Power Lunch - Crude Oil Prices Surge 4/2/26

Episode Date: April 2, 2026

Stocks shake off early losses. RBC Capital Markets' Helima Croft joins with her outlook for what's next in the Strait of Hormuz and oil industry.    And what happens if states start blocking data center construction? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, just two hours to go on this shortened holiday trading week. Welcome to Power Lunch. I'm Dominic Chu. Brian and Kelly are both off today. So here is where we stand at this hour. Stocks are lower all across the board, but trying to hold on to weekly gains with the major indices on pace to break five-week losing streaks. And the big story today is energy. Oil prices are higher in response to President Trump's speech, stoking some fears of further escalation in the war.

the benchmark U.S. benchmark, West Texas Intermediate and Brent Crude International benchmarks, both trading above $100 per barrel. Plus, cryptocurrencies down across the board and under significant pressure this year, Bitcoin, Ether, Solana falling between 20 and 35 percent so far in 2026. Van Ex, head of digital assets, Matthew Siegel, is here to help make sense of what the price action has been like so far recently. We begin, though, with the fast-moving headlines coming out of the Middle East, Stocks erasing earlier losses at one point today after Iranian state media reported that Iran and Oman are drafting a protocol to monitor transit through the Strait of Hormuz. This comes after President Trump's address last night, where he insisted the war in Iran is nearly done, but not over. We're going to hit them extremely hard over the next two to three weeks.

We're going to bring them back to the Stone Ages where they belong. The president also told countries that rely on the Strait of Hormuz for oil to step up and defend that critical waterway. The market reacting with oil prices moving sharply higher again, Brent crude, now back above $108 a barrel. So for more on the global market ripple effects of the Middle East conflict, let's bring in our own Pippa Stevens, somebody we've become very familiar with in the last few weeks because of the massive moves and volatility that we've seen in oil. after the president's address last night, maybe not a surprise that oil would move higher. Has it been a surprise that it's done so by this much?

I think the market is definitely surprised that we're up some 11% here on WTI because there had been a sense that maybe what President Trump is going to talk about is de-escalatory. And so we saw the trading activity during that speech. We started out negative. And then as he kept speaking,

and there wasn't a sense of, oh, there's going to be a quick resolution. We then saw prices start to take off. And I think it speaks to the growing phenomenon that we're seeing about this disconnect between the physical and the paper markets. We've been talking about that a lot. But it's kind of reached extreme levels here. And I think it's because it's hard to conceptualize just how bad this is and how each and every day that the straight is closed, the effects are compounding. And now people are talking about, you know, once traffic does resume, it's going to take weeks, if not months to get back to normal. Talk about repositioning all these tankers, trying to get even loading space to, you know, get.

to a port. That is all going to take time. And it seems like even in, you know, the equity markets, they've been discounting just how big this disruption is. And so we're starting to see some of that now reflected in prices. But in Rita's son, energy aspects partners was just on last hour. And she was saying that, you know, we've never seen this kind of disconnect between physical and paper for such a long time before. All right. So let's talk about the dislocation because we've addressed it a lot more as of late because of the physical blockading, if you will, of certain parts of the oil market, especially around the Persian Gulf, just how indicative are prices in those paper-based markets, futures markets, connected or disconnected to those physical

markets because we've seen prices for physical crude in certain key hubs and ports around West Asia, having much higher prices than we are seeing for, say, the international benchmark of Brent. What exactly goes into those physical market prices that we are not seeing reflected in the paper market futures? So the physical markets are the people who are actually using the oil. So think producers and then also refiners, what they're buying it at. And so we saw a dated Brent now top $140 today, according to Platz. We're now above the levels of 2022 when Russia invaded Ukraine.

