Power Lunch - S&P 500 Turns Positive Year-to-date 4/14/26

Episode Date: April 14, 2026

Williams Companies CEO Chad Zamarin joins in an exclusive. State Steet's Michael Arone and Oppenheimer's Ari Wald join for our market panel. And what is driving the chips and software stocks higher? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The brave bulls that hung on are being rewarded as major markets. Get back to near all-time highs. Welcome to Power Lunch, everybody. I am Brian Kelly is on Squawfox all this week. And your money, it is ripping higher right now. Everything is up. Big tech, up about 4% in two days' time. We're in the middle of some pretty incredible streaks.

In fact, here's one. The NASDAQ is on pace for its 10th straight day of gains. That is something that has not happened in over 4%. four years. We have got a huge hour ahead here on Power Lunch. More on your money with Michael O'Roney, how the data center boom is helping pipeline giant Williams companies and our friend the great Halima Craw playing out how Iran likely plays out from here. Welcome, everybody. It is a huge hour ahead, but let us begin with the fast-moving world of energy, oil prices. They're down again, about four and a half to five percent at the vice president,

J.D. Vance said the U.S. and Iran could return to the table for another round of talk. A big could, but it's moving the market right now. In fact, oil for June delivery is back below 90 bucks a barrel, maybe a little bit, a touch of relief for your gasoline prices. But for natural gas, it's a different story altogether. Natural gas prices are still very low. They're at 260. They actually moved down since the war began.

So what exactly is driving that disconnect? Well, your first guest today can help explain joining us now on a CBC exclusive. is Chad Zamoran. He is the CEO of Williams companies. They operate more than 33,000 miles of pipeline across the United States and handle about one-third of all of America's natural gas. And today, breaking ground on a new pipeline in the tri-state area, bringing gas to the New York area. Also, the company expanding and empowering AI data centers.

Here's a video of a project in Ohio. And Chad, glad to have you on set here. Welcome. Thanks. Thanks for having me. Get to the New York thing in just a minute, but I want to pull back, focus on the national story right now. Even as an observer in the energy markets, I'm a little surprised natural gas has not moved higher. Yeah. Do you know why?

Yeah, I think it's pretty clear. You know, natural gas production is our country's superpower. We produce 40% more natural gas than we consume domestically. You know, when you talk about liquid fuels, we only produce about 3% more than we consume domestically. So it's no surprise that when global disruptions affect energy, you're going to feel it on the liquid side because we're such a dominant producer of natural gas. That is an incredible buffer. And it's going to really protect us from volatility. Well, it is. So you've got, and we're going to zoom out to global affairs. Obviously, Qatar Energy, Ross LaFan, which is the biggest single natural gas processing facility in the world.

It's offline and maybe for years. Okay. I understand they've got a new project that recently opened up with ExxonMobil outside the Houston area. That's a lot of natural gas offline. Is the United States on the gas side, not oil, insulated from a lot of the global war and issues right now? Yeah, absolutely. This is the blessing of the innovation of America over the last decade. You know, a decade ago, we didn't export any natural gas to invest in the world. We were importing natural gas.

And in fact, we have now, in just under a decade, become the largest exporter of natural gas globally. And when you think about global production, we're the largest now gas producer. We produce about the same as the next three largest countries combined, and that's Iran, China, and Russia. So you think about how important this last decade has become for energy in America. It's been an incredible, but very important. And it does insulate us from a lot of volatility and threat around. Energy is getting a lot more attention, Ashley. And there's these things called the midterm elections coming up later this year.

I don't know if you've heard about them. heard them. But it was an article out somewhere today that basically electricity prices are going to play a big role in maybe how people vote. I don't blame it. It's been highly inflationary. People want more energy and they want lower electricity bills. But they also are very distrusting and nervous about more pipelines. Right. How do you square that at Williams? Yeah, this is the challenge. I think we've got to do a better job of educating folks. The reality is natural gas production in the United States. And you mentioned the price for natural gas. It's actually less. than it was in 1985. The price of natural gas today, our largest energy resource here in the country, you talk about inflation and affordability. We have an energy resource that is cheaper today than it was 40 years ago,

but we haven't been unleashing it to its fullest potential. In many parts of the country, we've been able to maintain low utility prices. That's where we've leaned into natural gas. In the places where we haven't, we haven't seen the same. And that's why this New York story, and I understand we've got a national audience. So I don't want to get two regional folks. don't worry, I'm not going to dive into local New York politics. But this has been an area that has been worried about pipelines.

