, nuke, as well as natural gas. And to be honest with you, the demand for power by high-power compute, NEI, it's not really affected

27:50by non-significant changes or insignificant changes in the price of electricity. Sure, oil that's high on the margins will affect things like logistics and deliveries, but it's not driving what happens in the high-power compute AI data center. But I guess what I'm trying to get at is somebody came to me and said, Brian, we want to soar electricity demand by 20% or 30% whatever it is over 10 years because we've got to power all these big data centers. Natural gas. Most of that is going to be done by natural gas. I would say, well, natural gas is going to be at five bucks because obviously it is because demand is soaring. We have a lot of natural gas. Yeah, we have a lot of natural gas. It takes years to develop new natural gas plants. We're working on small nuclear reactors as well, not terrible, but the industry. And so I think the United States will always have a very good commercially feasible energy solution. But again, electricity to the high-power compute AI taker, our customer, it's not something

28:53they're really terribly concerned about. My last kind of observation, and we've been talking a lot about this, but now that heating oil is I understand that diesel are kind of the same thing. Diesel's the highest level ever. We're going into winter, so a lot of Americans will have that kind of price shock. Can anything kind of help them humiliate the refinery shortage? Can't bring a refinery online. That quickly. So is this just a waiting game to see if other countries can... Listen, again, I think oil is a venture-driven in its price. It's not what will drive electricity prices, but certainly it contributes to people's concerns or what are going to be my electrical prices, which is a social issue for the high-power compute AI industry. Exactly. I think people have a sense of, I'm probably one of them, I just go, my utility bill is this kind of broad vague thing. All I know is it's a big number. And having to think to myself, well, no, but that's heating oil, so that's a diesel, so that's not AI, but it will feed this idea that utility bills are going on.

29:54But I think our industry has suffered for a few months now with the NIMBY concerns, that not in my backyard concerns. And I think the industry is then a really good job of getting organized around it. And I think one, there is a lot of misinformation, there's a lot of misunderstood information, and three, it is incumbent upon us, and that's what we do in the local communities. It's why we've been welcomed back, why we have the opportunities we have in Kentucky, why we have the opportunity we have to expand in New York, why anthropic signs long-term deals is because you have to educate the customer. You have to go to the local community, you have to explain to them that, hey, we're a closed loop system, we're not taking water from the lake. Hey, we're not making a lot of noise, measure the noise output, and you'll see, it is what you're accustomed to in your backyard. We're not going to increase rates for your electrical bill, because we're going to take stranded assets, take advantage of that, too, we're going to work with the utility

30:55and build new generation to drive prices down. As long as we can educate the local community, then we'll get like the positive bill of health that we got from Governor Monsieur in Kentucky, who said, Terrible is doing it right. Well, I will say this, without insert topic, if one political party says this must be good, the other one is probably going to say this must be bad, and then invert that the next time. Let's talk about Terrible. Your 20 analysts are sure they cover the stock, target price just over 35, stocks at 1640, so the Wall Street target is double, where your stock is now. So what are investors missing about this story? Well, I think the NIMBY story took center stage over the summer and the whole space traded down. I think, if you just take a look at what we've got contracted, everybody would say our stock price should be higher. As CEO, I'm focused on stock price, I'm focused on maximizing shareholder value, so for us, it's an execution story. And I think we are early in the game

31:57of being able to sort of have a wide view of who's going to be able to execute and who's not delivered. So because the data centers are just now coming online, Terrible has executed, that's why Anthropic came back for the 20-year deal in Kentucky. I am excited about the continued appreciation for what we do, but again, we need to be very involved in the local communities telling everybody, here's who we are, here's who we are not, and this is why we should be good neighbors with you. And as a result of that, more sites come online, more contracts or leases get done, and great credit back stops enabled, great financings, those happen, and then equity value will continue to appreciate. Paul Prager, the chair and CEO of Terrible of Paul, really appreciate you coming on. And also, like Orlando Bravo, coming up to New Jersey,

