Power Lunch - Semiconductor stocks keep surging 4/22/26

Episode Date: April 22, 2026

Brent crude oil ticks back above $100 per barrel. Noble Black of The Corcoran Group joins to discuss real estate.   And what is the options market hinting about Tesla earnings? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Tech and your money remain red hot as one of the best trades of the market on pace to set another record today. Welcome to Power Lunch, everybody. She is Kelly. I am Brian, the market. Kind of seems to be in a post-Iran moment. Investors looking past the headlines and more to earnings. And with more big names set to report is the money-making trade Kelly only just beginning. And Manhattan real estate is making a comeback.

One top broker says a surge in luxury demand and a shortage of inventory are pushing prices high. the median sale price up 9% from a year ago. A new proposal in New York City could threaten that momentum. Noble Black from the Corcoran Group will weigh in today. All right, welcome everybody. All the major averages. Hopefully your money is up today. President Trump indefinitely extending the U.S. ceasefire with Iran

or whomever is claiming to run the country. This after another Iranian faction led by the military seizing two ships in the Strait of Hormuz. It's actually the first time they've done so since the beginning of the war. But the market, right or wrong, seems to be looking right past those headlines because markets are up across the board. And as we noted at the top, the tech trade remains red hot. And here's a great RBI for you. It's actually baseball related. The Philadelphia Semiconductor Index is now up for a stunning 16 straight sessions. And if the socks ends higher today, it will officially

have the longest win streak ever. Basically, the Sucs. is the exact opposite of the New York Mets, who've lost 12 in a row and in their longest losing streak in 24 years. Let's talk more about the markets and your money and thankfully not baseball. With Brian Levitt, he is chief global market strategist at Investco. I saw that we weren't going to ask you about the Mets.

Don't worry. I don't know if you're a Mets fan. If you are, you don't have to admit it on national TV. I thought the baseball reference was about the socks, the white socks or the red something. No, it's our socks, the Philadelphia. Yeah. It's not the 1986 World Series, the Sox and the Mets. No, but great poll, by the way.

Very good pull. What do you make of this, I don't want to say new attention in the market, but certainly this renewed attention in technology. It's really something. It is really something, and it's part of a structural, secular trend that's going on in the market. I think people had historically thought of semiconductors as being more cyclical. There was some concern earlier, or late last year, about the valuations on it. And what you continue to see are the earnings deliver, you see

forward valuations, not all that excessive, and you've got a lot of big companies that continue to plan to invest in it. And now I don't know if you've heard of this Invesco QQQ. It's a pretty hot ETF. A couple trillion dollars in money. You're obviously, I'm being facetious. It's your ETF. So much, Nvidia's the top holding. But if you look at the top 20 or 30, a lot of semiconductor or related companies in there. If those stocks, go up, given the weightings, Brian. Is it pretty hard for the market overall to go down if semiconductors and tech go up? Yeah, that's true.

I mean, the concentration in some of these indices will make it hard for the markets to go down without tech leadership. But I think other things to consider is a broadening of the market. So if you remember coming into the year, most of the major economies were starting to expand. Fed was going to lower interest rates. that's when you want to start diversifying your exposure as well, expecting a broadening of the market. And really, you've seen that. You saw it for the first two months of the year.

You saw it get disrupted with the war in Iran. But really, since the middle of March, emerging markets up, midcaps up, cyclical's doing okay. So it's not just tech that's leading this. It is a broadening of the market, which tends to be healthier. Tends to be healthier. There still are a couple of questions to be answered. namely, why are small caps breaking out? What does that tell you? So small caps are breaking out amid the expectation that we're going to get right back on the path

of the global expansion that had been really considered at the beginning of the year. And also the idea, I mean, think about the Federal Reserve was expected to lower rates multiple times this year. That got priced out with the war in Iran. Interestingly enough, it got priced out without really any incident in the credit market. which I think is a testament to the fundamental health. The markets, again, starting to think about lower interest rates, a better economic and lower interest rates on the short end, a better economic environment,

and the earnings for small businesses have been quite good. I said for over a month that the Strait of Hormuz map that we bring up all the time was the most important map for the markets in the world. I don't think that's true anymore. We see headlines every day, Kelly, where this ship, that ship sees fire, but we don't know because we don't know who's running Iran.

The president confirmed. what we've been reporting for a month, really yesterday. Does that matter? I mean, it matters to humanity and it matters to Iran. I'm not saying it doesn't matter overall, but for our equity markets, technology, things you track it in Vesco, I would imagine that's not the most important map in the world anymore. It certainly matters from a humanitarian perspective.

