Power Lunch - Dow rallies, oil retreats as investors bet Israel-Iran conflict will be contained 6/16/25

Episode Date: June 16, 2025

Stocks rebounded on Monday as investors were optimistic that the conflict between Israel and Iran may remain contained. The spike in oil prices due to the escalating conflict also eased. We’ll tell you all that you need to know. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks and your money higher to start the week. Welcome to Power Lunch, everybody, alongside Kelly Evans. I'm Brian Sullivan. Israel and Iran ratcheting up attacks over the weekend, missiles flying over Tel Aviv and Tehran. But there is some hope for peace as Iran gets hit hard. It's actually sending oil down and stocks up. We'll talk about why. And a high-stakes meeting of world leaders convening in Canada for the G7 summit.

In addition to the conflict, Brian mentioned, markets are watching for any signs of progress in the trade war. front and center are the tariffs already hitting Canada, Mexico, the EU, and Japan, as the president said earlier today that he is, quote, tariff man. Dow still hanging on to about a 316 point gain. All right, all of that ahead. But let's start with the attacks that have the world on edge. Israel hitting Iranian energy installations over the weekend. They hit a nuclear facility, an oil depot, and a huge national gas field in Iran and in the Persian Gulf. And with that, Israel proving it can and it will hit Tehran's most valuable. assets. So here's where exactly we stand at this hour. Oil prices, they're actually down. Natural

gas prices, they are higher. OPEC, saying it does not intend to respond with more oil, at least not yet. By the way, the rotating presidency of OPEC this year is held by Iran. Oil also lower because ship traffic in the Persian Gulf and the hypercritical strait of Hormuz is still flowing as normal. That is a very important point. And the world is well, supplied with oil. ZOPEC has already increased production, and the U.S. is at a record 13 and a half million barrels per day. So that is where we are right now. Let's find out how the next few hours, days, and weeks may play out. Bring back in, Halema Kroff, contributor and global head of commodity strategy at RBC Capital Markets. Halima, what do we take away from the fact that oil is

lower right now? I think the market, as you've just mentioned, has decided that the Straits of Hormuz and other critical export infrastructure is not at risk. But again, we did see targeting of domestic energy infrastructure. We've seen, you know, Iranian oil depots hit, gas fields hit, and we've had the Iranians respond by targeting the all-important Haifa refinery in Israel. So the question is, are we getting a diplomatic off-ramp? We have reports that the Iranians are seeking and negotiated a solution to this war, potential ceasefire.

But the question is, are the Israelis looking to end? end this now? Will they continue their strikes? And will this go on for weeks as Israelis are preparing for? Well, do you think that it will? Because there's a Wall Street Journal's story, Halima, that says maybe Iran might try to put out the olive branch and have a little piece. But at the same time, I also know that the Nimitz class carrier group is now headed to the Middle East and the fifth fleet, which is based off of Bahrain for the U.S. Navy, the biggest non-World War II collection of U.S. naval assets is also already there. These appear to be very conflicting signals. Right. And we have an Al Jazeera report out saying that the Iranians are denying that they are

seeking a ceasefire and they are promising to intensify the attacks on key cities like Tel Aviv. So we really have to see what happens in the coming days, whether there's an off ramp. President Trump, for his part, has signaled that maybe he needs to let them fight this out. So no clear indication of the United States is going to really try to get in. involved right now. The Israelis, though, are facing a situation where they have air superiority, but can they demobilize the Iranian nuclear sites, particularly the Fordo facility, where the advanced centrifuges are spinning, where the highly enriched stockpile is located without U.S. help. So the question is, are the Israelis going to continue this fight, either in the hopes the United

States will come in or until they can do much more damage to the Iranian government to their critical infrastructure to their nuclear sites. So, Halima, the oil prices, 72-ish, a barrel selling off today. I mean, does that seem about right to you? Again, I would not be so sanguine that we are not going to see this war drag on for another couple weeks at a minimum. Again, the Israelis seem to be preparing for a longer conflict. They have more maximalist goals. And so the question is, in an extended war scenario, do we see the potential that export facilities, other countries, oil facilities could be targeted? And I think that is the wildcard. And just because the Iranians probably don't have the capacity to close the Straits of Hormuz for a significant period of time because of

the U.S. 5th Fleet in Bahrain, they have targeted tankers there before. So I don't think that that is beyond their capabilities. The question is, will they resort to such tactics? Well, that's why oil is lower. It's because they're, and if you look at marine traffic dot com, as I did this morning or tanker trackers, there's ships everywhere. So oil is flowing through the port. Oil is truly

