Power Lunch - Stocks Mixed as Iran War Enters Fifth Week 3/30/26

Episode Date: March 30, 2026

West Texas Intermediate crude oil settles above $100 per barrel. Eurasia Group's Ian Bremmer joins to discuss politics.  And Wedbush's Dan Ives joins to talk the tech trade.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Your money trying to start the week higher, but right now the sellers seem to be in charge. Welcome to Power Lunch, everybody. I am Brian. Kelly is off today. All the major averages, kind of on the midst of being lower right now, Dow up a little bit. It's a four-day workweek reminder. There is no trading on Friday for the Good Friday holiday. The S&B 500, by the way, headed for its worst month in nearly four years. All this, as oil here climbs back above a hundred bucks a barrel. And as one overseas leader says, the situation is, quote, unsustainable. All this. The Middle East hits a dangerous crossroads. Ian Bremmer, president of the Eurasia Group, is with us today on the decisions that might reshape the region and the world.

And in the markets, tech, of course, the hottest trade now. It's the biggest drag. The question, when is the bounce back? Will it bounce back? Dan Ives, Global Head of Technology Research at Wedbush is here. Welcome, everybody. Hope you had a great weekend. We have got a big hour. let's kick off this hour with oil and energy, because there have been many new developments that are sending oil prices higher. First up, President Trump now actively threatening Iranian oil. He wrote in part, quote, we will conclude our lovely stay in Iran by blowing up and completely obliterating all of their electric generating plants, oil wells, and Karg Island, and possibly all their desalination plants. end quote. That was just part of what has happened the last few days. Here are some of the other key headlines. The Houthis, the terror group, they've officially entered the fight. Ukraine,

they continue to hit Russian oil ports and oil assets. And Kipler now says that over 11 million barrels per day, about one-tenth, one-ninth of global oil supply may be offline. And while the entire world has been focused on the Strait of Hormuz, there is a new, critical waterway for you to know. It is the Bob El Mandeb Strait. We'll call it Bems for short. That is the strait between Djibouti and Africa and Yemen that leads into the Red Sea in the Suez Canal. It has always been an important strait because of the Suez Canal. But with the risk in Hormuz, the Bems has taken on even more importance. And ships now run the risks of attacks from Iran's proxy fighters, the Houthis, who have their base in Yemen.

About 5% of the world's oil runs through there or more than 10% of oil shipped by sea. So between the Bob El Mandeb and Hormuz, the world is looking at 20 to 30% of all shipborne oil potentially being offline or at risk. So how does this play out? Let's tie it together with Halima Croft, Global Head of Commodity Strategy. At RBC Capital Market is also a CNBC contributor. I'm not trying to scare everybody or be negative. We saw the Houthis. It was kind of a little attack.

Right. Limited engagement so far. Very limited engagement. Able to be stopped. But if things ramp up in the Babel Mendeb and keep going in the Hormuz straight, what then? I mean, that's so serious. I mean, we've been saying from the beginning the Houthis are the big wildcard because they could effectively block in all Red Sea shipments. If you want to think about like what oil is getting out of the Middle East, the only oil really getting out of the Middle East or the Saudi barrels that they are,

running through the East-West pipeline. That has reached maximum capacity. Into the Red Sea. Into the Red Sea, Yambu Port. About 5 million barrels of exports are now coming out of Yambu. If Babamandab is viewed as unsafe because of Houthis once again fire missiles, drones, ships going through, and we basically close that choke point, those Saudi barrels aren't running, and we've effectively now shut in all Middle Eastern.

And this is Middle Eastern geography. I understand it for a lot of our viewers and listeners, it's a little bit wonky, but I'll put it in a very basic way. There's three major, there's more than three, but let's call it three major West East highways in America, I-10, I-40, and I-70. Let's say I-40 has effectively been shut down. We're now talking about potentially risking one of, and the traffic flows to the other two. We're talking about shutting down or shutting down the amount of traffic in one of the other two. what were to happen if the Houthis ramped things up? Well, the problem is, again, Brian,

there's no way out for those barrels if the Red Sea is shut. Again, the only relief valve we have had has been the Saudi East-West pipeline. I mean, thank God they invested billions of dollars in that pipeline. They're very smart. Very smart. That was energy security.