It's a market that has chosen to look past it quite quickly. historically, if you look at events that take place geopolitical events, if you come into them with the market, with the economy in a reasonably good place, you tend to be positive a year out from those events. So that was our expectation. We came at this with good fundamental strength. It wasn't like 2022 when Russia went into Ukraine and inflation was already 7%. We had very contained inflation coming into this.

Now, look, none of us are military strategists, but what you need to look, at is what are the markets telling you? And the markets are telling you that we're not a very energy-intensive economy anymore. Credit spreads, like I said, have tightened. Five-year inflation break-evens relatively stable. The dollar is weakening. So the market is telling you, yeah, it does not matter to the extent that many people thought it might have mattered just six weeks ago or seven weeks ago. In this incredible performance in the semis, it'd be one thing if we were in 2022 coming off of the lows, you know, to be, to see 35% gains in 20 trading sessions, maybe or less, maybe 15 days for an index that's already done so well is, I mean, it's hard to fathom in some

ways. Yeah, I would be careful. You know, investors might be thinking about that big move and think that something ominous is going to happen or that there's been this incredible shift in, in valuations. Reality is the companies are delivering. It's not necessarily ominous. It's supposed to be a leading indicator for the rest of the market. Exactly. If it's that strong for the semis, you know, it does make you wonder, could it be strong for the broader market? Well, it's certainly a testament to what the businesses intend to invest.

And the businesses tend to invest, of course, is a significant input into your GDP numbers, which is aligned with your corporate profitability. And corporate profitability, the expectations continue to go higher. like I said earlier, the valuations based on forward earnings, not as excessive as people thought. Remember, last year was all about the AI bubble. When was the last time anyone asked me about the AI bubble? Well, they will. It's a great point.

And by the way, you have an article out on the Investco website managing the cognitive dissidents of long-term investing. Maybe that's what you're talking about. Because of the Iran War, we've kind of stopped talking about some of the other things that we were talking about before it. AI bubble earnings. My point at the top was I feel like we're kind of going back, good or bad, to talking about those things. How do we manage the cognitive dissonance of long-term investing, Brian? I mean, I was talking about the cognitive dissonance from the perspective of, you know, how do I hold two beliefs in my head? I know that markets tend to go higher over time.

Yes, but they're scary. Like war headlines, ships fired upon. Drones hitting super tankers. Scary stuff. I know people that have called me, text me, probably you do too. Kelly, should I sell everything? Should I sell everything? Because they don't know if it's going to be World War III. Oh, right. But if it's World War III, you have far bigger challenges than your investment portfolio.

I mean, we went through the same thing from April 2nd through April 8th of last year. On April 9th, if you missed 9.5% up in a single day and meaningfully deteriorate your return. So investors need to stick to the fundamentals. Like I said, none of us are military strategists. We don't know precisely how long this will go on. But what we do know, if we put it into context, markets usually do. do well in the months after it. Oil prices tend to abate. And what we can discern is how are the credit markets behaving? How is corporate profitability delivering our stocks overvalued? You know, I would

be worried if we were an over-levered economy. Inflation expectations were rising. The Fed wanted to raise raids. Credit spreads were blowing out. The dollar was strengthening. None of that's happening. So my cognitive dissidents is, yeah, it's a little scary, but these other things are pointing me in a better direction. You know, there's a benefit, I guess on my end, from a little, from a longer time horizon, but if we're talking about long-term investing, you know that high risk is how you get high reward. And so, in other words, even a recession, you have to welcome the volatility in order to get

those long-returner. So for a long-term investor, I think it's not so much the straight of Hormuz or anything that would bother me. I think the discussion would turn more towards tax rates or business competitiveness or, you know, the American innovation engine and things like that, where I'd be more interested in things that would cloud those developments, then I would worry about even dramatic news events of the day. Right. And what we know and what the market is telling us is we've got a pretty big structural theme here taking place with artificial intelligence and the build out of that and all

of the demand that that is creating for memory and for chips and for what that's doing to support the industrials. And we don't even start to think about, you know, what is that going to mean for all of the sectors that start to benefit from it and, you know, which ones do we look to? Things like financials, things like health care, that are likely to benefit from. If you look at businesses right now, profits to the number of employees they've had have never been higher. Companies are getting productivity gains. They're benefiting. They're profitable. And that's why the market is to be a higher. I feel like, you know, if you look at history, not to be a weirdo, but like, if you look back in a 30-year period, the world basically invented radio, sort of flight didn't invent

flight. Birds did. But you get my broader point. The Wright brothers out of old Dayton, Ohio. Not North Carolina, by the way. And the automobile, we're all kind of created in the same 20 years. Now, if the world could have just not gotten in its own way and gotten greedy and stopped having wars, we might have been okay. I feel like we're at that moment right now where the internet was really created 25 years ago. It's truly maybe the strongest bull market in the history of modern humanity. We'll leave it there. Brian Love it. How's that for an end? It's an optimistic note. Do you have a favorite baseball team? New York Yankees. Oh, okay. I mean, great. Great. Great.