supply and demand base with little geopolitical risk thrown in. I would imagine Halima that aside from U.S. naval deterrence, don't do it, or we might hit you with a missile. There's a little country called China that is probably getting in Tehran's ear and saying,

we need your oil or our economy will suffer greatly. What, if any, role do you think China is playing right now? Well, you raise an interesting question about China because China could also get oil from other countries as well. I mean, they're getting discounted oil from Iran right now. The question, though, is are they telling them, don't disrupt traffic in the streets of Ramos because that's so important to us?

Certainly, I think that would be a real concern of China to have the streets blocked or having issues where tankers are targeted. But the question is, Brian, if the Iranian regime comes to believe that they're in endgame phase of this war, that what the Israelis want is regime change, do they prioritize the free flow of oil to countries like China, or do they basically say we need to raise the costs for everybody else to try to bring this war to an end on our term? So again, I would not rule out that we could see energy infrastructure attacks in a prolonged war situation. Again, if we get an off ramp, I think these may be the ceiling of energy attacks. But if this war extends, if Israel is basically intent on regime change becoming the goal

or bringing the United States into this conflict, I don't think we can rule out that we could see energy once again in the crosshairs of a conflict in the Middle East. Natural gas obviously behaving differently today. There have been some direct hits there as well. But what would you tell investors in that space versus oil? Is it same kind of caveats, different ones? Well, we've actually seen natural gas fields targeted. I think that's why we have a difference in terms of like markets. We also had the Israelis closed operations at their key gas fields, Leviathan and Tamar. So at the moment, it's gas that looks like it's more exposed. But again, we are in like day four of this war. If this war continues for another, you know, a couple of days or weeks, we cannot rule out that further energy assets could become, again, targeted. this conflict. So again, just because we're looking like Sipra going through the Straits of Hormuz now, if we're here in a week from now or two weeks from now, it could be a different story.

Do you think the Saudis stand ready to help out adding barrels of the market? If needed, right now, not needed. Not needed. I do not think OPEC countries want to jump in front of this story until there is a clear and compelling supply disruption. They're not going to give their barrels based on risk. They will give barrels if there is a deficit in the market caused by this conflict.

Two quick things to wrap it up very quickly. Number one, what do you make of Iran's rotating? They're the president of OPEC this year. It's just a rotating thing.

It's a rotating presidency. It'll be very interesting for the OPEC seminar when the ministers gather in Vienna in July to see what the conversations look like at that seminar. So it'll make that meeting

much more interesting. And again, if we are still in a conflict situation come July, I do think the risk profile of this conflict for energy may look very different than it does today. And quickly, OPEC not happy with the IEA again. The IEA coming out and basically saying, well, we're standing ready to help out if needed. And OPEC putting out of communication saying,

we're not going to do anything. And it's not helpful that the IEA is saying that somebody may need to do something. The groups are just, they're a little, It's not a happy marriage. There's a gap between how they see the market right now. Lima Croft. Thank you.

It's the U.S. capital. Either in Texas or Washington, D.C. I'm in our nation's capital. I'm kidding. Halima, thank you very much. Thank you. All right. Could be either.

Texas is a little higher. Is it? It's a little tall, beautiful. Coming up, the Israel around conflict at the forefront of the G7 meeting, but it's not the only issue President Trump and other leaders have to contend with. We've got tariffs, trade, and the war in Ukraine. All of that's on the table. We'll take you there live and recap what we've heard so far when Power Lunch returns.

All right, welcome back. Let's talk G7. As you might imagine, President Trump weighing in on a series of issues at the summit up in Canada. A big focus right now, of course, is what we just talked about, Israel and Iran. But there's also the tariff elephant in the room and maybe even a European price cap on Russian oil. There's a lot that's going to be discussed. Megan Kisela is up there. And Megan, kind of waiting for the moment where the president comes out and just does what he does,

which is about maybe we'll talk about Trump mobile phones. I have no idea. Is that going to happen? We don't know about that specifically, Brian, but I can tell you we've heard the president touch on so many topics already that we actually just heard the Canadian prime minister say on camera. And I'm quoting here, Mr. President, I think you've taken a lot of questions already. Just to give you some color on just how much. much we've been hearing from him. But you mentioned Iran. He did speak about that. He essentially

confirmed reports earlier that the Iranians have been reaching out to the U.S. and saying that they do want to talk. The president saying, yes, it is time for a deal, but the Iranians should have been reaching out even earlier. But as you mentioned, trade is really the big topic here. Here's what he said on the topic ahead of his meeting with the Canadian Prime Minister Mark Carney earlier this morning. I'm a tariff person. I've always been a tariff. It's simple. It's easy. it's precise and it just goes very quickly. And I think Mark has a more complex idea, but also very good. So we're going to look at both and we're going to see what we're going to come out with something.

