Power Lunch - Pres. Trump Speaks in Oval Office 3/24/26

Episode Date: March 24, 2026

President Trump speaks in the Oval Office. Brian Sullivan brings key interviews from power players in the energy space at CeraWeek.    Crude oil prices remain elevated.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome back in the broad markets are under some pressure, giving back the sharp gains we saw yesterday as crude prices are rising and the Iran War moves further into its fourth week. Tensions escalating with the U.S. reportedly deploying 3,000 airborne soldiers now. That's the latest headline on the tape. Welcome to Power Lodge. This isn't Brian. This is High Tower's chief investment strategist and CNBC contributor, Stephanie Lake. Really pleased to have you here, Steph. A lot to get through.

Brian is on assignment and will be with us later this hour from Sierra Week. in Houston, the big lineup of guests. We'll hear from Conoco Philips CEO, Ryan Lance, G.E. Vanova, CEO Scott Strazik, and Brad Smith, who is president and vice chair of Microsoft. We have a lot of show to get to, so let's get started. Kick things off, talking through these markets. Stocks are broadly lower today as Brent is climbing back above 100. 103 is the print right now. We're seeing about 3, 4% gains in both WTI and Brent. Wall Street trying to factor in a bunch of different risks from the war in the Middle East, concerns about private credit, AI disruption fears in software. You can see the S&P down about

a tenth of a percent, two-thirds percent decline in the NASDAQ. It's not deterring Barclays from raising its year-end price target, though, for the S&P to 7650 from 7400, and they're raising their earnings forecast with 321 from 305 a share. In fact, joining us now as Vino-Krishna, Barkley's U.S. equity strategists who made those calls. Also here on set with us is Marianne Bartell's chief investment strategist at Sanctuary Wealth. Really, really great to have everybody here. You know, are we wrong about this? You look at everything going on and say, let's raise the price target. Talk about why.

Sorry saying, I'm tone deaf. Or the earnings are leading the way. I mean, this is what we were just talking about. The estimates for the quarter and for the year have been going up even in spite of the Iran war. Right. I think so there are a couple of things. The macro uncertainty is there. We fully recognize it.

And we recognize that the left tail is fatter now than it was three months ago. And that's why our downside scenario is significantly. more than the upside you're going to get. But that said, if we take a step back, earnings momentum over the last two quarters, especially, the solid earnings we saw in fourth quarter, the revisions upwards. Was it 13% in the fourth quarter, or am I imagining that?

Was it something to that effect? 14? Yeah. Wow. And for the full year also, for last year, we are clocking close to 15% growth compared to 24. And then most importantly, the engine for earnings growth in the U.S.

has been tech broadly. And the way we define tech, it's close to 45% of the market. And there, the numbers are going up even faster, including mega-cap tech. And everyone's been saying, oh, it's too top-heavy and it's broadening. I guess it doesn't matter as long as the big part of the market you think is going to do well then. And that big tech component, which accounts for a third of S&P profits, has been de-rating for the last six months. So we are sitting here with their multiples, forward multiples, seven handles lower than where we were a year ago, roughly. earnings which are still posting more than 30% as of last quarter.

It's crazy. So these numbers are, you know, very compelling. And we think that if that direction goes, what you do care about in that group, for example, is is the rate of earnings growth significantly higher than rate at which the multiple is compressing? And the multiple is compressing simply because the fee cash flow yield is falling as the capital spending has increased quite substantially. And these companies are seeing it as an investment. the market is uncertain whether or not this becomes a permanently more capital-intensive business. All right. So, Marianne, jump in here. And how are you thinking, given everything that we've learned in the past few weeks, does this case make sense to you?

Or, you know, if you should have heard Jeff Curry an hour ago talking about the fact that the physical, you know, the oil's market is not yet pricing the shortages that may be coming, that the price could be going higher. That's obviously going to look at the action today if that's a taste of that. So I'm just curious how to bring this all together. So I do think that the economy is percolating. There's really good things going on in the economy. We're coming into this Iran conflict with strength. The consumer's actually been strong. Based on Bank of America's data, the consumer is the best in terms of spending in the past two years. But we're in a risk-off mode.

And as long as we're in a risk-off mode, markets are going to remain volatile. And this time it's a little bit different because it's not just the public markets that are risk-off. We have risk off in the private markets as well. True. True. It's not helping. And until we can get confirmation that we're moving in the right direction in Iran, markets are going to have a hard time actually rallying. I don't think they'll be able to sustain a rally until we have confirmation of the direction. It's one of those statements that is self-evident, but remains a stubborn fact.

And so I don't know what, you know, maybe you can jump in here too. What do investors do about that? What we could hear from the president in a few minutes could move us, percent, two percent up and down in any direction. And that's true. Now it could be true with any message it could be true tomorrow morning. I think both of these guys, gal, are, I'm in the same camp in terms of the economy is hanging in. The economy is a heck of a lot better than just where we were at Liberation Day, right? And look what happened. If you sold on Liberation Day, you missed 35 percent rally off the lows. Same thing with Silicon Valley Bank in 2023. Same thing

in COVID. So I, as a portfolio manager, I love that we're growing, what, 2 percent? in GDP, that's the Atlanta Fed tracker, that actually should be equate to something like 8 to 10% earnings growth. Some sectors more, some sectors less, but the sectors that I like are the sectors beyond tech, because those have gotten beaten down much more than the overall market. Cal, if I would have told you, we have dealt with Venezuela, SCOTUS reversal of tariffs, AI, software, private credit, and now a war we have no idea the timing about. And by the way, the S&P is only down 4%.