32:57daring to cross that river. Great to be here, I appreciate it. Coming up, sticky inflation is raising the odds of a rate hike next week. Our market navigator has some picks to help hedge against it after the break. Welcome back to Power Lunch. Time now for our market navigator segment. We're gonna get the latest read on inflation tomorrow, just days before the Fed September interest rate meeting, and our next guest has some ideas on how to protect your portfolio against stickier inflation. Joining us now for that story in the cases, David Bonson, the Chief Investment Officer over at the Bonson Group, David, the inflation story, I just went and checked on Cal Shee for the prediction's markets. 64% of traders on the platform think there will be a 25 basis point hike coming up at next week's meeting, inflation's front of mind. How do you protect your portfolio? Well, we believe a permanent protection

33:58exists in dividend growth investing, that when the dividends, the income from the portfolio are growing at a higher rate than the rate of inflation, a significantly higher rate than the rate of inflation, and Dom, they're doing it every year, no matter what is happening in the market, that is an inherent inflation hedge. All right, so if you're gonna do that, the types of companies you're looking at are in specific industry groups that have been typically viewed as both defensive and bigger dividend payers, which companies specifically have caught your eye for dividend payments and inflation hedging. Inflation hedging, dividend payments and dividend growth, you look at Chevron by definition, 50 years of annual dividend growth, very connected to oil and gas. You look at the utility sector, people say, there's inflation, my utility bill's going higher, American electric power, very levered to the cost of power in the country and sharing that growth of revenues and profits with investors growing their dividend

35:02over 6% per year. And then I think that there's a lot of various commodity oriented plays and so forth, but when it gets to consumer staples, you get the best pricing power, Pepsi, which is down a tiny bit on the year, and yet that dividend growing for decades, because they have the ability to raise prices as things like bottled water, soda pop and snacks are going higher in price. And one final question before we leave, David, just how concerned are you and or your clients about the inflation story? Do we really have to reposition till the end of the year? No, I don't believe that we have to reposition, but I say that because we've already positioned around a permanent expectation, Dom, if inflation was 2%, not the 3% people worried about, 2% still erode your purchasing power. So no matter what, investors should always be sensitive to this because it's the norm, dividend growth we think gives a great solution. All right, American Electric Power, Chevron, PepsiCo, the picks from David Bonson, Kelly,

36:05all some things back over to you. All right, Dom and David, thanks. Let's get over to Pippa Stevens now for the CNBC News Update. Pippa, take out your federal appeals court ruled against the Trump administration today, keeping in place a lower court's block on new rules for mail and balance before the midterms. The judges said they would cause chaos and voter disenfranchisement. The new rules include new design and voter database requirements. The case is also being weighed by the Supreme Court. Canadian Prime Minister Mark Carney announced a new roughly $250 million aid package today for Ukraine following a meeting with President Volmiers Zalensky. It comes as Ukraine runs critically low on U.S. made patriot interceptors that are able to stop Russia's ballistic missiles. The weapons will be provided through a U.S. program that allows foreign nations to buy and supply weapons to Kiev. And one of Princess Diana's most iconic dresses is going up for auction. She wore the so-called revenge dress to a party in London on the same day, her then-husband, Prince Charles, admitted to having an affair in an interview.

37:07The dress will be featured during Sotheby's luxury week in December. It's expected to sell for between $150 and $300,000. Brian will send it back to you. Still so elegant. All these years later, Pippa, thank you very much. All right, still ahead. Don't forget rugby. American football is coming to Australia. I tried. So Alex Sherman trek to the land down under and spoke exclusively with NFL commissioner Rodger Gidell. You'll hear it from Alex at about four o'clock in the morning there. Next. Hey, Australia. Are you ready for some American football? Tonight in America, which is tomorrow morning in Australia, the San Francisco 49ers played the Los Angeles Rams on Netflix. So Alex Sherman either decided to fly nearly 24 hours or was told to to meet up with the NFL commissioner and a big wiggin at Netflix. He is live tomorrow morning today in Melbourne, Australia. And I'm going to be here tonight. I'm going to be here tonight. I'm going to be here tonight.