Yay! They all live right here, by the way, half of them. Like about a mile from this office. Brian, thanks. Let's check on global bond yields. The benchmark 10-year U.S. Treasury is around 429. The Japanese tenure is around 2.4. They're kind of inverted there.

And the central banks of both of these countries are set to meet next week. Rick Santelli has more from the CBO. CBOE, CBOE, CBO, right, Rick? Yes, and I'll tell you, Kelly, inverted doesn't quite cover it. It is a little misleading and you'll see why in a minute. Let's look at the home front first. Here's the one week of tens. Something should jump out at you.

We've had some volatility a little more than we had a couple of weeks ago, but we're still in a range. We're still, you know, a couple of basis points either side of 4.30. So let's do a mental experiment with all these long rates. Okay, so we're hovering at 4.30. Let's go to the next level up. When was the last time we were around 4.5 percent? Well, let's open the chart up. Around May of last year, not that long ago.

You mentioned the JGB hovering at 2.4%. So when was the last time it was at 2.5? Go way back. We're talking 4th of July, 1997. 97. Okay, let's stick with this. Let's go to the UK, the guilt, okay? Hovering around 490.

When was the last time, it was over 5%. 2008. And finally, let's look at the Boone out of Germany. It's the benchmark for the Eurozone. It's hovering right now at what, around? 3%. When was the last time was it 3 and a quarter? 2011. There's a point here. The point is that U.S. markets have higher yields than everything other than the U.K. But there's the interest rate differential. There's a lot of moving parts here.

But on a comp basis, I find it's so interesting that outside of the U.S., these long-term rates are definitely playing with history going in the way, way back machine. Today, UK had inflation numbers. They were warm. Let's not lose sight of it. of the fact over the next couple of months, even if what's going on with energy and based on the conflict doesn't make it metastasizing the U.S. economy and things come down. Overseas, it's a bit of a different scenario. Look for those inflation numbers to remain on the warm to hot side for the next several months. Back to you. Good point, Rick. Thank you very much, Rick Santelli. The ceasefire back and forth between the U.S. and Iran has oil prices ticking back up again. Is $100 a barrel crude the new normal?

We'll get into that after the break. All right, the energy market's still processing, really the fast-moving everyday developments out of the Middle East. Brent crude, for example, look at that. It's at $102 a barrel. President Trump extending the ceasefire with Iran. He says the move was warranted because of what he calls a, quote, seriously fractured government in Tehran.

Folks, that should not surprise any of you if you've been watching or listening to this program, as we have been reporting, our source is telling us there are more than two or more parties claiming control of Iran are parts of it. And if that were not enough, just hours after Trump's announcement, Iran's Navy, again, or what's left of it, said it seized two container ships in the Strait of Formuz. Iran or its military also reportedly attacking three ships in the waterway. Let's try to make sense. Let's bring back in our friend Rapidan Energy Group founder and President Bob McNally. And I hate to be so obtuse.

I don't like the headlines to say Iran says this, Iran says that, because Bob, my sources, maybe your sources, tell me if not. They don't know who, quote, Iran is. Is there in your mind a functioning government speaking for the majority of the nation? Brian, great to be with you. Functioning, yes, but also very fractured. I get this from my colleague. He's been on CNBC before Scott Modell, former CIA field officer, knows Iran, speaks Farsi.

very plugged in. I just asked him. I said, Scott, I'm going to be asked about this. He said, look, there are fractures. These decapitation strikes, Brian, they've killed a lot of people. Now, they plan for that. There are spaces, but you've got mid-level, ambitious guys, guys mainly, not too many gals, fighting for these positions. So there are fractures. But what Scott tells me is this. It's no coup. No one's a reformist, and the government's not allowed, not about to fall. So while they're having a fight on the 12th floor for who, gets to sit in which chair and they're different groups. It's fractured, but functioning, I'd say, Brian. That's our view. Fracturing. I would love to know what you and Scott

might think about this then, because what my sources were pretty doggone good, maybe some of the same as yours, Bob and Scott, what they're talking about is this idea that some of these, ICRG or IRC members, the military effectively, the bad guys with the missiles, they're dead. If this war ends and they're cast out, they have no future. So they got to fight to the end anyway, because if reformists take over, they're gone. In one way or the other, they are not going to be, shall we say, welcomed back in by a population that they have been brutally putting down for 40 years. So with that in mind, we all want peace, but what's going to stop somebody, and this goes to your world, on the beach with a bazooka or whatever on their shoulder, from shooting at a supertanker?