It's been worried about the climate and the environment, it's been worried about natural gas. This pipeline that's coming into Brooklyn for you guys that you launched earlier today, it feels a little bit like a sea change. Is it? I hope so. And it is a message for the entire country.

There are many parts of the country that's still, you know, we've grown gas demand by 50% in the United States. We've only grown pipeline capacity. by 25%. And the markets where we haven't grown pipe, on average, energy prices are three times what they are in places where we have. And so this morning was a great day for New York. It's been over a decade. That decade of growth we've seen as a country, New York and New England missed out on it. And so it's been over a decade since we've built new pipeline into New York. We kicked off, broke ground this morning. We had Secretary Wright, Secretary Bergham, Administrator Lee Zeldon,

the chair of FERC, Laura Sweat. I think a great day for New Yorkers, it's going to be, it's going to drive down costs, expand economic opportunity. It's going to be the amount of gas that can power over two million new homes and businesses. Two million. That's right. Two million new homes. That's right. So when we look at the energy mix in this country, and I know you're a natural gas guy and you're a pipeline guy, so I get it. We've talked a lot with Secretary's Bergman Wright about wind and solar and about how there has to be an always on component. If you were in charge of energy policy in America, maybe someday you will be, Chad. Who, knows. What's the proper mix? Yeah, look, our company's been around for over 100 years, built some

of the country's most important energy infrastructure in that history. We're headquartered in Oklahoma. In Oklahoma, we actually do a really good job. We've got a tremendous wind. A lot of wind in Oklahoma. The only way that it works, the only way we keep the lights on, we keep, you know, the systems running. When the wind slows down is we pick up the slack with natural gas. It is our dispatchable, but also our most affordable resource. So we can invest in other technologies where we've done that across the country, Oklahoma has some of the lowest electricity prices in the United States. We do a good job of balancing the intermittency of renewables with the power and affordability of natural gas. That's how you build. My late great good friend Boone Pickens was originally in Oakland.

He got everybody thought he's from Texas. He's from Oklahoma. In fact, he's got his name on the side of Oklahoma State University. And he called your area and going up all the way through Iowa and Nebraska, the Saudi Arabia of wind. He was big into wind. It all kind of fits. together because when you look at the data centers that are coming to you and saying, Chad, we need help. Talk to us a little bit, just in general terms, about can you quantify the electricity demand requirements that are coming? It's massive. They're actually like Carl Sagan looking at the skies. They're inconceivable. Yeah, it is incredible. And we've already announced just for Williams, what we're trying to do is bring American energy domestically produced, affordable, reliable,

to consumers and companies that need it the most. And if we're going to win the race for AI, we've actually, we're in the process of commissioning our first power plant, not built on the grid, but built on the gas grid, so that we're not going to stress local utilities. What does that mean? Explain what that means. Yeah. So in Ohio, it would take six to eight years. That's that video I think we had at the top. It could run that video again. Yeah, you showed our Socrates project. It would take six to eight years to build new generation in Ohio. And then to even build electric transmission lines. On average, it takes seven years to build a new electric transmission line in America. And so we are citing data center projects directly on top of natural

gas infrastructure. I mentioned, we produce 40% more than we consume domestically. This is our nation's superpower. So we're now citing power plants directly on the gas grid. We're going to bring power to these data centers in Ohio in under 18 months, not 6 to 8 years. So I want to repeat what you said. And I want our audience to really, you know, if you're, whatever you're doing, just listen for one second, because this is critical. If you're driving, just keep driving. Two eyes in the row, but listen on Sirius X-11. So I could have a fully ready-to-go data center, fully built, ready-to-go, boom. I could have a fully ready-to-go power plant or power source here.

And you're going to tell me it could take over five years just to string a wire between the two that can make it work. Yep. The average time for a new interconnect in PJM where these plants are being built, where our existing data centers are, where they want more power for this next generation of technology, just to get a connection to the grid will take six to eight years. And that PJM, by the way, we've talked about it, about 61 million homes or so, basically North Carolina to top of New Jersey, as far west as Chicago, where you're originally from. How do we fix that? Yeah. I know regulatory reform, everybody talks about it, but it doesn't seem to be getting any better.

Yeah, no, we do hope, and we're very focused on permitting reform. It has become incredibly difficult in the United States to build infrastructure. I mean, we built the war emergency pipelines of World War II from Texas to New York in under a year. Today it can take five, seven, sometimes 10 years to build a large piece of infrastructure. So we're hopeful the House passed legislation last year. We need the Senate to act. We've got to get back to building as a country. But the reality is we're building transmission lines at a third of the pace of 10 years ago.

