Power Lunch - Stocks Rally Second Day in a Row 4/1/26

Episode Date: April 1, 2026

Memory stocks surge. Niles Investment Management's Dan Niles joins with his outlook for equities right now.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks burning higher once again as a big part of the market to something you would not have expected. Welcome to Power Lunch, everybody. I am Brian Kelly is off today. Stocks higher again. President Trump set to speak to the nation tonight as the president of Iran confirmed some positive reporting from yesterday. Oil is lower, back below 100 bucks a barrel. We'll show you the real state of the strait of Hormuz and highlight a huge plea from one of the Middle East's biggest names. Is it time to back up the truck and buy stocks?

We've got real world advice for you. Wolf Fargo's Osang Kwan and Citigroups, Alex Saunders. It is an absolutely jam-packed hour. We have got a lot to do markets across the board. But your tippy top performers in the S&P 500 are the big AI data memory plays. Many stocks that until recently had had the biggest runs up this year. Then they got sold off. But today, they're running back.

backup, and there is some news. So let's kick it off with Christina Ports and Eveless. Here to tell us what is steering some of these stocks to double-digit gains, Christina. Yeah, these tippy top stocks. So it is really risk on for traders today as momentum names come rowing back into favor. Leading the charge, like you said, you got memory makers like Micron, Flash rival Sandus, Western Digital, Seagate, and these four stocks really perfectly capture today's risk move. They were among the biggest winners in the S&P 500 just last year, each soaring by triple digits. It says, AI really supercharged demand for memory as well as data storage. From a fundamentals angle, analysts say last week's jitters over Google's memory compression algorithm

and reports of overordering at Open AI were likely overblown, which is why memory really sold off last week. And then Open AI's fresh rounding this week, funding round, also gives it more spending power for high-end AI hardware. The rally isn't limited to just memory, Brian. Optical chip suppliers are also catching a bit today, too. Lomentum up almost. almost 10% coherent, almost 6% as investors really rotate back into high volatility names tied

to next generation connectivity. And don't overlook Intel, which rounds out the day's top S&P 500 movers. The chip giant is up after agreeing to buy Apollo's 49% stake in its Irish fab for roughly $14.2 billion, funded partially by $6.5 billion

in new debt. The deal pretty much hands Intel back full control of the site, strengthening its turnaround story and improving its credit profile starting in 2027. So overall today, traders are just really leaning back into semiconductors, betting the AI hardware boom still has legs. Got stocks of the green Intel's up and an Ireland reference to cap it all off. Christina Parts and Eveless. Thank you very much. All right. So let's now bring in Dan Niles. He's founder and head of Niles Investment Management. All right, Dan, we got a lot to get to. But I want to follow up

on Christina's news. You own Intel. You liken. tell maybe some of these other names, what does the news from today, if anything, do for you? Well, I mean, it just confirms in my mind that you still have a lot more legs to go in this AI trade. And what I would remind investors of is if you go back to the internet infrastructure buildout, at that time, Cisco was the internet infrastructure play, right? It was the Nvidia back then. And in 1997, you had a macro scale. with the Asian currency crisis, the Tibot selling off. Cisco at that time, intra-year was down 38%.

And then in 1998, you had the Russian bond default, long-term capital management, and Cisco was down 37% that year. It finished both of those years after those sell-offs entry-year, up 31% and up 150. So I think it's a similar situation right now where you had some scale, We have our own macro crisis this year with Iran. I think hopefully that's behind us in a few weeks. And then you're back to where having agents show up in AI, you know, as shown by Claudebot and OpenClaw, I guess it's called now.

And that's going to drive a 10 to 100x increase in the number of tokens you need to produce that. Okay, quickly, I want to go back to that point. I know you're not a political strategist. You're not a military strategist. you are, but I don't think you are. So we're all kind of guessing and hoping what happens with the outcome. Let's assume there is an end to this war one way or the other, next couple days, next couple of weeks, kind of what you just referenced. Would that change at all the way you look at this market? No, I mean, the only thing it changes is that it becomes even more risk

on than it is now. And what you saw, I think, is, well, there's two phases. There's two phases. If you go back to the end of February, the magnificent seven stocks were struggling. They were already down year to date. The S&P was flat. What was working was the asset-heavy, low-obsolescence risk companies. And I call it, you need to get messy. And if you look at that group, utilities, materials, energies, staples, and industrials, those stocks are up, I think, 13% year-to-date.