But it is contingent on that waterway remaining open. Yeah. Now, again, the Houthis have just entered the conflict chat. They have not done anything yet on tankers. They kind of raised their hand. We're still here. They've made some verbal threats. The question is, what is the tripwire for them to become active?

They're going to do what Iran tells them effectively. Well, they're an interesting case because they are an access of resistance member, but they don't always take their orders directly from Tehran. And they have to govern Yemen as well. And so the question is, how do they prioritize? their relationship with Saudi Arabia. Do they want us pounding them again? So again, I think it's important they've entered this conflict. We have to wait and see what happens. And I know again, a lot of our viewers are going, well, what about the Suez Canal? Ships can just come and go. Yes,

but there's a maximum size ship that can go through. It's called the Suez Max. A lot of the bigger oil tankers have to go in and out of the Bob El Mendeb straight. They can't go through the Suez. So there's limitations there. All right, over the weekend, we had one of the, the, the critical leaders of the Middle Eastern region, Sultan al-Jabar, basically come out and say, the situation is unsustainable, and here's what he's talking about. We show on our markets, we'll show the price of oil, Brent Crude and WTI, that's what's called the paper market. That's the futures contract. If you want to actually get a barrel of oil in the UAE region right now, it's going to cost you a lot more than 110. I mean, I think from the standpoint of the Emirati is 60% of the missiles and drones in this conflict from

Iran have been fired at them. So their concern is how does this end in a way that Iran is not operating the Tehran toll booth in the Strait of Hormuz? So I think they are concerned that we could potentially leave and leave Iran in charge of the world's most important choke point for energy. Yeah, and again, everybody knows this by now for the CNBC viewer, it's not just oil, it's LNG, it's plastics, it's helium, it's all these other things. So we've got Ian Brum, grammar coming up in a few minutes. I'll get more on this with him. But from a commodity perspective, Alima, what do you see as kind of the best and the worst possible outcomes here? I mean, the best outcome would be this ends now. And we have a free movement of ships to the Strait of Hormuz.

But it's still going to take months then to fully restore production. I mean, you had the CEO of KPC, Kuwaiti-Bortland Corporation from Sarah Weeks, say Kuwaiti production, it will take probably three to four months. to fully restore that output. Then you think about a country like Iraq. How long would it take Iraq to be fully up online? There's been significant damage to energy infrastructure throughout the region. Think about Qatar and think about the damage

to the Ross Lafant LNG facility. So, again, the best case outcome would be a multi-month return of energy flows. The worst-case scenario is extended duration conflict, that paper market and the physical market prices converge, and we end up in a much higher price environment. That's 100. What you just said is $130 to $150,000 Brent crude oil and I'm going to $125 WTI.

Taking out the 08 highs in a multi-month blocking straight of Hormuz situation. And again, that's why we have to watch the Red Sea exports, because if we close down that vital waterway as well, that gets us. That's got to be. That's the 08 high taken out. Because you're talking about potentially to your 0.5 million barrels a day in the Saudi port, they very smartfully built a pipeline literally across their country. They thought about de-risking infrastructure and made the investment in advance. But that Babel Mendeb straight, that's not entirely up to them.

Houthis and maybe the Iranians are going to have a say about it. Take two to three million of those five offline. Again, now you're looking at a tight world that's gotten to maybe Sultan Jabber's point, unsustainable. Brian, think about it. We ran up to 128 after Russia. Russia invaded Ukraine because we were concerned we would lose three million barrels of Russian production because of sanctions.

We're now talking about shutting in production of over 11 million barrels. Yeah, that's one-tenth of oil. And the reason, is it fair to say the reason oil is not at 150 or 200, whatever the number is, insert number here, is because there is a billion plus barrels in storage, or there was. There was. We've got the largest global coordinated oil release of all time. 400 million barrels, 172 million coming from the United States. And China, for now, has plenty of oil.

I think also, Brian, people believe this is transitory. So at what point do market participants say? That's a bad word because they were wrong about that nature with inflation a few years ago. That's what I'm saying. People believe that the straight will reopen soon. So the question is, tell me when we start seeing ships moving. of focusing on sound bites. Yeah.

And right now we got WTI, as you talked, hitting exactly 103. We are back to triple digits, which of course is not 08 because inflation has the impact. But let's just say these are high numbers. Lehm McRoft, always love having you on set. Thank you so much. Thank you very much. All right, folks, speaking of energy, a reminder to sign up for my forthcoming energy-related newsletter.