We're building pipelines at a third of the pace of 10 years ago. This used to be our country's superpower. We've got to get back to building if we're going to unlock our full potential. Stocks down a couple of bucks from it. So I had a huge run. So, I mean, big run-ups, down a couple of bucks. All your investors are probably watching or listening right now. What's the message about Williams as a company and as a stock? Yeah, well, first thing I'd say is today was a great day. I brought you actually a hat from our...

You actually brought three hats. So, yeah, that's for you and the team. Gray? Yep, yep. It's tan? That's tan, I think. My wife says I'm partially colorblind, so this is gray. Yeah, we had a camo version, too, so I can bring you that.

But I think the message is, look, it's a great day for New York, but it's just the beginning. We've got to build more infrastructure if we're going to keep energy of full. if we're going to unlock our country's full potential. Williams, our job is to be right in the middle of making sure we can bring energy infrastructure solutions to our consumers, to the companies in America so that we win this next generation of opportunity. And so been around for over 100 years. I'm focused on making sure that we're going to be a strong company.

I haven't been doing this 100 years. Not yet. I'm getting close. I don't think I've ever talked about a natural gas or pipeline company launching a new project in Brooklyn. Every day. That's what I love about this job. There's something new, and that was new. New hats.

Chad, really appreciate you coming on. Thanks for having. Thank you very much. Thank you. And congrats of the project. All right, by the way, speaking of energy and power, sign up for our new Power Insider newsletter. It officially launches tomorrow.

It'll be a weekly piece, key news, power players, and more. I look forward to work with all my friends and colleagues here at CNBC and put on the best product every single week. Scan the QR code on your screen and sign up today. you have and now all we got to do is write the doggone thing. All right, we are just getting started and up next, the rally to end all rallies. Jeff Kilbert on the stock that he said would run, and it did and keeps running in nearly record fashion. That and more. Next. All right, we are only two days into the week. We get it. But so far, so good, particularly for software. The IGV,

one of the big software ETFs, is up today, along with the broader market. But if you zoom out, the damage from the selloff is pretty doggone clear. Microsoft Palantir Oracle Service now all down 50 to 30% for the 52 weeks highs, which, while painful, has also led some to ask, are some of these stocks and companies now just too cheap to ignore? Let's talk about that at a big time run. Jeff Kilberg, founder and CEO of KKM Financial, also a CNBC contributor. We'll get to the run in a moment, Jeff, and welcome software. though, is this just some sort of a weird rebound off a technical bottom or a technical low or a real turnaround? How do you read the software sector writ large? I think a real bottom has been put in

in software. And if you look at IGV, which is ETF, we love to talk about. If you look at the dispersion, compare IGV to SOX, the semiconductor ETF. Wow, what a story this is telling. About a 50% dispersion year-to-date, Sully. So what I think is that maybe some of the, semiconductor names, maybe are a little overbought here, but more importantly, the IGV, the software names have just been thrown out, and we're seeing a terrific rebound, but I think it'd be very particular in some names. Oracle, almost back-to-back days up 10%. Yes, it's only been two days, but they were oversold. You saw relative strength index, way oversold. I think that's an opportunity if you're selective in software. Yeah, so why are we looking at it relative to the socks?

What is it about the semiconductor index and the software index that makes us interested in both together? Well, it's a great point you bring up. And what we think about, go back to 23, 20, even 25. It was a broad swath exposure to anything and everything technology. That stopped. Now in 2026 we have this dispersion inside of technology between software, which seemingly is being replaced or maybe it's not being replaced by AI. And now of a sudden the semiconductors, this need for chips. cap-back expenditure with Amazon just recently talked about. That is insatiable. So that's where I think

you're going to see some of the semiconductors and continue to prevail, but also some of the software names. We still need software. We still need Palo Alto networks. We talk about some of these names that's just been thrown out. There's value in those growth names. All right. So let's talk about Intel. Well, I mean, this is another chip maker. Yes, I know. But it's a different thing because I think this is a massive thing. Okay, Intel may be kind of down a little bit today. But it's up 60% in 10 sessions. It could have its 10th straight positive session if it ends higher today.