And the equal weight is flat. Is it really? Because that's the wall people always talk about. And retro, you go, oh, those problems were quaint. We all go, oh, Silicon Valley. But at the time, we thought it could have been another bank run. At the time, any of these items look so large. And in fact, that's what makes me feel very confident about the banking system.

Because of the regulation and the excess capital that these companies have had to have since 2008, they were – Silicon Valley Bank was a blip. Right? And so I think if we, it's all about timing, right, of this war once we get through it. But if we wait for certainty, I think we're going to miss a lot of good ideas and a lot of good buys. Feel free to rattle them off as I ask you about the one other area, too. We've talked a little bit about the private markets. And is there something opportunistic as an investor to do?

Here's the challenge I get my head around. If people say, look, the private credit problems, they're both, you know, higher on the capital stack, that's fine. And also kind of depend on what happens with software. Does that mean that private equity should be marked down here because they have some of their own concerns between high rates and the quality of some of the underlying and what's going on? Is that an opportunity for those, you know, if you take the long view to say, of course you'd want to pick up a name like a, you know, fill in the blank blue chip company at 40% off? I don't know if you do something there. I don't know what your proof point is in the short term, but I think long term, these companies are very diversified, right? And you definitely have the great managers and then not so great managers.

And we had fraud as well so that we had to contend with. It's not all fraud. So I do think I like what JPMorgan's doing in terms of marking it down. Maybe some other banks have to. But the big banks, the big six, they are so diversified. And Bank of America at RBC's conference, what was it, two or three weeks ago, talked about all good things, reiterating a lot of what you all said in terms of the consumer. But then also NIAI-I-I growth, M&A, capital markets, and they're flush with cash. The big six have $176 billion in excess capital right now.

And that after the GSI rules last week and the Basel 3, they're going to have about 220 billion to lend, which we want them to do and also to return it to shareholders. And they're trading it like 1.2, 1.5 times book. They're not super expensive. And some of the regionals are below book. And so, Veno, before we go back down to Houston here more specific, I mean, is energy and what some argue that we're going to see this big shift really in capital, moving from tech to energy, do you have a point? of you on that or the way that people should be, you know, we mentioned the market cap the tech is right now. Stephanie mentioned the performance of the equal weight. Is there something to do there? So one with Stephanie, I agree on financials. So we've been wrong thus far, but we certainly think it's all in the price. On energy, it's a little bit more dicey. Because coming into this whole crisis, their earnings trajectory was not good. In fact, it is one of the biggest detractors

of the forward guidance, which is going up. Which tells you that fundamentally, energy was not in a great place. And from physical standpoint, we were dealing with excess capacity. in the oil market. All that has changed overnight because of the war. And the reality now is the war has taken a shape in which the supply constraint will linger for much longer, and energy security becomes, again, a bigger issue. And the state of Hormuz, when it returns to normalcy,

is pretty much unknown. So I feel that even though fundamentally I still hold that view, that energy probably is more than pricing in pretty aggressive oil price deck at this point in time, which is far greater than where the oil strip is, the forward curve right now. But I think we went neutral on it. So from negative, we've gone to neutral, recognizing that this war casts a different shadow, and you can't fight that aspect to it. That's our view on it. That's our view on it. Yes.

I disagree. I think energy's in a new leadership position. Now, the sector's the best performing. It's up over 30 percent. I do expect that sometime you're going. to get a pullback. When all this gets resolved and energy comes down, you are going to get a correction, but I think these are going to be great buying opportunities. I think we're going to hear a lot about energy companies over the next three to five years. So it's one of the sectors almost bullish on. Well, let's hear from them right now. Thank you both. Really appreciate it. Vanu Krishna from Barclays, Marian Bartels of Sanctuary Wealth. And as oil prices are moving higher again today, Brent is at 103 or so last check, WTI at 92, natural gas. I mean, look, we're

we're glad it's not higher. One company watching every twist and turn in the Middle East is Conoco Phillips. Brian Sullivan does bring us a CNBC exclusive with Chairman and CEO Ryan Lance. Hi, Brian. Hey, Kelly, thank you very much. Yeah, we are joined by Chairman and CEO Ryan Lance. And I know we are also potentially waiting, potentially for President Trump to start speaking, so I'm just going to blast this out. Ryan, thank you very much. Thank you, Brian. Any impact, obviously the price of oil, $92 a barrel, any direct impact on Conoco Philips from the war on Iran? Well, we're a big partner with the Qataris in the Roslophan, the big LNG projects that are supplying

LNG to around the world. So we're a significant partner in that asset. And yes, that whole complex has been shut down as a result of this. So 20% of the world's LNG is not now flowing to the world because the shutdown in the streets of homeways. Is that a financial impact for ConocoPhillips? Well, sure. I mean, the revenue is not flowing as the production doesn't flow.

but obviously it's a it is an impact, but it's one that's manageable in a big diverse company like ours only represents about 2 to 3% of our company's production and cash flow. Yeah, and it's the world's largest single natural gas facility. So outside of the financial impacts on you, he said it was small, 2 to 3%. What do you see, this could be a 3 to 5 year offline. You're coming online with LNG next year here in the United States. what do you see as a short and longer term impact on the energy supply chain from this? Well, I think what everybody was concerned about one month ago was that there were headwinds to the LNG business

because it was going to be oversupply in the next couple of years. That has certainly turned into a tailwind as a result of some of the actions and taking 20% of this LNG off the market, and that's not replaceable. So we'll see fuel switching in the short term to other forms of energy, oil and coal, and to where they can nuclear and some of those things. So I think the medium term impact is we're going to see elevated prices as a result of this. All what we can hope is we get back to some of normal situation, get these facilities online as quickly as when, so we can re-establish that equilibrium in the world.