It's called Power Insider, a weekly piece in a key news, meeting power players, and more. It will launch in a couple of weeks. Use that QR code and sign up on your screen. you go to cnbc.com slash power newsletter. All right, coming up, more valuable insight this time from Ian Bremmer on whether the Iran war will really wind down soon or will it just keep ramping up. And if so, what's the off-ramp? That's next.

All right. The big question for global markets right now is when and how the Iran war ends. Will the two sides come to some kind of peace deal, or are they so far apart that no deal is possible, at least right now? President Trump, as you heard us just say a moment ago, further threatening Iran. And there is the growing talk that American soldiers may put boots on the ground in Iran or at least the region very soon. Eurasia Group founder Ian Bremmer laid it out very plainly on social media, writing, quote, Trump can't reopen straight to four moves with an air campaign in the Iranians.

They're not going to accept any of that outcome willingly. Ground troops are coming. Let's talk about that. and more Ian Bremmer, founder of ERAZ group, is with us now. Ian always value your insight. What's the off-ramp here? There isn't one soon. The off-ramp for the Americans requires the strait to be open.

And for the Iranians, to the extent that they can, it requires them to continue to have influence over the strait. Those are incompatible goals. They're pretty baseline. And I don't think the 7,000 troops that are on their way to the Middle East, some of them arriving today, are there for sure leave. So I do expect that they're going to be deployed in combat. And that is meant at a minimum to up the pressure on the Iranians, as well as increase the military damage done in the capacity of the Iranians to disrupt the strait. But we are, as you know, that that means that we're more than a week or two away from the conclusion here.

Yes. And, you know, we're a financial show. So focusing on the financial aspects of this, two distinct outcomes. Cargoy Island, 90% of Iranian exports. Right now, we've avoided hitting the energy infrastructure. Although over the weekend, President Trump kind of alluded to or didn't just allude to suggested potentially blowing up oil wells. What are the two differences, though, Ian, if we take Cargile, in other words, we just sort of have troops there and now it's ours, the oil theoretically would still flow, or leveling the oil infrastructure. I mean, those are critically different outcomes for global energy. Yeah, well, I mean, first of all, you're right that Trump did say that, but he has said many things over the last days, and he contradicts himself continually on this war because he's angry. he's frustrated, and he doesn't have a successful off-ramp that he wants. I mean, he wants to be out of this war now, but he wants to say I won, and he doesn't know

how to get both of those things. So as a consequence, what you're getting is sort of letter salad and every post frequently, the posts themselves contradicting themselves. So it's not super coherent, right? And this is driving American allies pretty crazy, but that's the reality. Now, they do not have, 7,000 troops is not reliably enough to take and hold Kark. The military folks that we've been talking to, say, 12,000 to 15,000 minimum for that operation comfortably, that's not where they are.

So if that is a goal, and it may well be, it is not an immediate goal. A more immediate goal would be taking some of the contested islands in the. the strait to give them more influence over and balance of power over what happens in the strait. Also raids on coastal areas, probably not trying to hold that territory, but rather going after missile launchers, going after capacity with drones and further degrading the Iranian position. And then from there, if that then doesn't lead to now you're willing to, now you're willing

to cry uncle and accept more of our 15-point plan, then you're bringing more troops in and you're going to CARG. The problem, as you know, is that on any given day, in the fog of war, the potential that you get significant unintended escalation is real. Yeah, and if we, by the way, Carg Island. That can happen from the water salination plant. That can happen from a, that's a war. I think so. A billion target, get all that. Yeah. If you hit these salient plants, I think that's a war crime. I'm not sure. Either way, Carg Island. The Barga Island is a scrub. I've never been there, but my colleague and friend Michelle Crusher Cabrera has.

It's a pretty small scrub island, basically a bunch of oil tanks and export ports, not much there. If U.S. troops were to be on it, then there's no reason why the Iranians wouldn't lob missiles at their own island because now it's not their island anymore. And there's not many places to hide. It's about the size of Catalina. But I want to ask you about somebody else we haven't heard from. And that's China. China needs, they get the majority of the oil that goes through the straight of form moves ends up in parts of Asia. China or South Korea, Japan, whatever.

