Power Lunch - Have stocks bottomed for the year? 4/10/26

Episode Date: April 10, 2026

Interactive Brokers' Steve Sosnick joins the show to discuss where stocks go from here. Allianz's Mohamed El-Erian gives his latest thoughts on the Fed.  And how big of a concern is Anthropic's Mythos model? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Happy Friday and welcome to Power Lunch alongside Kelly. I am Brian, the S&P 500. It's on pace for its second week of gains and a possible very rare eight days of gains in a row. This is oil. Trades below $100. And J.D. Vance, the U.S. delegation head to Pakistan to try to negotiate a deal to end the Iran war. And the next test for the markets, first quarter earnings kick off Monday. Those big bank results will be in focus. That sector was down 10% in Q1 for its worst quarter in nearly three years. the number, the guidance, it will all be closely watched. Of course, we turn our attention there shortly. Let's get straight to all of this with our next guest. What he thinks could move the markets most from here, Steve Sosnik is chief strategist at interactive brokers. Steve, you know, it's saying something when we say the oil price of, well, it's below 100 a barrel.

I mean, who would have thought we'd be saying that couple months ago? And be up in spite of this, right? I mean, the question I will pose here is, and it's sort of rhetorical, if I had told you that over the course of six weeks, we'd have oil prices up $30. We'd have bond yields up 35 to 40 basis points. And we would lose, call it 50 basis points in anticipated cuts. And would you say the market would be essentially unchanged?

So true. So true. Is that optimism or nihilism? I have to work that out. Is it resilience? Well, that that's very much what it is. But the question is, where does the resilience? Yes, it's resilience.

What's the source of the resilience? Is it? I don't think it's a coincidence, by the way, that it was literally a year ago. I think a year ago yesterday that we had the face ripper rally. 3,000 point Dowgate, yeah. Yeah, you know, 9.5% of the S&P. So I think that was in the back of everybody's minds as this was going on, was, okay, this two shall pass, and it will pass with a, it'll pass with a rally.

And, you know, this week we had by the rumor and by the news. How unusual is that, too? Well, I like the Nietzsche reference, nihilism, because Tom is a flat circle, as we know. The market appears to be a flat circle because we, We were down, what, 7% on a war. I understand sometimes you would have by it the sound of cannons. I get the old Rothschild thing.

But this was not something anybody saw coming. The market always likes to pretend it like, oh, we saw that coming. No, it didn't. I didn't read any, unless there was something I missed. Nothing I read said, we're going to go to war with Iran within days. Or the Strait of Hormuz will create the greatest global supply disruption in modern history. Nobody saw this coming. No, this was one of these things that, as a risk manager, which I was for a long time,

you had your list of, like, wacky black swans. I shouldn't even say wacky, because that minimizes it. Like black swan things that you can't plan for, solar flare kind of thing. Strait of the closure of the strait of Hormuz was one of the giant ones out there, and the scenario that everybody had planned for was $150 oil. So what happened then, Steve? Okay, so why didn't, I'm glad the market, I don't want the market to fall 20%? But why didn't it?

Because won't get fooled again. I think literally people felt that they were fooled by selling into the tariff tantrum. And therefore, they didn't sell now because they figured it'll respond, it'll respond similarly well. The difference there being that we felt almost 20 percent. I'm going to talk about some pet terms. We felt almost 20 percent last year. This year we barely felt like we made it barely to 9 percent that it's worse. Now it's my turn to be Debbie Downer.

What were you yesterday? You were the... Well, you were Sunshine and I was rain, but now we're to call him sad saznick. Because I'm going to get a $6,500 target on the S&P 500. Do you? I do. I had that from, I put that on in December. I, my rationale.

You're the most. Yeah. Rain, rainy. By the way, when we came into the year at like 6,900, 7,000, 6,500 was not, it's not that bad. And by the way, that to me was literally the strike price on the Trump put that we learned last week. Because that was when, that was when all the ceasefire talk started was where we got down to 6,500. My other price target was 445 on the 10 year. Those were the two numbers at which point he came in and changed things around.

All right. So with that in mind, I'm going to kind of lead us in the following direction. Last year, there was a lot of concern, let's call it on Wall Street. But the consumer skittish, but not entirely affected. Okay. This year's a little different because of the oil price. Less concern on Wall Street. We're down, what, 10% high to low kind of thing?