But I want to be, we had $65 oil a month ago. We had natural gas here is about the same. It's much different overseas. So it's only been a month. Right. We're all hoping for a swift outcome to whatever occurs. any change for ConocoPhillips's plans and capital spending plans based on the current price of oil, or would you need elevated oil and gas prices for months, quarters, or years to make a real change on your spending plan?

Well, I think our assessment is you have to see a new equilibrium and mid-cycle price over the long haul to get us to really fundamentally change our plans. We've got a pretty resource-rich company right now. We've got ability and options to invest into the portfolio. starting with the US lower 48. We're growing that business already today. But if we see a long-term call for crude that results in a higher price, absolutely we'll be leaning into the opportunities that we have in our portfolio to invest

to grow and develop our company. But how long, Ryan, would it take for oil prices to remain elevated, maybe this level, maybe higher, maybe a little lower, for you to say, okay, let's change our plans and invest more in the United States because now we just have more excess capital. Why, I think if you see that developing and you feel comfortable that's going to persist for a year or two, absolutely you're going to go into that. 2026 has already laid.

We made those plans at the end of last year. There's not much we can do to impact 2026 production. But if we see a better call on crude in more elevated prices, then absolutely. We'll be reacting this year as we go into 27 and 28 and beyond. The president said yesterday that when the war ends, oil will drop like a rock. And it was down 12% at the time that he said it's already is. But it's not back to 65. Does Ryan Lance think that the war ends tomorrow,

or next week or next month, back to 65 right away? Well, I think it's really tough. We're all trying to assess that today. What is the new mid cycle price? I think what we can say reasonably, the floor has risen up a little bit. And I don't know if that's risen from 60 to 65 to 70 or 75.

But I think the floor has come up a little bit. Because the fundamentals are risk premium? I think both. I think fundamentals are going to be that all the inventory is going to be drawn as a result of how long the war lasts, the floating inventory and the outturnerner. So we'll have to replenish inventories on the back end of this. But there has been some structural things that have happened as well. Like you said, facilities that have been hurt and not the ability to produce to all generate the product. So some of that's going to take some time to rebuild. So the whole system has to recalibrate. That is going to take some time, which I think raises the floor on the

bottom side of prices. You can argue five or ten dollars or what that does. And the real question is, what's the trajectory beyond that? And we've been pretty constructive even before this engagement of this war in the Middle East. I think it only does, it gives us more confidence that the price is probably going to be higher three, four, five years from now. Okay. You've got a huge refining business, getting bigger with the marathon deal. Right now at this price point for retail gasoline, are you seeing any demand destruction in the American economy? Yeah. So, So we're an upstream company only. We're no longer integrated, but we are seeing a little bit of changing behavior in the consumer.

Like what? Well, I think the real key is as we come into the summer months and we see what happens in the gasoline price of reformulation that the president announced, try to get rid of the summer blend and try to help that is going to help. But yeah, we're all watching that pretty closely to kind of see what happens in is their demand destruction, not only in the product space, but also in the oil space as well. You and I have talked to this conference for years and really appreciate you sitting down, by the way. It means a lot, Ryan.

That we're seeing this sort of push-pull with the administration, which is we want lower, the administration wants lower oil and gasoline prices for the affordability. But there's a level of which your industry is going to say, listen, it's fine, but we're not going to invest anymore in grow production because we can't lose, we're not going to lose money on every barrel. Is there a happy medium somewhere in there between prices, growth, and affordability for the American? Yeah, I think there absolutely is. And I think we were kind of establishing that in the kind of mid-60 to $70 range for all prices. It was certainly enough for companies like ours with a really good, strong portfolio, low-cost supply, that we can invest a reasonable amount of our capital back into the company for growth and development, but also give a reasonable amount back to the shareholder.

So it's really balanced. It's really trying to get some consistency built in and try to take. and the volatility that's naturally in our business. That gives us more concern, more ability to invest in some of the long-range projects like we're doing in LNG, like we're doing in Alaska. It gives us more confidence to do that when we see that trajectory over the longer term.

And that's what's important, dampen out the spikes, you know, the peaks in the valleys. So you mentioned Alaska. Yeah. You are, I believe, the biggest operator up there. I was up there less than a year ago to your shop. That's the great men and women that are put in hard work. I mean, that's two weeks on, two weeks off.

That's a different life. And it's a middle of the winter still. Yeah, it's, it felt, I was there in June. It was negative seven in the morning. It felt like winter. Exxon and Shell, both kind of maybe thinking about coming back into Alaska. You've been there forever. Yesterday, Secretary of Interior, Doug Bergham told us on air.

He was confident that the Alaska LNG pipeline was going to be built. Yeah, we're hoping. Are you as confident? I think it's got some hurdles to do. I think they've made a lot of progress. 44 billion is a pretty big hurdle. Yeah, and probably that may be a light estimate, too. But we'll see.

But they made a lot of progress. We have a lot of gas and gas production, and we've demonstrated our ability and our willingness to make the investments that we'd have to make to make that gas available for a project at LNG. I've worked on that project four times over the last 40 years. And I think it is as close as it's ever been to realizing maturity and actually getting a project in place. And then very quickly, finally.

So if we see other majors go back to Alaska where you've been for a long time, Exxon's up there in a way too, but if they come back in a bigger way, is that a good thing for Conoco Phillips? I think it's a good thing for the competition. It's a good thing for Alaska. We welcome more people to put more oil into the infrastructure that's already been built in Alaska. We welcome our partners and our competitors back again to the great state of Alaska. And a very different way of life up top, Miles Zero, I saw at the Alaska. PIPLIN, amazing place to be. Ryan, Lance, Chair and Sea of Conical Phillips. Really appreciate your time today. Brian, thank you.