Same with natural gas. China's been almost bizarrely quiet this entire time. When do they enter this conflict verbally trying to be the mediator of something because they are reliant on what happens here, Ian? Well, first of all, they're much less near-term reliant, less exposed than countries like the Philippines and Vietnam and Sri Lanka and others in Asia because they, of course, have much greater stockpiles at China. Secondly, they're playing the long game. They're more than happy to allow the United States to undermine their own position and their own reliability with other kinds of. countries around the world while promoting themselves as a face of stability and predictability. They are making no regret risk-averse moves thinking about 10 years down the road.

They, of course, are the world's first electro-state, and they're in a much better position on post-carbon than the Americans or the Europeans are at scale, including the critical minerals and supply chain to help power that. So they're thinking long-term. They have been for a while, and that benefits them, even if they're taking an economic hit from the crisis. I don't think that we're going to hear from the Chinese any criticism of Trump directly. I do think that any future of the straight, the Chinese will not want the Europeans to be engaged in any transfers and escorting by themselves. They will want to participate in that. And it's interesting because Trump has on many occasions now said, we shouldn't be policing the

straight. It should be the other countries, the Europeans, the Asians, they get all their energy from there. That seems to misunderstand basic tenets of globalization. But of course, if the Chinese then say, okay, look, we're willing to do that. By the way, we gave you TikTok, which is what really matters to you, sir. We want to have a role in policing the straight. I think Trump might well give it to him. I think it'll drive his own defense. and intelligence folks absolutely bad shit crazy. But I think Trump's inclination is to say, yeah. That's a fair description.

Let me wrap it up with this question. Does China have the ability to go to Tehran and tell them knock it off? I understand that we're doing stuff too, but from an Iranian perspective, would China have the ability to force Iran to back off? I doubt it. But I also think they have no such inclination. I mean, there was a big question about whether they could have done that with the Russians on Ukraine. Of course, that hurt the Chinese with their relations with the front line NATO-slash EU states

that they were closest to, but now the Russians invaded Ukraine, and now they're really angry at China for providing support. They weren't willing to deploy real pressure. They want to be seen as engaging with absolutely everyone. And I think the same thing remains true with China on Iran. Let's keep in mind that the Iranians are getting a lot of oil out. They're the only ones that are at this point, other than a few. marginal tankers from places like Pakistan, Malaysia, and most of that oil is going to China.

So, you know, they are not, even in the near term, the Chinese are comparative winners here and the way this war has played out. This is by far the biggest foreign policy mistake that Trump has made in either of his presidencies. There's no question, not even close. We'll leave it there. I will say this. You pointed this out, we've pointed out before, the unintended consequence, energy markets, that you know what's soaring is coal? Because a lot of these natural gas plants in Asia are now going to have to re-convert back to coal because they're worried they're not going to get the gas. So if you're worried about the climate, now we're burning more coal.

Ian Bremmer, Eurasia Group founder. Really appreciate it, Ian. Thank you very much. Good talking. All right, folks. On deck, we are going to get a check on the markets and your money. Dow is up a little bit. S&B down about two-tenths of 1% NASDAQ off about a half a percent.

the world, of course, remaining on edge. And we have got a very surprising stat for you on your markets and your money. You'll hear it right after this. All right. All right. Got a mixed market for you right now. The Dow is up about three-tenths of 1%. The NASDAQ and the S&P of which you probably care more are down a bit.

The NASDAQ down about 6 tenths of 1%. Now, on Mondays, we've tended to have slight gains this year, only generally to see those gains sell off the rest of the week. And with stocks lower to begin the year, year, do you know exactly how bad it's been? Well, it maybe not be as bad as you might have thought. Look at this. And this is, yes, a very good RBI, random but interesting. As creative planning's Charlie Bellello notes, we are in the middle of just the 14th worst start to a year for the S&P 500. The worst start was back in 2020. Of course, with COVID and the lockdowns, we lost 18.6% in the first

59 trading days of 2020. 1933, 1938, 1935 were the other top three worst starts to the year. But this year, we've lost 7% in the S&P, which Charlie notes, we know feels worse than that. And by the way, it may get worse. But overall, we have had 13 worst starts to the year ever and four worse starts to the year since the year 2000. So that's what's happened. The big question, of course, is where does it go from here? But we know where we're going. We're going to go to the bond market because Federal Reserve Chair Jerome Powell speaking this morning at Harvard University, indicating that the central bank is include or inclined to hold rates steady. And bonds, they are rallying with yields coming down. Springing to talk more about it with Steve Leesman. Steve. Hey, Brian, yeah, Fed's here, Powell, taking some of the edge off of the concern the Fed could, hike interest rates amid the surge in oil prices and the rise in inflation concerns.