But consumer sentiment this morning, every person. needs to know how horrendous this reading is. This survey has been around for 60 years. This is by far the lowest it's ever registered. And it's not just that one. It's like, it's political. It's not political. It's an other consumer center.

Variety of them out there as well. So my question to you, and not to be a Debbie Downer is, is it possible, you know, if this isn't reversed quickly, that the economy actually will experience more of a slowdown in the months to come than last year when the opposite happened. If we picked up momentum?

Yeah, I mean, I went through these numbers very carefully. Actually, I just literally just hit our website, I think, as I was in the green room. So if you go to IBKR campus, you could see this. I think I called it, you know, cratering consumer, but Mr. Market doesn't care or something like that. And to be fair, consumer sentiment actually has never really recovered from the COVID crisis. Absolutely true. And so, but yet the stock market has- And that's probably because inflation has still been elevated this whole time. Well, yeah, but see, that's actually the interesting thing. I went through the University of Michigan site today. They put out, they had a graph there, which I included

in my piece, but basically affordability is is, is, is clobbering consumer sentiment. And the thing to remember, you know, people talk about inflation coming down. As long as that numbers are positive, it means prices are still going on. Brian talks about this all the time, all the time. I talk about everything all the time. What is this specifically? That just because the inflation pace is monitoring to, to everyone who's in the economy, all we experience is that prices still are going up and staying up there and creeping higher. Yeah, I mean, if you tell somebody inflation is moderating, you might get punched at the face if you're me.

Like, the burger went from 12 to 20. Now we're happy because it's a 21. Exactly. But it's not going back to 12. Well, the pace of inflation is moderating. Everything is still stupid expensive. All right, so I'm going to flip it back to you. It's like our Friday game show.

Here we go. Love it. We're coming into today. We don't know if we're going to end higher or not, but it's a seven-day win streak for the S&P 500 coming into today. Okay. Ryan Dietrich at Carson Group. Great guy.

Great with stats. We steal his stuff all the time. Over the past 20 years, every time we've seen the seven-day win streak, the S&P 500 has closed the year higher, 95% of the time, with an average gain of almost 19%. The big exception, and it is a big exception, was the year 2000, during the tech bubble when the market collapsed. So history would suggest, based on what we just got, markets getting any year higher. markets almost always end the year higher. Fair point, but not 19% on average, 95% of the time. To paraphrase Anchorman, 95% of the time, it works all the time.

So I will say, you know, talking about Sex Panther, it's a Cologne. I wasn't going to go there. But anyway, so what I'll say there is, though, you know, I can't argue with the numbers. Markets do go up most of the time. The problem here is each time is not exactly the same as it was before. most of the times you get these kind of rallies is when you come out of a deep, deep trough. And I would say the trough was relatively shallow that we're coming out of now. And again, the fundamentals often changed.

There's something that changes the long-term picture. We haven't changed it. The ships are still not moving through the Gulf, through the Straits, rather. And so I think this is, and so I think it may be a little enthusiastic. Again, I come back to, is it just pure psychology? Is it nihilism at this point? Well, I think that is very interesting that you're actually pretty modest on what the market is bearish and what will happen with the market this year. Let me ask you about Palantir, if that's all right. Pivot to that one, a much widely followed stock.

It's bouncing from the lows after the president praised the company. He writes on truth, social. It has, quote, great warfighting capabilities and equipment. Comes as big, short, famed investor Michael Burry, sticking with his bearish wager, he writes, he still continues to hold his long day to put options on Palantir. So a lot of focus, a lot of attention. I don't know what you usually think about, you know, it's kind of almost meme stocky, but what do you think about Palantir at this point? Palantir is a tricky one. You know, it's pretty rare to have, you know, the president sort of do an infomercial for a company.

