Power Lunch - Stocks pop after Pres. Trump Truth Social post 1/21/26

Episode Date: January 21, 2026

President Trump says he has reached Greenland deal "framework" with NATO and backs off tariffs on Europe. Stocks soar after.  And what do shifting geopolitics mean for energy?  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks making a comeback as the selling in Japan slows down and calmer heads hopefully prevail around Greenland. Welcome to Power Lunch, everybody, alongside Kelly. I am Brian, a major CNBC exclusive from the world's most powerful stage. President Trump live in Davos sitting down with Joe Kernan. That interview about to begin when it wraps. We're going to bring you the conversation as soon as it is ready. But that is not all we have across this hour. Kyle Bass, Dan Yergan, and more market wisdom with Craig John. and a Piper Sandler, they're all, Kelly, here for you. Well, you and you and others.

And everyone. But stocks are right now. Let's get a quick check. Off session highs, but still green across the board after the worst day for the major indices since early October. The other key move is in government yields here and abroad. Bond yields are calmer, following that massive sell-off, especially in Japan, right under 427 for our tenure. All right, we're going to get to all that. And we begin with major headlines out of Davos, Switzerland. We're earlier today, President Trump spoke at the World Economic Forum. He is calling for, quote, immediate negotiations with Denmark for the acquisition of Greenland, but adding that military action on the part of the United States is off the table.

That's probably the biggest statement I made because people thought I would use force. I don't have to use force. I don't want to use force. I won't use force. Now, this is not the first, second or even third time. The United States has discussed anything around trying to acquire Greenland. We asked Denmark about Greenland in 1910, then FDR and Truman talked about it in various degrees around World War II, and then President Eisenhower considered aggressive military action and basically taking Greenland in 1955, ultimately deciding against it. But that was 70 years ago. How could this all play out now? And what about the possible threat of Europe retaliating either with tariffs or selling American stocks or bonds or both and do not lose sight of Japan, which really?

was the market driver yesterday. Let's talk about all this with Hayman Capital Management founder and CIO, Kyle Bass. Kyle, good to have you on waiting for that interview between President Trump and Joe Kernan to wrap. But I'm only trying to give a slight history lesson around Greenland. Obviously, this time, it's different. It's not new, but different. What do you make about all of this? Well, you're right with your history, Brian. I mean, Greenland is strategically and geostrategically very important to us. As China develops hypersonic weapons, if they were to launch hypersonic weapons against the Midwest or the East Coast, they would come right over the top of the Arctic right over Greenland. We must put an enormous

amount of our ground-based interceptors there. We need to put space arrays there. We need to keep maintaining that island. We've protected Europe for decades, and we put hundreds of billions of U.S. taxpayer money into protecting Europe. And what we're asking Europe to do is sell us Greenland, because Denmark was supposed to populate it. Denmark was supposed to operate it in a much more geostrategic fashion, and they've just failed to do so. So in the end, we have to have Greenland, and I think we'll end up negotiating a financial transaction where we're able to acquire it. There has been a pushback in the markets. There's been some talk that maybe Europe sells stocks.

They sell bonds. You look at, you know, maybe not Denmark, but Norway, one of the biggest sovereign wealth funds of the world. They used to sort of co-possess Greenland with Denmark, Norges Bank. Do you see some kind of financial pushback? or punch of the face or whatever you want to call it from Europe around Greenland that would impact our financial markets. I mean, Brian, as you know, we are 4% of the world's population. We are 25% of the world's GDP and we are 60% of the world's capital markets. We have the most liquid deepest markets in the world. We also have the highest interest rates

of any developed nation. If someone is going to shoot their nose off despite their face, you know, be our guest, our treasury market trades a trillion a day. It just doesn't matter. But what it would signal is that they don't understand the enormity of the threat that China, Russia, Iran, et al, are actually responsible for against the West. And so I think it's vital for us to, and it's vital for the president to explain it a little bit better to the world. I watched the speech in Davos, and he went a little further in this speech than I've seen him go in other speeches. But he needs to explain why Greenland is so important to us, why it's important to the security in the West. And in the end, we're going to make a financial deal with Denmark that takes care of the 57,000 Greenlanders.