They're up between 6 to 31%, depending on the subgroup. the subgroup. You compare that to the Magnificent Seven, which I think right now is down about 11 percent year to date. And so those stocks were doing better beforehand. You then got to the Iran War, went risk off, they sold off even more. Now they're bouncing back. The war goes away. You get to go back to focusing on fundamentals, which look actually pretty decent, given what's going on in the background in terms of agentic AI requiring 10 to 100 X computing power. You know, this is, I think, going to surprise a lot of our viewers. It surprised me, to be honest. But with the gains of the last couple of days, both the small cap index and the mid-cap

index in the S&P are actually higher this year. The small-cap 600, Dan, is now up over 4% year-to-date. I bring this up. They're not huge indexes, but they're sensitive to the domestic American economy. I know with all the doom and gloom out there, people are going to be surprised to that any stock index is actually higher this year. Does that, maybe not, but does it tell you anything about how the market maybe perceives the American economy? Well, yeah, I mean, well, there's two parts of this. Go back to the end of February before the Iran War and magnificent seven stocks are under tons of pressure. And those indexes, by the way, you just mentioned, we're up here to date. And so I think what it shows you is you need just, you need a broader

exposure than just seven names. Because within those seven names, you have some that I think are going to be really great, and you have others that I think you're going to have real problems with. And so it comes down to you just can't say, I'm going to buy them all, and you're going to be fine. Because valuations coming into this year were high, and those sectors you just mentioned, Brian, have sort of been forgotten for the last three years in a one-way AI trade where everybody's going to win. And then starting in late October of last year, people started to question, does it make any sense to think Open AI can spend $1.4 trillion when their run rate revenues are $20 billion? And so— I'm assuming the answer to that would be no to you.

Yeah, I mean, it's absolutely no, because I don't even think they're a long-term winner. I think that's anthropic in terms of the private companies, and it's Google in terms of the public companies. And so you've got investors starting to finally get a lot more discerning around this and sort out the winners. Okay, quickly, let me ask this, because Open AI, whatever, they've got some weird marketing campaigns to commercials, billboards in the West Side Highway that I don't understand. That's a marketing issue. But I bring it up because let's assume if OpenAI, OpenAI, ChatGPT is not the winner, and their private company, can the stock market still do okay? Okay, Dan, even if they don't do okay. It's a question I've been asking for months, and I still don't know the answer to it. Well, which stock market? Because you just brought up, you have a couple of subsectors that are actually up here today.

As we just referenced. So if you're if you're just going to say, I'm going to own seven stocks, then you probably have a problem. If you're if you look at it and you say, well, which are the companies that benefit from AI? There's no question that they benefit from AI. They have, you know, Lots of assets that AI is not going to replace a truck, an airplane, a train, you pick it. Those industries will benefit. Then it's a much different question. So I don't think it's as simple as saying, well, can the stock market do well? Well, depends on which part of the stock market. I've been saying for a while, you need to be in other names other than seven.

Beginning of the year before the Iran War already showed that. During the Iran War showed it as well. and coming out of this, those asset-heavy names are still actually doing okay. And so I think that's how you need to think through this. And if you're small and midcap, you're actually higher this year. And nobody, I think but us and a couple people, you know, maybe watching and listening, would know that. Dan Niles of Niles Investment Management. Really appreciate it. Thank you very much.

All right, folks, it's not all sunshine, lollipops, and rainbows out there. Today, Wells Fargo lowered their year in price target in the S&P, taking it down to 7300 from 78. 800, adding that the Iran war was not their base case heading into the beginning of the year. I'm not sure it was anyone's base case. The new Target incorporates emerging risk for the global oil shock. But let's be clear, despite this slight comedown, Wells Fargo still structurally bullish on American stocks. 7300 is just over 10% higher than where we are today. Joining us now to talk about that.