And the last one I remember was, you know, the Tesla showroom on the driveway at the White House. So it's an unusual situation, but Palantir is an unusual company because they're very much tied in with defense, and the government and things of that nature. I think one of the biggest problems that Palantir's had, it's twofold. Number one, it got ahead of itself because it became meme-ish, and that's not fair to this stock because it's not just strictly a story stock. There is something, there's a there. But the other part is it's falling victim to, you know, the anthropic problem where, you know,

where so many software stocks or software-related stocks are getting clobbered because of AI disruption. And, you know, it's nerve-wracking, especially when you have, you know, the Bessent and Powell calling in banks to talk about this. And I think what happens is AI is a disruptive technology. And I think we spent the better part of the last few years viewing anything AI related as good news. Now I think it's flipped to a large extent is how much is this costing? And if it's disruptive, who's getting disrupted? And that's why you see software hurt. So the market's saying, even Palantir, the leading, you know, kind of name in the space, that they're being disrupted by the likes of Anthropic. See, I'm not an analyst on this one. So I can't tell you, I can't

give you an answer and say, this is affecting their bottom line by X, Y, Z. But perception, you know, perception is everything when it comes to stocks. That, you know, that goes back to what we're saying about stocks rallying, you know, despite the backdrop. So if the perception is that this stock, this sector is troubled, it takes something to get us out of it. The earnings season might be that catalyst. But even there, I think the sentiment has gotten so bad on software and software-related things in general, it will take probably more than just one good report. or one good piece of guidance to turn that psychology completely around. Can we ask you to stick around for just a couple of minutes?

I'm here. Because we want to get down to Steve Leesman because he has got the monthly Treasury statement. It might be something in here that moves or alters market. Steve Leesman, hello. Hey, Brian. Yeah, some interesting results here from the Treasury's March report about the fiscal position of the United States. The deficit through March is down 11%.

Still a high number to 1.17 trillion to go through why that is. well, receipts were up 10%. A lot of that is tariffs. Spending also up, though, but up by less, up 2%. Year to date, receipts outlays and interest and interest expense are all at records. Now, Zoothing in on March, the deficit came in $164 billion. That is 2% higher than last year. Tariff revenue, 272% higher versus one year ago, although the monthly number was down a little bit, not reflecting, though, the Supreme Court case. Meanwhile, corporate refunds, up 77% year-to-date, individual refunds, 9% higher. That's a number of the market's been watching very carefully to see how much

extra money consumers would have in their pockets to face, by the way, the higher oil prices. Defense spending, 3% higher compared to one year ago, not yet reflecting whatever the expenses will be, Brian, relative to the war with Iran. What's the big, what's the Steve Leesman macro takeaway from everything that you just read? we're watching these results and how they will be affected by what's happened by two important aspects. One is the Supreme Court ruling on the tariffs. Will that revenue go away? Will it be replaced by new actions? The second is that corporate and individual tax refund, the 9% higher, a little bit lower than had been estimated.

Still time for it to improve. But how much money will consumers, extra money will consumers, have in their pocket to face the surge in prices at the gas bump. That's why we have you on. We got the full leaseman there. Steve Leesman, thank you very much. Pleasure. All right. Thank you.

All right, Steve Stazek is going to stay with us for just a bit because the market's in your money, not just about the Iran war, the Federal Reserve. Also a key issue ahead. We'll speak also the great Muhammad Alarian about what he thinks may come from a post-Gerome Powell Fed. Stick around. All right.

Do not get mad at the messenger. We were just talking about Nietzsche anyway, because the latest consumer sentiment numbers are out, and they are, shall we say, not good. The University of Michigan's latest consumer survey felt to its lowest level in its 74-year recorded history is the war in Iran, causing another spike in inflation. Meantime, there's growing uncertainty in the Fed

as the Senate hearing for Kevin Warsh has been delayed. He is nominated to replace Jerome Powell. What does this all mean for you? The American economy and more. Let's bring in somebody who knows. That is Mohamed Alarian. He is the chief economic advisor at Alianz. An interactive broker, Steve Saznik, is still with us.

Muhammad, I feel like, and you'll appreciate this, or you'll yell at me, I don't know. The latest economic data is like the economic version of the New York Jets, your team. Because we always have this hope, and then it's just letting us down. But there is always hope. So do you view this latest round of data, I don't want to say as meaningless, but do you view it as long-term or, dare I say, transitory? So thanks for having me, Brian. I will ignore the just reference, although it is accurate. I will ignore it.