And so those are the actual transactions that are happening at real time. The futures is helpful for a sense of where people see the prices looking forward. But a lot of people are saying that those prices have not come up enough to reflect the true shortages we're seeing right now and that they might start to converge, we might start to see the curve move higher. But for the time being, clearly the market is still saying this impact is not going to be that long lasting. But then when you talk to people who are actually treating oil, they say, no, no, no, this is going to be much longer-term impact than people think. And also the fact that we might never get back to the pre-Iran war prices just because that geopolitical risk premium will now

be priced in for the foreseeable future. One place that we are able to get a little bit more relative transparency in the financial markets as opposed to the physical markets is in that future's curve, as you point out, this kind of expectation of what prices could look like two months, three months, six months, a year from now. Further out you go, the less trading there is for obvious reasons. But what exactly is that crude curve telling you or traders about what we can expect in price action in the next three, six, nine, twelve months? So it's come up over the course of the war, but we're still looking at about $70. into 2027. And I was talking to Dan Pickering from Pickering Energy Partners, and he said around the

maybe $73 level in 202027, we'll start to see producers pick up a little bit of hedging, but that has now come down to more the $68 level looking out further into 2027. So probably not a lot of hedging activity there. But I think one, also one point that the market may not be missing is that to fill, to refill the 400 million barrels from the strategic reserves, that supports demand for crude looking into the future. For the U.S. specifically, the swathes The swap structure that the DOE announces is refilling at 120%. So for every barrel that's taken out, a barrel plus 20% is then refilled. And so, you know, who's going to be refilling that?

And it's going to be producers. And so that does create, you know, much more demand looking forward. So when the straight is open, you know, when things start to normalize, there's still going to be that added level of demand from the stockpiles falling. Late in demand because of the exchange process, if you will, in the SPRs around the world. All right, PIPA, thank you so much for the, current state of play there. Now let's bring in with some of this context as markets hover near the flat line, investors grappling with some of these big unanswered questions. So how long

will the conflict last? Whether the realistic off ramps here, if there are any, how deep could the war shockwaves cut across the global economy? We're going to bring in Halima Croft for that conversation, the head of global commodity strategy over at RBC Capital Markets. She's also a CBC contributor. We've seen you a lot more lately for obvious reasons, Halima, but let's talk about the aspects that Pipwick laid out and then put it to what exactly is happening in the region itself, geographically speaking, how exactly as an analyst do you cover what are the headlines that you can pay attention to and which are the ones that you slightly discount given what we know so far? I mean, Don, the real question is, are ships actually moving through the Strait of Hormuz?

I think the market, a lot of market participants almost have us irrational optimism about the restart of the Strait of Hormuz based on sound bites from this administration, from unsourced, you know, people talking about potential deals between Iran and Oman. These are really driving a lot of sentiment in the market. But if you look at the physical shut-ins, there is no indication that we have a near-term plan to reopening the Strait of Hormuz. And if you listen to the president's speech last night, he essentially said to both the producers in the Middle East and the key consumers in Asia and Europe, you're on your own for getting

this straight open. It's not a core responsibility of the United States. So I think the big question we have to be watching is, how close are we to any negotiated settlement to reopen the straits? That does not seem a near-term option. Is there any military solution? Again, not a near-term option. So we think you have to brace for a potential multi-month disruption. There does not seem to be a real plan to reopen this critical waterway. We've heard about some of these headlines about Iran possibly working with Oman to kind of develop a construct by which they will allow ships to kind of move through that area. We've also now heard reports out of places like Europe and Asia, to your point there, that there are some shortage issues coming up for oil and gas products to those end markets. Does the president have a point with regard to just who needs to be involved in keeping the strait of Hormuz relatively free if the U.S. is not as exposed on a relative basis,

to oil and gas markets in the Persian Gulf like Europe and Asia are. First of all, Dom, I would treat that Oman headline very carefully, because that could be planning for a post-war situation. We are not in a post-war situation. Also, Iran is looking to basically continue to operate a toll booth for ships going through, potentially charging up to $2 million per ship based on how much oil is in that ship in Chinese currency. So again, I'm not sure Oman is going to be that closely involved in something that would put it on the opposite side of its GCC partners. But again, in terms of like Europe and Asia,

yes, they are the main consumers of the products going through the Strait of Hormuz. But the question is, do they want to be putting ground troops along the Strait to try to reopen it? Do they want to be sending their ships into reopening the Strait of Hormuz? Not clear who is going to be deploying military assets to do so. The expectation would be that it would be the United States given our role in this conflict. So that then raises a question of, are they going to be pursuing a diplomatic off-ramp with Iran? And Iran right now looks like it is digging in. They are letting a few ships through again, but they are charging for those ships. And I think the Iranians benefit from having a much higher oil price because we've pulled our sanctions off