And more is Osang Kwan. He is chief equity strategist at Wells O'Song. Fargo, 7,800 to 7,300, not a huge cut. Why make it? Yeah, I mean, I thought there was a prudent thing to do that Iran obviously wasn't our base case heading into the year. It was nobody. We didn't have this. Nobody I read or anything said, we're going to go to war with Iran. Exactly. And now we're incorporating that risk that has emerged. And we're still structurally bullish. I mean, to your point, 7,300 is still 10% plus upside from here. That being said, I think the market is still going to remain pretty volatile over the next couple months.

I don't think the setup for stocks is that favorable, especially at these levels. Okay. So as of last week, we estimated that about two quarters plus of this disruption was fully priced into the equity market, which is actually more than what the oil market was pricing in. So for the first time since the war began, the equity market was pricing in a bigger war risk than oil. So at that point, we were like, you know, a lot of that has been priced in. But after yesterday and today, we just priced out about a quarter of that disruption. So equities are now pricing in less of a war risk than oil.

Well, and my, so my point on the small and mid-cap stocks, those are almost 100% domestic American companies that sell to people in the United States. They're not global multinationals. The fact that those indexes are higher with oil around $100 a barrel and gasoline at $4 a gallon, there's a disconnect there, Osang. The market is saying, I think, that $4 gas gallon is not going to kill the American economy. What do you think? I agree with that. I mean, I think the economy is going to be fine.

I think earnings are going to be fine, too. So a lot of people talk about the 70s. I mean, the oil intensity in the economy versus the 70s... Way lower now. It's down 75%. So it's no longer that 70s economy anymore. Also, the one big beautiful bill tax returns, obviously, you know, there was a real bookcase for equities

and to the economy heading into this year. That almost gets full... That actually more than... gets wiped out over the next 12 months. But the point is, it's over the next 12 months. The cost of living impacts over the next 12 months. The cost of living impacts over the next 12 months, whereas the tax return is happening today. So over the next six months at least, the average U.S. consumer is actually going to break even.

But then that's the average consumer. I think this is a K-shaped widener. That the bottom 40%, they lose right away, whereas the top 20%, they are still going to benefit by about $500. It's hard to say because I understand your point. And the bottom part of the economic spectrum has never, I hate to say this, been that relevant to the stock market, correct? I mean, because there's not a huge amount of consumer spending. It's not something I want to say. I want everybody to participate.

But it's kind of the reality. And that $4 gallon gas is annoying to a lot of people. But the market, not me, but the market has said maybe it won't matter that much. I want to go back to what you just said, which is that about volatility this year. Because coming into this, before the Iran war, we know we talked about it, that midterm election years tend to be more volatile, that top to bottom, the market tends to fall 15%, roughly, on average, in midterm election years. So strip out the Iran war, what would you expect from the rest of the year?

I think the biggest risk to the equity market this year, and this is something that we have been highlighting even before Iran, is the second half inflation. So inflation at the end of the day is too much money chasing after two few goods. Money supply has turned. Inventory levels are pretty low. We are firmly in a restocking cycle, as you saw this morning from the ISM data. So if that's the case, those are the drivers of inflation that we were highlighting as a risk into the second half the year.

And the Iran war happened. So I think the risk has gone up. That's essentially the biggest reason why we lowered our S&P target. At the end of the day, though, I think. I think equities are going to be fine if the Fed is okay with, say, 3% plus inflation. Are they? I don't know. What do you think?

I mean, I think there's a chance. What is your chief economist whispering in your ear, O'Sung? I think there's a chance that they are okay with it because I think both Washington and the Fed want to inflate out of this deficit issues. And if that's the case, I mean, we've been talking about this, but this is a debasement cycle. That if they are okay with it and they're just running it hot, that's the debasement cycle continuing. And the example that we give is look at Japan. They are running it hot. That's the perfect example of the debasement cycle.

Their FX is collapsing, razor ripping, sloths are going higher. So the basement itself isn't necessarily bearish for equities. Everything is the number of the dollar. And by the way, Japan's had like 12 recessions in the past eight years. I mean, I'm being facetious, but your point is well taken. Osung Kwan of Wells Fargo. Always love having you on set. Thank you very much.

