Power Lunch - Stocks Climbs, Oil Falls on Report that Iran President Reiterates Openness to Ending War 3/31/26

Episode Date: March 31, 2026

Crude oil prices come down. Rapidan's Bob McNally joins to talk energy. MCC Global Enterprises' Michelle Caruso Cabrera joins to discuss the geopolitical angle of the latest Iran War developments.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, welcome, everybody. We have got breaking news for you. Stocks, they are soaring on unconfirmed. That is key. Unconfirmed reports that are on may be ready to end the war, albeit with conditions. Welcome to Power Lunch, everybody. I am Brian Salon. Kelly is off today. Stocks, they're ripping higher across the board. The NASDAQ, it is up more than 3%. Oil and the fuels also reacting, although not as much as you might think. WTI and Brent both down. We'll get more on that trade in a moment. We have got you fully covered on everything you need to know as all this news develops. CNBC's Megan Cassella in D.C., Pippa Stevens here on the commodity trade, and Schwabst, Chief Investment Strategist, Liz Ann Saunders. Perfect day to have her here right on set. Welcome, everybody. It is a huge day. Let's get right to it and begin with an unconfirmed report that the Iranian president says they may be ready to end the war,

but there is almost as much we don't know as we do know. Let's find out what we do know right now because it is moving markets with Megan Kisela in D.C. Megan. Brian, that's exactly right. Major market reaction, as you said, in response to this unconfirmed report. And this all stems from a phone call held earlier today between Iran's president and the president of the European Council. So Iran's press TV, which is state-affiliated media. They're reporting that Iran's president reiterated during that phone call today that Iran seeks no war,

but is prepared to end it with guarantees against further attacks. So they're appearing there to lay out some conditions by which Iran would be willing to make a deal. But to be clear here, Iran has made this sort of declaration already. There was the five-point plan that we were reporting on last week where conditions included a complete halt to aggression and assassinations, reparations, as well as assurances that war is not going to be reimposed. Now, the White House did not respond to my request for comment on this latest report in the last hour, but as of this morning, the White House's position remained the same. They're continuing to pursue diplomatic negotiations, which they say are ongoing.

but they're also preserving their military options and pressuring NATO allies to get involved in order to reopen the Strait of Hormuz. So on the question of what sort of talks are ongoing, just in the last few minutes now, Al Jazeera TV is reporting, according to Reuters, that the Iranian foreign minister says he's been receiving direct messages from Steve Whitkoff, that's the U.S. special envoy. Now, Iran says those do not constitute negotiations, but it does confirm that there is contact between the two sides. Al Jazeera also reporting that the Iranian foreign minister says Iran is really,

ready for any ground confrontation. So, Brian, further throwing cold water there that were really in any sort of a different situation than we were a few hours ago. Well, the markets are buying into whatever the unconfirmed rumor may be. I will ask this, Megan, not to put you on the spot, but there were reports out just a couple of hours ago also that the Iranian Republican Guard potentially would be threatening American technology companies with something. We're not exactly sure what that is, and I want to be very careful in the way that I

word anything, that doesn't sound, again, if true, like a de-escalation, is it fair to say that there are some conflicting messages that are happening right now? Absolutely. There is a lot of confusion out there, a lot of conflicting messages. And yes, the market is excited about this one report that Iran might be willing to end the war with conditions. But we knew about most of these conditions, or all of these conditions, I should say, at least a week ago, if not more.

So there's not really a difference in circumstance. There is that report that they're threatening U.S. companies with some headquarters in the region as well. That was earlier today. They put a deadline on it of sometime tomorrow. And just to Al Jazeera, saying they're ready for any sort of ground confrontation as well. So they continue to be really hard-pressed. All right, Megan, Kassela work in it as well. And I'm sure we'll have more as the day goes on. Megan, thank you very much. Now of the moves in the energy markets, because oil, Pippa Stevens, oil is down. But oil is not down $10 a barrel. So it's moving, but maybe not to the extent. of the stock market. What do we know?

That's right, Brian. So WTI is down about 1% right now and off the worst levels of the session. And I think that just indicates what you and Megan were just talking about, which is the fact that there is a lot of confusion about what this latest unconfirmed report means and also the fact that a lot of those parameters we were already aware of. And so right now, clearly, energy traders are saying this is not really anything new. And I just got off the phone with Tom Closa. And he said that, you know, it won't amount to much and that it is a downday. in an up market. And that is the key there. It is still an up market. Even with WTI here down 1%

at 102, we're still about $37 above where we were prior to the war. And there's also the fact, and Brian, you've been talking about this a lot, that in the past month, throughout the month of March, there was still a cushion in terms of the oil that was being delivered that had already been loaded onto VLCCs ahead of the war. That is now basically running out. And so that takes a big cushion out of the market. And so even if the war were to end, you know, miraculously say today and the straight were to open again, it will still take a long time for all of those ships to get in position, to reorient, for the production to come back online, for refineries to get back up and running.