of Iranian barrels so they're getting full economics for the barrels they can sell. Halima, based upon what we know from the news, from government spokespeople, about the military campaign as it stands right now, and given what we now know about some of the possible negotiations from multiple countries that are involved in this off ramp, or if there is one, what scenarios do you put the highest probabilities on? I know that you and your team are looking at all these different kinds of possibilities. What do you think are the most likely outcomes on a relative basis over the course of the next three or four weeks? I mean, I think we're looking at over the next three to four weeks, either U.S. military escalation and President Trump laid that pathway out last night, saying we're nearly done. But if Iran doesn't capitulate, we are going to escalate, which then raises a prospect of Iranian retaliatory action targeting once again its neighbors in the region, essentially more cascading. disruption. And then there's a question of does the United States in three to four weeks just decide, like, we're done, we're leaving, regardless of what the situation looks like in the straits. And again, turns to the key consuming countries and turns to the producers and says, you figure it out for

opening up the straits. And that is a real challenge in terms of how would we restore our flows to pre-February levels if we essentially walk away. So there's not a great option set right now for getting the barrels back on the water to key consuming markets. We're seeing this map right now on the screen about all the other countries that have been hit and are involved in this conflict right now. What exactly do you think is going to be the, I guess, strategy from places like the UAE, Qatar, Bahrain, Kuwait, and others in the Gulf Coast region to respond either militarily or otherwise to either support what's going on here or even escalate them on their own? Well, these countries have different economic risk profiles. Saudi Arabia invested ahead of time in key de-risking infrastructure. They are the only country that has been able to get significant quantities of oil to market

because they can run it through the east-west pipeline and out through a port on the Red Sea. We are watching whether the Houthis start attacking that pipeline or that port, but for now, Saudi Arabia has been able to export about 5 million barrels a day. The other countries are really locked in at this point. And we are hearing certain Gulf countries saying you cannot leave the United States the situation as it stands now. Like when you decide to wind this war down, Iran cannot be operating a toll booth for the Strait of Hormuz. So I think that we have certain countries saying to the American president, you need to figure out a way that when you leave, we have Iran not being able to essentially. exercise hostage right over the strait of Hormuz.

We've heard some estimates that could be about hundreds of millions of dollars per day in tolls, hypothetically, that are collected in a situation like that. All right, Halema Croft, thank you very much for that. We'll see you soon. Thank you. So does your neck hurt from the market whipsaw yet? Some folks are feeling it in full force. Our next guest says to look through all of that back and forth and have full faith in this

bull market. Ryan Dietrich is here on set with us next to make that case. All right, welcome back. The markets are erasing some of the earlier losses. They actually briefly turned positive in a volatile last trading day of this holiday shortened trading week. This is after Iranian state media reported that Iran is working with Oman on a protocol for ships passing through the Strait of Hormuz. For more on how to invest with all of this global turmoil and uninserti is Ryan Dietrich, the chief market strategist over at the Carson Group joins us here on set. Thank you for making the trip here to see us this afternoon. No, honored to be in your city. It's always fun, Doc. Thank you for having me. So, Ryan, we just showed the chart of the Dow on an intraday basis. We kind of saw that little tiny green peak in the late morning trading session. But we are well off. We were down about 607 points at the lows for the Dow.

What do you attribute this kind of intraday volatility to when we thought that the markets were going to be in pure sell-off mode to start the day? It's a nice change because I guess this is potentially going to be the 10th down Thursday in a row, the most negative. of Thursdays ever. There's some randomness to that, but this week's kind of what we've seen. You have early optimism on, okay, the war is going to be over, and then by the time you get later in the week, you get hard selling. But it is interesting. We've had this big reversal. You look at, I love market cinnamon, right? So much hedging. I know you've got a lot of guests talk about this. Massive puts, the skews have been one way, lots of shorts. It's like this real slow motion. It's not a crash, but like a slow motion crash because everyone's

predicting it. And then the market has a funny way I'm not doing that. One more quick one. The last three weeks in a row now, we've seen potentially. less new lows on the New York Stock Exchange three weeks in a row. So market's going down, yes, but less stocks are going down. I think that's a glass-half-fold type of thing to look at. That skew, though, that you mentioned has been talked about by a number of folks that I've spoken to and even people that we've seen on our air over the course of the past three weeks. But it makes sense, right? If you are along the market, in times of geopolitical uncertainty, you will pay relatively higher prices for downside protection as opposed to up.