And we keep operating at the way we're operating. We're going to continue to provide security for the West using Greenland. But at Greenland, you've got Arctic shipping lanes, you've got, you've got missile potential missiles coming over the top. And we also have heavy rare earths. I mean, there are plenty of things that we can do with Greenland to help drive that economy in a more advantageous manner while we're also defending the West and defending our homeland. I think it's, look, if you even look back, you gave the history, but if you look back to Clinton, Bush, Obama, I mean, they spent a lot of time increasing our country. security and spending a lot of money on our assets in Greenland. And, you know, we don't get anything in return for that other than, other than providing security to ourselves in Europe. In the end,

we need it. Kyle, some are pointing to the president's approval ratings, which have dropped in the last few days as this has come up. Just from a very real politic point of view with the midterms arriving, and the focus was supposed to be on affordability, kind of take that, you know, it looks like the Democrats probably take Congress, obviously, at this point. But can you just walk through if there's any implications from this move connected to whatever might happen with the midterms, connected back to the market off and having one of these weak stretches in a midterm year, kind of in that summer period? Are we just pulling all of that forward right now? Yeah. I mean, are you saying that this move on Greenland is some sort of counterbalance for the

Republicans' position in the midterms? I think if you look at what the Trump administration is doing, You just take a few steps back, and you see that when the Big Beautiful Bill passed, they added $200 billion to special defense acquisition projects. They go from critical minerals to shipbuilding to enhancing, call it America's best and brightest private companies and having them coming in to help the Department of War with our readiness. So if you actually look at what this administration is doing, behind the scenes, they're acting like they're on wartime footing. On the front of the scene, we haven't said anything to escalate the situation with China since October. I believe there was a presidential directive to basically press pause during the hostage negotiation, meaning us sending them Nvidia chips or some of our best chips and them sending us for Earth metals were currently in a kind of a hostage exchange.

And we're trying to get out from under China's thumb and they're trying to get out from under our thumb. But if you look at this administration carefully and you look at it objectively, what you'll see is they're acting like thrown wartime footing at the Department of War, at the Treasury, at State Department. And I think that is the wisest thing they can possibly do because, you know, we're staring down the barrel of a potential Chinese invasion of Taiwan. And if you listen to Xi Jinping's speeches, including his New Year's address, he's telling you that he's going to take it. And that would be an absolute catastrophe for the West. I want to switch gears. You just talked about China. I want to look.

that way, though, to Japan. Yesterday we led this show, Kyle, thinking that talking about how Japan, we thought, was the real reason the markets shook. It wasn't Greenland. Greenland's a big issue. But sort of this underlying liquidity problem in Japan, sellers by primary dealers, they have 33 of them, maybe the real reason. Japanese bond yields are the highest than what, Kelly, 27?

Almost 30 years. I know, Kyle, you've talked a lot about Japan. In plain English, what the heck? going on there? Why do we care? Yeah. So it's really important. Again, take a few steps back. I know every day we want to talk about what's happening in the day. Yesterday was a big move. So I'm not knocking you for that. But it's important to think about this is the largest peacetime accumulation of debt globally that we've ever seen. And historically, when when sovereigns would gather as much debt as we have, we'd both be deficit spending into a potential conflict. And then to the winner go the spoils and to the

goes defeat and default, as Germany and Japan have shown us in World War I and World War II. So we're at this peacetime accumulation of debt where Japan is in a trap, right? They're north of 250% debt to GDP. They can't allow their short rates to move up. And COVID just happened. And we grew the Fed's balance sheet from $4 trillion to $9 trillion in two years. We created $50% dollar inflation for the world. And Japan had to let one of two things happen.

And they had to let their bond market go because you can't be pegged at zero rates and have 50% inflation hit you, or you let your currency go. So the Japanese yen went from 100 to 160. So the Japanese lost 60% of their dollar purchasing power during the COVID move in the end. And now you're starting to see their long end. So 10-year to 30-year JGBs are kind of flapping in the wind. they do have a lot of their economy financed on the front end, meaning the short end. But from zero to 10, even the 10-year JGBB is moving up pretty materially in yield. There's not as much as

the 30 and the 40-year bond. So Japan's in a trap. They're going to have to let their currency continue to depreciate or they're going to let their bonds move. I don't believe they can let their bonds move much more, Brian. I mean, it's checkmate if they let their bonds move. Yeah, what did John Arnold say, the natural gas billionaire? He quoted Hemingway, Kelly. There's two ways to go bankrupt, gradually, then suddenly. One of the great lines of all time. A moveable, was that, I think that was a movable?

I don't know. All right, Kyle Bass, thank you very much. Appreciate that, and we'll figure out the Hemingway. Pleasure to be here. Thank you. Always has such a nice way of framing things. The largest peacetime buildup of debt. I mean, that's a striking thing to think about.