38:08I'm going to be here tonight in Melbourne, Australia. And as with us now on, I think where the sun is probably closer to coming up than it was when it went down. Yeah, that's right. It's Friday here and this 49ers Rams game is going to take place on a Friday morning at 10 30 in the famed MCG, the Melbourne Cricket Ground, which is just to my right here. I'm on the roof of the Pullman East, the East, Pullman East, Melbourne. I keep messing up the name of that hotel. But it's the Pullman chain of hotels, which is nice enough to let me use their rooftop for this live shot. This game, and of course the first ever game in Australia, it is one of nine international games this season for the NFL. That number will go up to 10 next season. And Commissioner Roger Gidell has talked about increasing that number to 16 games. But he's going to need player buy-in in order to move that

39:11number from 10 to 16, which will have to come with the next collective bargaining agreement. So I sat down with the commissioner and I asked him, do you think the players like this international travel? It can be very disruptive to a player's routine, particularly when it comes in the middle of a season. Listen to what he told me. It really struck me when we were, I think it was in Ireland. And the players really take the mantle for saying, we're ambassadors for the game, right? We're helping to expand the game on a global basis. We're expanding our own brands at the same time. I think they see the opportunity. I get calls, texts from our players during the off season. And they're all over the world. So I think this generation of players is used to being international. I think they're used to looking at opportunities to continue to grow their brands. And I think it's great for the NFL. So of course the reason he says it's great for the NFL is

40:13that the more eyeballs, the more revenue, right? And of course the NFL is wildly popular by far the most popular, sport from a viewership standpoint in the US. But internationally there's a lot of room to grow. We got a little bit of data last year for the week one international game, which was on YouTube, where 18.5 million people watch that game in the US and only 1.2 million watched it abroad. Now some of that has to do with time zone reasons, of course. As I just said, of course all these games are based around the US. It could be the middle of the night in certain other countries. But this game Netflix has it and Netflix has the global rights to the game and Netflix and the NFL are of course joined in their mission to make this game more popular. Netflix wants more eyeballs just like the NFL does. I spoke with chief content officer Bella Bajaria about how Netflix increases the popularity of international games. Listen to what she said. We also have all of those country offices that all make local

41:15originals in their language and in those countries. They know how to speak to that audience. They know how to make that connection of why that event. Whether it's NFL, which maybe there's still growing sport in those countries. Or it's just a completely different kind of one-off event or the Westminster dog show. Like we're gonna know we know how this rid of connects with that audience. So basically what Bella Bajaria there is saying is that the data that Netflix has can actually push international viewers toward the NFL where maybe they wouldn't click on a game to begin with but the content that they do watch could be associated with an American football game and maybe that makes them a fan. We got to go Alex but I also know not only you awake all night your giant San Francisco 49ers fan. So I hope you can stay awake for the game. Have some of those flat whites and we also the only ever comparison between the NFL and the Westminster dog show in the history of media. Alex Sherman thank you to you in the entire Pullman East hotel.

42:16Roof team Alex thank you. I don't know how he's gonna do it. I mean that is a long fight. That is a long day. I like that with flat whites. Quick check of the markets as Renear Session lows. The 10-year yield is kissing 4.95%. We'll have more after this. A new op-ed from Stan Druckenmiller in the Financial Times warning that yields could go even higher and Peter Bookvar also writing in Brian to say the low demand we saw for the repurchase auction at 2pm could be because those 30-year bonds are trading at $65 cents on the dollar and no one wants to take the loss. Anyway we'll pick up coverage with the Dow down 384 points. Thanks for watching Power Lens. Closing bell starts right now. Now on CNBC.com slash sport.