Thank you, Kelly. Brian and Ryan, thanks. And we're going to take a quick break. More power lunch possibly hearing from the president. Dow's down 33 points. We're back right after this. The conflict in Iran is not the only major story that's dominating the conversation down at this year's Sere Week.

Power demand and how to fuel the AI revolution. That would have been the whole story, front and center. One company right in the middle of that is GE-Vernova. The stock is on track for Unique. Another record close. You're literally a broken record talking about this. It's up 160% over the past year. And Brian is back here with a CNBC first on interview with the CEO. Hi, Brian. Hey, Kelly, thank you very much. Yeah, big run there. Scott Srazyk is the CEO of G. Renova. And I just want to say to you and also the viewers, again, we are potentially waiting for President Trump.

Yes. He comes out. I'll have to jump out. I don't want you to think I'm rude. My mom would get very upset. No worries. Thanks for having me in the show, Brian. That may happen. 160% gain on your stock over the year. Everybody I talk to here at energy, anywhere I go, they say, gee, Renova, Giva, Giva. Tell our viewers, your investors are watching right now exactly where in the energy supply chain you are. Well, we provide 25% of the world's electricity every day

with our equipment, through our customers. In the U.S., that's more than 50% of the country's electricity every day through our customers with our equipment. Scott, sit tight. The President Trump is speaking at the Ovalon. office in Washington, D.C. Let's go to the president right now. Ideally, you want to end mail-in ballots because it's tremendous corruption. Then we added a couple of things, Mark Wayne, like, I don't think being a great athlete

and having a family of great athletes, they have produced great athletes in this family, all-American wrestlers. They especially like wrestling, by the way. What about baseball? Do you play baseball? They like wrestling. But I don't think that you would say that his family, and I don't know this for a fact, and I shouldn't say it because I could get myself, does anybody in your family want men to play in women's sports? I don't think so, Jim, right? I don't think so. I don't think so. How would they do? Would they do good wrestling you? They would be in trouble? He said, yes, they'd be in trouble. It's so crazy. So that would be one, and then we have a few others that we call them the best of, best of Trump. But if you look at

transgender mutilization of children. We don't want that. It's the mutilization of children. We don't want that. So generally speaking, I think I can answer that Mark Wayne would be very much in favor of what I'm in favor of. Would you say that's right, Mark? I can't think of too many things. He might be worse. He might be worse than me. That's my look at his wife and say that's right. But so, yeah, he's going to be great. Yeah. Do you believe the secretary will run DHS that he differently than Christine Ome did? What do you hope to see us as priorities? Well, we had a good run. Look, we created the strongest border

with the help of that man right there. Tom is so incredible. He's going to be a big influence here, too. There's nobody more professional, nobody better. There's nobody better as a human being. You know, he looks tough, but he's got a good heart. But not too good. Don't make it too good.

But, you know, we had Tom. We have the safest border we've ever had. We have a lot of assets, but a lot of things we can we can do and we're going to do. We have to get criminals out of our country that were allowed in by Biden. Yeah, please. Mr. President, do you support the, what appears to be emerging agreement coming out of the Senate to reopen DHS? Well, I'm going to look at it, and we're going to take a good, hard look at it. I want to support Republicans, and, you know, sometimes it's awfully hard to get votes

when you have Democrats that don't want to have voter ID. They don't want to have proof of citizenship. They don't want to do anything about men playing in women's sports. That's one of the items we put on, you know. And I did that just because it's so popular. You know, they say that's at least an 80, 20 issue. No, it's about a 991. I don't think it's, what do you think, but do you think it's 80, 20? Who's closer?

80, 20 or 991? Almost 100. Yeah, I think 100 is really there. So, you know, so I support that and I support comments. Would you be comfortable with a deal that involves separating? ICE funding from the DHS funding package in order to re-over. Well, they're working in all of that. You know, that's a detail that they'll explain later, please.

Election integrity and DHS measures, Mr. President, since Siza falls under DHS, and given that many credible voices have raised concerns over its premature and possibly faulty, likely faulty 2020 election assessment, will you and Secretary Mullen implement reforms at Siza and at DHS to ensure full confidence in future elections, like in the upcoming? We'll talk about it. You know, pros and cons. Look, they used it to try and put me in prison, right? So I can't be thrilled with it.

They use that very strongly, very illegally. The Democrats are thugs, and I don't want to say that. It would be nice to everyone get along, but it's a different country than it was years ago. It was very dangerous the way they used it, and they weaponized government. They used that to weaponize government. So I'm not thrilled, but I'll also go along with two groups of people, the military, and I think the military likes it, right? And I'll go along with the senators.

I'm fine. But I was a big victim of it. Yeah, please. Are you going to send Jared Kushner and Steve Whitkoff to do direct negotiations with the Iranians? Yeah, well, we're in negotiations, as it turned out. And now you've seen what I said yesterday was exactly correct. We're in negotiations right now.

They're doing it along with Marco, J.D. We have a number of people doing it. And the other side, I can tell you, they'd like to make a deal. And who wouldn't if you were there? Look, their Navy's gone, their Air Force is gone, their communications are gone, that's the biggest problem. It's very hard to communicate them between themselves. All of the anti-aircraft is gone. Most of their missiles are gone.