And so clearly the oil market here is saying that this is not going to, you know, be a meaningful end or meaningful return to the pre-war environment anytime soon. And that's, I think, a critical point that you're. making PIPA, right, which is that there's going to be a lag. Let's just say, and we all hope, let's say the war ends tomorrow. Two sides come together officially say this. I'm making it up, but we're kind of being optimistic. It will take weeks or months, perhaps, in some regions, to rebuild production, to rebuild supplies. And in the case of natural gas like Qatar, that could be multiple years. Maybe is that a reason why the energy markets aren't moving at the same speed that the equity markets are moving today?

Yeah, it seems to be the market taking this with a note of caution here. Of course, there are a lot of traders that have been burned, notably, after Russia's invasion of Ukraine when prices shot up, and then Russian oil was still on the market. But this time is fundamentally different because we actually have lost supply. And to your point, think about Raslafan. We heard that 17% of their production could be offline for as much as five years, and all told, they supply about 20% of global LNG.

Or you look at Iraq and Kuwait. Some of their mature oil fields might never. be able to return to pre-war levels, thanks to damage in the reservoir with the water pressure. And so there are just a lot of structural shifts that have taken place here. And I think longer term, it's also going to make, you know, countries wary of over-reliance on any one nation. The Middle East, particularly Qatar for LNG, was always seen as a reliable supplier. But this now is changing that narrative and perhaps leads to a higher geopolitical risk premium price in going forward. Yeah. And why oil is down, but not down as much as one

might think. Pippa Stevens, thank you very much. All right, now, folks, let's get back to the markets and your money. Perfect day to have your guest on. Lizanne Saunders, chief investment strategist at Charles Schwab on set. Lizanne, don't worry, I'm not going to ask you to go into the political school side of this. Thank you, because I wouldn't answer anyway. Well, we don't know. We don't know. Right, we don't know. And tonight, everything could change again. It's not even clear who may be in charge of Iran. So let's just put that aside. There is no doubt that today is a good day. What does, if anything, think, today's market move maybe tell you about positioning or sentiment in the market.

So, you know, sentiment has been a tricky one in this recent part of the cycle because, you know, I've been in this business for 40 years. I learned from the best that there was in sentiment, which is the late great Marty Swig. And I remember 40 years ago when I was learning about investor sentiment, the two buckets that mattered was institutional. sentiment and individual investor sentiment. You know, kind of smart money, dumb money to use it generically, and I find that too degrading a term. Now we still can think of that separation,

but we also have to think of behavioral measures of sentiment and attitudinal measures of sentiment. What does that mean? Well, an attitudinal measure would be like American Association of Individual investors. It's just a survey. Just asking investors, How do you feel?

Are you bullish? Are you bearish? Then there's behavioral measures, like what are they actually doing with their money? AIII actually tracks the equity exposure of their members. And sometimes in a tough market environment, they'll say, I'm very bearish, yet it doesn't manifest itself on what they've done. So you've got to listen to what they're saying, but also watch what they're doing.

But now, even within individual investors, you've got the retail trader versus the longer-term individual investors. So it's a real jumbled sentiment picture right now. But I think what happened on a day like today is the lead-in was a very, very oversold market. You had less than 20% of the S&P 500, trading above a 50-day moving average. Sometimes that in and of itself means your sort of launch point. Like a spring. The market was kind of a spring almost in...

Is it fair to say max pessimism or a lot of pessimism? We know hedge funds have been net sellers. We saw that. A lot of oversold technical conditions. So it's more than just sentiment. It's technical conditions. And the positioning can really shift in rapid fire. All we have to do is think about what happened last April, between April 2nd and April 9th.

It's hard to judge an environment that's so driven by headlines and social media posts. But what we can do is get a sense of what is the positioning right now? Are we positioned such that if you get a positive catalyst, do you have greater short-term upside by virtue of positioning having gotten washed out and having, you know, moved to the word of attention? Sounds like you just described today. Right. That's exactly what I'm talking about. Now, how long live debt's going to be is obviously still a function of the headlines and in turn the positioning. And, you know, the bottom line is ending this war, whatever that looks like is good news.

But to Pippa's point, that doesn't mean production gets back online quickly. And the ripple affix in terms of the economic impact are still very much ahead of us, because this is not just about oil and the Strait of Hormuz. This is what has been a supply chain shock. And it's not, it's LNG, it's oil, it's refined products. It is, it's helium, which goes into semiconductor chips. And so I think the economic impacts of this, that story is not fully told yet. You know, if we go back to, and you can't find a period that mirrors what happened now,

except for maybe the Suez crisis of the 70s, but let's go back to Russia's invasion of Ukraine in 2022. The NASDAQ in November of 2021 went from whatever point it was at down. It lost 35 percent from November of 2021 to September of 2022. We forget that. It was a pretty grim nine, ten months, just slow drawdown in part. And you had Russia, Ukraine and high energy prices in the middle of that. the NASDAQ started to fall last year. Now we have this supply shock.