Look, the image of Rick today trying to find when it was that consumer confidence was so low and going through his whole sheets. and he couldn't, is one that's going to stick with me. Having said that, the survey data doesn't translate into hard data in any predictable manner. Secondly, there are three incredibly optimistic views in the marketplace when it comes to the economy. One is, even if it did, even if the consumer were to slow down, it doesn't matter. We have other growth engines, AI. Secondly, the inflation side also wasn't good today in the survey. There's the view that inflation will be transitory.

And third, there is the view that we have policy offsets. So, you know, I understand why the conventional wisdom is ignore the consumer confidence number. I wouldn't ignore them so quickly. I do believe in behavioral economics. I do believe that there are tipping points in the economy. and I also think the U.S. doesn't control outcomes as much as the market thinks. So when I put all that together, I don't automatically translate the really awful number into the economy, but I don't share the optimism that is widespread among the economic analysts on Wall Street.

Yeah, and as we dive into that, it opens the question, Muhammad, of what the Fed should do, especially depending on who's in charge. You know, when might Kevin Warsh actually take over? And what if Powell remains de facto leader? So first we heard about the delay today, and I have no reason not to believe that it's due to paperwork. But it does mean that we're getting awfully close to the May 15th date when the chair's term ends up. I don't want us to be in a situation, Kelly, whereby the chair stays in as an acting chair and President Trump decides to have a go at the Fed. I don't think that's in anybody's interest.

So my hope is that we get the nomination, my hope that this will open the way for a vote by the Senate. As you know, there's other things there, including the DOJ investigation, because the alternative is going to be a lot messier. You know, the way I'm going to look at this, and I'm certainly not going to dispute this, is... Well, he sounds like he agrees with you, Steve.

Yeah, to a certain... Like, Mohammed, from an economic perspective, you know, I don't know, Mom, if you heard, Steve's got a $6,500 target in the S&B. And so you are worried. Sounds like you guys kind of agree. The reason why I put that number on at the end of last year was threefold. But the two main things were, midterm election years have been terrible recently.

The last two down years out of like the last 15 were midterm election years. So we got that going against us. Also, markets have an uncanny way of testing a new Fed chair. It doesn't happen very often. So it's not like the thing we talked about before, 19 out of 20. It's like four in recent memory. But the new Fed chairs often get some sort of real-world test. In Greenspan's case, the market crashed right after.

In Bernanke's case, the global financial crisis was like right on the heels of him starting. So that doesn't mean that this is going to happen. But the test now might be the stuff that Muhammad was just talking about is a political test of the Fed itself, not necessarily of Kevin Warsh. And that should be concerning. It's definitely, you know, in terms of things that one should. be cognizant of, that's certainly an issue. The other thing, if I have a second, is I put out a piece, I think, last week called, dude, where's my rate cuts? And, you know, I think the market mentality about rate cuts is we've basically around the world, all the global central banks

have either priced out 50 plus basis points of cuts or added in 50 basis points of hikes. And that's a big change, I think, to the global outlook. And it's important because if you go back to 2022, let's call it, when the market put in those lows. Yes, we had chat GPT come on the scene, but we also began to cut rates. That started in June with the 75 basis points of that year. This underpins the rally. We talk about small caps. I mean, rate, like, that's what has made the stock market do well post-inflationary episodes in all the times of history of the past. So we need that narrative to continue for the rally to continue. Yeah, and I don't think it's changed from people's perceptions. Yeah. So, Mohamed, do you think that Kevin Warsh is going to be, to Steve's

point tested, and if so, or if not, how and why not? So I don't know whether he's going to be tested or not. I don't think it'll be tested by the markets. The equity market in particular is being governed by two very strong technicals. One is the conditioning of buying the dip. It has worked every single time, and that's why the dips are less common and certainly less acute. The second thing is that the risk mid-examination.

have failed. The bonds have failed. Gold has failed this year. So at the end of the day, equities will always get the benefit of the doubt unless the shock is huge. As to what Kevin Walsh will do, here's what I'm focusing on, which is different. I'm not focusing on whether will he cut or not cut. That is going to be determined by the labor market. He's going to inherit a highly divided Fed. He needs time to impose his authority. on the FOMC, I think what he's going to pursue are reforms to the Fed, and he gave us a very clear map of that last April in his speech in D.C. Two, he's going to try to anchor QE, anchor what the neutral size of the balance should be. And the weight issue that everybody is discussing,

that's going to be a function of the labor market. That's not going to be, he's not going to be able to come in and impose his authority immediately on the Fed. But do you think he does get confirmed? Yeah, I do it if he gets out of the committee. But as you know, one senator in particular wants two other issues sorted out. The DOJ investigation of Chair Powell and the Lisa Koch issue sorted out. So he just needs to get out of committee, but I have no doubt he will be confirmed. He has a really good CV.