It doesn't look like it will. But if it did, it'd be the first time that's happened in 21 years. Even if we don't get to that mark, it's been an unbelievable run. What's been behind this insane reversal in Intel? A couple inputs. So let's go back to last August

when it was trading under $20. Yes, under $20, that's when the government, I don't know what the exact transaction was if they took shares, bought shares, acquired shares, but they picked up about 433 million shares of Intel around $20.50. And that was the catalyst for this essential chipmaker. And why is an essential chipmaker Intel, which certainly has had a rough and rocky volatile road, it's here. It's U.S. economy. This has been a U.S. soil chipmaker. And when you talk about sovereignty,

we talk about security with our military, that's why this chipmaker, when it was back in $20, was of value. And that's why we bought it. This is actually our largest, stock in our essential 40 portfolio because it is essential. But when you saw last August, it's up over 220% since last August. But what happened? You continue to see it gain momentum and all of a sudden it became relevant again. And TerraFab, that is the new deal with Elon Musk down in Austin, Texas. So they are coming in with their foundry business. If you think about their foundry business, they did 300 million in external sales last year in 25. 300 million. What did TSM? What did Taiwan semi do last year? They did 122 billion.

So now with TerraFab solely, you are going to see Intel potentially do two or three billion dollars in revenue. Now they have a template. Now they have a foundry business. So what happened to it then? You're making a good story. But what that didn't happen 10 days ago? Somebody rediscovered something. Yes.

Once they realized, I think the tariffab, that was really the component. When you look at the margins inside of designing, fabricating, and packaging. Packaging is probably the most lucrative of those three inputs when you're doing chips. And now with these margins up at 40 or 50% or even above 50% with the packaging, they can rinse and repeat because you're not going to see Nvidia go down. Nvidia is up $10 since this was announced, right? So despite the fact that that Nvidia tax, which is all the margins that now Elon Musk is going to be making internally, you're going to see other folks look to do and replicate the same foundry business.

So the foundry business for Intel, that's the aha moment. And if they can take any market share away from TSM globally, even if they just take 10%, They went from zero to hero in that business. It's dropping all the bottom line. So that's where Intel, I'm not taking any chips out the table, pun intended. This is our largest holding. It was our largest holding last year. We want to continue to own this essential chipmaker here in the United States.

Well, if it's your largest holding, then you printed money because 60% gain in 10 days, and you're not selling. You're not selling. We're not taking any chips off the table. I think you can look at some of the options. If you want to look at selling calls, you can't up at $70. But we just made a new all-time high yesterday. the momentum is still intact for Intel.

Chips off the table. I heard the dad joke. I got it. It didn't go by me. We're both dads. You're the best. You're the best. Appreciate it.

Thank you very much. All right. Chips off the table. All right, coming up, the S&B 500 pacing for its ninth straight up session. We're going to ask the chief strategist, one of the largest asset managers in the world, what he thinks about these markets. Stay tuned. All right, welcome back. The markets, they are rallying again to.

And don't tell anybody. All right, you promise? The latest up move now makes the S&P 500 higher on the year. Small caps now up 10% in 2026. That's actually one of the greatest starts ever to a year for small caps. We're not soaring. The S&P's up 1.5% but we are up on the year. So is it possible to sit here right now and say this, the worst maybe behind us for stocks this year? We don't know, but our pay. panel does. Erie Wald is Oppenheimer's head of technical analysis and Michael O'roni, State Street Investments' chief investment strategists are here with us. Errone and his team oversee $5 trillion with a T in assets under management. Michael and Erie both. Thank you. Michael, make it make sense. We're at war. Energy prices soaring

and yet the S&P is positive on the year. I don't understand it. So the economic data continues to be pretty solid. It's certainly not dismal yet. And we have fiscal stimulus. The potential for monetary stimulus. And Brian, overwhelmingly, the biggest fuel to the rally is earnings. Earnings results are outstanding and are expected to continue to be outstanding. So for this year, you're looking at 17% earnings growth for S&P 500 companies on almost 10% revenue growth. Those numbers are outstanding. Okay, listen, you're a Boston guy, you know, Boston, but don't be a little cynical. Okay, so my Boston hat here. It's early. Goldman's numbers weren't bad. Fixed income was a little bit on the weaker side.

Citigroup's numbers pretty doggone good, were very early into quarterly earnings. You sound pretty confident that what we're going to see from here on out is going to be pretty good. So you're looking at for this quarter, year over year, about 13% earnings growth. So, Brian, if the companies beat those earnings, which they always do, by the amount in which they normally beat them, you're looking at earnings growth of close to 19% year over year for the first quarter earnings. And so I'm very confident. Profit margins have rarely been higher. And the great news is, as you're highlighting, you're seeing breath.