That says something. It does. Coming up, how could greenie? Europe, and Iran all play out on the energy front. We are going to ask these questions to none other than Dan Yergan as crude breaks above 60 a barrel again after the break. All right, welcome back. Let's talk energy because as the world, as usual, with highly valuable commodities, let's be honest, has a number of red hot hotspots. You've got Venezuela. What happens now?

You got Iran violently crushing protests. The UN saying thousands of civilians may have been killed. And now Trump's talk around Greenland getting others. worked up as well. Oil, it's up. Many oil stocks, they're also up. The XOP oil ETF, it's up about 3% today. All this as the International Energy Agency continues to capitulate and is now raising its global oil demand growth profile, but warning that supply is still expected to outpace consumption, of course, the IEA's forecasting ability, let's say, has not been the best the last couple of years. Let's talk about all of this from Davos with Daniel Juergen. He is vice chairman of

SNP global outlet in the cold. We appreciate it, Dan. Thank you very much for joining us. Put on that big brain, Venezuela, Iran. Kazakhstan is having some issues right now. What is your best take on how these global scenarios play out? Well, I think I like, Brian, your use of the word capitulate to describe the IA. They did raise their fore. on demand, and I think that's probably one of the things that's in the price. But still, you know, if you look at the oil price, given the amount of tension in the world, it's still very much in modest territory. Yeah, it is.

And it looks, you know, we didn't know what was going to happen with Iran. It looks like they put down the protests violently, by the way. Very violently. Very violently. Just another hit to the already hit population there. Venezuela, we don't know what's going to happen. happen. But there, I just added up four million barrels a day. You add Kazakhstan, that's little over another million a day, call it 1.2. So we're talking about five million barrels a day.

Theoretically at risk, do you see a real risk of supply disruption debt? I think not right now. I mean, obviously Venezuela, there's a general feeling that, you know, a few hundred thousand barrels could come back in relatively short time. But the risk is there. But I'll tell you one of the things you feel here. First of all, of course, the tension was lowered when the president said that he's not going to use force on Greenland. But the second thing is you do find a lot of anxiety about Russia here, about this sort of what the German chancellor called, that gray area between war and peace. And that tension is something that maybe you don't pick up so much in the United States, but it's pretty palpable here.

What else are you picking up on, Dan, being there? It's good to see you. you know, and what impact do you think all of this is going to have? Well, I think obviously what has been the dominating thing is Greenland and the question of where it plays out. And so the tension was lowered by what, obviously, by what the president said. He said some interesting things about energy, too. Of course, he talked about gasoline prices and about the amount of electricity that's necessary for AI. But one of the things that really caught my attention is he said, there's no, there's no rare,

Earth, there's rare processing. And what he's referring to was the Chinese domination of processing of minerals, which we talked about, of course, in our new copper study, but is particularly clear in terms of rare earths. There are a lot of rare earths, but the question of processing is something that has really come into focus. Do you think the, on that note, Dan, do you believe that the focus on rare earths, as we've highlighted many of these companies in America, and we don't need to name names, but they are what they call pre-revenue, meaning they have a plan. They hope to do something someday, but at this point, there is no revenue, there are no sales at all. There may never be. We hope that's not the case. But do you feel that the frenzy, for lack of a better term,

around rare earths, is a little bit overdone, given what you just said, the complexity and expense of not just mining, but what they call refining because a lot of acid is used. It's environmentally disgusting. It's also dangerous. Well, I think that it is the question that you don't build this processing capacity overnight by any means. I mean, the big emphasis is how do you diversify the supply chains to make them more resilient? But you know, when we were back last spring, when major automakers and other companies were going to say they're going to have to shut down or a week and a week and a half, the Chinese had really figured out where their weak point was. And when I was in China just before Christmas, I came away with a strong sense that the Chinese

had been really planning on this, thinking it through since 2018, and they realized where they had the high cards, and it is in the processing of those minerals. There is capacity, for instance, in Europe when I was just there, you know, there is capacity in different places to process, but it's not a problem that could be solved overnight because it was not a problem that was created overnight. Right. Dan Yergan, joining us from the World Economic Forum. I think we'll leave it there,

but we'll get you back on soon when it's not five degrees out and dark, Dan. See you soon. Thank you very much. See you. Bye-bye. Coming up, talking of trouble across the pond, relations between the U.S. and Europe are at a crossroads. What might come next and why it matters back here after this? Welcome back. The European Union is halting approval of the trade deal it reached with the U.S. last summer amid the president's tariff threats on Greenland.