upside protection. That skew moves more towards the put pricing side of things. But we've learned lessons about just how shallow or deep some of these market moves can go. Whether you believe it's justified or not, the market seemed to want to buy dips. Is that something that we can see continuing over the course of this? Or is this a scenario where you have to say, if the war escalates, maybe this does become that deeper, deeper pullback that people have been waiting for? A great question here. I know I sent a couple charts. One of them is earnings. The other is profit margins, right? I mean, the reality, Dom, this year, S&P 500 forward earnings are up 7%. Okay? So that's a lot. Markets down ballpark, 56, 7%. Profit margins hit in all-time highs. And we understand the worries. We understand the concerns.

But at the end of the day, if corporate America stays strong, the labor market, which, hey, we've had some okay labor market news. Look at claims this morning. Again, pretty good. The economy's not going into recession. We're not minimizing, again, what's happening here. But with all this negativity, it feels a lot like a year ago. We had all that negativity, and then we got through it. The market's not about good or bad. It's about better or worse.

And with all this stuff priced in, we're optimistic that we're going to have probably some good news, maybe on the economic front, starting real soon with earnings, which, again, have been really strong so far this year. When we take a look at just what the coming months will bring, you're one of those folks who tends to look at the historical precedent that has been set. You look at the past as maybe some kind of an indication on the future. What do past cycles tell you about how we should treat the back half of this year with all of the factors, notwithstanding the fact that we're in a midterm election year?

Right. History to repeat itself. It often rhymes. Mark Twain used that a lot. The last 20 years, no month has been more likely to be higher than April, up about 80% of the time. Now, fun one also, if you look at a four-year presidential cycle, this second quarter is the worst out of the four-year presidential cycles. So that's something to think about. But I think the reality is once you get to the second half of midterm years, things usually do pretty good. I mean, you know, midterm years correct about 17% on average peak to trough. But one year off those lows, and that's the catch.

No one knows and the lows are. I get it. One year off those lows, markets never lower up 32% on average. So for investors out there, this isn't fun. This is unfortunate what's happening in a lot of ways. But looking out a year from now or so, if the economy avoids a recession like we think it will, Dom, we're probably going to be back to new highs.

And I think it's still in this bull market that we've been in for a couple years now. I'm going to play devil's advocate here. People have called for a recession for a long time now, one that has never, not not should, I shouldn't say never, one that has not near term come to fruition. Over the last five years, there have been multiple calls for possible downturns that have not come to true fruition. What makes you so optimistic that the economy is actually in a good place and can sustain that over the course of the next six to 12 months? Well, great question there. You know, productivity is still pretty solid. We mentioned earnings.

We mentioned the labor market. It's not a low, it's low hiring, but low firing, right? So it's moving along. You know, you've got the manufacturing data we just saw was a little bit better and expected. Again, it's all relative. It's all, you know, what's priced in, what's not. But at the same time, the economy, if it was a recession, that's one thing.

But this bull market, another chart I sent one you wanted to talk about, once you into the third year of bull market, like we just did, right? You go back, Dom, since World War II. There's been eight bull markets made it this far. Seven of them got to their birthday with four candles on it. The reality is you tend to see bull markets get to this point. They continue to go further. And that's just one other way to think about. This bull market's probably not over, as we see on the screen right there. So this is what we're showing right now. For folks who are listening on Sirius XM radio, this is basically the length of bull markets in years. Right. And we kind of go back and see historically some of the present that's been said. So on average, a bull market lasts about five and a half years. And we are not there right now. We're currently in like year three-ish of this one right here. So is that the reason why? people should feel more optimistic.

Well, it's not the reason, but one of the reasons, I think. I say bull markets like a cruise ship. Once they get moving, the hard to slow down, really hard to turn around. We've had bull markets that went for a year or two. But once they get to this third year like this one, as we're showing there, for the listeners listening out there, you tend to go further. Again, you know, the last 50 years, Dom, bull markets that got to this point, the average length,

been five of them, was eight years. I'm not saying this bold market's going to go eight years. But we are saying if you look at history, these cycles last longer. and if the economy stays solid like we think it can, those are some things that I think investors should be smiling about in a sea of, honestly, a lot of uncertainty and a lot to frown about. All right. Ryan Dietrich with the bull case here for the markets.