Not straying from his nickname there of Tariff, man. We don't know yet what Carney's other more complex idea might be. But waiting to hear more of a readout from that meeting, Carney also said later that the leaders were having what he called Frank discussions, that they might not agree on everything. And Brian, I can tell you the trade discussions are continuing throughout the day today. We can confirm now that the U.S. trade representative, James and Greer, will be meeting with his EU counterpart, Maroosef Kovic here later today as well.

So a lot to talk about on all fronts, but trade, of course, at the forefront. Guys? We'll call this WBI, wonky, but maybe not interesting, wonky but important. There was a lot of talk, Megan, about the European Union right now has a $60 price cap on Russian oil. Russia's technically not allowed to sell oil. over 60 bucks. They wanted to lower that to 45 and they didn't know if Trump would be on board of that. Now, of course, we obviously have Iran. Israel oil's down now, but it rose last week. Does that, do we know, and I hate to put you on the spot, does that take the $45 cap off the table?

We don't know yet, and I don't have any of my own reporting on this. I did see that Reuters report that European leaders are considering potentially going it alone. Of course, with oil higher, the $60 price cap still is a limit there compared to market prices, but maybe they do still want to push it lower and to do it whether or not the U.S. is on board. I'll say a couple of things on that. The first is that we know so far here this week, the president is not afraid to stand alone, to not sign on to joint statements and other things like that. The reports earlier today that EU leaders and other G7 leaders were prepping a joint statement on Iran, Israel, and that the president was not going to sign it. I will say the other thing, though, is this

what actually happened off camera. The president was asked whether Russian sanctions might happen from the U.S. So a slightly different topic, but still on Russia. And he did say, quote, it could happen. Very noncommittal there, but not shutting the door on the idea of sanctions. So we know he's been talking with President Putin this weekend. We don't know how he wants to proceed on that front, but he's not shutting the door to doing something to try to crack down on Russia a little bit further. Very interesting. Megan, for now. Thanks. Thanks. Appreciate it. Megan Kassela. Our next guest expects the Israel-Iran crisis to really dominate the agenda at the G7. All of this as the president's July 9th trade deadline looms,

James Pethakoukis, is an economic policy analyst at the American Enterprise Institute and a CNBC contributor. It's good to have you hear it. And I think that in some ways these stories are related because it was just a couple of weeks ago, we were told, you know, look, the U.S. might be trying to strike a deal with Iran to bring those barrels back or keep them in the market, even as it has to crack down on Russia. Well, now it sounds like the tone is shifting towards more aggressive on both Iran and Russia. Yeah, I mean, right now I think it's hard to be super positive about Iran. Listen, there's going to be these sort of rumors of off-ramps, and they're searching for a deal.

I kind of look at it like trade until there's an actual deal. I just want to put a lot of confidence in the rumors of the concepts of deals. Right. So what do you, you know, kind of, I guess the point would be to the oil. investors to the gas driving public, should we expect that things are about to get a little tighter now or not? Because again, OPEC has indicated they were willing to put some barrels out on the market even before all of this broke out. So I don't know, it doesn't seem as if, you know, all arrows are pointing towards higher oil prices. Yeah, I mean, obviously what OPEC does, that's huge.

But if you can tell me, I mean, this was a little shocking the Israeli attack. So if you can have, if you can tell me the, what's happening in Tel Aviv, what Netanyahu is thinking, what's happening in Jerusalem, that I could, that I could tell you. I don't know. So I think, you know, listen, we've been in a lot of uncertainty with trade. So now we're sort of in another, another division of that uncertainty with what's happening with Iran and Israel. Meanwhile, Jimmy, where are the trade deals? Where is the, we've had one with the UK. Maybe we're close with Vietnam. Maybe we're close on Japan, although autos are a big. hang up there.

There's been this back and forth between the U.S. and European officials today. Maybe there's going to be, no, there's not. And we have three weeks to go. Yeah. I mean, I don't think anybody outside maybe the president thought these deals were going to be very fast.