Is there any parallel correlation, whatever, between four years ago and today? Because that was a rough patch for investors. We forget. It was a rough patch. The difference, though, is that there were route options that were available in terms of, you know, some of the distribution of LNG, that. that had been coming from Russia to Europe. The United States was able to quickly shift some export volume there.

Very different when we talk about the choke point of the straight-of-form movement. So I think that's an important difference. Another important difference is 2022 was a massive inflation problem for reasons not just related to... Related to COVID and lockdowns, the pandemic, etc. And so we were also in a very different monetary policy backdrop. So I think to me what this is reminiscent of, from somebody who's done this a long time, is 1990.

Not just because of the military conflict, the move up in oil prices, but what was also going on in the late 80s, which was the LBO boom and the credit concerns that we've been dealing with that kind of went to the back page of the newspaper in light of the war. So to me, this reminds me a little bit of 19-19. Because I made this graphic just for you, Lizanne, from 35% drawdown November 2021 to September 2020, and then the market doubled. And I look at a lot of the stuff that you and your great team does, and you're talking about

with the market decline, and it's not been a huge decline heading into today, but we are down. 14th, worst start to a year for the S&P 500. But in that decline, big tech valuations effectively got to the same level, roughly, as the overall market. Right. So where do we launch from today in terms of how the market war aside? Let's put the war aside. I know it's hard to do, but let's do it. Where do we stand with fundamentals and valuations in this market, earnings, everything? I'll answer that in a second. But I also want to talk about something I think it's important. That's why I'm talking about it. We have to, the market, we have to think of not just at the index level, what the NASDAQ is doing, what the S&P is doing, what the maximum drawdown has been. where we are year to date, but what the underlying constituents are doing. So here's the math associated with that, and I'll start with the NASDAQ. NASDAQ did move into correction territory. I think it's 11% maximum drawdown or maybe 13% maximum drawdown at the index level.

The average member within the NASDAQ, if you average up all of their individual maximum drawdowns, it's negative 33%. Wow. Like Microsoft is 35% from its high. It's just happened through a process of rotation, not all of it. And because we show the averages, which are, by their name, they're averaged out. They're also cap-weighted. So it's actually been worse?

The S&P hasn't had a 10% drawdown. The maximum drawdown for the S&P is shy of that, but 9%. The average member within the S&P 500 has had an 18% drawdown. Again, it's just happened through the process of rotation. Now, I think most investors would choose sort of a rotational correction where you either ease valuation excess or sentiment excess, as opposed to the NASDAQ dropping in one fell swoop by 33%. So it's not a bad way through a process of churn and rotation to correct some of these excesses.

But the fuller story of what the market is doing is being told under the surface of the indexes. It's fascinating. Which is also why we have you on the show because it's just fascinating stuff. And again, if I'm wrong, we're just freestyle in her. I love it.

All that in then, and when you look at earnings expectations, which, of course, we know folks, they could change. But everything you know right now about earnings and valuations, does the market look overvalued, fairly valued, undervalued? Or is that a stupid question? No, yes, depending on what the segment. Were we in Minnesota? No, yeah. No, no, yeah.

The answer is yes, and I know it was a multiple choice question, but it depends on the segment of the market. The good news is that this corrective phase has been driven by valuables. compression, not by a deterioration in earnings estimates. Now, that's yet. Why, though? I think analysts, first of all, we have upward revisions to overall S&P, mostly concentrated in two sectors. The energy sector, for very obvious reasons. Which, by the way, doesn't really matter. I hate to say it doesn't really matter that much. It's 4.5% of the overall market. Right. Well, but... It's my baby, but it doesn't move the market. But the tech sector has had huge upward revisions. One thing that a lot of people don't realize is the breadth has not been great.

Two stocks, Nvidia and Micron, represent a good chunk of the increased estimates for the tech sector, but very concentrated in just a couple of stocks. What I think has also happened is, as it relates to the war impact and the feeder of energy costs and what that impact has on the labor market, what that's going to do to profit margins, I think analysts have not done a lot of monkeying around with the numbers yet, but we're now on the cusp of earnings season. And I think you'll start to see a little bit more movement on the part of analysts making adjustments, particularly to companies that have as a big feeder cost.