We either shot them or they shot them and don't have them anymore. They're down to a trickle. They're pretty much everything they have is gone. I don't know. Can you name one thing that's not gone? Can you name one thing that's doing well? You know, if you read the papers, you think we're tied. You think we're in a tough battle.

We are roaming free over Tehran, the city, Tehran, as opposed to Iran. We're roaming free. We can do whatever we want. And as you know, today we're going to have the privilege of shooting down a very big electric generation plant, one of the biggest in the world. And one shot to the right location ends the plant. it collapses. And we held off based on the fact that we're negotiating. What do you think was the turning point to make you want to pursue a ceasefire? A few days ago,

you know, you said you wanted to continue bombing Iran. Now you want to pursue peace talks. Was there something that happened? The fact that they're talking to us and they're talking sense. And remember, it all starts with they cannot have a nuclear weapon. Just, you know, I said yesterday, what are the top ten? I said, well, number one, two, and three is they can't have a nuclear weapon. And they're not going to have a nuclear weapon. And we're talking about that. I don't want to say in advance, but they've agreed they will never have a nuclear weapon.

They've agreed to that. How do you ensure they won't have an agreement? Your former Border Patrol chief, Greg Bovino, said his only regret is that he didn't catch more illegal aliens. What's your reaction to that? Who said that? That's your former Border Patrol chief. He just retired. Well, I mean, we captured a lot.

They were allowed into the country by Sleepy Joe and that group of incompetent people that were. He was the worst president ever, the group of incompetent people. To me, that's the biggest scar. You know, inflation, they caused the highest inflation we've ever had. We've already gotten rid of it. The biggest scar is what they did, the people that they allowed from prisons all over the world. They came from the Congo, from all over South America. Rough, rough, rough people.

Really tough people. So, no, I understand what he means. means. He says, you know, he would have liked to have captured more. I'm not capturing so much as removing. You know, removing thousands of people. And many are self-deporting because we're going after them so powerfully that they're self-deporting, Tom, going back. I think that's one of the big unkept secrets. It's, we have thousands and thousands of people, and they're self-deporting. They're going back to where they came from. But what we want really is the criminals. We're really focused on those criminals getting them out.

Yeah. What's your message right now to Democrats and also to Americans that are stuck in airports is really devastating watching it online because Democrats won't fund DHS. What's devastating? What's your message to Americans right now stuck in airports as we speak because Democrats won't well. Well, they just don't, they won't. Look, this is a deal that was done in the great big, beautiful deal, which gave you the biggest

tax cuts ever, including no tax on tips and no tax on Social Security for the seniors. Think of it. No tax on overtime. time. Tax deductions when you buy a car, you take money, pay interest in the money, you deduct it. We've never had that for people buying cars if it's an American car, only if it's an American car. But they are just what they're, they stick together the Democrats. I'd tell you, I give them great credit for that. We have some that will, they're not good stickers. We have guys like Tom Massey and Congress, who's terrible. He's just terrible, terrible person. I call him Rand Paul Jr. But they don't vote. Ren Paul,

I mean, rarely votes for stuff. Likes me. He says, I'm a great president. He said, I'm a great president, one of the greatest presidents. But I said, do me a favor, vote for us, and don't call me a great. I'd rather have the vote than the statement. But we have people that don't stick together, and those people hopefully will someday be gone. The thing I most respect about the Democrats, even on horrible policy, they stick together. What they do have, though, is horrible policy. Transgender for everyone, open borders, men and women's sports. They have the worst policy that you can imagine.

And so whether they stick together or not, I mean, they have just this terrible policy. We have great policy. Republicans have great policy. We have common sense policy, but it's great policy. That's our biggest advantage is our policy is correct. Yeah, please. Mr. President, are you encouraging our allies in the Gulf to be more involved in the Iran operation? Say it.

Are you encouraging our allies in the Gulf to be more involved in the Iran operation? Yeah, I've been a little bit, but more NATO. I think our Gulf allies have been pretty good, to be honest with you. UAE's been hit so hard. I think I got hit by 1,400 rocket, shot them all out of the air with our great, with our great Patriot missiles. Think of it. They shot 100 missiles at one of our aircraft carriers. Abraham Lincoln, one of the biggest ships in the world, actually. And out of a hundred and one missiles shot, every single one of them was knocked down in the sea. Think of that. Think of what

that means. A hundred and one missiles, highly sophisticated, very fast missile shot. At of 101, all 101 were shot down. And now, for the most part, at the bottom of the sea. Pretty amazing, right? Pretty amazing. Our military is amazing, Pete. You know the attack I'm talking about recently? 101 shot. I said, wow. I saw it. You can see we have sort of pretty good equipment that we see.

It's called the red line. Those red lines were thick, right? I said, that's a lot. And then we saw them one by one just get shot. And these guys are due the shooting, the coolest cucumbers ever, you know, most people. You don't have a lot of time. When a missile is going at 2,500 miles an hour, I don't care how far away it is. You don't have a lot of time. But I watched them sit down and think. Great students.

MIT's, a lot of MIT's, a lot of guys like this, and not as much into the muscle as they are, this one right here. And amazing to watch them perform under great pressure. Because they have a matter of seconds to do it. if they don't do it properly, it's a big problem, you know, because these were powerful. These were very powerful missiles coming. And so a lot of people choke. They don't choke. These guys don't choke. They're the best in the world. We have the best in the world. Yeah. Mr. President, what would be your message today to the TSA agents who have been staying home in recent days amid this impact?