Maybe, again, maybe you'll get sort of these frameworks, but to get actual deals, historically, it takes a long time these trade negotiations. And I mean, and I get what's happening at the G7. If I was the Canadian Prime Minister, if I was the British Prime Minister, you know, I too would hope that sort of my personal charm would help get a deal or help, you know, extend the timelines, you know, beyond the July 9th timeline.

But I think you have to listen to what the President said. And despite his novel sort of gender-inclusive language, as I'm a tariff person, he is a tariff man. And he believes tariffs are important. tariffs are like the one-fits-all policy to solve what problem, to solve the problem of trade deficits, which is the number one thing he's focused on. So he loves tariffs, hates trade deficits, and is very angry about the history of the EU and the U.S. So it's going to take a while, and I would keep my expectations low. So two things.

Number one, if you were an ambassador, you'd be to Greece, Jimmy Pethicou, of course, so we know that. You know, wonderful place. Let's now re-show, guys, if we can, that big wall with all the G7 representatives. You've got Macron of France. He's been there for a while, but Frederick Males of Germany, he's new. Georgia Maloney of Italy, relatively new. Shigato Ishiba of Japan, relatively new. Kirstarmer, new.

And Mark Carney brand new and sort of was in England for like the last 15 to 20 years. What do you make of this group? What is Trump's influence going to be with those? people because we don't have a track record on any of them except for Macron. Well, right. We don't have a huge track record. And I think the upside there is that there's sort of no bad blood. There are no sort of grudges that Trump can hold against them. And I think they looked at what Starmer did. I mean, Starmer really, especially after the Zelensky thing, he went in there, is very positive with the president, showed perhaps a roadmap of how you get

along. And I'm sure, listen, all those other leaders have paid close attention that roadmap. But I think ultimately, that stuff really only matters at the margins. The president wants tariffs. He views tariffs as a solution. And it's hard to think that at the end of this, without a market or economic reaction to change his opinion, that charm offensives by any of these folks is going to be the deciding factor on what their future trade relations with the United States looks like. Yeah. So where do you think, Jimmy, this kind of leaves. We haven't talked about the bill. We're going to get the details, I guess this afternoon from the Senate. It sounds like maybe pushing a little bit further against Medicaid, maybe pushing on salt, and you don't think they're

going to pass this by July 4th, do you? I'm skeptical of that. And one of the things I've been saying in my, you know, other times where we've chatted about this is that one of the big hangups and where you're going to see Democrats, you know, dig in and find friends on the other side of the aisle. is all these clean energy, inflation reduction act tax credits. So I think that remains a very live issue. I think it's gotten a lot of tertiary play, you know, versus salt, for instance, and the Medicaid cuts. But that is a huge issue, and there are lots of Republicans who either they have that stuff happening in their states or districts, or they worry how this is going to affect, you know, power for AI data centers.

I think that remains a very sort of evolving mercurial issue, and it's very hard. for me to see that being solved, you know, in the matter of like two weeks. You're right. I agree. We'll see. James, thanks very much. Good to see you today. James Pethakoukis with AEI.

Keep calm and buy on. That is the market message of your next guest. Investors are breathing a bit of a sigh of relief today on reports Iran is seeking to resume nuclear talks to end hostilities with Israel. We don't know much more about that at this point. But geopolitics, not the only uncertainty to face. of grapple with. The G7 meeting in Canada. We've got the Fed rate decision Wednesday. And then in three weeks, the end of the 90-day tariff pause. Our next guest says,

now is not the time to panic. And that diversification is key to manage. Matt, in fairness, that's kind of evergreen advice. Matt Orden is... I mean, is there a time to panic? Like, panic now. Maybe panic at the top of the bull market. I don't know. No, but seriously, the thing about stock market investing is that, of course, these things are always true. And of course, that's how you build wealth in the long term. So it's just hard day to day when you can see, as we said, people have foggy, fear of getting in. You're afraid to get in at all-time highs.

It's a point of me when you said that. Because we talked about it. We talked about it. And now there's all of these things you can look at and say, well, maybe now's not the time. Yeah, well, I love the acronyms. FOMO, Tino. There's never a shortage of that. But it seems like such simple advice, Kelly.