Here to discuss that and the impact of all this growing tension as world leaders convene in Davos is Daniel Dresner. He's a professional international politics at Fletcher School at Tufts University. So I guess from the market's point of view, Daniel, they're most focused on the tariff question. And what would you tell them about that? I would tell them that especially given the perception that President Trump has de-emphasized the military option, there's no question that the tariffs are going to be his main way of attempting to coerce the European Union into granting the United States ownership of Greenland. I think there are two wild cards here.

The first is to what extent does the Supreme Court weigh in over the next month or two about whether or not Trump's use of the International Emergency Economic Powers Act to justify why this kind of tariff is actually constitutional. There were indications early on in the fall during oral arguments that they were pretty skeptical about that. And if they take this away, it'll be tougher for Trump to use this particular economic weapon.

The second question is, how will the EU respond? You've already talked about the fact that they've clearly put the transatlantic trade deal on hold. There is something else that they can potentially do. There is an anti-coercion instrument that the EU passed in 2023, designed, frankly, to prevent this very thing from happening. But they've never used it before, and it would take some time for the European Union to actually try to wheel that bazooka out and actually fire.

But if they start making moves in that direction, then the question is, does the Trump administration, you know, ratchet things up even further? Right, but I take your point that if he's ruling out military force, that, well, then the only other kind of cudgel that remains is tariffs, right? the deal is that if the EU suspends this trade agreement at reach with the U.S. Remind us, what was in the details of that one again? The details was that after the Liberation Day tariffs, the agreement basically cap U.S. tariffs on EU products at 15%, which was lower than most of the other tariff deals that the

United States negotiated with other countries one-on-one. Furthermore, certain agricultural goods would be the tariffs on those to export to the European and union would be lowered. And also, most importantly, the idea of the deal was that it was supposed to secure or eliminate, rather, uncertainty. And if there's one thing that I'm pretty sure businesses don't like when it comes to making long-term investment plans or trade plans, it's uncertainty. This obviously injects more uncertainty into the bilateral relationship, which will retard investment. Who would be the biggest losers? I don't know how kind of company or sector specific you'd be if the trade deal doesn't come to pass with the U.S.

The two groups that I would, you know, that come to mind are, well, three groups, I guess. The first are European, sorry, American agricultural exporters because Europe is a pretty robust market for a lot of those goods. They would obviously be hurt by the loss of tariff-free access. The second group are European automakers, which I would imagine would have some issues in terms of whether or not they'd be able to complete production chains in the United States. the biggest loser far and away would be consumers in both the United States and Europe, because this would guarantee that prices would go up. Right. And so all of that being the case, I mean, none of this may happen. We're just looking at the market reaction, trying to basically assign probabilities to all of this.

And in the meantime, the EU has gone and signed this big trade agreement with Latin America. So maybe they can get agricultural products elsewhere. Well, this is the disturbing thing about this and sort of the long-term effects. of Trump's sort of year of liberation day tariffs and America First Trade Policy, which is in the short term, you've seen a lot of countries make some marginal concessions to the United States

in order to make sure that their tariff rates aren't escalated too high. But basically, what you've also seen are a lot of other countries cozying up to each other, finding ways to work around the United States because they don't want to give up the benefits of globalization. And so what you might see going forward is not so much a return to the brutal days of 1930,

where there were trade wars and tariff wars, but rather globalization minus one, where the minus one is the United States. Interesting. Daniel, thanks so much. Appreciate it today. Thank you. Daniel Dresner with Fletcher. All right.

On deck, it is a complex time. It always is. So coming up, we're going to try to answer a very simple question. What should you do with your money right now? Craig Johnson is up with that. Next. All right, welcome back. The world's attention.

is focused on Greenland. But as we said on this show yesterday, that might be more of a head fake for the markets. Japan, bond selling, earnings, and the Supreme Court on tariffs, the real issues. Do not lose sight of them and also do not lose sight of how the charts look right now. Where is the momentum? Where is the fear? Joining us now, Piper Sandler's chief market technician Craig Johnson. Craig, one day does not a trend make. I am quoting you back to you yesterday. Did yesterday do any technical damage to what you see in the charts? Right. I think it kind of shook people up a little bit.

But again, at this point in time, the technical damage has not been that severe. I would say this is a market that's just sort of very resilient. It's rotating. It's been moving out of a lot of these Mag 7, Mag 8 stocks. And it's been rotating down cap. And I think a lot of that has to do with what you've been seeing in Japan, where people have been borrowing cheap money. bringing it back over to the U.S., levering it up, buying all these Mag 7 and Mag 8 stocks, some of that is unwinding. And as you look at the charts there, Brian, those stocks are now

starting to lag, and you're starting to see a lot of other stocks in the market, starting to pick up the baton and starting to perform well. And I think you're going to see that sort of rotation continue to play out. Is that what you mean by downcap that maybe the halcyon days of the invidias and the alphabets just crushing everybody else are over? Yeah, I think those are wonderful companies, great companies, in fact. But at this point in time, if we're focused on where do we make money, like you asked, Brian, right now a lot of the charts like Apple and Microsoft, they're all sort of distributional looking charts rolling over and you're seeing stronger names down cap.