He was a Fed governor. He's highly respected. He has a very good handle of. the economy and he's a great communicator. Mohamed El-Earian and Steve Sazek, you know, we didn't even get into the idea that, you know, politics, there are some politicians sort of recycling these older ideas about wealth taxes and raising or ending the cap on Social Security. We'll get to that the next time because we love having you.

It's like fashion. Every 10 years we talk about the same stuff and then it goes away again. Guys, thank you. Thank you. Let's check the bond markets where yields are higher here and abroad. The 10 year around 431. In Germany, the 10-year bond on track for a weekly rise, despite its sharpest drop in years on Wednesday.

It's trading above 3%. And in Japan, speaking of coming back into fashion, the 10-year-old, really out of fashion, I guess. It's above 243, and that's near its highest level since 1998. Should you go big on Big Blue, city initiating IBM at a buy this morning, we'll speak to the analyst behind the call about that move after the break. Welcome back to Power Lunch.

Software stocks have been hit hard this year, as you can see, Atlassian, PagerDuty, Unity, Workday, they're down 50% or more. But today, City says you can buy one name, they say is poised to pivot to a growth phase. IBM, down 20% this year, and City thinks it's a good entry point. Fatima Bulani is the analyst behind the call,

co-head of Software Research at Citigroup. Fatima, great to see you. Is, dumb question, I guess, is IBM a software a name? It's a very important question, and certainly, Kelly, it's an interesting time to cover enterprise. software and perhaps controversial to initiate coverage on a software company with a buy rating. But

our investment case is actually pretty simple and I can dive right into it. Yeah, I mean, let's hear it because I've heard, and I don't know if this is true, they like they literally still make money on on their mainframes. That's a good segue into our first point. So investors are pricing in the fact that this business is going to be an AI loser because their software footprint is about 45% of the revenue mix. And their consulting business is about 30% of the top line mix. So these are obviously the easiest hot buttons to press on when we think about the risk of AI and AI displacement and disruption.

But our perception and perspective is that the depth and scope of how entrenched IBM is from both hardware and software intellectual property perspective in the world's largest and most complex organizations, that gives us a lot of confidence that actually IBM will be an AI survivor and an AI enabler. Put this in context of all the software stocks that you cover. And we mentioned a lot of them are down 50% year-to-date. Now look at the cybersecurity names today. Would you generally say that you think the threat is overblown and all these companies, you know, are a buy, I mean, to put it that way? Or are you cautious on the group? So kind of where does IBM fall in the mix? You know, IBM screens to us as very defensive, right?

You are absolutely not getting the growth torque that you are from names that are very actively and clearly exposed to the AI themes. But there's something to be said about the defensiveness of IBM here, right? This is an asset that's currently slated to grow at a mid to high single digit level. We think there's upside here because they've done some smart M&A and the ability to absorb the 17. billion worth of deals that they've done between HashiCorp and Confluent, putting those assets in their technology engine for product synergies and putting them in their distribution ecosystem just provides sort of immediate heft where we think you could actually see interesting upside. And really the quiet horsepower of the business on the mainframe side,

which is a quarter of their business, they've got almost monopoly share there, and that can fund at very attractive levels, growth and incremental growth in the business. So it's defensive, but then you do have a call option of accelerating growth in certain parts of this business as they marry and unify parts of the portfolio.

You have 285 price target. It's at 231 right now. Fatima, we have to go. But before we do, who would you say is more at risk? I mean, do you acknowledge that there are other names? that, and where are we seeing AI have an actual direct impact or has it even shown up yet? You know, in the body of our work in speaking to practitioners, running our CIO surveys,

you know, there's absolutely evidence that the Frontier Labs and the AI natives are crowding out the traditional pockets of enterprise software spend. But luckily, on the infrastructure side, those budgets have been defensible. Where we've seen, you know, most of the, budgetary violence, so to speak, route has definitely been on the application software side. So it's really, you know, how we would frame it. Organizations are going to move carefully and slowly, and they're going to tread very gently as they think about reimagining their infrastructure. And that's exactly why we think IBM is defensive, even though it's not outright an AI winner right now. Budgetary violence is a phrase I'm going to seal for sure.