But it's tough for a lot of investors to overcome the biases where when there's uncertainty, rather than leaning into that uncertainty where we know the fundamental backdrop is still very, very stable, it's hard to take that plunge and actually want to make an allocation into the market and the advice I've been giving investors throughout this year. After DeepSeek, after Liberation Day, was follow the fundamentals, lean into longer-term, durable, secular growth trends that might not be as impacted by some of that uncertainty and really just follow the money, follow where the cash is being invested in this economy. And that has served you very, very well, not only to capture a lot of great growth, but also when the markets pulled back, those names have been compelling to add to not only this year, but over the past five, 10, 15 years.

So I'm still optimistic about where we go, and I still think there are a lot of opportunities for investors to get into if we're given some pullbacks. Do you want to get more specific? So this is always, do you just kind of buy the S&P? Do you go international this year, even with everything going on? any kind of tactical advice? Yeah, so I think the easy gains in this rally, Kelly, are past us. I think where we're seeing that right now, the market's trying to find excuses to sell off. So selectivity matters a lot more.

We saw dispersion increase during the last earning season. And so what companies are actually fundamentally delivering really matter a lot more. So within that theme of leaning into where those long-term growth themes are, I think, number one is lean into the tangential AI trade. We've seen a significant amount of gains to the high. hyperscalers, but they're spending $335 billion this year alone. Who are the beneficiaries of those? Look downstream.

I like electronic equipment's area. Vertev's been a top pick of mine that we've discussed in the past. And you're still with that one. Absolutely. When it got irrationally low after Deepseek, that was the time to move in because when you listen to their earnings report and talk to the management team, they have got backlogs multi years out and they're leaning into the trends that are very compelling, not only for liquid cooling, but also power and finding ways for the future of powering all of

these data centers that are being built. So that's one example. And then you can look down as well into defense. Front and center today, but I've been talking about leaning into defense or playing offense with defense throughout this year. And if you get a pullback in some of those European names, Leonardo is one of my top picks. It's an aeronautics electric company. They're lever to a lot of the growth, not only on the drone side of things, helicopters, but also

unmanned vehicles. So I think there's a lot of areas investors can find success and diversify portfolios. You were saying in the break when you sat down, you just got back from an overseas trip. Yes. Pretty much every stock market in the world is doing better than us. I mean, we did better than everybody else for years. But now you look at Germany and Spain and Saudi Arabia and pretty much throw a dart and that stock market's probably doing better. Is there a trend there? Is that a long-term trend? Should I have half my money in European stocks for the next five years? No.

I think you want to have an allocation to global stocks. I'm still overweight the U.S. I think this idea of U.S. exceptionalism being over is overstated. The U.S. still has some of the best earnings growth in the world. That's unlikely to change going forward, but a lot of these other countries are catching up. Their earnings growth is inflecting higher. Their economic outlooks are starting to improve and they're cheap.

But you look even past Europe, Brian, you look at countries like India where it just was two weeks ago. There's fantastic growth. You're going to print six and a half to seven percent GDP growth with a growing middle class and a number of very high-quality companies that don't just serve India, but the rest of the world, that's a compelling ballast to portfolios that I would want to add to you. By the way, you know I love about India? A lot of people don't realize this. My previous life, I was a commodities trader, and I had to sue somebody in India, and I sued somebody in China as well.

The China person just vanished. You couldn't find the company holding company behind a holding company. India uses British law. You can enforce a contract. I wonder if people underweight that when they think about investing. You talk about intellectual property and tangible assets. Having the courts sort of there for you is a huge differentiator when it comes to English language, international trade, and I think investing. It absolutely is.

And also just the way of doing business. There's a familiarity with respect to doing business around Western protocols and also expectations with respect to earnings releases. Sebi, the Indian regulators, probably even more vigilant than the SEC. It's very, very difficult to trade without having proper documentation. And so it's a very interesting market that I think is dynamic. And it's underweight structurally in a lot of investor portfolios. So as money starts to move there, I think there's long-term tailwinds. Again, it's a secular grower that can help diversify and maybe look at.

through some of this uncertainty that we have in the broader market. All right. Don't panic. Matt, thanks very much. Appreciate you coming in today. Great to be here. Matt Orton with Raymond James. All right, coming up, hold that call because the president may be about to launch a phone service. Yeah, you heard that right. And it's next. I think everything we do on this network is pretty good, but this is a particularly fascinating story. The Trump family launching a new mobile phone and service. It's called what else, Trump Mobile.