Right. No, definitely they have a hang together or hang separately, you know, challenge. However, Brian, I would say this. They think they're winning. They're not worried about the mob. They have the guns. The people are cowed. They may face a bigger risk of overthrow than perhaps. Maybe your source are right on that.

I'm hearing these guys are in power. They're having a fight on the 12th floor. They're not afraid of the people. They've cowed them. And they're winning and they're winning against President Trump. They are ready to eat grass for six months to keep their chokehold on this jugular, to wait for those oil prices to go even higher and eventually equities to go lower. And they think they're going to end up surviving this conflict, having taught a lesson,

and maybe even with some control over the Strait of Hormuz. So I would just describe them right now as not fearful, confident that they have the upper hand. Bob, all of that said, the situation is worse now than before the war started. The oil price is higher now. It's unclear. I mean, maybe to our recent guest's point, it comes down to the same. 60s or 70s by year end. The stock market is saying this is not impactful. Right. One of the fascinating, there are two things that surprised me, and I think many about this.

One is we waited so long before attacking Iran's capabilities to disrupt shipping in Hormuz. Why we waited weeks and now we paused, that makes no sense. I'm not a military strategist, but that makes no sense. The second is this disconnect between the financial markets, the equity markets and every barrel counter I know, myself included, who sees a disaster coming. It is amazing to watch. I think it has, it's due to the fact that no one expected Hormuz to be shut for more than two days. It was a load-bearing assumption in economics, and people still can't believe it. Number two, remember, we've talked about this over and over again in recent years. Since 2019, we've had Boyukried Wolf over and over again in the oil markets.

2019 Abkhake attack, Russian invasion of Ukraine, bombing Iran last June, each time. oil prices spiked, and they went nowhere. There was no disruption. So the smart money has said, I can't believe hormones can be shut. President Trump can stop this anytime he wants to, number one. Number two, every single disruption risk I should have faded. And so people believe this can and will go away soon. And I think that's sustaining this reservoir of hope and confidence that this is going to end soon.

We've got to go, Bob, it out quickly. As a barrel counter, how much does China's 1.2, 1.3 billion barrel of oil stockpile mitigate the economic damage here? A lot, a lot. It's bad enough in Asia, but China's not desperate. That means they're not pressing too hard or acting desperately in the region, in the region of the Gulf or in Asia. So I think the fact that China is stocked up and feeling pretty good, doling out some products here and there to country. That's good. It keeps China calm, and we want China calm right now. I'm glad they have that $1.2 billion. I bet they are too.

Bob and Daly, Rapid End Group. Really appreciate your insight, Bob. I know you're in demand. We appreciate you taking some time, my friend. Thank you. Thank you. Let's get to Amon Javvers with more news from Washington. Amen.

Kelly Janine Piro is doubling down on her investigation of Jay Powell, the U.S. attorney for the District of Columbia holding a press conference a short time ago in which she said that she is going to appeal the decision of Judge Bosberg. You remember that they had issued some subpoenas to the Fed. demanding access to documents, which documents we don't specifically know, but demanding some information of the Fed, Judge Bozberg, a federal judge, quashed those subpoenas saying that they appeared to be pretextual. That is, there was no substance to this investigation of J. Pal.

Piro, in her news conference just a short while ago, said, the investigation continues, I am in the legal lane. There are others who are in the political lane. I don't intersect those two lanes. I am going forward, she says, we are appealing the decision of Judge Bostberg. She says the idea that a judge can stand at the door of a grand jury and tell a prosecutor, you're not allowed to go in when the United States Supreme Court has said you can go into a grand jury based on rumors and suspicion is an order that we think must be appealed and we are continuing this investigation. So this standoff between the Department of Justice on the one hand and the Federal Reserve