All 11 economic sectors are going to experience revenue growth. So this is what is fueling the market rally. They're ignoring the geopolitical news and kind of the highlights from that perspective. More than 20 times there's been airstrikes in the Middle East and North Africa over the last four decades. Eight weeks later, 95% of the time, the S&P. P-500 is up. And boy, Brian, we're right on track for almost that exact timeline. I know, Aria, you've been very, you're champing at the bit here because you're like, no, no, I'm a technician. I don't really care about earnings. Did we hit something technically?

Because you heard me ask Jeff Kilberg about Intel. It's not like these numbers that Michael were giving are brand new. The street has been expecting good earnings. Is there something technically that we touched that caused this big reversal? I mean, just the action over the last week is undeniably bullish to have such a breakaway type move in the markets. And this is coming after a pretty tough six-month period. I know you were talking about some year-to-date stats, but when you really consider that the NASDAQ had peaked in October and through that, we were kind of in this five-month malaise and that final washout. Our kind of take is the action we've seen over the last week is marking a low. I think, at least from the near term, the worst is behind us. It sets up this

multi-week rally into the summer. Really? So, okay, dig a little bit deeper. What are you seeing technically, you said undeniable? That's a strong word. What are you seeing under the hood of the market that's giving you this optimism? Well, I'll take off of one of his terms breadth of the market is strong, both from the economic sectors and the equity perspective as well. Again, a lot of re-broadening and participation. Really, we're coming off a point where small caps had made new highs. It was very concentrated weakness. It was essentially just the mag seven that had broken down. A lot of the key small-cap averages, equal-weighted averages, came right into the 200-day average. They turned higher. Now they're gaping higher. And so I think it's just this

broad-based-type move, which is what is the key positive that leads us to say that. Michael, you and your team recently upgraded tech materials and energy. Great call, by the way, in energy because that's been rocketing for obvious reasons. We do have a new Fed chair, we think. He's got to be confirmed. Okay. We plan to have a new Fed share. market's kind of vacillating about rate cut or not, rate cut or not, whatever. Do you care, change your view on equities in America, depending on if we get no rate cuts, one recut, two, whatever? It won't change my view on our bullish outlook for equities,

whether we don't get any rate cuts or we get a few rate cuts by the end of the year. Now, I do expect that Warsh will be confirmed, and he will cut rates later on in the year, and at least probably twice, I think, towards the end of the year. Do you think the bond market will care, though? Because we've been signaling rate cuts and all that's happened is yields have actually gone higher. Well, I think yields are going higher for different reasons. Certainly most recently the spike in energy prices has put upward expectations on inflation.

That's certainly part of it. Given the fact that the war is going to cost more and tariffs revenue is going to be less. And now we're asking for a significant increase in terms of the defense budget. We're going to have to borrow more. And we're probably going to have to borrow more, we being the U.S., at higher rates. And of course, the economy is still expanding. So I put those three things together, and I'm not surprised that rates continue to be range bound. Brian, this is where they've been now from 375 to let's call it 475.

That's a wide range for the better part of more than a year. I think we're stuck in that range, and that range doesn't change my outlook for equity. And it doesn't change your outlook area for Citigroup, which is one of the names that you like. Obviously, the numbers were good as a chartist, though you're looking at it. I guess what looks attractive in City's chart? Right. Well, to follow up on that for us, intermarket stability, it's range-bound rates. It's neither high nor low rates that equities have historically responded favorably to.

That's what we have. So they kind of want to be in quicksand. Not too hot, not too cold. And I think that helps keep the equity market afloat. Our conscious of mid-tier year seasonals that do typically are a headwind as you push into the third quarter. And usually you'll reset into a better queue for. Why Citigroup comes up, it's not really a call in bank. and brokers. It's a call on high beta, high momentum. The momentum factor, we're momentum

investors, which has really been the key factor coming out of this turn in the markets as well. We're seeing areas both that work a lot. High beta is working, cyclicals, and its stocks that have already outperform. Winners are continuing to win, and Citigroup included, best of the big banks and brokers. All right. And State Street upgrading technology, energy and materials. Michael O'Roney is State Street Investment Management, Ari Wald. Really appreciate your time. gentlemen, thank you. Have a great day. All right, so we just talked about bond yields. Let's get a quick check on the bar market. Ten-year yield breaking back below 4.3 today. If it does hold, it would be the second day in a row that it closes below that level. Some have said rates may be too high in the U.S. Take a look at the U.K., 10-year yield there, 476. And a bond offering today. The U.K. Central Bank sold 10-year bonds, the highest yields since the global financial crisis in 2008. So what they're called, GILTS. If you see a four-year bonds, a letter word on your crossword that says UK debt? The answer is going to be guilt. 4-7-6, higher than us. All right, going back to energy oil, back below 100 bucks a barrel. White House, considering a new