It'll cost just over $47 a month, and here's the real rub. There is also apparently a made-in-America mobile phone that you can buy with the plan for about $500. Now, as you might have imagined, there's a lot of questions about this, especially how do you get a phone made in America? And at that price point, joining us now is Editor-in-Chief of The Verge. Lee Patel. All right. So is this real? I mean, it seems real. No, I don't think it's real. You can't press release past your way. You can't press release your way past the reality of shipping hardware on a phone network. And you certainly can't press release your way past the reality of operating a phone network. So I think what we have here is a lot of bluster over what amounts to a mobile virtual network operator, an MVNO, a rebrand of T-Mobile's network. And what will almost certainly be a, skinned Chinese Android phone. I think it's important to say very obviously that's what's going to happen here. It's what always happens.

You don't think there's any way that a $500 phone could get built. There's so many weird things about the story, Nelai, not least, and I know this isn't your lane, but the branding of Trump and during the Trump administration hit the fight with Apple and basically the idea of, I guess, if you're not going to move it and build it here, we're just going to launch a phone that does have those. attributes. And it's not going to be an iPhone, but maybe there's a segment of the market that that doesn't care. Yeah, you know, like so many things in Trump world, it's important to carefully parse what they're actually saying. The only thing they're specifically claiming that will

happen in United States is the call center will be in St. Louis. Eric Trump today, I think on the Benny Johnson show, said eventually all the phones we made in America. That's a long eventually. My first take, and we know that the president has kind of come out of a, a, a at Apple a little bit and said we want the phones made in America. And there's all kinds of estimates out there. Anywhere from making it America might cost 25% more to like 250% more, a $3,000 phone. My first take, Nelai, was that this was going to be like a test. Is it even possible?

It sounds like you think the phone will be an overseas phone, maybe just rewrapped. Yeah, there's two things that are playing on the website. First, you can bring your own phone to the network, which is really, I, I think probably what they're assuming most people will do. You already have a phone. You can get it off your carrier. You can pay an exorbitant amount of money for the service they are offering. It's $47.45 in $47.45 in reference to the presidencies.

That is so much more expensive than any other prepaid service. You can go to Mitt Mobile today and get that same service for $15. You can go to any of the big carriers prepaid. I've parsed those Ryan Reynolds commercials because I think it's highly effective. It's also handsome. But sure, but if you want to pay full frame. Right, for Visible from Verizon. But they say that you will get unlimited data.

They say it will offer free text and calls and unlimited data for that price point. I mean, that would be a steal on the market if it's true, right? Once again, you've got to parse it. So that unlimited data, like everyone else is unlimited data, is only 20 gigabytes of unlimited data, and then they throw all your speeds. If you go and pay full freight from Visible or Cricket or Metro, which are the prepaid carriers from the big three, you're going to be paying $35 a month for more.

data before it gets throttled. Okay. So even just like on the face of it, you can get better deals if you shop around and switch carriers like you always can. But if you're just going to pay full freight, you can go to the big carriers and get a better deal for more data. So when they're saying, what you also get is. Sorry.

So when they're saying we will sell phones that will be built in the U.S., you think what they're referring to is assemblage and not actual, you know, soup to nuts construction. I don't think they're going to sell a phone. that has anything to do with the United States on any kind of timeline that makes sense. I think they are assuming people will pay money for a Trump-branded service and bring their own phones because people have phones now. And then what they are going to sell is the T1 Model 8,002, which is what they will tell you it's called if you call them, is undoubtedly a rebranded Chinese Android phone.

That is the only way you can get to $499 with the specs that they're offering. You cannot stand up the capital expenditure to build that phone in the United States and then sell at those specs for $499. Those specs match some flagship Android phone specs, right? You're competing with the margins of a Samsung at those specs. And to do that, you need existing manufacturing, and you cannot just, like, horsepower your way through the CAPEX needed to bring that manufacturing. And that's just math.

Like, that's aside from however you might feel about Trump. The reality is it costs a lot of money to send up a network. So they haven't done that. The rebranding of what is almost certainly T-Bowables network. And it costs a lot of money to start manufacturing phones. And there's no way they're going to do that at $4.99. So what you have here is the Trump organization, being the Trump organization, they're putting their name on some existing products and services in very familiar ways.

And then they're making a bunch of promises that will probably not come true over the long time. Is there, and I know, I mean, obviously, we all know that there's going to be people that lose their minds over there. I mean, it's just anything having to do with the president. People just lose their minds. Forget about the name Trump. Maybe it says Biden or somebody else's phone, whatever. Is there a positive aspect to the consumer? Because at least it encourages people to shop around and realize that maybe Mint Mobile is, forget about the Trump phone.