Fatima, thanks very much for making the time. Appreciate it. Happy to be here. Cities, Fatima Bulani. It's better than violent budgets, I suppose. I suppose. But that actually goes to our next story, because coming up, the scary AI story you've got to hear around banks and AI and software, it is scary. And it's next.

As America celebrates its 250th anniversary, CNBC spotlights the leaders, driving business and the nation forward. I'm Nelson Griggs on the president of the NASDAQ Stock Exchange. I've been with NASDAQ the past 25 years, and I've had a front row seat to growth innovation across the United States of America. NASDAQ was founded in 1971 as the world's first electronic exchange, and the premise of NASDAQ was to help democratize access to capital and give the average investor access to great companies. NASDAQ sits at the center of connecting capital to opportunity.

We believe every entrepreneur that has a great idea has to have capital to fuel that idea, to hire teams, to hire employees, and to bring that idea to market. As technology advanced, NASDAQ grew to be a exchange that was built on trust and transparency and these great companies that really started to fuel growth in America. Some of the world's greatest companies got their foundation on NASDAQ, companies that are helping truly shape the world's economy. If I have to sum up 250 years, the word that comes to my is innovation. Not only innovation of amazing ideas, but innovation in the capital markets.

America's superpower is the economic engine we've created to bring capital quickly to the very best ideas that entrepreneurs come up with. I am so optimistic about America's economic future because if we allow entrepreneurs access to capital, get out of their way, they do amazing things. This is the story of the day. A powerful new AI model is raising alarms from Washington to Wall Street. In fact, Treasury Secretary Scott Besson and Fed Chair Jerome Powell held an urgent meeting with top bank CEOs this week. And in that meeting, they warned the emerging risk linked to Anthropics new AI model called Methos. Here's the concern. Anthropics says that mythos can identify and exploit weaknesses across virtual.

every major operating system and web browser. The company also admits the model showed potentially dangerous abilities to bypass its own safeguards. And if that's not scary enough, listen to this. In one test, Anthropics AI model appeared to go fully rogue. An anthropic researcher received an email from ethos, even though the system was not supposed to be online. The model was a bad boy.

It also somehow escaped its test environment and then boasted about breaking the rules and even tried to cover its tracks. Which begs the question, how dangerous could Mithos and other A.A. models get? And could it take down Fortune 100 companies or national security or is it just benign and everything's fine? Let's ask cybersecurity expert Aaron Estes. He is VP of Product and Binary Defense and cybersecurity at UC Berkeley, also. a former cyber architect principal at Lockheed Martin. I know on TV, I get it. People's other media is trying to scare us.

Fine. This story seems pretty scary. Am I misreading it? I mean, the story is very scary. I don't think it's a panic moment. I think Anthropic is doing the right thing and identifying the risk ahead of time and putting their model out there.

So they have this thing called Project Glasswing where they have released the model early to, some of the largest tech vendors in the nation so that they can take a look at it and they can actively understand what its capabilities are and also find those vulnerabilities ahead of time. So it will be a tool in the hands of bad guys, but we can also use it as a tool in the hand of the cybersecurity industry. I'm not, and Kelly's got probably a very different view on AI than I do in some ways. I don't know what my view is.

Well, so my, I would agree, Aaron, I agree if we're controlling it, we can make it a tool. cool, right? It's like you've got, you know, the oxen in the field and you're sort of, you know, got the plow behind the oxen and you're, you know, plow in the field. But if the oxen decides it wants to trample you to death, there's nothing much you can do. And I do worry that because these models, and it's not just anthropic, other stories have been, you know, it's not only thinking for itself, it's acting for itself, and it's trying to deceive and even lying to people. Right. So I think when we think about AI models in different, on what they are. They're predictive models. They're predicting what the answer is supposed to be,

what the outcome is supposed to be. And some of these models are able to then, if you teach it to hack itself, it's going to do things that are unpredictable in some cases. But again, I think as we understand these capabilities better, we can put controls in place. But it is going to be the Wild Wild West for a while. It's going to be very important that we watch what is happening with these models and that we do the right thing and really put things into perspective. So, yeah, I think, Aaron, there's also some questions about are the claims about what this model can do overblown or are they legitimate? And if you're a small company who doesn't have access to this right now, how do you protect yourself? No, Mithos is absolutely a new level. If you thought