Well, some of them are needing money, you know, because the Democratic. cut off their money. I blame the Democrats more than anything else. But some of them, you know, they didn't get paid because they're not funded by the Democrats. This is a Democrat problem. In fact, I actually said to the Senate, why would you say this is a Democrat problem? I think the polls are showing us a Democrat problem. And they'll do anything actually to hurt our country so they can try and win the midterms. And if we ever went back to our old policies, we wouldn't have a country left. If they get a deal Republicans and Democrats in the Senate to fund all but enforcement operations of ICE to get those TSA agents be paid and to open up the rest of the department, would you sign that?

Well, I don't want to comment until I see the deal. But as you know, they're negotiating a deal. I guess they're getting fairly close. But I think any deal they make, I'm pretty much not happy with it. These guys came in. They wouldn't pay people. You know, they had a deal to pay. They had to break their deal. The Democrats broke the deal. deal that we had. It was all done. Everything was fine. And then they just said, well, we're not going to pay anymore. And they hurt our country. And at a very difficult time, because, you know, we are at, as they would say, a war. They call it a war. I call it a military operation, a very successful one, like, successful like nobody's ever seen before. Hey, Venezuela was equally as successful. That was a great thing. No, the Democrats had a deal. It was a done deal. It was a done deal. And then they said, well, we're not going to pay. And so a lot of people suffered over that. And put our country in danger. You have another question? You haven't been here in a while.

Well, in Iran, can you give us any more sense of who exactly in Iran it is either Whitcomb and Cush or others are speaking with? Yeah, we had, I hate to say this in front of these young people. They're not children. I spoke to most of them. They sound like adults to me, even though They are sort of children, right? They'll always be your children. But I hate to say it, but we killed all their leadership. And then they met to choose new leaders, and we killed all of them. And now we have a new group, and we can easily do that.

But let's see how they turn out. We have really regime change. You know, this is a change in the regime, because the leaders are all very different than the ones that we started off with. that created all those problems. So this was, I think we can say, Jason, this is regime change, right? What makes you trust them? I don't trust anybody. I don't trust you.

I mean, that's only because I know you. But if I didn't know you, I'd probably have more trust. But I don't trust anyone. Why bother talking to them? Why do you say that, why do you say what makes you trust? Do you think I trust them? I don't trust them. Then why bother talking to them?

Because they're going to make a deal. They're going to make a deal. They did something. thing yesterday. That was amazing, actually. They gave us a present, and the president arrived today. It was a very big present worth a tremendous amount of money, and I'm not going to tell you what that present is, but it was a very significant prize, and they gave it to us, and they said they were going to give it, so that meant one thing to me would deal with the right people. Is that nuclear-related? No, it wasn't nuclear-related. It was oil and gas-related. It was oil and gas-related,

and it was a very nice thing they did, but what it showed me is that we're dealing with the right people. Because, you know, you don't know, because the leadership was killed, all gone. Comini, all gone, as the expression goes, the past Supreme Leader. And then the new Supreme Leader was racked up, at a minimum racked up pretty good, and everyone else was gone. And then many of the people in the third tier are gone, but we're dealing with a group of people that, I think it turned out. And the present, the gift they made to us was very significant. And they said they were going to do it. And it happened. And they're the only ones they could have done. Jennifer. Was it related to the straight of her moves and the flow of the? Yeah, it was related to the

flow and to the straight. Yeah, it was. Are you negotiating on who's going to control the straight from now on? No, we'll have control of anything we want. Look, if we can end this without more lives being down, without knocking out $10 billion electric plants that are brand new and the apple of their eye. I'd like to be able to do that, you know. But we, they can't have certain things. I mean, you know the things. I don't have to go over the list,

but again, it starts with no nuclear weapons, and they've agreed to that. There won't be any nuclear weapons. They're not going to have, and they're not going to have enrichment, any of those things. But, look, I hate to say that we're in a very good bargaining, position. But, and I hate to say that they're defenseless because, you know, until that last missile is fired, they have little power. But we are in about the best bargaining position.

We're way ahead of schedule. And again, they have no Navy and they have no air force and they have no missile protection and most of their missiles are gone. Most of their launches we've killed. You know, we've killed about 82 percent of their launches. So even if they had a missile, they can't launch it. We've been very effective. We have the greatest military in the world. Nobody even comes close. We have the best military equipment in the world. Go ahead. On Saudi Arabia, there's been some reporting that you've been talking to the crowd prints. Have you been focused on normalization between Saudi Arabia and Israel? Well, no, we have a great relationship with Saudi Arabia. What do you hear with Saudi Arabia? Just hearing that you've been talking and that he has been encouraging you

to do certain things related to Iran. Can you share a little bit? He does. Yeah, he's a warrior. He's fighting with us, by the way. Saudi Arabia has been excellent, and UAE, excellent. And I will tell you, Qatar, incredible. Qatar took a hit, a pretty bad hit. Qatar is very close, you know, they're essentially, you can walk right over the border. Qatar took a hit. They've been great. They've been very strong. Kuwait, they had a little mishap.

They shot down three planes with our missiles. They happen to be our planes. But the pilots made it. Can you imagine the pilots making it? The pilots saw what was coming. And they said, those are patriots. We're not going to escape patriots, and they got out of there pretty quick, Pete, right?

Pretty amazing that they got out. The three pilots lived. They're fine. In fact, they're flying today. Was the Kuwaitis that accidentally fired the Muslim? Yeah, the Kuwaitis made a mistake. They fired. They thought they were firing at the enemy.

It was, as the expression goes, friendly fire, but the pilots are great. They're flying today. Pretty amazing, when you think of it. Yeah. President Trump, on a human level, how hopeful are you that this peace deal will work out, like as a human, on a human level, not as the president of the United States. How hopeful are you that this peace deal will work out with Iran?