Maybe they're like, wait, Ryan Reynolds and Mint Mobile in those commercials, 15 bucks. The more people that get into this market, I think, I hope, the better, regardless of the name. or any political connotation, I think. Yeah, here's your problem. All of those other carriers, all the Mitt mobiles, the boost, whatever you think they are, they are just rebrands of the existing three wireless carriers. There are only three wireless carriers in America that operate at nationwide scale with nationwide coverage, with the capacity to operate for all 300 million people in the country.

And they basically move customers around, right? And their prices go steadily up. We lost a fourth carrier in the first Trump. administration when T-Mobile was allowed to buy Sprint. And in order to make that deal go through, Trump in his first term, brokered a deal in which some of that spectrum would go to DISH network, which never really stood up a network and is now in trouble with this second Trump administration for not using the spectrum effectively. So we've actually cut down the number of carriers competing on price over time. And all of these new carriers are just rebrands of the existing infrastructure.

They're riding on those networks. And the reason the carriers are, wanting that to happen is because it essentially prevents churn while they get to keep their prices high. Ryan Reynolds or the guys from SmartLists or Eric and Donald Trump Jr. get to put their faces on what is effectively the existing network. They are not bringing new technology to the market. They're not making the networks more efficient. They're just lowering or in some cases increasing the marketing cost of getting one more subscriber onto T-Mobile, AT&T, or Verizon. Whatever it is is a heck of a story. And I can ask, you know, Xfinity Mobile really works well. That's the one I use. And if I had to, I'm not lucky enough to have.

Eli. That's Verizon. That's Verizon. That was the joke. That one of the three. Yeah. If you have to explain the joke, it's not funny. I tried. Thank you very much. Thanks for having it. I'd like to launch my own if it's that easy. Just join the Kelly network. How much does it cost? Fifteen dollars a month for the first three months. And then what after that? I don't know. Day six, day 91. What am I? Hang on Evans Net. Let's get to Contessa Brewer now for the CNBC News update. Contessa?

Kelly, Brian, with Tel Aviv and Tehran trading strikes against each other, Iran's foreign minister said today it would take one call from President Trump to Israeli Prime Minister Benjamin Netanyahu to get Israel to stop attacking and return to the negotiating table. He also accused Netanyahu of attacking Iran to sabotage, a potential nuclear deal between the U.S. and Iran. Sources tell Reuters the foreign ministers of France. France, the UK and Germany are expected to hold a call with Iran's foreign minister later today. Investigators in India say they have recovered the cockpit voice recorder at the site of the Air India crash.

They're trying to piece together what caused the Boeing 787 Dreamliner to crash moments after takeoff. It killed all but one of the 242 people on board and dozens more on the ground. And at home, the home goods retailer with more than 250 stores across 40 states has filed for bankruptcy. The Dallas-based chain announced today it reached an agreement with lenders to eliminate most of its roughly $2 billion in debt and has $200 million in fresh funding to keep operating until it can emerge from bankruptcy. We'll keep our eye on that, Kelly. All right, Contessa, thank you, Contessa Brewer. Coming up, our trader says this huge stock is at an inflection point. After being down about 20 percent year-to-date, we'll reveal the name right after this.

Crypto Watch is sponsored by Crypto.com. Crypto.com is America's premier crypto platform. Welcome back. Let's do a little three-stock lunch, where we hit three different stocks to watch and ask our guest how investors should trade them. And here on set with her trades today is Jessica Inskip, the director of investor research at stockbrokers.com.

Great to see you. You too. A lot of different things to kind of comb through here. Let's say. Let's start with Apple. That was the name we teased before the breakdown. 20% this year, underperforming the rest of the MAG 7. Is now the time you think for something significantly to the higher to finally happen here?

Well, if there was anything significantly to the higher, this is where we would be. So speaking from a trading perspective, there is a very, very strong resistance support zone where we're in right now, thus the inflection point, which is around 195 to 200. We're sitting in there. But this is the bottom of a range to the highs, which were around 260. which means from a trading perspective, it's very beneficial to deploy something called the wheel strategy from an option's perspective. The wheel strategy. The wheel strategy.