Thank you very much. Thanks, Tom. Thank you, Tom. I appreciate it. Now to the bond markets and the big move in Japanese yields, the 10-year hitting its highest level in more than 20 years, Rick Santelli joins us from Chicago with the latest on the global rates market. Rick. Absolutely, Dom.

Let's start domestically. $202,000 for initial jobless claims. If you look at a chart going back to 21, you could clearly see how well-behaved it is. And continuing claims are well behaved as well. That really throws a monkey wrench in the notion of how much deterioration is going on in the labor market. And if you look at twos and tens for one week, they're not only down and yield on the day, they're down on yield on the week. As the crow flies at 379 for a two-year, it's down three on the day, down a dozen on the

week, 4.30 for a 10 down two on a day down 13 on the week. And the reason I bring this up is because outside our time zone in the wee hours of the morning, we saw 386 and two-year yields, a 438 today in 10-year yields. And now let's go to Japan. Because Japan, like much of Asia, much of the world outside the U.S., has an energy problem. And this conflict is really aggravating that energy problem. They had a yield on their tenure today that closed around the around 238. 238 from the 27th was the high yield close. So we're sitting right there.

And you are right. You have to go back to 2011. I'm sorry, 1999, Dom, 1999 to find a lower yield. So you're looking at 27 years. The 2011 was for the euro rates, the German rates, but they've eased off a bit. And the reason I bring up outside our time zone is because the markets are,

much more illiquid U.S. markets outside our time zone. And the headlines are much more negative because of the European and Asian effects of energy during this conflict. So things really get crazy. Everybody's talking about dated Brent at 140. And even though it's true, that's not where Brent is. That's dated Brent. Stuff that's ready to be delivered. This last minute pricing couldn't paint a more dismal picture.

And I understand it. But it isn't necessarily the base case. to you. All right, Rick Santelli with the latest there on the global macro scene. Thank you very much for that bond report. Now, one of, if not the biggest concerns during this AI buildout has been figuring out just how to build the necessary infrastructure. But what if some of that infrastructure isn't even allowed to be built? We'll speak to a big data center CEO on those issues right after this. All right, welcome back some news in the deal-making space today. Amazon reportedly in talks to buy Global Star, and this would be a big boost to its Leo business

that it was hoping will rival Starlink. Amazon declining to comment on this particular report here, but it could be a big deal. Joining us now to break down what it could all mean for us as CNBC correspondent McKenzie Sagalos-Mac. This could be a kind of boost, right, in this race that Amazon is trying to put up there in terms of a constellation of satellites against the likes of Starlink and everybody else out there. Absolutely, a boost that they really need. So satellite telecom company Global Star is now very much at the center of these space internet wars. You saw shares in that company jump on the report that Amazon's weighing a $9 billion deal for the company, a move that could give it that meaningful boost that it needs to Project Leo. That's Amazon's satellite venture that's

targeting commercial service later this year. So far, though, they've only launched 200 low-Earth orbit satellites, have been hitting multiple delays. And recently, had to ask the FCC for an extension of a key deployment deadline. Still, Amazon's trying to take on SpaceX's Starlink with this, which has a multi-year head start and a massive moat with roughly 10,000 satellites in orbit and more than 9 million users. SpaceX also reportedly explored a deal for Global Star last year, and that's notable because this company only has 48 active satellites,

so its appeal isn't scale, it's the fact that it has spectrum licenses, operational experience, and crucially, direct-to-device capability, which lets you connect a phone straight to a satellite without a separate terminal. That is a market that Starlink has been chasing, which is why SpaceX was interested in them. And another potential roadblock here, Dom, Apple owns a 20% stake in Global Star and is reportedly making these late-stage talks harder to close. Mac, just how much could a deal hypothetically like this change the competitive dynamic and tilt it way more in favor of one versus it. We know that Starlink has a massive head start in this whole process.