on the other will continue with this. appeal. The question is, what does that mean for Kevin Warsh and his confirmation up on Capitol Hill? Senator Tillis has been adamant that he will not advance Warsh's nomination until this DOJ investigation has been shut down. It's not being shut down. That means Warsh doesn't advance. That means we're in limbo about who controls the Fed for the rest of this year, guys. Exactly. Amen, thanks very much for that. We appreciate it. And by the way, Amon, we thought we might hear from the Supreme Court this morning or in any of the upcoming days about the Lisa Cook issue. Yeah, we were, you know, we get all dressed and ready for all these. We know that the decisions

are coming down at 10 a.m. We're ready to go and we just kind of wait. And each week, it's been a case where the Supreme Court has issued, you know, a bunch of other things, but not this Lisa Cook decision. And it's fascinating. You know, why is this taking so long? All of the analysis of the court, you know, all their oral arguments earlier this year was that the court's seemed very skeptical of the president's attempt to fire Lisa Cook and said that this might be just a pretext and he doesn't have the authority to do that. Yet they haven't issued the decision. We'll wait. Right. Okay. Amen, for now, thanks. Amy McJavvers. Coming up, Bitcoin closing back in on the 80,000 mark. We'll talk it over right after this. Welcome back, Bitcoin hitting a high of 79,018

today. It's its highest in about two months. For more on that, let's get over to McKenzie Segalos. Mac, it's still down about 9% year-to-date. But everything going for it right now, that's part of what this comeback is about. So on the institutional side, in the last six trading days, you've seen those spot Bitcoin ETFs, all net positive on flows,

adding $1.5 billion. That's after a long losing stretch in terms of those ETFs. And then that digital asset treasury trade, we talk so much about those crypto treasury equities. And for a while, they were among the worst performers, in public markets, but now we are seeing this conviction, a lot of those names in the green today,

Bitmine immersion and Strategy. And what's key here, Kelly, is the fact that they are adding to their position. So last week, Bitmine Immersion, which is an ether proxy, it's Tom Lee's digital asset treasury name. They added their biggest weekly haul since mid-December. And then, crucially, Monday, Strategy, our big Bitcoin Bull bought two and a half billion dollars worth of Bitcoin in a single trade. That's one of their biggest on record. Wow. So you think that's changed or kind of at least given some new life to a trade that, you know, I don't want to call it dead. That would be saying too much. People have made too much money. It's still way higher than it was a few years ago. But, you know, I always just look at the leading edge, those kind of first movers who might now be into data centers and things like that where you just wonder, do they kind of know that the best days are over? Well, I think that part of this is, I mean, part of the trade is also to do with just global macroeconomics events that are rippling into Bitcoin. So anytime you see a promise of an end to the Iran war, you start to see Bitcoin go up.

And then also with the war shearings, the promise of potentially somebody who might slash rates, more easy money coming back into the system. That's always good for a risk asset. But as for whether this trade is over, it's winding down or if it's already passe, a lot of people within this community, would argue not. And part of that is the fact that we're just getting, you know, it was just last month that the SEC and the CFTC issued guidance that the industry has been waiting for, basically for its entire existence on what is a commodity versus what is a security. They put 16 names into the commodity basket, which is pretty huge. And so what everyone is waiting for is for the Clarity Act, which basically will open the door for banks, Wall Street banks, to be able to actually custody these coins, trade them without risking running afoul of securities laws.

All right. And I think, you know, if it crosses above 80 and can kind of show that it can keep going, and you're going to start getting all those takes again, about $100, $2.50 and all the rest of it. So this is the first step in that journey, I think. Mackenzie, thanks very much. McKenzie Segalos. All right, coming up, we're going to talk real estate and ask a very simple question. Why isn't anybody selling their house right now? Let's talk about the health of the housing market. This should be the peak selling season of the year, the spring selling season.

But existing home sales had a nine-month low in March. We'll get the new home sales data tomorrow. Mortgage rates remain stubbornly high, with just a slight drop over the past month to 6.3% or so for the 30-year fixed. One bright spot has been the New York City luxury market. But could that momentum even stall, as the city now considers an additional tax on second homeowners? Here on set with us is Noble Black from the Corcoran Group. It's great to see you again. Thanks for having me.

And Brian referenced us into the break as well, this idea that kind of not much is happening. It's been a very frozen market for the kind of the broadly speaking. Do you see that starting to change it all or no? Not really, frankly. I mean, we're all hoping that it does, but that's kind of a common conversation we're all having, not just in New York, but my friends across the country. We'd all be doing a lot more business if there was more inventory. And it's a matter of where that inventory is.