round of possible peace talks with Iran, but what's the real likely outcome here? RBC's Salima Croft, been in D.C., talking to power players the last couple of days, and she will tell you what she heard. Next. Here's a look at the most important map in the world right now, and that is the straight of Hormuz. U.S. Central Command reporting that no ships made it past the American blockade within the first 24 hours. They do add that six merchant vessels

complied with erection from U.S. forces to turn around. So there you go. For more now on the Iran War and its impact on the energy markets. Bring in Halima Croft, global head of commodity strategy at RBC Capital Markets, CNBC contributor, and as somebody you can see from the beautiful capital building, I assume that is not Austin, Texas

behind you, Halima. It is not. not. You are in Washington, Austin would be a little higher, actually. You are in Washington, D.C., huge meetings, IMF, World Bank, big CNBC conference, IEA is there. What are people talking about? What's the global expectation of how this plays out? I mean, Brian, there continues to be a divergence between experts like Fatiburro, IEA executive director who yesterday said, look, 13 million barrels a day are disrupted, 80 facilities in the Gulf have been damaged, one-third severely damaged. It could take two to three years to bring those facilities back. Warning about the dire economic impact if we cannot get a resolution to this war.

And yet there's a large segment of the market, if you just look at the prices on your screen, that are pricing the end of this conflict based on the prospect of continuing talks. Now, you put up that map of the Strait of Hormuz. A map I'd like to see is airport maps. in Washington. Which officials from Washington are actually getting on the plane to have talks on Thursday? We've had these press leaks of talks on Thursday. We've had President Trump saying we may have talks the next couple days. Really unclear at this point who is going to be leading those talks. And that's important because so many market participants are pricing endgame for this war.

They are. And the one, okay, I will see your flight radar 24 map and raise you a little bit of China because quietly the crown prince of the UAE, Al-Nariang, is in Beijing or was. What is China's role in all this? It seems like nothing's ultimately going to get resolved until Beijing, which is the primary buyer of Iranian oil. And not right now, but down the road will be the most impacted by any continued blockade. They're going to have to be involved in this somehow. I mean, I think that's why we had the blockade announcement.

I think the White House is hoping that basically if ships are not going to, going with Iranian cargoes to China, China will become more active in trying to convince the Iranians to take the deal on the table. The challenge, though, is, Brian, is it China exercised prudent risk management before this war? They were basically buying aggressively for their strategic stockpiles. Also, their reports that with that 400 million SPR release, a coordinated release from stockpiles, China was a big buyer, they put the barrels in their strategic reserves, and then slapped on export restrictions. So the question is, how much economic pain is China feeling right now from this?

And then there's the other side benefit. We've moved military assets from the Asia theater to the Middle East. Do they have a freer hand now strategically to think about Taiwan policy? So again, question is what's going to incentivize China to really pressure Iran to take the deal? I know you had an interview, sort of a panel with Fatibirol. He is the head of the International Energy Agency. My great colleagues here at CNBC also had a peace out. about how they're worried. The IEA is worried or even sees its demand destruction from higher prices

coming. And there's this huge divergence between or convergence between the numbers we show on the screen. That's the futures market, the paper market, and actually trying to buy a physical barrel of oil. What are they really worried about? I mean, what everyone is worried about, you know, in Washington or at the IA in Paris, is that that divergence between the price you have on the screen and how much you have to pay to buy that barrel now of your refinery, that it's going to ultimately converge, and we're going to have much higher prices flash on the CNBC screen. Now, people have been saying that for a while.

The question is, when are we going to get convergence? And the more people in the market think this war is about to end, we have the continuing divide. That's why I think it's so important these peace talks. I think we have a very limited window. When this ceasefire expires on April 21st, if we're not further along in getting a deal at that point, the market participants start to say, wait a second, we're going into summer driving season and no barrels are moving through this trade of Hormuz. Like, this might be a more serious outage as we think about who's going to be on the road. Well, I also feel like, let's say we get a peace deal. We all hope that. We want a peace deal.