Right. So, I mean, Amazon has been, it was originally called Kuiper. Now it's called Project. Leo, this has been an ambition for them for a few years now. But they've been struggling in part because their launch partners aren't getting enough satellites into space, which is why they're out to the FCC, looking to get this extension. Because right now, by July 30th, in order to keep their license with the FCC,

they need to get 1,600 satellites into space. But it's typical that you'd see delays. SpaceX is trying to block that extension. But the goal remains the same. Get commercial service up and running by the end of the year. And where this company and where this acquisition could be especially helpful is on the licensed side of this. So yes, it only adds 48 satellites to their total, but it puts them at a head start in terms of some of the operational capabilities where they need to close the gap. All right. McKenzie Segalos here with the latest on deals and satellites. Thank you very much, Mack, for that. Let's now get over to Julia Borston for a CNBC News Update. Good afternoon, Julia.

Hi, Dom. Well, the UK hosted a virtual summit of diplomats from more than 40 countries today for discussions on how to reopen the Strait. U.K. Foreign Secretary Yvette Cooper said the group focused on, quote, diplomatic and international planning measures for ways to reopen the strait. The discussion came after President Trump told other countries to, quote, just take it in a primetime address on Wednesday night. New DHS chief Mark Wayne Mullen is reversing predecessor Christy Noem's controversial policy of requiring approval for any expenditures greater than $100,000. A DHS spokesperson told the AP that his decision will allow the agency to allocate and aid more efficiently. And the Martin County Sheriff's Office released body camp footage earlier today of its response to Tiger Woods' rollover crash and subsequent DUI arrest last week. Police said in the incident report that Woods's eyes appeared bloodshot and glassy. Woods pleaded not guilty to driving under the influenced.

Dom, back over to you. All right, Julia Borson, thank you very much for the news update there. Power Lunch is going to continue right after this, so keep it right here. Welcome back to Power Lunch. Maine is poised to become the first state in America to halt new large-scale data center construction. A dramatic sign that the AI boom is colliding with political and infrastructure. limits as well. Now, a bill advancing this spring would pause major projects until late 2007 as concerns grow over power grid strains, power costs, and the possible environmental

impacts of putting data centers in. Tess Stervasala is the CEO of Atlas Edge, one of the biggest data center operators in the European continent with 23 facilities across that European continent. Tesh, thank you very much for joining us for this conversation. I maybe want to start, first of all, with just how you read as a data center CEO, this development in Maine, and just what the kind of popular outcry is against putting data centers in people's backyards, so to speak. Well, thanks for having me, Dom. I really appreciate the opportunity. To the point of the question, you know, data centers right now are part of the infrastructure, and it's no longer optional to have data centers in U.S. and the rest of the world, it's a necessity. And so the industry has been dealing with these industries,

the industry has been dealing with these issues for many years. And we always work with the communities to try to make sure that we're doing the right thing as we continue the massive growth that we've seen over the planet. North America's leading it, Amia right behind, Asia PAC, South America, all participating in. in the digital economy and all participating in this growth. So we just have to continue to be aware

of what your communities are looking for as they want to participate in this growth. You know, Tesh, one of the other questions now is just kind of the information gap or just what people think is correct or not correct about how these data centers are being built. Can you tell us from your perspective as the CEO of one of these companies that builds data centers and operates them, right? What exactly is the public getting correct? or not correct in your mind about the narrative around putting data centers in certain key parts of this country and certainly around the world? Sure. So the part that we're all getting correct is that we know that it's being funded. You talk about it on the show a lot. So everyone

wants to participate in it. You know, as Maine is talking about this legislation, you're seeing Texas continue to boom. So I look at it as kind of a bar. barbell effect. There's a lot of, lots of growth going on, and we're also working with each community. The things that I think are going really well, when we come into a community, we're creating lots of jobs for the community, lots of opportunity for them to participate in the digital infrastructure. The things that they think that are also happening, are we straining the grid? No. What we're doing is using the capacity that's available, and there's a simple supply and demand issue. We're using or we're taking up a lot, we've got the demand for a lot of the electrical capacity. What we're seeing now globally is that the supply side is going to continue to improve. And so that part has to continue to work, not just in the U.S., but in North America, across the planet. We're not using water.