For instance, energy, an area that you like, we talk about quite a bit, you look at things like slumberger, Halliburton. A lot of those charts look much more constructive. Even when you go through and you look at things in health care, there's a heartbeat there, Brian. We haven't had one in quite some time. And you're starting to see things like Medtronic, all performing Boston Scientific. So you've seen a lot of other things broadening out. That's a good, constructive, technical sign for this market. And I think it's one that investors need to certainly pay attention to. Okay. Craig Johnson, I'm going to ask you to sit tight. We're not ending the interview. We do have some breaking news about Trump and a social media post. For that, we'll go to D.C. and Eamie Javvers and go back

to Craig. Yeah, Brian, that's right. President Trump is calling off his tariff threat on a number of NATO countries. Remember, the president had threatened to put in 10% tariffs on February 1st and raise them as the months go along because those NATO countries had sent troops to Greenland. The president now just posting on truth social and saying that based upon a very productive meeting that I've had with the Secretary General of NATO, we have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic region. The president going on to say, I will not be imposing the tariffs that were scheduled to go into effect on February 1st. He says, additional discussions are being held concerning the Golden Dome as it pertains to

Greenland. Further information will be made available as discussions progress. He lists a number of officials who are participating in negotiations here, Brian. So a couple of important things. One is, this is the president retracting that tariff threat that he had put in. The second is that the president says they've formed the framework of a future deal with respect to Greenland. Not clear what that means. Does that mean a full acquisition of Greenland, as the president said in his speech to the

World Economic Forum this morning that the United States needs, or does that mean some sort of basing golden do? Dome Missile Defense Defense Agreement in Greenland. Not entirely clear, but nonetheless, markets would be expecting to react positively to that. And they are. They're ripping. And we got Craig Johnson at the ready here. A couple of things.

I'm going to put you on the spot. I'm in Jabbers because we don't know. And I want to remind our viewers that Joe Kernan is scheduled to be interviewing President Trump basically right now. I can't see a feed, so I don't know if they're interviewing. They have not begun yet. Everybody could see the feed but us. So, Amon Javers, breaking that news.

Thank you, Amon. So let me ask you this. The framework of a deal, Amin, with NATO. Obviously, Denmark is a part of NATO, but Greenland is a part, effectively, of Denmark. I don't know, maybe you do. Does that NATO potential deal speak for Denmark? That's a really good question. What the president's saying in this truth social post is that he had this productive meeting

with the Secretary General of NATO. not saying that he met with any officials from Denmark or that he met with any officials from Greenland. So we'll wait and see whether those officials agree to whatever this potential framework is. But remember, we've seen the president say in the past that he's got frameworks of deals in a trade context, not in a national security context, but in a trade context. And those deals have taken a while to materialize or just never been confirmed by the other side. So I think what this is is a very significant de-escalatory signal from the President of the United States. You saw the first de-escalatory signal during his speech when he said, I won't use force.

Now he's saying, I won't use tariffs. This is a climb down by the President of the United States from that very threatening posture. He's obviously heard something that he likes in those conversations with NATO or market reaction has served sort of as a guardrail here. and the president said, I don't want to necessarily spook the markets any further than I've done. So we don't know the motivation for it, but clearly the president backing off a second big threat to the NATO nations here just within the same day. Our audience, I know I do. I certainly have deja vu on this moment, Amin, when I remember sitting here almost exactly this time last April when the president backed off of his Liberation Day tariffs. And the Dow shot up almost 2,000 points in an instant with the truth social post. So here we are again.

Yeah, this one, you know, obviously not in terms of scale as big as the Liberation Day climbed down, but obviously because of the nature of this tariff dispute and land dispute with Denmark over Greenland, you know, this was a geopolitical flashpoint that a lot of people around the world, a lot of strategies around the world, were worried about an actual shooting war between the United States and Denmark and Greenland. in Greenland if the United States were to attack and try to use military force. As the president said and his staff said, military force was on the table to take it, you know, forcibly from Denmark. Now the president backed off that force threat earlier today and now he's backing off the

tariff threat right now. Yeah, threat of a shooting war. I know Eisenhower talked about it in 195, wrote it a letter to the Joint Chiefs and staff about it. Obviously, nothing happened. Glad it's off the table either way. Aymond Javvers with the breaking news that's moving markets. We still got Craig Johnson, Chief Market Technician of Piper, said,

Hey, Craig, how do you like it? You come on the show. We're going to talk about whatever we're going to talk about. Now you get the breaking news. Markets ripping higher. And folks, can we put the SML small cap 600 index up? Because, Craig, do your point at the top, you said the markets are moving, quote, down cap. Guess what?