There's plenty of inventory if you want to look in general at the market, but it's in places that buyers are not wanting it. So it's in offbeat areas, it's in places that need work. For something that's in a prime location, and especially towards the higher end, buyers want something that's turned key. They don't want to do any work at all. There's very little of that. Is there a mortgage rate? And we're going to talk about New York in a second, but that's its own thing.

From Maryland or Virginia or California, Indiana, is there a mortgage rate, which would not be 3%. I get it, but would be low enough that would entice people to sell? Look, I think if you get to 5%, that's a meaningfully different place than where we are now. I think it's also a matter of moving in that direction. So, you know, we came into the year with a lot of headwinds, particularly in New York, or a lot of tailwind. Sorry, we were doing very strongly. Rates were coming down. We thought they were going to be coming down further.

That helps a lot with sentiment apart from the rates. In New York City, we're basically like 80% all cash deals anyway. So it's not so much people getting. 80%? Wow. Yeah. Not 8%. Did I miss 18?

Am I getting old? Kelly, what's the number? 8,0? All cash? All cash. Who are these people? CBC viewers. Exactly. We were just talking, right? There's a lot of people out there with a lot of money. And especially in New York, you'd be surprised. Even on a healthy market, when rates were lower, we saw 50% of the deals being all cash. But especially with rates being so high, people just aren't taking the financing. But I think once you get that trajectory started going

lower, you get more people coming in. They feel more confident. But look, if you're asking for a number, I would just. say 5%. 5%. And that may or may not be doable. So what happens in the meantime? We've heard a smattering of proposals in Washington that may kind of help on the margin. Anything jump out to you? No, I think it's positive that Washington is concentrating on it. I think that obviously there's a problem in terms of affordability. I think there's a lot of different solutions that are being floated. I think the biggest thing that Washington can do is kind of set forth some programs and kind of examples of how to cut red tape, right? A lot of the different state and location

They may have great aims that we all can agree with, but it's getting in the way of development. And in general, the only way we're going to get out of this is more supply. We need developers to come in and build more housing. And if it's hard or if it's uneconomic to do that, that's not going to happen. So if we can set a framework in Washington can do this, that the states and localities can look at and say, this is the way that we're going to streamline things. I think that's really beneficial. How much did COVID change the landscape for real estate for a decade plus?

I think in a huge way. I mean, I think for... It pulled forward millions of sales. 1,000 percent. And that's exactly what it did, right? So you're seeing, you know, it pulled forward people in places like New York that were already thinking they may have little kids and they're going to be moving out. They went ahead and sped that up.

And you're still seeing a shortage of supply in a lot of the suburbs surrounding great metropolitan areas. You're seeing in the sunbelt some other places where it was easier to build. And so there's almost oversupply in some of those places, right? Especially as they've gone or pulled down. but back to the office or back to those kind of northeastern Midwest markets. Exactly, right? And we're seeing some of that with Florida.

People that move back, they're moving back up towards the northeast. So we're still working through that. But to your point, I think it probably would be a decade before we get back to kind of a steady state. All right. So what do we do? $5 million if it's your second home. What's the tax you're going to have to pay? Well, they haven't said officially.

So what they had proposed last time this was floated was starting at $5 million, if it's your second home, graduating up to 4% annually. Wow. for anything 25 million or above. Okay, wait a minute. So you would have to pay 4% of the purchase price? Four, well, again, they haven't announced that. So how are they going to assess it?

We don't know. They haven't come forward with details. So even if you don't buy a new property, this is just if you live in one of it. So if you live... You live in an apartment that they determine is worth $30 million. And they haven't said, as far as I've seen, how they're going to assess that. But it's your second home. It's your second home.

Then it's going to be, according to the old plan. And they're wanting to raise the same amount of money, if not more, for, percent annually. So if it's a $30 million apartment, it's $1.2 million a year that they're expecting you to write a check for. Well, the simple answer for that, not that I'm an expert in this, would be just convince people at your first home. I mean, just be like, yeah, we live for, now they can go after the income taxes. I get it. I think that's a lot of what some of them are wanting, right? I think there's this mentality of, oh, people have moved away, so this is a way to get the money back. But people are not going to do that necessarily. But here's the

foolish. I'm sorry. I know there's a race to get tax money. Let's be, folks, New York City's budget has almost doubled in 15 years. Right. And the population is barely moved and the poverty rate has gone up. So somebody needs to ask, where's the money going? Where's the, there's rant over, Seacrest out. My issue with the pit of tear tags. You know my point, but these people aren't consuming services.

These are people you want. They come in a couple weeks a year. They spend a bunch of money. They go home. Their kids aren't in school. One thousand percent. They're kicking in the cash, but they're not using the resources. Correct. And they're employing designers, architects. They're going to restaurants. They're going to shows.