It doesn't make up with the fact that for five weeks, we've had maybe the greatest energy supply. by shock since the pandemic, or even worse than that, for specific regions because of the near total and complete shutdown of 20 to 30 percent of critical minerals. What's going to happen the next five to six weeks or two months when it comes to helium and natural gas and all the other stuff that's not called oil? Brian, it's really important because think about it, those last ships that left the Middle on February 27 before the bombing started and the straits closed, those last ships are reaching those markets. So we are now going to really start hitting that wall in terms of the disruptive

impact of this war. So it is so important to see are we any closer to bridging this divide? And again, the Iranians say they want to retain their right to enrich uranium. Maybe they'll pause for a few years. But the U.S. continues to say no enrichment or you have to pause for 20 years. And by the way, we don't want the missiles and we don't want support for proxies. And we may want to operate a JV for the toll booth on the Strait of Hormuz. So not clear we're bringing our sides closer together. And again, I'm not sure who's taking off from Washington to fly to Islamabad. Well, we'll watch the flight maps. We're going to watch the Strait of Hormuz, and then we're going to put the flight maps up next to that. Halima Croft. Great idea.

As always, Halima, thank you very much. Thank you. All right. Let's get out of Simomodi for a CNBC News Update. Hi, Brian, here. The stories we're watching. The Department of Justice said today that it is suing the state of Connecticut. Governor Ned Lemma, the city of New Haven, and others. The lawsuit is challenging sanctuary city policies that the DOJ says are interfering with the federal government's enforcement of immigration laws. The lawsuit targets state law and local rules that limit cooperation with the feds. When the World Cup arrives in New York area this summer, New Jersey Transit is reportedly planning to charge more than $100 for return train tickets from MetLife. stadium to New York's Penn Station. The tickets normally cost about $13. That's according to the Athletic, which says the final decision on the price is expected in the next few days. A spokesperson

for NJ Transit telling CBC in a statement that the pricing for match days has not been finalized. Just two weeks before it was set to shut down, one of the longest running newspapers in America has found a buyer. This Pittsburgh Post Gazette founded in 1786 says it is selling to the nonprofit Benadillo's Institute for Local Journalism Financial Times. terms were not disclosed. Brian, I'll send it back to you. $100 for a possible train ticket. Can you believe it? I actually can believe it because everything around the World Cup, Seema, that I've seen every single thing is just like a money grab. And it's sad. It's sad. It is. Watch on television. Seema Modi, thank you.

All right. Still ahead. Wall Street bending the rules for the next generation of tech giants to fast track their inclusions to the major indexes when they IPO later this year. A lot of words there. What does that mean? We'll explain in your market navigator. All right, welcome back to Power Lunch. I'm Dominic here with your Market Navigator today. Now, a slew of high-profile IPOs are in the pipeline in the coming months with names like SpaceX,

Anthropic, even Open AI, possibly in the offing. So with the NASDAQ looking to change its rules to possibly fast-track some of these offerings into indexed inclusion, what could that mean for index funds? Joining us now for this conversation is Victor Haggati, the founder and C. I.O. of Elm Wealth, Victor, this is an interesting proposition. Because if you're going to fast track some of the most well-known, privately held companies out there, what exactly could it mean, risk-reward-wise, for those people who own, say, the Invesco QQQ, ETF or other index tracking instruments? Sure. So I think people are right to be thinking about this because there's a long history of

IPOs not performing very well over longer horizons. So the idea of getting these IPOs into the index funds sooner has some people worried. And indeed, you know, NASDAQ has already changed the rules to fast track. And MSCI is looking at that. And, you know, we're kind of worried about that a little bit. But the main thing to realize is that, like last year in 2025, we had $80 billion, roughly, of IPOs. But the size of the whole stock market is $80 trillion. So that's one-tenth of one percent. So it's kind of much ado about nothing because even if these IPOs, if these stocks, which might do great, but if they don't do well, it's not going to hurt index fund performance that much. Because even if we get twice the amount of IPOs in 2026 or over the next 12 months as we had last year, that's 0.2% of the whole market. And if they went down 20 or 30%, you'd be losing a very small amount on your index.

Victor, we're looking at some of the private market valuations for names like Open AI, SpaceX, and others. These things have ramped up tremendously in valuations. So the momentum is there. Yeah. But valuations are also arguably elevated, given what we've seen. Is that a risk as well? I think that people are right to be concerned about what the performance of these stocks will be. But again, they're just going to be a really small part of most of the indexes.