Thank you. All right. So a lot going on, folks. Let's take a look at today's market movers and one name we that can't seem to do it lately. Sorry, that's Nike. The stock not participating. In fact, Nike's heading for its worst day and nearly a year. Nike warning that sales will fall for the rest of this year. Nike keeps tripping up investors. The stock trading at 11 year lows. And it's actually wiped out about 45% of investor value. since Elliott Hill returned as CEO in 2024. But here's a bonus trending ticker, Eli Lilly. That stock up 5%. The FDA approving its daily GLP1 weight loss pill called Foundaio. Lilly's CEO Dave Ricks told us this morning it's quite a big moment. And investors might agree.

All right, lots to do. We are just getting started. Oil moving lower today on hopes President Trump will lay out a real path to peace. in his prime time address tonight. Plus, can't we all just have a good old-fashioned rocket launch? Four astronauts about to lift off to the moon. First time we have done this since 1972. Barely when I was even born,

how the launch could spur a new wave of investments here on Earth, a reason to cheer and all, whatever your differences. Just love a good old-fashioned rocket launch. And we're back right after that. As investors wait for an update from President Trump tonight, he will address the nation 9 p.m. Eastern time. One of the Middle East's most influential leaders is sounding the alarm, rather bluntly, warning about the global fallout of the Iran war.

In a LinkedIn post, Dr. Sultan al-Jabber, who essentially runs the UAE's energy strategy, writes that Iran's actions in the Strait of Hormuz, quote, represent global economic extortion of threat the world cannot tolerate. Dr. Sultan goes on to say, quote, disrupting Hormuz hits food prices, airfares, energy bills, medicine costs, and much more. This is not about oil supply. It's about everyday affordability for billions of people. We're already seeing the effects around the world, of course, here in the United States. Gas prices have risen above $4 a gallon in some areas.

In Germany, electricity costs, which were already soaring for the last couple of years, are now nearly four times higher than in. France as natural gas supplies tightening. And Indonesia, now limiting impact or fuel sales to blunt the impact of the conflict. In fact, shortages, as we have said for weeks, may start to trickle through more economies. And for many emerging economies, the poorer economies of the world, cross, say Africa, Latin America, and even parts of the Middle East, IMF economists say this is the equivalent of a large sudden income tax. Put simply, the conflict is sending shockwaves through the global economy. And Dr. Sultan's message is clear the world must act together. All right. On that, let's bring in Matt Smith. He is lead oil analyst at Kipler. They've been

tracking and helping us and the world track flows through the Strait of Formuz. And now the Bob L. Mandeb straight as well. You got two straits on the brain, Matt. We're glad to have you back. talk to us first about Hormuz. Has it gotten any better the last couple of days? No. Answer is no, Brian. And so, well, we did see an increase in traffic going through on Saturday. That was an anomaly as opposed to the start of a new trend.

And so we're just back to a handful or less vessels passing through there every day. So no real changes there hasn't been for the last month. Okay. And there's a narrative going around. round, that the ships that are going through, Matt, are really paying a toll effectively, attacks to Iran so they won't get hit. They're basically buying their protection, if you will. What can you tell us about that? And do you have any insight or visibility or expectation of when things might return to, quote, normal? Well, in terms of the traffic going through there,

the majority of it remains to be Iranian crude. And so the sanctioned, and sanctioned tankers shadow fleet that are going through there. There is the odd one that is passing through there. It's not for us to speculate whether they are paying tolls or not. All we can say is that perhaps they are humanitarian cargoes. So because of fuel scarcity, we are seeing the Iranians let some of these cargoes go through. But for the most part here, it is still these Iranian crude tankers that are passing through and nothing much else.