Most all of us have closed-loop systems, so we're not putting any strain on water or sewage or sewer systems across the country. And I think the other thing is they think we come in, we do a project in one to two, three years, and then we leave. Usually there's two types of data centers. There's the single-single site data center, and then there's multiple centers on a campus. Those campus centers are five, seven, ten-year projects, multiple deployments on a phased approach. And when you're trying to build multiple gigawatt type campuses, which is going on in North America, it's going to take a few years. So it's not coming in, disrupting the community and leaving. It's usually coming in, being part of the community, building with a plan, working with,

working with community officials to get the right plan in place to meet this growth. And if you look at that chart, you showed there, one of the things you think about, North America is about 40 to 45 percent of the global data center capacity. And so for us to keep leading this innovation chain, we're going to keep building across the states. All right. Tester Vassela, thank you very much for the conversation. I know it's a longer one that we need to have, but in this time, we appreciate the insights. We'll see us again soon, sir.

Thanks, Tom. All right. Coming up here, our next guest has been paring down risk, but he says it's time to get back into certain areas of the market. Stay tuned to find out where. All right, welcome back. Time now for our market navigator segment. Has all the market volatility pushed you to the sidelines? Well, if you're not alone, because our next guest says he's reduced his risk recently,

but is now ready to start adding to exposure, but select. collectively. Joining us now for this conversation is Keith Buchanan, senior portfolio manager over at Global Investments and Keith. This is interesting because we are seeing the volatility again play out today. A big downside move only to be bought up. We don't know if it's going to continue to the closing bell, but it does kind of tell you that people want to buy dips. So how exactly are you deploying capital? Sure, Dom. Thanks for having me. We've looked over the past week, especially, but we've kind of been tiptoeing in this position and took another leg in next week. last week, and that we pulled back from risk, put on the front end of the treasurer curve

because we felt like the treasure curve was probably pricing in a little more hawkishness than warranted. And the equity markets just haven't really absorbed what we feel like is a geopolitical risk kind of developing and continuing over the near term. So we felt like pulling back from growth and also adding to some safety as of last week was the prudent move. Now we're positioned defensively and in a position where we can take advantage of volatility as it comes to pass over the next couple of weeks. Where exactly would you be looking for right now? You mentioned some of those defensive sectors

that you've been tactical about. So if we wanted to be, say, more longer term, medium longer term in our investments, what parts of the market stand out to you? Sure, and this week is critical this week and next week over the next couple of weeks as we start into earnings season. And the valuation pullback from the equity markets,

particularly in growth, either has to manifest itself in earnings or the earnings picture. stay stable, which it has over the past month, to rebut the valuation pullback that we've seen. So we're looking at the financials. They kind of come out of the gate first to pay the picture of economic growth, whether there's a growth scare that is not priced into expectations or whether the valuation pullback has been unwarranted and the market continues to look through the energy scare as just at a very

temporary, short-term, quick resolution, that the market's kind of priced in already as we see the stability on a week-over-week, month-month basis. So as we kind of look forward to next week, we look at Virtue Financial as a name that we have in financials, the kind of benefits from the volatility in the interim. But we're looking at a name like a J.P. Morgan, Best Debreed, as they report, and paste the picture, again, all the financials, all the bigger banks will also come to the microphone as well. As we have a clear picture of whether that growth scare is really manifesting itself in the C-sweets of corporations in a real-time basis. If it's not, then that's probably an opportunity to get more optimistic of some of those names. But we can see another leg down if they do confirm that the valuation pullback is just a precursor for earnings skepticism that could find itself into stocks over the next couple of weeks. All right. So with that in mind, really quickly, just what kinds of things will you be looking for metric-wise, numbers-wise, or commentary-wise, that would tell you that that story for those financials remains intact with earnings season on deck?

And by the way, those big banks really kicking things off. Sure. We're looking for any concern about loan demand, first of all, from the larger bank that gives us a sense of what our broader economy is really reaching for when it comes with financing, and also the appetite to continue to invest in growth. If that starts to diminish or they have some or any uncertainty as to how those numbers remain sticky on a quarter of a quarter basis, because we do have a baseline to go from for that, and that will cause a lot of concern for us. All right, Keith Buchanan, Global Investment. Thank you very much. We appreciate it, sir. Thank you, Doc. All right, coming up on the show, Bitcoin has had a rough year, but our next guest is still overweight on that mainstay cryptocurrency. He'll tell you why coming up after this break. Welcome back to Power Lunch. Since the start of the war in Iran, all major averages are solidly in the red, falling nearly 4% apiece.