We sell a put to buy the stock. It creates neutrality in the short term, but then bullishness on the long term. And since we're in the bottom end of a range, we'll do that while we're at the bottom end. If we're assigned and we're wrong, we'll sell a call. So we're essentially, you're reducing your risk by capturing premium constantly. So you're not sure yet if the inflection point is definitely here. you're starting to kind of lay those bets for it being so. Yeah, well, this is an inflection to go higher.

Okay. Because we're at the bottom. But if we're wrong, this is a strategy where you can utilize capturing some premium. And it was definitely beneficial for something like Apple that's stuck in this sideways range while we're waiting for AI something to emerge. Exactly. All right. So that's Apple. What about NASDAQ, the stock, which has recently been doing quite well.

The shares have been breaking out. They're up. This is different than Apple. They're up 20 percent the past couple of months. Does this one flash anything to you? It does. So, Kelly, I recently changed my job about a year ago. And my job is focusing now really aggressively on understanding retail traders.

And I talk to the brokerage firms all the time. And so that's where this is emerging from. There is this new theme of 24-7 trading. And 24-7 trading doesn't mean people domestically, night owls. It actually is more global access to markets, what I'm hearing from the brokerage firms. Now, if we have 24-7 trading or 25 trading and we need liquidity, We have broader participation, but the way to truly hedge is utilizing options, which means that's next. But you think people are getting into the stock in anticipation of 24-hour trading.

Well, 24-hour trading is already here in a lot of brokerage firms. It's just the next- Like Robin Hood. Exactly. Robin Hood has it. Schwab has it. E-trade has it. This is going to screw up our entire business model because I don't know how do we say after-hours or before market when there is no before or after. It's just like Bitcoin. It doesn't stop trading.

It keeps going. You're right. Absolutely. So what's our bench? Like, if a stock is up? Off what? Well, but that's why NASDAQ would be a pick because they generate off of a lot of trades. We have more trades if they start listing options.

You need that in order to hedge properly. So there's more activity, more activity exchanges. We have to imagine more IPO activity. All of that's probably helping too. Absolutely. And a snazzy CNBC set over there, by the way, fast money 5 p.m. Eastern. Quickly, I don't know what to make of this next one. United Health Group, stripping out the emotion because this is a stock.

There's a lot of stuff around the. the company, you strip that out. You just want to look at the stock, the chart, the technicals, maybe the darts, as you just talked to us about. What do we make of UNH? So that was interesting, again, paying attention to the retail trading group. This came up on Schwab Stax Index, which is their trading index where they pull the most actively traded securities. It was your normal Nvidia Palantir, but UNH came up with this by the dip mentality. I pay more attention to Schwab because Darts, which are just daily active revenue trades, is three times that individually of Robin Hood fidelity and even interactive brokers.

So it moves the market. UNH was one of those. And so just from a technical perspective, UNH is in a bearish trading cycle. It is finding support based on levels so far even before COVID. But if there is some support that's there, I expect some rallying to, at least, least the 240 level, but I am not a bull on this. I think this is the theme that I want retail traders to watch out for. Just like GME, we're buying something because we think it's low, buying the dip without any real conviction of earnings follow through it. I don't see that. See those lines tilting over. I know what that means. You've taught me enough. Jessica, thanks for now. Stockbrokers.com. Power lunch will be right back. Before we go, everybody, the battle for big

spenders is heating up, and I have a bone to pick with this. Amex and JPMorgan are both teasing fresh updates to their premium cards. Chase announced last week a refresh of the Sapphire Reserve card, which went viral on its launch in 2016 was imminent. By the way, shares of both are doing nicely today. In response, Amex says that major changes are coming to its consumer and business platinum cards later this year. Because, Brian, people think the Sapphire has gotten a leg up on the Amex cards. Now, Amex said its update would be its largest ever as it responds to those competitive pressures and a card refresh. Here's my problem with this whole thing.

This is why we all have to pay 3% every time we use a credit card to shop. We are subsidizing all of these rewards programs. And as someone who's not a big user of said programs, and just out of fairness point of view, I just don't love it. So, you know, power to them and people who use these programs wisely, but it all feels like it's getting able to carry away. I think that'll be the question. How much are they able to charge as an annual fee?

It's going to be like $800 a year, where to go. It's literally, yeah, it's going to be a lot. It's going to be a lot. And you got to get something for that lot. Sapphire 550, the platinum card, 695, and the JPM fee could go up to almost 800, reportedly. Thanks for watching. Watch, buddy. Closing bell starts right now.