All the markets are ripping right now, small caps the most. And now the SML is higher this week, even with, the big down move that we had yesterday. This has got to be good for the technicals. Absolutely, Brian. I mean, the breadth of this market is widening out. You can look at the SML. You can look at the 400. You can look at the 600. You can even look at the Russell 2000. That's up 1.92% right now way outpacing the S&P 500 and the Dow. I think this is constructive. And, Brian, if you look at this breaking news and you sort of put it all into context, I mean, it is very clear that the U.S. innovates, China replicates, and Europe regulates. That is the world we live in. And that is not changing no matter what happens with Greenland or anything else at this point in time. So again, Trump is negotiating. Again, people don't really like his tactics in terms of negotiating. But he seems to be getting things done. And he seems to be perhaps going to leave the world at a better place. And it had been when he took over.

We've had some people insisting that Europe is now deregulating, which I know hard to believe, but they argue there's some banking in some other sectors. This is what's been driving those moves. But does this Craig now eliminate this overhang? Remember, we're only really back to where we were, you know, going into this a couple days ago. So for the market's original start to the year, do we go back to that pattern? Like you said, Russell's leading the way. We're back to talking about the memory stocks. Intel's up 50 or 60 percent since January. one, do those trades come back on the table? We're talking about strong GDP growth. We're talking about a surprisingly good labor market, perhaps, you know, things like that. So what do you do now? Do you scramble to go back to that framework? Yeah, I think the economy seems to be doing fine. Again, I'll defer to Nancy here at Piper on that one, but that seems to be doing well. And at this point in time, small mid-cap stocks are where the rotation is going. So I think you're going to continue to see that innovation. People are going to come back. back to those names, I think they'll be buying those names up again. And then if you go through the

list of stocks where Trump has talked about here, even with the Davos conversation, sounds like we're going to see more nuclear come into fruition. We're going to see more industrial companies doing well. You'll see perhaps some of the truckers, all these stocks are all turning up and acting a lot more constructive. The small cap, I know we got it, we keep getting got to go, got to go. Craig Johnson, I guess that means we got to go. Thank you, Brian. It's either producers or the voice in my head or they may be the same. I don't know. But I will say the SML up 2.7 percent. Small caps ripping.

Wow. And again, there could be a lot of reasons for that. This kind of leveling off of the NASDAQ and the triple Q's has really been going on for a couple of months now, and it's definitely significant. We're talking about that with Jay Woods right here yesterday. Yields are on the move and they're, you know, let's see, 425 now. So a slight rebound. What is the bond market telling us amidst these news cross currents? Rick Santelli is here next with that. All right, welcome back.

If you are just joining us, the markets are ripping higher right now. The Dow is up 1.5%. Small caps up 2.7%, NASDAQ, up 1.4%. You can see big moves there. What happened? Well, moments ago, the president putting out on true social, his social media platform, that he has reached what they were. would call the framework of a deal, so no deal, but the framework of a deal with NATO around

Greenland. A lot of questions still remaining. Kyle Bass is back with us. Kyle, we appreciate you being flexible enough to jump back on with us. We led to show with you. Now you're back. Framework of a deal around NATO. I know you're going to speculate why we don't know much. What would you imagine any kind of a deal might look like? I mean, it's very important for us to install what we need to install and work with Greenland to make sure that that Arctic pathway is something that we have sufficiently covered for both submarine warfare, shipping lanes, and ballistic missiles and hypersonics coming over the top. So we're going to work closely hand in hand. It sounded to me like

when you listen to Stephen Miller, you listen to Trump very carefully, says we're investing hundreds of billions of dollars in Europe's defense, and we're doing that for the betterment of the West without anything in return. And so I think we're going to end up owning the territory of Greenland is what I believe. The whole thing. The whole thing. You know, again, maps are, they make Green look a lot larger than it is, and sometimes the location, I know Eisenhower in 55 wrote that he thought it was part of the Monroe Doctrine? Whatever you think about that is a different issue. Do you think there could, though, be like a 1951 solution where effectively we agree,

Denmark, Greenland says put base, do kind of not whatever you want, but put military bases here, protect us, there'll be a trade, that there is some kind of an outcome that is not purchasing the entire country of Greenland, but a negotiated settlement that would give the United States the missile protection, the control of the Arctic Sea routes, which I believe, as I've said to you,

Kyle, on and offline, I really believe that this is what this is about. You can argue about where it's all you want. I think it's about the opening up of Arctic shipping lanes and the fear that Russia and China are going to dominate that la la the Panama Canal.