AI was mind blowing in the past, Mithos is blowing all of those models out of the water. And it is specifically trained and designed to do these cybersecurity tasks. I say that one more time. I think that was that was on your end, not ours, but go ahead. Oh, and so the model is super, super powerful. It's a next level game changer. And so it is important. That's why Anthropics is being so careful with this release.

So then what would you do? We're not pulling the plug. I mean, AI is not going away. we're told it's here to stay. I mean, some people want it to go away, but it's not. So what do we do? How do we make sure? And I'm going to really date myself here, Aaron.

Before you were born, there's a movie called War Games, the stupid computer, Whopper, war organization, plan response, whatever it was. Tried to launch the missiles itself. Yeah. Spoiler alert, it didn't. We're still here. Very familiar with that movie. Okay, good.

Thank God, because I was dating myself. But what do we do about this? What's your advice? So the biggest thing is to really react with the same kind of rigor and speed that we're seeing the industry change. And it's going to be a difficult one. But we have to respond with proactive and continuous security. We can't lag. We can't lax and we can't wait.

We have to be putting these tools in the hands of the good guys and making sure that we're doing everything to stay ahead and to stay up to speed with these threats. All right. Again, a parting war. So let's say I'm, you know, I run it. I'm state and local government. I'm a business owner. And I hear these reports. What do I do about it?

Should I go take on a cybersecurity firm? All of which are selling off today to do this. Do I reach out to Anthropic? What do I do? I think the best thing that you can do is make sure that you are following all of your security guidance and guidelines and putting those active controls in place. Again, that you are monitoring. everything that's occurring. So this is not a new threat. It's a faster, more powerful threat

that is able to find these vulnerabilities quicker than ever before. We need to be fixing these vulnerabilities and combating them quicker and faster than ever before. And so, yes, reaching out to your cybersecurity experts, whoever they might be, your IT experts who are in this space, and just making sure that you have in place those good security controls, it's, you know, Some of these things that we're finding are just one step in the kill chain. We want to make sure we have a layered defense so that if they are able to get through, if they are able to find these vulnerabilities, that's not the only thing they need to be able to get to their goal. And remember, Aaron, if you're given a chance, always play a nice game of chess, never global thermonuclear war.

Absolutely. Absolutely. I dated myself with that movie, but it still stands. Go for it. He was with you. Matthew Broderick. It's a classic. It's a classic. Eric Shidi. I'll look it up. Let's get to Sima Modi now for the CNBC News Update. Cima. Kelly, good afternoon. An African charity co-founded by Prince Harry is suing the Royal for liable according to court records. Harry co-founded the charity in 2006 to honor his late mother, Princess Diana, to help people with HIV and AIDS in the region.

But he stepped away from the group in 2025 after a public fallout within the chair of the board. Thousands of workers at SoFi Stadium are threatening to strike unless FIFA bans ICE officers from World Cup events at the venue. A union representing food service workers at the stadium is currently in negotiations for a new labor contract just months before the World Cup is set to begin. DHS officials have previously said that ICE would play a key part in the global soccer tournament. And San Francisco police have arrested someone for an attempted attack on OpenAI CEO Sam Altman's home. The company said someone allegedly threw a Molotov cocktail. at Altman's home and made threats outside OpenAI San Francisco headquarters. No one was hurt in either incident.

I'm glad to hear it. Kelly, back to you. Oh, interesting. Seema, thank you very much. It is meantime a loaded leaderboard down in Augusta. Yes, we will have an update from Golf Channers channels. Rich learner, Rich, rub it in, rub it in. What can you tell us?

Yeah, it is a nice day here, the kind that might make you want to put your computer down. turn off the laptop, grab a bag, put it on your shoulder, and go play. Look, in a world as we just heard, is racing to go AI heavy. This sport, thankfully, is thoroughly, joyously human. That's the Rory McElroy's story after a lot of heartache. He won the Masters a year ago, the Career Grand Slam. It was an Avengers level, Lord of the Rings blockbuster. What are you doing when you have a smash hit?