Here's what he said earlier today. Now we're facing events in the Middle East, which will certainly affect gas prices, and we feel like our policy is in a good place for us to wait and see how that turns out. A good place is the phrase power likes to use to signal little change in the way rates are currently set right now. Looking at the December Fed Fund futures, the market now banking on no change at all in and just a modest chance of both hikes and cuts. The bond market already gains, Powell made clear that the Fed is committed to bringing inflation down to 2% of that the Fed would watch longer term inflation expectations for queues, Brian, that it might ultimately respond with two higher oil prices.

Brian? Yeah, I mean, this seems to be the question. to the market, Stephen, of course, Fed Chair Powell is going to be leaving as of May. Do we have any idea what the possible, I guess, incoming Fed leadership may think? Well, we know that Kevin Warsh, if he gets in it may, of course, that's a question right now. That's why I kind of hedged it. Yeah, just to be clear, he wants to bring interest rates down. But what we're hearing from the committee is more of a let's wait, watch and see what's going on. There's still the tariff inflation that there has, it causes some concern. And Powell mentioned that again. They're

looking through that and then they're going to look through the oil prices. So you get to a point where if you look through too many things for too long, Brian, then the credibility of the 2% target becomes called into question. All right. Steve Leesman never called into question. Steve, we appreciate it. Thank you. All right, coming up, the biggest IPO in American history, Will it be out of this world or something else? Dan Ives on that and more. Next. All right, welcome back. Stocks, they're trying to shake off last week's downturn. The Dow is up, S&P and NASDAQ down a bit. But for the biggest market drivers, lately the pain for you continues the Mag 7 down more than 30 to 20% off their 52-week highs. Apple's down 14, Microsoft down the most off 35%.

But what about Meta? Well, Morgan Stanley out with a new note saying, it's time to buy meta, making it a new top pick and seeing an upside of 50%. With a price target of $900, your next guest, even more bullish on the stock. Let's talk about that and more with our friend, Dan Ives, head of tech research at Wedbush. Securities, Dan, welcome. Great to be here. All right, so before we get into specific stuff, again, we know you're optimistic. But what's, as the market keeps trickling down, what's your message to your clients?

I mean, the message is that it's a white-knuckle environment, but just like the COVID days, just like Liberation Day, it comes down to like, what does the spending look like intact in terms of the AI revolution, in terms of the $4 trillion of cap-backs that's going to be spent? That's not changing. So as I want to be clear, as of now, $4 trillion intact. Nothing's changed. And to some extent, accelerating in terms of a lot of these projects. So our whole point is similar what you're talking about with meta, and I can say the same about Microsoft. and Tesla and many of these other names, you have to be able to navigate these white knuckle periods,

and that's what it is, to understand who are the winners, and especially a lot of these stocks right now, they're trading, like numbers are getting cut, not that numbers are going higher. I'm going to say something I shouldn't say, so don't tell anybody. It's just between you and I, of course. Which is that energy, which I love,

energy doesn't matter to the market. It's 4.5%. Energy's soaring this year in the market is still down, so not my opinion, right? Energy's booming, and the rest of the market, market is lower. Is there a point at which some of these things we're seeing with oil trickle over into your world at all or not? Look, I think this last, you know, going into the summer, into the next few months, then, of course, there's some ripple effect on the economy, on enterprise,

on consumer, where eventually then capbacks could start to get cut. But our whole point is, is that if this is contained and it's something that is not prolonged, it's really a speed, bump on the broader view of tech. But even to Dan Ives, and we know that you've been bullish and are bullish. If we, if this lasts into summer, you might have to start rethinking how you think about things. Look, if this lasts into the summer, then you could start to have clearly a ripple effect in terms of what they mean in terms of numbers, capbacks. And I think right now, where you're looking in terms of tech, a lot of these stocks are

basically saying, like, numbers are already coming. I mean, I would already say, like, bad news is starting to get big significantly into a lot of these names. And that's really our whole point, how we navigate through these movements. And we saw, you know, the intro, we talked about meta, and you're very bullish on meta, the Facebook company, Instagram, WhatsApp. Microsoft is off 35%. It's lost a third of its value from its 52-week high. It's 65% or so below its Wall Street average price target. What's going on with Microsoft? To your point, I don't, it has nothing to do with what's happening in the Middle East. What's going on? I think there's three reasons.