Correct. And just remember, we actually purchased the U.S. Virgin Islands from Denmark in 1917. I mean, there is precedent, to your point. Truman offered money in 1946. 1910, we approached Denmark about buying Grealin. Yeah. I mean, we have constantly danced around this issue, principally because it's an early warning from the Cold War ICBM pathways, as well as now Chinese hyper-Syses. And, you know, you got to remember, in 1950, we didn't have any kind of early warning apparatus for a potential invasion by, at the time, Russia and the Cold War, which is why we actually

formed MIT's Lincoln Labs. Lincoln Labs was put together as a specialty national lab of the United States to set in force our early warning system for a potential Russian attack. This is just the next iteration of that with China now being the number one threat to the United States. And I think that we are, as you can tell, the level of rhetoric is at a zenith right now. And at some point in time, we're going to get something done. And it's by necessity, Brian. This isn't just President Trump, you know, getting to an issue and standing on it. This is vital to our security here and now.

Because, you know, basically China can move any day on Taiwan. And when that happens, it sets so many different dominoes into motion here that we better have our ducks in a row before that happens. Yeah, it's really been quite the whirlwind. I don't think we talked about Greenland ever in the last, say, 25 years. And now of a sudden it's top of everybody's mind and maybe top of their globes as well. Kyle Bass, thank you very much. Thank you, Brian. We're also watching Bond Yield after the president's announcement,

I mean, not a ton of movement to be sure. We're still around 425. If anyone can give us the significance of that, it's Rick Santelli, who joins us now with the Bond Report. Rick? Yes, Kelly, it's a two-for today, and you'll understand why in a moment. Remember, yesterday's moves in large part, we're all about Japanese yields. But to think that the effects of the tariffs in Europe and how they move the equity markets

didn't spill over in the foreign exchange or the fixed-income sovereign market, Well, of course it did. But I think it was more like three portions of Japan, maybe one portion of Greenland. And today, the markets will agree with that. Let's look at a two-year. The least affected by any of this. This starts last Friday.

Virtually, it's a sideways market. As a matter of fact, yields ticked up just a little bit, which I'm sure didn't really have anything to do with Trump. It's just not part of the game right now. It's focused on the Fed, and very little from the Fed has changed. Now, let's look at Japanese 10 years since Friday,

along with our 10 years. 10 year. Look at that. It is on top of each other. That's why the market moved. But we do see yields coming down a little extra helping right now in the mid to long maturities, not the short and like the two year. So that really is about what's going on in equities. That's the feedback, Lou. When the doubt pops 300 points, usually the bond market takes notice. Now let's take that 10 year out and put the dollar index in there. And this is really fascinating because it's indirectly correlated, which makes perfect sense. When the orange line was going up and yields in Japan were going up,

the value of the dollar was going down and vice versa. Why? You know, it's the same reason about gold. We can get political about all this, but in the end, it's about central banks. Central banks cannot be the champions of the universe. They cannot have all this debt. They can't play games with this debt without markets taking notice.

And that's why Japan and the Bank of Japan are such a driving force in the marketplace. And finally, all of that comes back to the Chinese. They're part of the Greenland discussion. But yet, with all the talk, with everything going on, with their AI progress, let's look at this chart starting in May of 2020, the dollar versus the onshore you want. And we're still within a nip of the lowest level on the one,

highest level on the dollar in 32 months. Brian, back to you. All right, Rick Santelli. Really appreciate it. Rick. Thank you very much. All right, folks, do not go anywhere. I've got more of the market's reaction. It's ripping higher from Trump's announcement that the framework of a deal with NATO around Greenland has been reached. We don't have any more details of that. We don't know what the deal looks like. We don't even know if NATO speaks for Greenland or for Denmark, but the markets, they're not waiting around. Russell 2000, up 2% Dow, SB NASDAQ, all higher, and we're back right after this. A lot going on. Love Live TV. We are live, by the way. Joe Kernan speaking right now to President Trump.