So I'll wrap it up with one final question. So it is the last day of the quarter. So that means earnings are upon us again. And there's another thing about that. Remember that mutual funds do their rebalancing the final week of every quarter. So some of this that you see some of these big swings that happen on a day-to-day basis. Maybe to the upside. Could be a function of that rebalancing timing.

There's always so much going on. So when earnings cross in about two to three weeks, we're going to start to get a lot of numbers very quickly. If those numbers are pretty much in line with expectations, not even raised, not cut, not raised, just kind of where you and your team think they're going to come in. Does that mean this market is still a... I think the market's pretty reasonably valued now. Assuming we don't see a serious deterioration to forward estimates. And if we don't get the deterioration, though, that would be not a good sign but not a bad sign. What if we get earnings upward revisions?

Is that a market rip your face off rally kind of a situation? Do keep in mind that valuation tells you nothing about what the market's going to do. It is a terrible market timing tool. If you look at starting valuations on a forward PE basis over any period of time and look at what subsequent one-year performance is for the S&P, there's no correlation between the two. If you look out, say, a 10-year window and you look at starting valuations, then you have that upward slope where, you know, the higher the starting PE, the worse the market is, and vice versa. But on a one-year basis, you do a scattergram of that. There is no correlation. Well, we're going to start to get those numbers in a couple of weeks.

And to your point, if there's not a deterioration, we'll see what this market does. Today is one day, but today is also the best day for the NASDAQ since all the way back last May. But we'll see what tomorrow brings. Well, you know what also matters, too, as it relates to valuations. What's the monetary policy backdrop? What's the inflation backdrop? Because earnings are more valuable when interest rates are moving down. They're less valuable when interest rates are moving up.

Well, maybe if oil falls, inflation expectations fall. We get back to that lower. We'll see. That'll be for the next time that you're on because we're out of time. Lizanne Saunders, always a pleasure to have you on. Chief Investors, Judge, Charles Schwab. Bonds are also reacting to 10-year yield briefly dipping below 4.3. It's back above it now.

But Rick Santelli, to Lizanne's point, you know, listen, stocks are ripping, but oil's down a little, and the bond market's not moving that much. Right. It didn't move that much to the upside. Let's, you know, the high yield, the close for a two year was under 4%. It was like 399. For a 10 year, couldn't even get above 4.5%.

It's high close was around 443. And if you look at what the pre-conflict lows were for a 10 year, it was down at 3.94 on the Friday before the conflict, the 27th of Feb. So we're under 40 basis points. So to your point, I think we should expand that to both. sides of the market, meaning that we're not seeing a lot of upside on the treasuries when it looked dire, and we're not seeing a huge downside as it looks more optimistic that things are coming to an end, even to dollar index. The dollar index was a counterintuitive trade. It was siding with things like commodities, higher oil prices, dollar denominated commodities,

boosting it up. So the fact that it's down about a half percent today also is pretty good news. I'm much more optimistic than you are, Brian. I think that the lows in stocks are in. I think the highs in interest rates are in. And I think if we wait any longer, all the good trades are going to be gone. Now, that's just my opinion. And there's a lot of risk involved into being early, but those are the people who make the money. And to me, it's about money. This isn't about brownie points. It isn't about how the world's going to look supply-wise. I keep it simple. We are the best country in terms of our own energy needs. We're an exporter of energy and for all practical purposes, whether people like a RAND conflict or not, it certainly

is going in our direction. We want to be optimistic, Rick Santelli. I'm right there with you. We all want optimism. We want people to certainly to make money. It doesn't sound like it. It doesn't sound like it. How so?

Why not? Why not? I mean, to me, it seems like most of the, what you're talking about is looking at everything half empty. I think, you know, just like Liberation Day, all those who looked at it at half FMT gave up a lot of money in terms of the marketplace. I think this is the time that people should be buying whatever it is they wish they could have bought.

You might have already missed some of the cheapest prices. Well, listen, it's a fair criticism. My wife doesn't call me worst case scenario, Sullivan, for no reason. So it's a message taken. Rick Santelli, I always appreciate it. Love the optimism. By the way, Rick, thank you very much. All right, folks, the markets, they are optimistic right now.

Again, it's an unconfirmed report, but we do know, According to Al Jazeera, the two sides at least are talking. And if you're talking, you're hopefully not fighting. The NASDAQ is up 3.4%. We're going to get Jeff Kilberg's take, what he is seeing, what he is doing, if he's buying, if he's selling. We want to hear from you. Are you optimistic? What do you think?

We're back right after this. All right, welcome, folks. If you are just joining us, the markets, they are rocketing higher. The NASDAQ is on pace for its best day since May of last year. year on reports, confirmed reports of a conversation that Iran may be willing to end the war with conditions that's based on a conversation that Iran had with an EU official. So the confirmation is that the conversation occurred. It's not confirmed exactly what they talked about, only that we know what the EU person said.