You're talking about to end it? Well, I think we're going to end it. I can't tell you for sure. You know, I don't like to say this. We've won this war has been won. The only one that likes to keep it going is the fake news. I mean, the New York Times, you read the New York Times. It's like we're not winning a war where they have no Navy and they have no air force and they have no nothing.

And we literally have planes flying over Tehran and other parts of their country. They can't do a thing about it. For instance, if I want to take down that power plant, that very big powerful power plant, They can't do a thing about it. It's like, take me. That's all they can do. And yet, if you read the New York Times, or if you watch ABC fake news or NBC fake news,

you'd say it's a close battle. It's not a close battle. They're totally defeated. You know, we kill the Navy, and would you say three days, Pete? Gone. In fact, I was a little upset with Pete. I said, why didn't you save the ships? We could have used them, right?

He said it's more fun shooting them down. But the Navy was wiped out in a very rapid order. Pretty impressive for you guys, you champion wrestlers, right, when you hear this out? But you don't, if you read the news, you don't hear this. You know, you read like, oh, they're doing wonderfully. They're wiped out militarily. They are dead. Yeah.

Are you afraid, is there a new sense of a timeline? Do you want to get something done before the midterm? Well, I'd like to see President Putin and President. President Zelinsky, sit down and make a deal. I think they're getting close, but I've been saying that for a while. I've settled eight wars. All of them should have been more difficult than this one. This should have been the easiest one, but these are two people that truly hate each other. You'll find out that hatred is not good for making deals. These are people that they don't like each other very much. Yeah. I know you said there's a bunch of people from the administration who are

negotiating with Iran. There's been reports that the vice president is leading those negotiations, Is that true? Well, he's involved. J.D. is involved. And Marca is involved. And Jared Kushner's involved. Very smart guy. And Steve Whitkoff, smart guy, is involved. And I'm involved.

Why? I'm going to be so big. I don't want to talk about it. I'm the president of the United States, Tom. And I'm not going to talk about it. It's beneath me to talk about saving millions of lives. Because that's what you're talking about. You're talking about saving millions of lives.

If Iran had a nuclear weapon, they would have used it. And if I didn't end the horrible Barack Hussein Obama, Iran nuclear deal in my first administration, they would have had a nuclear weapon three or four years ago. They would have used it. I would have never gotten the chance probably to be president. Who knows you of what it would have been so devastating. And if we didn't send those beautiful B-2 bombers, They took them off my desk.

They were right there. I don't know why. But if we didn't have those B2 hit, which was so we obliterated, despite CNN, CNN said, well, maybe the word obliteration said, no, no, we obliterated it. Just obliterated their nuclear potential. You would have had them having two weeks after that attack, had we not made the attack.

They would have had a nuclear weapon. They would have absolutely used it. And they would have used it on the entire Middle East, including Israel. And you know why you see that? Because unexpectedly, when this war broke out, unexpectedly, they started sending missiles to UAE, Qatar, Saudi Arabia, Kuwait, Bahrain, and elsewhere. And nobody thought they were going to – were you equally surprised by that, Pete? Way more than we thought.

Pete, do you want to give about a three-minute – statement on how we're doing in this, as I call it, military operation. People don't like me using the word war, so I won't. But the Democrats go out of war. How about a little statement? I think he's done a very good job. Do we agree he's done a good job, Mark, what? Can we take some of your time?

Well, thank you, Mr. President. You're spot on. Never in history has a modern military. Iran had a modern military, a modern navy, A modern air force, modern air defenses, leadership, massive bunker. Never has a modern military been so... And that was President Trump speaking live from the Oval Office as Mark Wayne Mullen was being sworn in as the new homeland, a new secretary of homeland security.

The president, of course, taking a variety of questions about the war in Iran, the economy and more. The Dow is about 76 points. It's kind of our most highly sensitive one because the markets are largely unchanged today, showing a little bit more optimism in the markets. As the president has declared, this war has been won. As it relates to negotiations, he says they're happening. He named Jared Kushner, Steve Whitkoff, and he said, I'm involved in the negotiations. Amon Javers is standing by in Washington with more reaction to what we just heard, Amen, as the president continues to defend the war.

Kelly, he also said that the Secretary of State is involved, J.D. Vance is involved in those negotiations, but not saying exactly who the United States is negotiating with on the other side of this transaction. So not really clear who is in charge. in Iran right now and who is negotiating with the U.S. team. The president also made what I thought was a really interesting but very cryptic comment about something that the Iranian leadership did. It sounds almost as if, and this is just a guess here, it sounds almost as if the United States demanded that they do something in order to prove that they actually had command

and control of the Iranian state and they were able to do it. The president described it as a present that the Iranians gave to the United States. He wouldn't give any detail about what that present was. Was it money? Was it something physical? Was it a gesture? We just don't know. But this is the second time in as many days the president has made cryptic remarks as to what's going on in Iran,

alluding to things that he knows that he can't say. Yesterday, he told reporters that the Iranians had, there was some question about where the money was going to finance the Iranian oil purchases. So, you know, are those two things related? Is there some rediversion of the money that's going to buy Iranian oil to some other entity? You know, we just don't know as we stand here, but the president in two days has made very cryptic remarks about where the money is going that's buying Iranian oil. And now today about a present that the Iranians gave to the U.S. government.

So we'll try to find out more. I'm not sure that the White House will tell us anymore because the president signaled that was as much as he wanted to share. Right. But it's great that you picked up on that name. And I also think people in the markets are highly attuned to this action that president keeps talking about that would be a bombing of the electricity generation plant that he says kind of basically powers to Iran or Iran. Now, a lot of observers have commented that that would be a war crime. But I think in the markets, while that's being prosecuted, whether or not that actually happens, the concern is what knock-on effects this escalation would have if it does escalate.