Yeah. And we've seen the Saudis. They had a lot of foresight, I think, a couple years ago to build this huge pipeline, literally across their country into the Red Sea. Your data, another data I've looked at, Matt suggests this might be maxing out at four to five million barrels a day. How have flows in oil and shipping changed in the last week or two? Yeah, so as you mentioned, the East-West pipeline there is getting up to capacity we hear,

but in terms of what can be loaded out of Yanbu in the Red Sea, we're maxing out, to your point, around four and a half million barrels per day. Typically, you see about 750,000 barrels a day out of Yambu. That heads north. It goes to Egypt to then go into a pipe to go into the Mediterranean. But what we're seeing now is a change in behavior as we see these flows ramping up. We see them heading south. We see them declaring for China, for India, for South Korea. But what has got to happen is they have to pass Babal-Mendep here. And that's where the Houthis in the last few years have been firing pop shots. tank is going through. So the concern is that whenever there is an escalation from the U.S. or

Israeli side with Iran, there is a tip-for-tat escalation on the Iranian side. So if we work to see boots on the ground, whether it's at the Strait of Hormuz or at Kag Island there, it seems that there's a natural progression there for the Houthis to get involved and fire at those tankers that are passing around Babel-Mendem, which is hugely problematic, right? Because then you cut off the four million barrels a day that are passing through there from Saudi. And so the only other flows we see are going from via Figeria, and that has been bombed in recent days. We still saw a loading yesterday, but hugely problematic.

The one thing is, Brian, you can actually get a VLCC. This is a very large crude carrier. That's what these long-haul vessels are carrying two million barrels. They can pass through the sewers canal if they're not fully loaded, if they're partially loaded. But if the, you know, 90% of the crude from the Middle East there goes to Asia. And so it would have to go through the Suez Canal, around the Mediterranean, around the Cape of Good Hope. And so that would take another four weeks, something like that.

Yeah, because Suez can only accommodate a certain type of vessel, certain depth vessel. Talk to us about Asia. Because I want to drive this point home to our audience, very clear, that even if the war ends tomorrow, let's say Iran agrees, we agree, there's no more fighting. It's going to be a long time before things in Asia get back to normal, right, Matt, because you and your team, and I want to give a big shout out to your team. They've been a great job helping us here up and me personally. A lot of the ships, the last ships of LNG that were going from the Persian Gulf to Asia are arriving now or have already arrived from Qatar. There's nothing behind them, is there? Like Qatar is offline.

This is it. This may be what they get from Qatar for the next couple years. Yeah. No, exactly. And you can look at South Korea. You can look at Thailand. You can look at Taiwan and that you see on the weekly data, those flows are just drying up from the Middle East because those cargoes that loaded prior to the war are now being discharged.

And so those flows are dropping off. Now, we do have the Saudi crew flows that are going to pick up there. But essentially, those flows still arriving over the last few weeks have been a cushion. So these Asian refiners have been able to take that crude. They've been able to turn it into products. We're in the weeks ahead here as those flows dry up. They have nothing to refine. They're dialing back on those runs.

That means that not only domestically, they're not getting the jet, the diesel, the gasoline that they need. But they're also not being able to export it. And so then suddenly a South Korea that sends a lot of jet fuel into the U.S. West Coast, those flows are going to slow down. We see inventories in Japan being drawn down there as they are taking that. SBR refining it themselves. Matt, I'm sorry to interrupt out of time. Is it possible that the U.S. state of California has some kind of fuel shortage of diesel, jet fuel something in the next couple days or weeks?

Weeks, and it's going to be jet fuel first, yes. Wow. Matt Smith, Kepler, doing a great job. Not sure when you're sleeping, but we appreciate you, Matt. Thank you very much. Thank you. All right, folks, speaking of energy, be sure to sign up for our forthcoming energy-related newsletter called Power Insiders.

It's going to be a weekly piece, key news, meeting power players, insight, and more. It's going to launch it a couple of weeks. You can use that QR code on your screen or sign up today. All right, 5, 4, 3, 2, 1. Get ready. The big SpaceX IPO, it's about to blast off, and we'll talk about it with an investor in SpaceX. Next. All right, as Americans prepare for the historic launch of the Artemis 2 Moon Mission this evening, yay rocket launch.

Many investors are also getting all geared up for an historic stock launch, the SpaceX IPO. The highly anticipated IPO, expected to raise around $75 billion for SpaceX, which would give the private space company an out-of-this-world valuation of about $1.75 trillion dollars. Okay, that's a big number. Let's put that in perspective. A $1.75 trillion valuation would make SpaceX smaller than Amazon, but bigger than Broadcom, bigger than meta, bigger than Tesla, and bigger than Walmart, even making it really the sixth largest company in America. Joining us, Eva Ados, C.O. and Chief Investment Strategist of ER shares, also an early investor in SpaceX through her fund. Eva, good to have you on. Thank you for help.