why the stock is just down, you know, obviously in this fashion. One, I think the view that Google in terms of what they've been able to do on the cloud, in terms of AI, that there's a share gain situation happening versus Microsoft. But our whole point is... Gemini is beating ChatGPT, which is partly owned sort of by Microsoft through its investment in OpenAI. Exactly, as well as co-powered. And then when you go back to the Open AI, it's a view like they're less relying on open AI. That becomes more of a competitor. Is that some... something that ultimately cascades. And then I think the third thing is really about Azure growth. And we think that ultimately does accelerate. But right now, they're going through a lot of

software companies. You're going through one of these where the CAPEX build out to there, but the monetization is not at the pace that investors want to see. And that's why it's not just Microsoft. You look at Oracle, you look at cybersecurity. I mean, software stocks are selling off in dramatic fast. Except today, I will say that, you know, Marr, the tape is down a bit, right? We've got the NASDAQ off about a half a percent, but some of the cybersecurity stocks, they're actually higher today. Well, to that point, I think that continues to be, I think one of the most disconnected trades I've ever seen intact in terms of the view that the AI goes trade, an anthropic is going to unseat a crowd strike, a Powell out there. And that's really more of a fairytale.

The reality is that for cybersecurity, the budgets, and we were at RSA last week, they're just going to increase, we think going from 5% IT budgets, 10%. So cybersecurity is a good. So cybersecurity is a good example where that right now is way overdone relative to why I think it's going to be the fundamental case on not just those names, but the sector. Yeah, any one of those names you like more than others? We show CrowdStrike. We showed Palo Alto. They're both up today. It seems like there's a couple stocks companies that are turning into the real winners of Yeah, I think CrowdStrike and Palo Alto. They're kind of in their own. And then you could say Z Z-scaler, I think, is another name that's going to clearly be very well positioned. Checkpoint is

another name on a barbell approach, obviously a cheap stock. I think well positioned from an install based perspective. But Brian, I think right now, like, you are just going through a glass half empty view. A lot of these stocks are getting thrown out in terms of just the nervousness. But you've got to separate out between what's happening in terms of the real spending versus what the stocks are telling. Yep. And tech valuations. About the same now as the S&P 500. We'll leave it there. Dan Ives and Wedbush. Always value your time, Dan. Thank you. Thank you very much. All. Let's get now to Angelica Peoples for a CNBC news update. Hey, Brian, more than 40 congressional Democrats have written to the CFTC asking the agency

to curb alleged insider trading in prediction markets. Senators Elizabeth Warren and Amy Klobuchar are among the names on the letter, which asked the agency to issue guidance for federal employees surrounding the use of prediction market platforms. CNBC and prediction market Kalshi have a commercial relationship, including a minority investment. Mexican President Claudia Scheinbaum defended the country's right to sell oil to Cuba for humanitarian or commercial reasons earlier today. Her remarks come after President Trump said he had no problem with Russia sending an oil tanker to Cuba despite a U.S. blockade.

JetBlue announced it is raising its baggage fees as jet fuel prices soar amid the Iran war. This is the latest sign of airlines passing rising costs onto their customers. The airline said it is constantly evaluating how to manage rising operations. operating costs while keeping fare as competitive. Brian, back over to you. All right, Angelica, thank you very much. All right, folks, your mystery chart today has been flat for the past 15 months. But your next guest says it's cheaper than it's been in years, and it may be ready for a breakout. The name next. All right, welcome back to major averages. They're mostly lower. The Dow is up a little bit, despite President Trump signaling an end to

the war in Iran could be coming soon or maybe not. The markets may not be out of the woods yet either. According to Carson Groups Ryan Dietrich, we are about to enter the worst historical quarter for the S&P 500. Here's how we laid it out. During a four-year presidential cycle, this quarter has an average return of negative 2.8% since 1950. So every four years, presidential cycle, this.