So I think hearing him talk about the choice not to do. do that, whatever it would have amounted to might give people a feeling that the most acute moment that that might have happened would have passed. Yeah, and I think that was the walk back yesterday, right? I mean, remember that the president had said that he would do that unless the Iranians, you know, gave in. And yesterday what he said was, well, actually, the Iranians are talking to us. And so now we're not going to bomb any of their power plants. And we're going to allow them to have this five-day grace period. So, you know, is the president going to be intent on doing that? It's unclear, but clearly one of the things he wants to do is to preserve civilian

infrastructure in the region so you don't have sort of mass chaos and, you know, breakdown of civil society in Iran after the war, presuming that he can still get a government in place that he can deal with, which seems to be his strategy as of right now. All right. Amen, thank you. Thank you. Appreciate it for now. Amy and Javers at the White House. I want to mention some of these big moves we've been seeing not so much in the stock market, but in the bond markets today. The two-year yield was up 13 basis points at one point after a $69 billion two-year auction this afternoon. That offering saw weak demand. Rick Santelli gave it a deed. The rising price of oil is keeping investors on edge. It's tamed down a little bit. We're up about nine points intraday now, and we're seeing some global bond moves influencing our tenure as well. We'll have a lot more power lunch right after this. Stay with us. All right, welcome back to Power Lunch. I'm Brian Sullivan. We're here at the Sierra Week by SB Global Conference in Houston, Texas, and we've got a big interview to wrap things up. Brad Smith, the Microsoft is here.

Let's talk data centers. Let's talk energy. Let's talk nuclear. Let's talk. Brad, welcome. Good to have you on. Thanks for joining us. It's been a crazy hour.

Let's talk about what's going on with the world because there's some chatter here at the conference. Will what we see globally with the war on Iran? Will that trickle to the United States eventually? It hasn't yet. Natural gas price is still three bucks. And will that damage or dent our AI, Microsoft's AI capital spending plans in America? I think we're resolute. We need more data center capacity.

Our customers want us to provide them with more services. We need to keep investing and we'll keep on that path. So there's nothing on the table right now for Microsoft where you guys have gotten together and said, well, maybe we should pull back on our spending plans. Hasn't happened yet. When you have more demand than supply, you need to grow supply. It doesn't mean that there are not supply chain complexities arising out of the events in the Middle East, but we are experienced in managing supply chain complexity.

How complex. It already was complex the last month or so. Does that add a layer of complexity to you if this were to go for another couple of months, would that add other layers of complexity for Microsoft? Well, I think not in ways that would or should disrupt our ability to keep moving forward to serve our customers, including in the Middle East itself. Obviously, you have ripple effects when you have things like petrochemicals. We use chips, memory chips that are manufactured in Korea.

They need to run on electricity. The electricity may be based on LNG coming from the Persian Gulf. The world is quite interconnected, but I think part of running a global company, especially a global infrastructure company and cloud platform and AI services, it's about managing that. And there will be a day. I don't know if it's tomorrow, next week, next month, next year, where this is behind us, and we look to the future.

You're big in a nuclear. You just had a big blog post on nuclear as well. Does what we're seeing change the way you think, Microsoft thinks about nuclear as a more viable option versus a fuel like an LNG that can be, as we now know, disrupted a little more easily? Well, I would say this month is a powerful reminder to all of us in the world of what people in the energy sector know every day. The world, our prosperity, our standard of living is all dependent on a diversified set of energy

sources. For a company like Microsoft in our data centers, we're having to build more data centers, bring in more electricity, do everything we can to ensure we don't impact the electricity prices of our neighbors. That does mean more sources of electricity, including nuclear as one. Yeah, so what is the nuclear plan for Microsoft? Well, for us, we have already started down that path. We invested with Constellation with Crane to restart one of the reactors at Three Mile Island.

That will bring almost a gigawatt of a lot of. electricity onto the grid. We're looking at a future with SMRs, but we're also looking, as we announced today with Nvidia, to create solutions, AI and cloud solutions so the nuclear sector can better design, permit, build and operate, in effect, build up the nuclear ecosystem that everyone, I think, in the United States would benefit from having. And we've been here for two days talking about some really serious, heady stuff, stuff that's happening on the ground, and that is incredibly relevant. But I'm But I want to wrap it up by looking up to the stars a little bit, looking, being optimistic.

Data centers in space, yes or no? Never bet against Elon Musk. What about Microsoft? We have our feet on the ground. The guy named Satchanadelli is a pretty big thinker. I don't know you've heard about this guy. You know, in a way, it's great for humanity to aspire to do new things. Let's master in 2026 what we need to build on planet Earth, and we'll follow closely, the progress of SpaceX.

It's always an exciting company. I just wonder if Microsoft maybe has its own little secret space plan built in there, Brad. You know, free to share it with us. No secret space plan unless it's been a secret from me. Okay, and I can't imagine that it would be being the president of Microsoft and the man, largely with a huge team, great team behind you, responsible for so much this build out. Brad Smith, President of Microsoft, really appreciate your time. Thank you very much for joining us.

Thank you. All right, so we're going to wrap up our coverage here from Sierra Week by S&B Global. There's a lot more, by the way, content online as well. You go to CNBC.com slash power dash insider. Just CNBC.com. There's a lot of interviews that we did here over the last two days. Great team, Vinny, Andy, Harriet, Jose, the whole squad. Appreciate it.

Thank you all for watching. closing bell overtime starts right now.