But the one asset that's bucking the trend and is actually higher since the start of the war, believe it or not, is Bitcoin. In fact, the digital coin outperform gold by nearly 13% in the month of March, which is the largest outperformance for Bitcoin since November of 2024. So can that flagship cryptocurrency be considered the real, quote-unquote, safe haven asset? It's been one of the use cases that's been espoused on in the past. Joining me now to discuss this is Matthew Siegel, the head of digital asset research over at Vanek Funds. So Matthew, let's talk about the price action that we've seen, it's outperformed, but it hasn't been without the roller coaster ride. A lot of folks said that that price action at the beginning of the war signaled that it was no

longer a viable asset. Is it or is it not? It's 100% viable. It really depends when you start the clock. So Bitcoin peaked last October one month before the NASDAQ peaked. And, you know, if the bottom holds here, then it also bottomed one month before the NASDAQ, roughly. So, you know, you tell me your macro outlook, unfortunately right now, for good or for bad, Bitcoin is trading at a high correlation with risk assets. And I think there's many reasons why that's the case. You know, one is this four-year cycle for Bitcoin, which has been very reliable, and the down year tends to be a midterm year. That's what we're seeing right now. Certainly tightening liquidity conditions because of the energy price spike. And some of the largest holders of Bitcoin have

been sellers, partially because of the four-year cycle, but also these miners who control roughly 40% of the Bitcoin network, the publicly traded miners, they've been actively selling their coins in the spot market to pay for their AI buildout. So we think we're optimistic that some of those conditions are going to turn around in the second half of the year. We wouldn't be pushing all in right now. But when the funding rates get negative like they like they are now, when it's much more expensive to buy puts than calls, as is the case now, from a tactical basis, we do like it here. What about the kind of structural developments and evolutions that we've seen with regard to how people actually own or get exposure to

cryptocurrencies? And Bitcoin in particular, because it's far and away the biggest one out there. There are now retail avenues, institutional avenues by which you can use exchange-traded products. You don't have to have a digital wallet yourself. What exactly does that kind of demand profile look like? And how has it changed, say, since the beginning of the war to where we are now? Has it materially been affected by the kind of price volatility that we've seen? Adoption continues to grow. And the best leading indicator is the surveys, whether you ask retail investors or institutional investors,

Do you plan to allocate more to this asset class in the future? The answer is yes. And we're seeing that at the sovereign level, where the first central bank has just bought Bitcoin for its foreign exchange reserves. We're seeing that, obviously, across Wall Street, whether it's Morgan Stanley filing for a Bitcoin ETF, and the retail investor, especially outside the U.S., continues to allocate. So at some point the bill for this war will come due,

and the fiscal and monetary largesse in G7 will become dominant, again, from a narrative perspective, and that'll mark the turn in Bitcoin. Just one thing on the integration between Wall Street and crypto, there's 10 crypto companies that have banking charters that are going to be approved. Now, these are special-purpose banking charters, but they're going to make it much easier for folks to move value back and forth between Fiat rails and crypto-rails, those paths continue. Coinbase has got a banking license today, in fact, and that is going to, we think, turbocharge adoption in the next cycle.

All right. So let's say hypothetically you are correct about this thesis. At what point can investors, or what are you telling clients about when we could see a $100,000 Bitcoin again, if at all? I think that's totally reasonable in one year's time. And why? Well, the four-year cycle will end, you know, in October. The midterms, that'll mark some type of bottom when people properly freak out that the GOP is likely to lose control. The reality will be not that bad.

Meanwhile, the fiscal issue keeps getting worse. It's cyclical. The risk appetite will return to this asset, and it's very reflexive once it gets going. All right, we're going to have to revisit this a few months down the line. Thank you very much, Matthew Siegel, at Vanek. We appreciate it. All right. For more power lunch, keep it right here.

We've got interesting stories to close out this hour. that the company is potentially in the process of exploring some options, including a potential sale after receiving a preliminary takeover interest. That's according to Bloomberg, citing people familiar. So keep it right here. Closing bell starts right now. Have a great long weekend.