When that interview wraps, you will hear it right away here on CNBC. And Joe Kernan, this, this Kelly, is perfect time to sit down with President Trump because the president posting minutes ago that there's a framework of a deal with NATO around Greenland. Joe gets the first interview with him. Yes. And the question is, if you're in the markets, not for those who are trading this minute by minute, do you lean into? the framework of a deal, or is he going to come out with some comments that, you know, kind of dial that back. How would you define framework of a deal with NATO around Greenland? Kelly Evans is mine. Yeah, well, I mean, I think what the market has found out, that it doesn't matter.

It doesn't matter. All you need from the president go back to last April. You begin with the threat. I'm doing this. You take it at face value. You lose on that trade. You turn around and you wait for him to walk it back. And on that day, you buy it.

And it's been buying ever since that moment that he dialed it back last year, set up the rally that continued for the rest of the year until today, until the last couple of days when we've watched a mini version of the same thing. And so why are the markets going higher when yesterday we led the show with, we'll bring in Mike Santoli perfect timing for this. We led the show about Japan, Mike, some of the liquidity issues there. And some of that being the reason for the markets decline yesterday was not really Greenland. And I think that Greenland, while important politically and the people of Greenland certainly care about what happens to them, the markets, my guess reacting number one, they like nicey nice. That's a good.

good thing. Number two, that's a technical term, too, by the way. Number two, they like the fact that tariffs are likely off the table. Yeah, that's the piece of it that I think matters the most. You know, you can actually look at this, tick by tick from Sunday night, or Monday night, rather, at least, where you were going to look at a 1% decline off the threats of tariffs on Europe, and then once the Japanese bond market started to act up, you added another percent and a half decline, and then you ended up down two yesterday. So you're getting back most of it. We're not back to Friday's close on the S&P 500, but I do think that in general, the market was always keeping insight the possibility that this would not necessarily be a very open-ended crisis or threat

or re-escalation of trade tensions. I do think that these issues struck a market that was unusually certain about the fact that 2026 was going to be a super clean policy year and we're going to grow and it's going to be tariffs for last year's problem. So anything that interrupted that was going to get a reaction. So I think now the job is for the market to prove that this wasn't it, that this was or wasn't in fact the thing that mattered most, or was or wasn't the thing that it really was contending with. Because last week before any of this, the SEP tried five times to get to 7,000 couldn't get there. The mega caps have been under pressure. That's where the relief has come since that post by the president. The relief has come in the

mega caps that were really under a lot of selling pressure. And so I do think this is the reflex move. It makes a lot of sense. And I'm all for the analogies with last April. Last April, we had a flash crash. Really, honestly, a mini crash. It was down 20%. We were not even down 3% from the all-time high. So this is nothing like some kind of heroic buying of the dip.

This is just people betting that the rotational market, the re-acceleration of the economy will allow them to start ignoring policy again. I really think that's what the market always wants. All-time highs, Mike, for the small caps. Yeah. Yeah, four years coming, right? I mean, I think that that's what we're seeing. And it's just this massive kind of pent-up potential catch-up move.

I know Brian was talking about the Small Cap 600 earlier. That's the relevant piece of it. Because the Russell 2000 is super low quality. It's got a bunch of the real speculative stuff at the higher weights. And it's the Small Cap 600 that profitable companies that are a little more geared to the real economy. And on today, even before the announcement, a little while ago, Small Cap was trying to outperform. But it's been lagging. Yeah.

So, yeah. So far, look, equal weight's doing well, all the rest of it, all the stuff that people wanted for broadening is showing up. And we got Steve Leesman as well, guys, really appreciate everybody being so nimble. That's what we do so well here on CNBC. Steve Leesman, I would imagine also markets like the fact that, you know, maybe no tariffs, reduces the inflation expectation. Put the Fed back into play. Yeah, and I'm watching this behavior of the 10-year, especially right now and the dollar as well. What's interesting me about the 10-year is it's not gaining back as much as it lost.

It really does support the idea that Rick talked about that a piece of the rise and yields was indeed Greenland, but another piece, maybe more important piece, was Japan. So I'm watching this, whether or not we hold that 420 level to see if that damage goes away. But I think we need to all be on our toes, Brian. I don't think we thought that tariffs was a story for 2025. the still top of the mind of the president when it comes to how to implement policy. So any utterance, I guess, Steve, about potential tariffs being back on would change the view. Except that what Kelly said earlier is that conundrum of investing with Trump, which is, if it gets really bad, he goes back on it.

So what do you do in that situation? I think that if the market didn't fall, we might still be in a tariff fight with Europe. Steve Lee's been great stuff. Really appreciate that folks. Much more on closing bell.