How did we oversell that? How big of a deal is this IPO? It is one of the biggest deals going. It's going to be the biggest IPO, as you said, the next closest, and certainly in the U.S. history, the next closest one will be Saudi Aramco. We think if there's one company, private or public, in the entire investable universe that we would own, that would be SpaceX. And that's why, as you said, it's our biggest weight in our ex-OVR UTIF. We have very strong conviction in this company.

Maybe given it SpaceX, it's bigger than just this investable universe. Maybe it's all the universes. Okay, it's very, listen, it's thank you for laughing at that. It's very cool. Rockets are awesome. But what do they do that deserves that kind of valuation? Yes, it is the mode. It's one of the very few companies globally that actually has a mode.

And it has a mode, a very well-diversified mode, across many industries, space, AI, telecom. Think about it. When Amazon is launching Amazon Leo, and in order for them to meet the FCC deadline, they need to use SpaceX. when you make your biggest competitor, your biggest customer, that is a real moat. So we're the first ETIF to democratized private equity. We included private companies in it. And we decided to invest in SpaceX and not open Aero-anthropic because in these companies,

AI models can be easily replicated. There's not a real mode. The moat is infrastructure. So now with XAI and SpaceX together, you actually have a mode. Yeah, we're looking at anthropic and open AI, and who knows where this will all go, but I think your point is well taken. And that rocket scientists, actual rocket scientists, are harder to find than software programmers. And is that sort of the idea around this, which is that what SpaceX does, and maybe Blue Origin, Jeff Bezos and Leo, his company, Amazon, that that is just takes decades to get good at. Decate, if you ever get good at it.

Correct. And we think Elon has put together the best team. That's why they have reusable rockets. They are the most cost-efficient and reliable rocket operator. We believe Elon is the greatest turnover of all time. We think it's a combination of Carnegie and Rocket Theater together. He's going to be a trillionaire, I think, after this. He might be.

I'm not joking. He's going to get close because this is going to be, if those numbers are accurate, this will be bigger than Tesla. Do you worry there's too much Elon Musk risk in this, that he's too relevant to all these companies? Sort of that key person risk? I think it's actually to the benefit because now he owns the whole supply chain. Just like Rockefeller, he owns everything linked together. So his competitors are going to be to be using him in order to put rockets up in the space.

So once you get to that point, then you kind of have a monopoly. That's why we think the valuation is justified because this, This is not just the tech play. It's an infrastructure play. It has monopolistic characteristics. You guys do a lot more than just SpaceX. So how much, if at all, does this IPO, SpaceX IPO, does it matter for the overall market? Yes.

Because if it goes well, I do wonder if there's like an element of investors who'd be kind of flittering around the edges that might think, oh, this is cool. Maybe it's time to get in. I don't know. We see, and that's the reason with democratized access and provide access to retail investors that are being locked out of these opportunities. This is the biggest, we believe, opportunity of the last decade. And this is a unique IPO for three main reasons. First of it's the biggest IPO. Secondly, there's going to be 50 to 75, as you said, billion fundraising on day one.

This is a historic number. And third, if there is an S&P 500 fast track inclusion, that's a $1,000. that's going to have a buying pressure that's going to mitigate the selling pressure that we see after the six-month lockup. So all the, and by the way, that's also going to have buying pressure before the lockup. Buying pressure, not selling pressure, buying pressure. Buying pressure. Because you have, you have 7 to 10 trillion in mutual funds and ETFs of passive money following the SMPI

Funding Index, and you also have 8 to 11 trillion of corporate mandates following the index. So if that money comes in, and if SpaceX has now a 2% weight in the SMP5 funding index, because it's going to be similar valuation of Tesla now, then that $15 to $20 trillion equates to $300 to $400 billion of buying pressure once the company goes public. We're talking about rockets. I feel like we should bring in Carl Sagan because it's like he's talking about billions and billions of stars. We're talking about trillions and trillions of dollars. I love it.