That's right. Shopping. We need as many of these people as we can coming in and supporting the city. Why we would make it less market. They're not a burden on the system at all. Not at all. I wonder if one of the points of view is, well, because Manhattan is an island with a finite supply of housing, are they literally trying to force people out of more expensive housing in order to kind of push more of that housing down to the lowest, you know, more affordable? I don't know. So the number of apartments that this would apply to is apparently around 11,000. So I've seen an estimate saying 11,000. Some people say it's as high as 13,000. They're actually looking at the number of apartments that are going to raise the revenue is only like 2090 apartments, right? 290 total apartments might qualify as second homes that are worth $5 million or more.

No, that number is more like $11,000 to $13,000. But the bulk of the revenue they're talking about gaining, which is $500 million, is only going to be from those really expensive apartments getting to 4%. getting wealthy people to stop buying apartments that are valued at $50 million is not going to ease the housing shortage in New York. What it is going to do is mean that certain buildings that are employing a lot of construction workers don't get built. It's going to mean that a lot of buyers that are buying these apartments employing an army of people don't continue to buy. And what percentage is like people who live in Dubai? They're not even, they don't even live in the United States full time.

It's a meaningful percentage of that international, sorry, of the pita terror market. Yes, that's what I'm saying. You got somebody coming over from Abu Dhabi for two weeks a year. So to your point, it's not like these are people that moved to Florida to escape income taxes. These are people that were never a residence here. They just choose to own something here and support our city. We should be encouraging them to come. Wasn't there also a proposal to do something with the broad property tax?

There was. I think Mandami had floated the higher income tax. And when it looked like Hukal wasn't giving on that, he wanted to increase property taxes across the board. Is that still on the table? As far as I know, no. What happened back in 2018, I think, when this peer tear tax was less floated, at that point, they raised the mansion tax. So I think there's some talk, maybe this would become mansion tax or higher transfer tax. At least then it's a one-time tax.

It gets baked in. Right. I'm not encouraging that, but I think that's certainly less harmful than the pitotera tax. It's always, anyway, it's always about, they never, they never, they never, they never, where's the money going? Well, you need to look. I don't have to answer that. Nobody can answer it. It's just the money goes.

It's a good headline. The budget's doubled in 20 years. The population is barely budged, and the money's just gone. Like, where to go? I don't know. All they want is the headline of we're taxing the rich. It doesn't matter. That's it.

That's it. That's right. Luckily, I live in New Jersey where no one cares. Where it's so much better. See, thank you for laughing at that. I heard that. Noble, thank you. Thanks for having me.

Good to see you today. Noble Black with the Corcoran Group. All right, let's get now over to Angelica People's phrase CNBC News Update. Hey, Brian. Clearing mines from the Strait of Hormuz could reportedly take six months, and the Pentagon is unlikely to undertake such an operation until the war with Iran ends. The Washington Post reports the Defense Department informed Congress of that assessment during a classified briefing earlier this week, calling it the clearest sign yet that gas and oil prices could remain high long after any peace deal is reached.

Congressman David Scott has died. Minority leader Hakeem Jeffries confirmed his passing, calling him a trailblazer who's served his district admirably. Scott was the first black man to chair the House Committee on Agriculture, first elected in 2002. The Georgia Democrat was serving his 12th term. He was 80 years old. And NFL executives defended their media rights strategy in a meeting with the Trump administration regulators. That's according to an FCC filing today. The meeting came after the FCC launched a probe into whether shifting more games to streaming services is harming consumers. According to the filing, the league pointed out that 87% of its games are still on broadcast networks. Brian, back over to you.

Angelica Peoples, thank you very much. All right, coming up, it is time. The first of the magnificent seven so-called tech stocks reporting their earnings tonight. What is the options market telling you about how Wall Street may be setting up for it? You'll know, but only if you stick around. Massive mega-cap earnings report after the bell in just a couple of hours. The company, Tesla, down the options setup. Susqueh on a co-head of Derruder strategy. Chris Murphy, Chris, always love your stuff. What is the options market potentially indicating about Tesla? You know what? The options market, first of all, it's pricing in a 5% expected move. That's actually a little bit below its average move. Tesla's had smaller moves over the last couple.