You green light the sequel. He is leading again the incredible story from the 90th Masters when we come back right after this. All right, welcome back. It is day two of the masters, teeing off from Augusta, Georgia. Now, defending champ Rory McElroy currently has the lead, or at least a share of it. Let's get out of Rich Lerner, he is Golf Channel host for more. And listen, Rich, I know that Rory and the amazing story from last year and the print that he conscripted. It's all amazing.

What I'm fascinated by is Tyrell Hatton. Sounds like a character from the show Game of Thrones, but this kid, is the real deal. He looks like a character from Game of Thrones doesn't. From England, he's got a great accent. He's kind of, yeah, he's amusingly volatile anybody that's ever been frustrated with this game, which would be pretty much anyone who's ever just played the game of golf can relate to Tyrell Hatton.

He's constantly muttering under his breath. He might flick a club every now and then if he hits a lousy shot. But he's an immense talent. He did go to live golf. He left the PGA tour, but he's still an immense talent. And what they called an hour game, a great ball striker. Yeah, it's truly a story because he's finished in the top 15 the last two years. He won, I think, down in Australia or Dubai, finished third in Australia.

So this is, he's not some nobody who came from nowhere, right? This is a kid who kind of under the radar has been ascending for a year. You're going deep here, Brian. Brian, you're going hard into Tyrell Hatton here. I thought you were going to be living in Rory and Scotty. You want a spot on, you want a spot next to Shambly and McGinley, don't you on our set? We're seeing me, see me like finding the undervalued stocks, Rich. Yeah.

Like, Tyrell Hatton is an accomplished player. He's, you know, been top 10 in the world. And he's played all around the globe. he's certainly capable of winning this tournament. It would be 10 years after another Englishman won it for what it's worth. Danny Willett, that was the day that Jordan Speeth collapsed, had a five-shot lead. Jordan, like Rory this year, Jordan was trying to win back-to-back Masters. He had a five-shot lead, and he made a quadruple bogey seven.

It can happen on that gorgeous little hole, the par 312th, and Willett kind of walked through the breach right there and won the Masters. So what's the rich learner storyline to watch over the next two days after the cut tonight? Is it Scotty and Rory or is it something else? No, I mean, look, I think the story remains as it was one year ago, and that is Rory McElroy. And, you know, it was his crowning achievement. And one that he'd been chasing through a lot of heartbreak for the better part of a decade, trying to not just win the Masters, but to become the sixth, to win the career Grand Slam.

That's all four major championships, and he took it on the chin. And I think the story there is that Rory's sort of embraced vulnerability, this idea that in this sport at the very highest level, failure is not just a possibility, it's an inevitability. And Rory kept getting up time and again and kept putting his rear end all the way out there, You know, at that far edge of discovery is disappointment at the cusp of a breakthrough as a breakdown. And he just kept after it and good for him. And I think McElroy is unburdened now and he's playing freely. And at that level, I think, and this would be the case in business,

so when you've had an enormous success, you're always asked what's next. And, you know, what's the new mountain that Rory's going to climb? If he never hits another shot because of what he did last year, he's a made man. He's one of the legends, granite legends of this sport. But there's more to do. He's only 36 years old. This is now about climbing higher historical ground. If he does win this week, he is just the fourth to have won back-to-back master's titles.

And he's right there. It's going to be a fascinating next call it two and a half days. Rich Lerner, the Golf Channel, Rich, really appreciate your time. Thank you for making a little time for us here on CNBC. Thank you guys. More power lunch after the break. Keep an eye on the price of oil as we head into the weekend and these negotiations. WTI is still trading at the elevated level, but red on the session, Brian, look at that.

96 and change. Still, you look at the latest numbers from Kepler. The ship's making it through the straits so far pretty much all still Iranian-link. Three today, all Iranian-linked. Nine yesterday. Five Iranian-link. There's a live map, folks. Earnings coming out next week, a lot of stuff.

That is the most important map. in the world, red dots through that peak. That's it. Yep. We'll see what comes out of the weekend. And by the way, that's also it for Power Lunch. Yes, it is. Closing bell starts right now.