We just want a good old-fashioned rocket launch because it's cool and it's like not political. Eva Ados, ER shares, really appreciate your time. Thank you for having. Fartista. All right. All right, let's get over to Julia Borsden for a CNBC News update. Brian, President Trump is looking to skirt a Democratic filibuster to get funding for ICE by June 1st. Trump said on social media he would like the bill to go through the reconciliation process,

which would allow it to pass with only Republican votes. It is unclear what such a bill would entail. Trump said that ICE and Border Patrol agents would be paid through, through funds already authorized by Congress in the so-called Big Beautiful Bill until funding is secured. A Russian military transport plane crashed in Crimea killing all 29 on board. Russia's state news agencies citing the defense ministry said the preliminary cause of the crash was a technical malfunction, and there was not an impact on the plane. And the NBA is fetching bids upwards of $1 billion per team for its Upstart League,

NBA Europe, the athletic reported citing sources. NBA Europe would compete with the Europa League, the premier basketball division on the continent currently. Brian, back over to you. I thought all the good European players are coming here. Who knew? Julie Borsden, thank you. All right, stocks, they're higher today. But not everybody is buying the rally, one major firm, downgrading U.S. equities a little bit. We'll talk more about that and the risk they see to you and your money. Next. Obviously, it's been a very good couple of days for your money. and the market's optimism and some hope grow around a possible solution, an outcome, and end,

whatever you want to call it, to the Iran war. President Trump will speak more on that tonight, but there are also some mechanical things happening in the market, which aren't getting a lot of attention, including there was a massive computer buy program that hit the market earlier this week that likely helped push stocks higher. Now, your next guest recently took down some of his overweights on stocks here and around the world, moving U.S. and Japanese stocks to neutral, not underway, just neutral. Alex Saunders, research strategist at Citigroup. Alex, welcome back. Do any of these headlines last couple of days make you think about pushing those ratings maybe back to it like an overweight? And if not, what would?

Yeah, thanks for having me back, Brian. As you say, we moved equities to neutral. We're not outright bearish on equities. And we see this much more of a risk management exercise. As you had just mentioned there, we have a long weekend coming up. We had lower liquidity. There's some technical positioning reasons that we saw potentially a rally yesterday. And we know that conflict escalation tends to happen on weekends. The equity market has moved, but we would say it's moved more than the oil market in terms of pricing that de-escalation. So I want to be clear to our viewers and listeners, then, Alex, this is a very short-term call on the market.

Correct. We would say that the risk reward right now for being long equities is just not as attractive as it had been prior. When would it be? What would you have to see to flip back to be more bullish? So I think the speech that you mentioned tonight is going to be important. Hopefully we see a cessation of historic. hostilities or a de-escalation. But the second most important thing is the oil price. So we'd like to see

more meaningful downside in the oil price and allied to that a resumption in exports. So normally we would say that the economy is state dependent. Right now, we would say the economy is straight dependent. Yeah, and I'd reference that I don't want to put you on the spot, Alex. I'd reference these buy programs that have been hitting. There was a huge, technical short ahead of that. So can you just in sort of layman's terms, please, because I know you know the inside of the market, explain to our audience that are not professional traders, some of the mechanics that have been going on in the market the last couple of days? Yeah, so I would, I think positioning is always important in these sorts of markets when we have

these large potential shocks, positioning becomes very, very important. And I would put positioning into two buckets, really. The first bucket is futures, very nimble traders, very nimble traders, very dynamic. Those traders went outright bearish, and our quant equity team has models that showed that they went out outright bearish just at the beginning of this week. Now, some of that will have reversed. Some of that will be due to technical factors and the fact that we were on a month end, there was rolling of some options contracts, month end, when equities are down, you tend to see rebalancing into equities as well. So I think some of the moves that we saw yesterday in particular were related to that. Now, there's also the longer term positioning,

and we analyze the positioning of managers with a longer horizon, so call it a more traditional three-month to 12-month horizon. There, we have seen a noticeable shift in sentiment, but we haven't seen a shift in actual positioning, which again points to the risk reward. If we don't get a soon resolution in terms of the conflict, the risk reward is for equities much lower or slightly higher. Alex Saunders of City, really interesting stuff there on the markets inside, under the hood. Alex, we do appreciate it, and we are watching the president tonight. Alex, Thank you very much. All right.