If you follow all that, you're better than I am. But let's bring in KKM Financial's Jeff Kilberg. Because Jeff Kilberg, we're not going to confirm anything except working for affirming that the markets are buying into something. The market reaction is the NASDAQ up 3.3%. Your take. The VIX is down 15% and U.S.E and buyers emerge. And this is really interesting.

As we are the last day of the quarter, month end, there's two inputs here, Sully. I actually think we had a capitulation yesterday. But it wasn't in plain view. It wasn't a conventional capitulation. We saw S&P 500 options yesterday, historic high, one of the bigger spikes in put volume, we saw 13 million options contract traded, 60% of them were puts.

Therefore, the positioning going into today was kind of off sides. That in conjunction with being oversold conditions, earning season around the quarter, here we are, and I think you're going to see follow through once crude oil goes under $95. That's the confirmation. Why is 95 important for crude oil? 93 to 95 is where we were sitting last week and all of a sudden we broke up to 107, and that's when yesterday felt horrible for all the bulls out there. You can feel in the pit of your stomach how bad it was day after day of the market moving lower.

Here, of a sudden, now with Crudol still at 102, that's the last piece of the puzzle for confirmation that this war, this Iranian conflict, is coming to an end. Yeah, and we got some data, did we not, Jeff, that we saw a lot of selling from hedge funds. You heard Lizanne Saunders' top of the show talk about sort of institutional sentiment. It sounds like maybe the sentiment of this market underneath the hood was even worse than we thought. So if that's the case, is today then a one-day spring? Like the market sprung higher? Or if there isn't into the war, is this the beginning of something more meaningful?

I think there was a lot of torque in the market, to your point, and the Liz Anns. And sometimes sentiment comes in different ways. But I look at the options market. And in between the tea leaves, we saw people loading up on puts. And day after day, they were profiting on those puts. So being off sides with all that open interest means, yes, this is a coiled spring. And I think if we do see continued positivity out of our government, I'm not trusting what our adversaries are the terroristic Iranian regime is saying. We just can't trust that. So it's been 47 years. So I'm going to trust

what we're here in out of our government. We're pretty close to obtain in all four of the objectives, which have been laying out from day one. So therefore, I think this is the first leg up. And yes, we have the ability to gap up another three or five percent if we do see follow through it. And more importantly, if we see Crudeau come back down. And lastly, Selle, this crude oil, I know it's been a duration play, but this crude oil component, it could be deflationary. We can see just like in COVID, they're rerouting supply chains. In a couple months, even a year, you can see energy costs even lower, which would be a welcome, welcome input. Well, we'll see if these higher prices, which are going to relate to higher earnings, we know that.

If that translates into more production in Texas and the United States, because companies like Chevron, Exxon, Conoco, and others, they use that extra free cash flow to drill more holes and pull out more oil. They won't at 65. maybe they will at 80-85. We'll see Jeff Kilberg always appreciate your time. Thank you very much. All right. So your next guest has actually been on Iran's Karg Island. MCC will join us with her insight in the Iran situation. What should we believe right now? The markets believe something. They're ripping higher. We're back right after that. All right. Welcome and welcome back to Power Lunch, everybody. Big day for the markets.

You can see the NASDAQ is up just about three and a half percent. The SPB up two and a half The Russell 2000 up about 3% as well. The markets are ripping higher across the board for equities. Oil is down, but just down a little bit. It all follows a report from Iran about the European Union, or at least an official from the EU, effectively stating that they spoke to somebody in Iran who says that Iran might be willing to end the war with certain conditions. But again, there is a lot we don't know. Let's bring in Michelle Caruso-Kabrera, who has been to Iran.

Michelle, thanks for joining us on short notice. Listen, we're not even sure who's running the country. Right. So we want to be very careful with all these headlines. But do you, do you, the market's buying it, do you? Yeah. So there are two headlines, right, that the president of Iran has said something to the effect of that they're willing to have discussions. And also that the foreign minister says that there are discussions.

They don't want to call them negotiations. Those are two reports. Those, I'm guessing, are probably true. The question is, are they meaningful? Well, you have to realize what has historically always happened with Iran. And by the way, with Cuba and previously Venezuela, historically moments like this have been about buying time. Can they buy time?

Can they extend things out? Can they get a ceasefire going so that way they can have more time? Now, the president and his team have to be very careful about that. They have shown, actually, I think, already with the Iranians, that they understand that the Iranians try to buy time. That was Operation Midnight Hammer when they bombed the nuclear facilities. That's why they had grown very frustrated. They thought the Iranians were buying time and trying to.