Now, NASDAQ is a little bit different, but all the rest of the indexes, They look at how much of the stock exists on the marketplace, and that's how much weight they put on them in their indexes. So you can just look at how much money is raised in the IPOs, divide that by the total market cap of the whole market. And then you're like, wow, these things are just, it's much ado about nothing, I think. All right. So the evaluations, they're concerned, but maybe not as much for you as some others out there. Victor Iconi at Elmwell. Thank you very much.

We appreciate it. Brian, I'll send things back over to you. All right. Dominic, Victor, thank you very much. Right, coming up. Cruise stocks, they seem ready to set sale. Oil prices keep coming down. What's it going to mean? Contessa Brewer is down in Miami with a lot more, some of the news that is looming on the horizon. We'll get more with Contessa coming up. All right, let's have some fun. Let's talk about a big business and some big ships. We're talking about cruise lines. Fuel prices, they've been up the last couple of weeks and months.

And so what happens with the cruise lines really depends on where energy costs. and consumer spending is going and how many people want to get on one of these amazing ships that I've never been invited on. Contessa Burrough has been invited. She is at the Sea Trade Cruise Ship Industry Conference in South Florida. What's the mood? Is it still good? Very upbeat.

Very upbeat because the cruise industry is going into 2026 with very strong demand. They say that they're not just in the United States, but in Europe, in Asia. they're seeing people ready to cruise and the big driving factor here is value, the kind of value you get for your dollar when you go on the cruise ships, Brian. So the mood is very upbeat. They've got a lot of destinations represented here that are trying to get a piece of that action. But of course, you mentioned the fuel. That's a big headwin for these companies.

Today, the stocks are up. Norwegian cruise line up 4 and a half percent. Viking is up 4 percent, Carnival up 4 percent. Royal Caribbean Flatish to, you know, it's in the red right now. But what I heard about the fuel is that it's a cost headwin across the board, especially for Carnival though, because they don't hedge. So he said, look, it was great when fuel prices were low. Now we're getting hurt more than our competitors because we don't hedge. Royal Caribbean hedges at 60% for the year.

Norwegian hedges at 50%. And they have a brand new CEO at the helm, John Chidze, who I talked to when I asked him, how are you thinking about this? this big issue of unstable oil prices. Here's what you said. I think as a whole, yes, it's a headwind. And if you're very short-term focused, I get it. If you're a long-term investor, I would look right through it and just have confidence in how the industry is always maneuvered its way through these different issues.

But look, the stock charts of these companies over the last three months, year-to-date, over 12 months, they look like rough seas. They're going up and down. And Norwegian especially, he's got the added pressure. of Elliott as an activist investor. And I said, well, here you've been on the job for about a month. How are you dealing with Elliot? And he goes, it turns out that Elliot's priorities for this company

and my priorities for the company are about the same. So I've got to imagine fuel is a big issue, as you just mentioned. But people, I think, correct me if I'm wrong, Contessa, don't they buy their tickets really far in advance for a lot of these cruises? So the people that are going booking now, what kind of prices are they paying? because I don't even know where fuel is going to be in nine months. That's right. And so then that's one of the reasons why it hurts the cruise line so much

because those people that booked six months ago, they've already paid their tickets. And it's not like they get on board and then you say, oh, now you've got to pay an extra fee because fuel's really high. But the other thing that's happening is people are spending more on board than they ever have. They're spending more on excursions that they ever have. So there is some leeway with pricing when it comes to that thing. The other thing is they've had globally a little bit less than what Las Vegas sees for annual tourism.

37 million people on global cruises. I said, look, if you look at Las Vegas, their prices went sky high after the pandemic, and they got hit really hard with people all of a sudden pulling back and thinking that Las Vegas was not such a great value. Are you taking any lessons from that? They said there's still such amazing value. When you book that ticket, you're just getting the attention of the cabin store, the food, you know, the entertainment, and then going from place to place. Nothing beats that. Nothing else in travel and tourism.

We need like a Las Vegas cruise ship, like a wind on the water. You can make it happen. I don't know. Don't give me that look. You can make it happen. I think it's going to. No, you could make that happen. We could. We could see it. All right. More power lunch right after this.

We got it in the show with this RBI on just beautiful cars. This is a Rolls-Royce called Project Nightingale. Put it up. Look at that. Custom-built, two-seat drop-top, fully electric. Only 100 will be made. And if you want one, you got to be invited. That car, Nightingale from Rolls. Invites only. By the way, it's going to be like $6 million. So we're not going to have one anyway. Thanks for watching everybody see you tomorrow.