Sort of on that note, there's a news alert that you have to know about. We got President Trump speaking tonight, but there's also been a headline from Iran. I want to be clear, is this somebody who claims to be an Iranian spokesman for whomever is running the government, in that the Iranian president, Pazeschian, will issue a letter to the American people likely later today. Again, this is a headline on X from a spokesman representing the Iranian president. Again, we've made it very clear. The president of Iran could say they're running the country. Theocracy may have something different to say, but either way, watch for a potential letter

from those purporting to run Iran to the American people tonight. We assume it's going to be more of a message of peace. We don't know, but it's just something else to kind of be paying attention to in the market. All right. All right. We just showed you stocks right now. What about bonds? Ten-year yield?

kind of hovering right around that 4.3 mark. And if you're in the market to buy a home, I know it's the spring selling and buying season, it's not great news. I'm sorry. U.S. mortgage rates climbing for a fourth straight week. Nationally, the rate on a 30-year mortgage increased to 6.57%

at according to the Mortgage Bankers Association. That is actually the highest level on the nationwide average mortgage since last August. It's up about half a percentage point. from just one month ago. So mortgage rates and interest rates going up, at least for now, not down. All right. Coming up, oil is down, but crude oil is still hovering around 100 bucks a barrel.

What your market navigator says? Not too late to cash in. Find out why. Next. Welcome back to Power Lunch. I'm Dominic Chu with your market navigator today. If you aren't already invested in energy, is it too late to jump in and benefit from those spike in oil prices?

Our next guest says no and has a twist on that energy trade. So joining us for the case is Skylar Wynon, chief investment officer at Regan Capital. So Skyler, let's talk about if you don't want to deal with what could be an overbought condition in oil and oil stocks. How exactly do you play energy from a derivative standpoint? And I don't mean futures and options. We got two great energy names, one of which Trinity, TRN, the largest rail car owner, in the United States. They also are one of the biggest lessors, and at 97% utilization rate, when we think about de-globalization, as well as, you know, what are the issues going on right now,

is trade of Hormuz and shipping. We're talking about being able to ship via rail car. And it's not only oil, it's wheat, it's other commodities that they're going to benefit from. The other one being wirehouser. W.Y, this is the largest public landowner in United States. trading for about $1,500 an acre. They own over 10 million acres, and you can benefit from housing, you can benefit from direct lumber sales, but you can also benefit from royalties and land sales. So they can sell land, they can sell royalties on their land,

they can lease their land. And if we go the other way, they can also sell to carbon capture regimes for folks that want to just own that land and be able to benefit from carbon credits. So two great names. One's $2.5 billion. One's about $17 billion that can benefit in that non-energy sector from high oil. All right. Skylar wanted it at Reagan Capital with the case for how to play energy without energy stocks. Thanks for that. And by the way, keep it right here. We've got more power lunch coming up right after this break. I've got to wrap it up with this. Got some more headlines about the war in Iran. Vice President J.D. Vance has been speaking with intermediaries to Iran as recently as yesterday.

that according to new reporting from our colleagues at MS now. President Trump reportedly has directed VP Vance to communicate privately that he is open to a ceasefire as long as certain American demands are met. So again, they're apparently, according to MS now and Reuters, back channel communication, Trump to Vance, Vance to intermediaries purporting to speak with those who say they are in charge of Ron. Again, we hope that's the case. We want that to be the case. We're just not sure who is running Iran by now, but either way, certainly is good news.

And the president will address the United States tonight 9 p.m. Eastern time. We'll see if we get more. Apparently also a new letter or a post from Iran. We'll be going out to the American people later today or tomorrow. A lot of fast-moving headlines. Here's what we do know. The markets are up. Not as much as they were, but the NASDAQ still up about 1%. The S&P 500 up marginally. Small caps, mid-caps. They're now higher on the year.

I'm heading to a great friend and country called Canada. I'll see you in a couple days next week. Closing bell starts right now.