And they went in and arrested Nicholas Maduro because they thought he was trying to buy time. So they're cognizant of that. So I think the headlines likely you could bet on them than they're true, but you don't know if they're meaningful. Yeah. And earlier in the show, Rick Santelli kind of accused me of not being optimistic enough. I want to be optimistic, but here's my issue. And you know this, Michelle. This came from the president, theoretically, the president's faction inside of Iran.

He did not, he doesn't run the country. He's the president, but let's be clear, the Supreme Leader, the Ayatollah is the one who really calls the shots. We don't know the condition of junior Kameney or whatever you want to call him. But because this came from the president, does that make you a little more wary than if it came from the, quote, supreme leader? And I hate that term. Yeah, so I think that's. You hit the nail on the head. We haven't seen the new Supreme Leader.

There are reports that he is in a coma. So the president may be the de facto leader. The other very important group within Iran is the Iranian Revolutionary Guard. And they this morning were making very contrary statements to this point. The one other point I would make is that there was a military objective when the U.S. went into this. stop Iran's ability to project power. That's military talk for it. We've got to destroy their missiles.

We've got to destroy the Navy. So that way they cannot project nuclear weapons. And I don't think they're going to stop until they achieve that objective. Bottom line. Michelle Krushikabura, who has actually been to Iran. Michelle, we're glad you joined us, especially on short notice. Thank you very much.

See you later. All right. So now more to the energy markets. joined by our friend Bob McNally, president and founder of Rapid End Energy. And Bob, we know, listen, this is all developing real time. It could change overnight. It could change certainly tomorrow. You heard my conversation with Michelle. The markets, the equity markets are buying into this. They're up three and a half percent on the NASDAQ. The energy markets are not. Oil's down 1 percent. Still above 101 bucks. What's your take?

Brian, great to be with you. Yeah. So this is a nightmare. The energy market is experience a nightmare. It never thought possible. And it wants to believe the nightmare is over. I think what really got things going was President Trump, reportedly Wall Street Journal yesterday saying, look, I'm ready to walk. I've had it. Let Europe go and take care of the oil. So the quote unquote taco option. I think that's really what behind what paired the gains last night and Brent and got us going down. Look, we think it's going to end most likely with a ceasefire. Both sides decide we're at the apex of the cost benefit curve. Are we at the cusp of that? We don't think so. There is a report in Axios.

I don't want to put you on the spot, Bob, because it just came out. So maybe you saw it. Maybe you didn't. I'll give you the gist. Axios reporting that Pakistan and China, I don't know what their role is in this, but Pakistan and China effectively have a deal to put forth a potential ceasefire that would involve what they would say is the reopening of the strait of Hormuz. Forget about the meat of the article. Answer this. What is China's role in all of this? Because they have been shockingly quiet, even though they are the biggest consumer of the majority of those refined products and unrefined products coming through that straight. I think China's role is less than advertised. They want to be like everybody else, the one that steps in and oversees and introduces

the solution. They want to project power, et cetera. But you know what? I don't think they have much sway over Iran. I think that's been overstated. They've got 1.2 billion barrels in reserve. they're not as bad as shape as the Philippines or even India and so forth. So China wants to be the one to save the day. I don't think Iranians are listening to them much. Their kit didn't work too well in Iran or Venezuela. So I think China is pretty much a side show right now. All right.

So Pipa and I, we're talking about this at the top of the show. Let's be optimistic. Let's assume there is an end to the war soon. Okay? Yep. The two sides agree. Everybody agrees. The conditions are agreed upon.

People, traffic resumes full freight. through the Strait of Four Moos and the Bob-O-Mand-Eb Strait. How long will it take to get oil flows? We'll get the natural gas in a second. Oil flows back to pre-war levels. Three to four months to get the fields, the facilities, and the boats moving again. That's what I'm told. I think the head of Equate Petroleum Corporation said three to four months.

I understand other large producers, also three months. However, Ryan, however, Romalia, a workhorse field in. Iraq, that thing may never come back to where it was. We may have some permanent loss of supply from some of those big, old, tired fields. But for the ones that can work, three to four months, assuming no damage above ground. Is that why we're seeing oil down 1%, which is nothing? Oil was higher. Oil is higher now than it was a couple days ago. So I think every instance of verbal intervention loses power. And last night, President, according to the Wall Street, Gerald, came out in Truth Social and said, I'm walking. I've had it. And so I think that's worth

about a percent off. I don't think the market really believes it. But I think that that's the reason we're getting that. It's just the waning potency of happy news to get this nightmare over with after 30 days. Yeah. And again, you're a definitely mid-east expert. I know you've been there many times. In fact, just recently. So you heard my comment to Michelle that we're getting these comments thirdhand from an EU official who reported, spoke with somebody in the president of Iran's office. Do you buy that chain? Do we know, Bob, who's really running or who's speaking for the Iranian nation, assuming, and I mean this respectfully to the people there, because it's not their fault, is there an Iranian nation right now?