quarter of this year is historically the worst. And remember, during a midterm election year, which is this year, markets also historically fall about 15%. But if you're a longer term investor, don't you want to buy low and sell high? Let's find out and get more on that. And more with Jim Tierney. He is Alliance, Burlington's CIO of U.S. concentrated growth. All these stats, Ryan's great. All these stats are great. Midterm year, worst cycle, we're at war, etc. the markets aren't down very much. What's holding them up, do you think? I think if we rewind the clock by a year

and we were in the teeth of the liberation day issue, all of a sudden we realized it's going to be over. And I think people are looking at Iran the same way that at some point we'll declare victory and oil prices will go back down and the strong economy, and it is a strong economy, will shine through. Us declaring victory doesn't mean it's over.

There's two people in this fight, us and Iran. Really, there's Israel, too, so three or four, depending on the Houthis, whatever. Just because we declare it, I'm not getting into geopolitics, what I'm saying is what if the market collectively, Jim, is wrong about how this plays out? What if July and August, September, we're still talking about this and dealing with this? That's certainly the risk on. I think the current administration has a huge incentive to get this behind them and probably will be more willing. than not to do what it takes because we have midterm elections coming up really fast. And if we're in the same spot we're in today, it's not going to be a good result in November.

So there is an incentive to solve this. Okay. Individually, let's get some ideas, right? It's a holiday short and week. We're off Friday for the Good Friday holiday MasterCard. You're not worried about consumer spending. No, the consumers hanging in there. Higher gas prices are good from the perspective of you're spending more at the pump.

But more importantly. Which they get a slice of that. So if the numbers go up, they actually make more money. money. More importantly, the market is freaked out about agenta commerce. And agenda commerce is one thing. How you pay for it is completely different. And the thought that all of these payments are going to go away from MasterCard and Visa's Rails, I just don't see it. All right. Let's talk about Schwab because it was a day out, God, could have been 100 years ago, but I think it was about three weeks ago, where Schwab and the other wealth managers all sold off because some firm had said they figured out AI and it's going to tell you how to do your taxes. there's nothing new about that. So Schwab is one of your picks?

Yes. That technology is a feature. It's not a product offering. It's not a company that's going to take over the world. Schwab continues to grow net new assets at 5% a year. And higher rates for longer are great for Schwab because their net interest margin keeps on drifting up. And they're adding lots and lots of new capabilities to their platform such that they're going to monetize their clients at a higher rate. You're looking at a company that's trading at 16 or 17 times earnings with no credit risk.

We've talked a lot about insurance. We've talked a lot about risk. And there's actually a company that you like that has the word risk in its name. It's services, the insurance industry. Who is Verisk? Why do you like them? Verisk has the insurance risk model. They have every policy written for decades.

That is proprietary information. Unless you believe that AI is going to be able to access that information, they still have a around their business. This is a stock that's traded off significantly, yet they keep on growing earnings nicely and have that moat and it's proprietary. Until that is pierced and I don't think that's going to get pierced, this is a very interesting company. As well, as companies that we just don't talk about a lot, but probably just have a lock on certain parts of their industry. Unless you're in that industry, you wouldn't know what they do, right? Exactly. Unless your information is commoditized and available to the world, if you have

proprietary information, you still have a moat and there's a lot of value to companies like that and they're being thrown out with everything else right now in the market. Mastercard, Schwab, Veris, three names and a macro market view. Jim Tierney of Alliance Bernstein, really appreciate your view, Jim. Thank you very much. Thank you. All right. Oil, by the way, just closed, and it closed above $100 a barrel here for the first time since the war began. Gasoline prices, meantime, nearing $4 a gallon. But is that enough for Americans to switch their car buying habits? to electric cars? Or is it a complaining point that won't matter at all? We'll talk more about it, with the car dealership guy. Next. Let's talk about cars. It's not been a great run for any company

that makes non-Tes electric cars. According to Kelly Blue Book, prices for EVs overall are actually down a bit year over year, while more traditional cars are higher. But with gasoline prices, nearing $4 a gallon nationwide, and of course, well over that in states like California, we wondered if that may change what kind of car you buy. So the only way to find out is to find out. So we asked that very question on X. How long would it take for you to change the kind of car you buy based on gas prices? Under three months, three to six months, over six months, or you won't change?