And so the options market is pricing that in. Now, the options flow that we've been seeing is mostly taking advantage of the fact that it's the cheapest earnings move in a while to buy those options. And like everything else, the bias is shifting towards the calls as people have been chasing this rally, have been kind of under positioned and using the options market, particularly the calls, to catch up. Yeah, is there any indication that the option set up is some indication of a hedge the other way? Because whenever there's options, you can say, well, people are maybe they're positioned the equity one, and they're using options to hedge that out a different way? Yeah, 100%.

And I would actually frame it as over the last couple of weeks, everyone has been really caught off sides. So you're not necessarily buying calls because you're hedging the fact that you're short the Mag 7. You're buying the calls because you're hedging the fact that you are underinvested in the Mag 7. And you're thinking, hey, if this thing continues to rip and I'm underinvested, my boss or my investors or whoever are not going to be happy with me. But I can buy some upside calls. And if the

stock continues to move higher, you get more convexity with those calls and increase your position as the stock moves higher. What does a convexity with the call mean for our non-options experts out there, Chris? Yeah. If the calls are out of the money, they don't really have much of an impact in terms of your overall position. But as the stock continues to move higher and the delta to that call increases, your position increases in its weight as well. So they work as if the stock doesn't move any higher, your calls go away and they expire and you have no position. But if the stock does move higher,

they increase in value, they increase in the effective amount of shares that you own. So that can help you if you're underinvested. Chris, we're going to let you get back to the desk because I know you've got to set up here. Those numbers coming out in just over two hours or really an hour's time. Chris Murphy, Susquehanna.

Thank you very much. And coming up, today's trending. Tickr. We'll tell you which stock is having its best day of the year. Time to reveal today's trending ticker that has everybody searching and interested, and it's GE Vernova. Shares surging past $1,100 after the company raised its revenue outlook. It's riding a wave of data center demand powered by the AI boom. That makes it a good time to revisit one of the boldest corporate breakups in recent memory. Back in 2020, General Electric's market cap fell below $50 billion. Four years later, it split into three.

separate businesses. Today, GE Vernova, GE Aerospace, and GE Healthcare have a combined value, get this, Brian, of $620 billion. That's about 12 times what GE as a combined entity was worth during its pandemic glow. Just incredible. GEVernova's been a remarkable. We interviewed the CEO at Sarah Week on March, I think it was March 25th. Stocks up 20 percent since that time. They're involved in every stage of energy, whether you're nuclear or natural gas or whatever it might be. wind, they're probably in that. They've really done a remarkable job coming off of that GE, which as somebody described it 100 years ago, was a hedge fund that made light bulbs. That split up has been a

real moneymaker and winner for investors. And I think Renova was supposed to be more of the green energy play, but the fact that they, you know, with the wind business that you referenced and then natural gas turbines, I mean, this is all the rage. Well, they literally using jet engine technology to power some of these natural gas turbines. They're converted jet engines. from the GE jet engine side. So cool. Pretty cool. It is. And so is that performance of 13% over the past week to a new record high.

Now we know who's buying all the apartments in New York City. More power lunch right after this. Spirit Airlines could be getting a lifeline. A source tells us that the Trump administration is in advanced talks on a potential rescue deal for the struggling carrier. President Trump hinted at a potential government aid on Squawk Box yesterday.

I don't like it. No, I don't mind mergers. I think I'd love somebody to buy spirit, as an example. You know, Spirit's in trouble. And I'd love somebody to buy Spirit. It's 14,000 jobs. And maybe the federal government should help that one out. And yes, soaring jet fuel prices added to their problems. But the struggles for Spirit and other discount airlines are not new.

Look at some of these names over the past five years. Frontier is down 80%. JetBlue has fallen almost 75%. American is down nearly 43% during that time. We have repeatedly seen judges, certain states, and the Biden administration insists that these airlines shouldn't be able to consolidate. In 2024, a district judge blocked JetBlue from buying Spirit. In his ruling, he said, quote, to those dedicated customers of Spirit, this one's for you. And now Spirit may reportedly have to liquidate, losing hundreds of jobs, maybe thousands.

The Trump administration has signaled more openness to mergers, but Jonathan Cantor, assistant AG, under Biden, told us earlier this week that he would still expect states to sue to block a potential tie-up. Now, that was between the likes of United and American. Raises the question of what would happen if someone did go forward with spirit, not under this administration possibly, but with the future one, and more broadly, whether low-cost carriers will then actually be able to survive in the U.S. market. There's been a lot out there. People's Express, Western, Braniff, PSA.

I love cheap flights, but is it a sustainable business model? Speaking of cheap flights, I'm going to go to Newark now, so I'll see you on Monday. Good luck. I need it. Thanks for watching, Power Lunch. Closing bell starts right now.