You know, there is a core leadership. Galibaf is a leader much more so than the president. The president's form of figurehead. But there is, you know, they did plan for this. My colleague, Scott Modell, ex-CIA field officer, Iran expert, he's been had, he's gotten all over this. And they, they plan four or five rungs deep. Is it super coherent? No, but there are leaders. They're operating. They're keeping quiet. And there is a leadership. I think we kind of know who we need to talk to. It's not the president. It's others. And I think that isn't, that isn't the problem. It's getting to the apex of that cost-benefit curve for both. President Trump's there. Iran may be getting close.

Bob and Daly, Rapid and Energy. Bob, always appreciate your super valuable time. Thank you very much. All right, folks, just a quick reminder. Go back to the markets. They are at record highs. The NASDAQ has up 3.5%. And coming up after the break, we are going to speak

with a company that might produce your power. They are right at the center of energy and energy infrastructure. And that stock has more than doubled in the last three years. Drew Marsh, the CEO of Intrigy, will join Next.

All right, welcome back to stock market and the energy market reacting to a wave of reports coming out of Iran or at least associated with Iran. Stocks there ripping higher. The XLE is down. WTI crude oil down a little bit to about $101 a barrel. Natural gas up a little bit, but still below three bucks on the margin. And that's pretty amazing, considering that the world's largest natural gas facility, which is located in Qatar, is offline.

Let's kind of tie it all together. Bring it back to the United States and to you. Joining us in a CNBC exclusive is the CEO of Entergy. That is Drew Marsh. They're one of the biggest power producers in the United States, based down there in the southeast. Drew, thanks for coming on. Listen again, I'm not going to ask you to get into the war details.

It's one day. We don't know where this is going to go. But what does the fact that natural gas in America is under three bucks and the biggest natural gas facility in the world is offline? What does that tell you about American energy? Well, first of all, thank you for having me on, Brian. It's great to see you again. It shows the strength of the United States natural gas infrastructure and natural gas supply.

We have a very large reservoir gas in our country, and we're exporting it all over the world, and that's helping keep natural gas prices low here in the U.S. Does it matter for how you make deals? you've got two sides. You've got the residential side supplying power and electricity to millions of residential customers. You've also got the data center and the AI side and this huge meta, you know, Facebook data center and some others. Does the war and worries about supply, does that factor into how you approach either side of your business? I think that from a supply perspective, there's going to be plenty of natural gas for gas

generation. It's the fastest and most efficient controllable energy that's available right now to not just power data centers, but to power all kinds of industrials. We have LNG facilities. We have steel mills, petrokin facilities that are growing in our service territory. So the natural gas is going to be available for all of that, regardless of what happens in Iran. But if Iran got to be resolved, then there would be an opportunity for others to decide to make investments. And I think even Removing that uncertainty is going to help. I think that the fact that there was the conflict in Iran will probably cause people to look all over the world for investments. And when they look for investments, they're going to look back at the Gulf Coast where we are fortunate to be because, you know, there's all the elements that you really need to grow a business on the Gulf Coast exists there.

Access to global markets, access to energy infrastructure, welcoming communities that are focused on economic development. All that exists in our service territory. And so we're going to continue to see investment. But it could help that Iran got resolved. Well, we hope it has. True. You know, pre-war, the focus was all on AI. And it will be for years to come.

You're making a data center deal with meta, which if I tried to explain the size and scale to our audience, I'm not sure I could do it justice. It's effectively going to double your race bait. you know, you're rate bait with one customer. Do you worry about that concentration risk that it's almost too much meta, given the scale of this project? Well, it is a significant project, and it's significant for Louisiana. We're fortunate to say that we also have other data centers in our service territory, AWS, Google.

We have some of the smaller developers of data centers that are entering our service. service territory. But our industrial base is very large. And even though we are seeing these very large projects, you know, we still have a significant base that is well over half of our sales today. And that is going to still be around. That's your more traditional industrial customers, your industry, your refineries, your petro Kim's, LNG's steel that I mentioned earlier. So even though these are very large customers in the big scheme things, we aren't going to be completely taking over our sales. This is a significant investment, but we are also watching, you know, the continued growth and the need for compute well into the future, and we expect that

that is going to be a very safe investment for a long time to come. Yeah, I mean, trying to as a guy prone to sometimes TV hyperbole, Drew, I don't think I could put this fully in the size and scale that would do it justice. But we appreciate you coming on. Drew Marsh, CEO of entry to the stock has doubled in three years. Drew, thank you very much. Thank you, Brian. All right, take care. All right, let's step out of the world of money and finance for a second. Get a CNBC News update with Julia Borson. Thanks, Brian. The Supreme Court ruled this morning against a Colorado ban on controversial conversion therapies for LGBTQ children. And today is ruling the court sided with a Christian counselor who argued against the state's ban on