Of the respondents, 70%, 7.0 said they're not going to. to change no matter what? Joining us now is Yossi Levy. You may know him better as the car dealership guy, which he is founder and CEO of and Yossi always love talking cars. Great to get you on. With all due respect to my lovely followers and everybody that watches the show, do you believe that? Do you think 70% of people aren't going to change the way they think about buying a car if gas prices keep going up? I don't know how reflective X is of the job. It's also skewed by my people who follow me. I get it.

Yeah, yeah. Look, here's what I'll tell you from, and Brian, great to be back. Haven't seen it in a while. From my initial conversations with dealers, we speak on average in a week to hundreds of dealers between our communities in person and on podcasts. And, of course, our engagement, we're seeing that the bump in EV consideration has been very strong, but the actual conversion has been relatively muted. So why is that? Well, remember that, yes, people are seeing things in the news. They're seeing the gas prices at the pump, but it's still, prices are still pretty high on your average EV. And so where you're really seeing the big bump happening right now is in the used market. The used market is the beneficiary again. And specifically used EVs where dealers have said things like, I'm selling them as fast as I can get them. And you've used EVs are being the real big beneficiary here.

So I actually, yesterday, to watch whatever happened to Duke basketball, I don't even know, it's a different issue, had dinner with a friend of mine who owns car dealerships and EV dealerships and talked about this. And I literally said to him, what would be the price of this type of a car, this EV brand? And it's getting to a point where it's getting so cheap that I almost feel like buying another one, because I bought one in the past, because I can just, it's almost, it's almost, Like, it's so much cheaper. Is that how people are starting to think? They may not even want one, but the price is getting to a point where it's hard to ignore them? So this really depends on what part of the country you're in because, you know, demand and

just the desire for the electric vehicle is very different. But if you look at the coast, and I like to look at the coasts because California, New York, the East Coast in general, you have pretty strong EV demand in those markets. So it's a pretty good bellwether for how demand is shifting. dealers I've spoken with have literally doubled their sales in the past 30 days. Now, you're not talking about a massive baseline. You're talking about maybe from 10% to 20% is the rough number, but it's still very meaningful.

When you go from 10 to 20% EV as a percentage of your revenue in one month, you know, the question you begin asking is, is this a flash in a pan or is this going to persist? It's definitely the most meaningful bump we've seen since the tax credit. Yeah, certainly has been. And resale is a part of this, though. And so if I'm a buyer, and I want to buy a used car, Yossi, that's good for me, right? Because I'm getting a cheaper car than I would have. But if I'm the owner of that car who is selling it back to the dealer, that's or coming off lease, right?

And they're like, here's your price. No, thanks. This is a bad thing. Talk to us about the depreciation of certain types of cars because EVs do depreciate, I think, non-Teslas faster than others. I would say that's that's not fully true anymore. It used to be true, especially around, look, EV prices were the most volatile during the COVID years. And naturally, as they went up the highest, they also came down, the sharpest. All of these prices have stabilized.

If you look at just the annual units, the industry's projecting new unit sales, it's called SAR. It's around 15.8 million. So that's been pretty steady. Dealers aren't expecting too much growth and they're really focused on efficiencies, but they're also not expecting crazy declines either. And the real, again, the star of the show, bar putting aside the last 30 days has been hybrids. Hybrids last year, the last 12 months have been the hottest seller in the country is a Hyundai Pallisade hybrid. And so EV depreciation has stabilized.

Yes, EVs depreciate differently than internal combustion vehicles. The battery is what determines the majority of an electric vehicle's depreciation. And it has a different type of, you know, it's, again, it's not fully linear. It does take a big drop when that warranty expanse. But that's not, I wouldn't say that's the case anymore. I think at this point, it is more vehicle by vehicle and what you can find out there in the market. And again, the used market being the ultimate beneficiary right now. Yosey, always great to have you on.

And I promise it won't be that long again. We've had a little bit going on. Yosey, love you, the car dealership guy. Really appreciate it. Thank you. All right, folks, we're going to leave you at market lows here. Got an hour to go on Monday, and we are seeing declines. Not on the Dow, but the rest of the market.

I'll leave it there. Closing bells. Going to pick it up. We'll see you tomorrow. Thanks for watching. Thank you.