First Amendment grounds. Elena Kagan and Sonia Sotomayor sided with the majority, noting that the ruling meant a state could also not ban gender-affirming care. Staff scheduling at LaGuardia Airport may have violated the operating procedures on the night of the deadly tarmac crash. According to a document seen by Reuters, LaGuardia's air traffic controllers are supposed to handle either air or ground traffic, but Reuters says the controller may have been handling both. And Indonesia announced today that it will be rationing fuel supplies as the Iran War continues to push prices higher. The government is limiting fuel sales to 50 liters per day and implementing a work-from-home

policy for civil workers outside of health care and security. More power lunch is coming up after the break. All right, stocks there right at session highs. The Dow Jones Industrial average is up 1,000 points. The NASDAX's up 3.6 percent. Brint crude down about 2%. Tyler Rosenlicht as energy portfolio manager at Cohen and Steers, head of natural resource strategy. We had ostensibly asked you to come on to give us some stock picks. We'll probably get one,

Tyler. You picked a hell of a day to come on, by the way. It's usually how it goes, right? Well, that's how it goes. Live television. Maybe some good news around the Iran war. We'll see as an energy stock person, how do you read the energy market, some of the headlines, how do you approach this right now? Yeah, so we're definitely believers, you know, a phrase that I learned last week from Paul Sankey at Sankey Research is, when you shut down energy, it's an event, turning it on as a process. So we're definitely believers that... Sounds like something Sanky would say. Exactly, right. But you know, I think that

there's going to be a reverberation in terms of getting energy flows moving again, getting gas moving, and so forth. We do think we came into this with excess supplies. They've been drawn down. And this is all noise. It's really going to take a while for us to work out of this. Actually, I think that's a good thing for energy stocks, even if oil prices are down a few percent, because we understand how important they are for the economy, for economic growth. And this is going to be, I guess, to some... an ugly part of this story. There was an article about it last week about all the excess cash flow these companies are going to make. And I look back at earnings from 2021 to 2022 when Russia invaded

Ukraine and oil surged. It does flow to the bottom line. We're going to get a huge pop in earnings from these companies. Are we not? We are. But for us, I think spending your time on next year's earnings is actually less important than thinking about the terminal value expansion you get from, we were in an end of the era, end of the oil era, a decade ago. up until about 2022, we thought we didn't need energy anymore. And one of our core thesis is actually energy is going to be around for a really long time. So yeah, maybe next year's earnings are going to be up 100% or 200% but it's really about who has duration of cash flow, who's going to be around and producing oil 20 years, 30 years from now. And I think that's

really going to differentiate the winners from the losers. Are you resetting your baselines for the price of oil and other things? We were at 60, 65 ahead of the war. Do we have to reset that to 80 over the next two years? I think you definitely do. I mean, we would have come into the year. We did come into the year a little more bullish than most saying Brent 70 or 75. You think you have to raise that at least $10. I mean, part of it is we've realized how fragile the oil supply system is, right? If you can shut down a straight and that can constrain global energy movement, that's a big problem. And so as you move to other producers, marginal costs has to go higher, we do think in the long run oil price needs to go up and also oil is going to be around for quite a long time. And that's a good thing

for energy investors. 2021 to 2022, Exxon, Conoco, and Chevron had huge earnings pops. I just did the math last night because I'm boring. It was up over 200%. Conoco Phillips, a buy here? We like Conoco. We like all the oil producers that we think have long inventories. Who's been investing countercyclically?

Who has these assets that were underappreciated five years ago that are suddenly going to be appreciated again? So that's a great example of a company that we think as the oil era comes back, they're going to be really rewarded. Yeah. And we'll see if they reward a, America by putting more drilling rigs in line and taking more oil out of the ground. We'll see Tyler Rosalect of Conan Steers. Really appreciate your time, Tyler. Thank you very much. My pleasure.

All right, folks, before we wrap up this hour and send it to closing bell, want to give you a full rundown of how things are moving again on reports that are on as potentially signaled it may be willing to end the war if certain conditions are met. So there's a lot of ifs ands or buts. But either way, the market is buying into it. The S&P 500 and the NASDAQ are right now on pace for their best days since May of last year. The NASDAQ up 3.6%. As energy stocks not move today, but they have been moving. Oil, as we just talked about, not moving much. Brent crude down 2.5% and crude oil, WTI here, down one half of 1%. So not a big move. In fact, oil still higher than it was. The VIX, though, it is moving down. The volatility or fear,

gauge is down 15%. This could all change tonight, but right now, markets ripping up one hour to go. Lots to do. We're done. We'll see tomorrow. Closing bell picks it up right now.