Power Lunch - TeraWulf’s Data Center Deal, Trump Accounts Launch, and the State of Energy & Tech 7/6/26

Episode Date: July 6, 2026

The Nasdaq and S&P 500 jump to start the new trading week as semiconductor stocks pop to lead the markets higher. Brian Sullivan and Kelly Evans are joined by TeraWulf CEO, Paul Prager, to discuss his company’s $19 billion deal to lease its data center facility to Anthropic. Tech strategist, Dan Ives, sits down on set with the anchors to give his take on the tech sector while Citi’s Francesco Martoccia joins the show remotely to break down his latest energy research note. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The Dow reaching new highs as big tech puts in the work. Welcome to Power Lunch, everybody, putting in the work with Kelly. I am Brian, and ahead this hour, the head of one of the hottest stocks in America is here. Terawolf, CEO Paul Prager, talking a huge 20-year power deal. It just made with Anthropic. Plus, our gasoline price is about to fall back below where they were before the war. A big call from the Citigroup on oil, you've got to hear. and a new investing initiative from the White House. President Trump opening U.S. financial markets and officially launching Trump accounts, a federal savings and investment vehicle aimed at kids, Franklin Templeton CEO Jenny Johnson, leading one of the world's largest asset managers, nearly $2 trillion under management. She is at the White House and joins us today. All right, there is a lot to do on this Monday.

Hope you're having a great start to your week, and we're going to start this hour with a big deal right at the intersection of AI, data, and power. Now, this involves a company that should be no surprise to all you power lunch loyalists, Terawolf, saying this morning it is signing a huge 20-year deal with Anthropic to use its upcoming Kentucky data center. It will also sell its stake in another center. Shares of Terawolf up about 10% on the news and competitors in the power space, names like Hut 8, Cypher Digital, and more. They're all moving higher. Let's talk about this with Paul Prager. He is the CEO of Terrellwolf and joins us again, Paul, good to have you back on the show. Congrats on the deal. Cantor Fitzgerald putting out an

equity report this morning saying, we get the sense this deal had multiple parties involved, meaning they want your power. Anthropic got it. How much interest was there for your power? The Kentucky site's a great site. Demand is robust. We've said that all along. Certainly it was a competitive process, but we have an existing relationship with Anthropic. They're a terrific customer. We were delighted to end up with this 20-year deal. Does this deal, I don't want to say reset the cost and demand for power, but does it raise what you would believe are fair market estimates of what your power, say at Lake Mariner, the other Kentucky site or more, are now worth going forward? I don't know if it raises it.

I think last week was a misnomer. I think people misread or misinterpreted some of the information that was coming out from meta with respect to being able to sell surplus compute. I think the demand for power is significant. Listen, you could create all the disruption in the spaces and the technology. You could manufacture more silicon. You can manufacture these chips. you just cannot create overnight megawatts.

And there are very few sites that are consistent with the requirements, both for quality and redundancy, like what we brought to the table here in this anthropic transaction. We have a number of sites behind this to go. I think demand is very significant. And the evolution in the space is, you know, we're at the tip of the iceberg here. So we've worth the tip of, and Paul, it's capital. here. It's good to see you. By the way, what's the equation behind you? It is a mathematical equation, which is supposed to try and define beauty. Okay. If you like math, you like math.

Well, you know, the answer to that then would be in the eye of the beholder. The answer to that is a 20-year deal with endropic. The answer to that is a 20-year deal with anthropic for our shareholders. Right. And that's where I'm getting at is when you say it's the tip of the iceberg. Tell us what the rest of that iceberg looks like. like? I mean, I think that what you're seeing is every enterprise on this planet at some point is going to want to access high-power compute and AI. They all can't afford to build their own data centers like the hyperscalers, but they can afford to rent time or buy compute. And so we're at the very beginning of that. That's what the meta deal or announcement last week was

indicative of. So I think we're a long way to go on the demand curve from where we have what we have to where we could even come close to meeting the demand that is currently in the marketplace. Go back to the meta deal because, you know, we started today with your deal with Anthropic, but you are right. Last week, sort of the theme was this meta deal. A lot of companies like yours kind of got taken down. Other people I spoke to in the industry suggested, I think like you are right now, Paul, that the market got it wrong. There may be misreading or misinterpreting what the meta-a-I deal may have meant. Explain what you mean. How did the market get it wrong? Listen, I think meta is really, it's a talented group of people. I think they saw an opportunity

to extend their service to enterprise customers. And so that's all that they said they were really going to do. What it means is adaption. in the market for HPCAI, for its usefulness, for its utility. So in my opinion, that deal only means that the demand for energy infrastructure is that much greater because HPCAI is becoming adopted by the general global marketplace and will ultimately drive demand for high-quality megawatts at really good sites so that they could do what we need to do. Paul, would love for you to respond to these comments Alex Karp made on CNBC last week about kind of the whole business model and a lot of the, I think, sort of what's implied in the way that a lot of the AI components are trading.

Take a quick listen. General way these things were sold. And these people are, Sam and Dario, there's nothing more fun than debating Dario in private. So I'm not throwing shade at them. But something has gone completely wrong. and the basic view among enterprises in this country is I'm going to chillax and waste my time with tokens. I'm going to get no value and they're going to get my IP. What do you think about that, Paul?

I don't have a view on it, to be honest with you. All I see is that we have customers coming in, government organizations, enterprises, hyperscalers that need megawatts and compute time. If they can't afford to build their own facility, they're going to go buy it from the folks that are lucky enough to have locked it in or built their own facilities. Terowulf is on the receiving side of that trade. So we see very robust demand at every sector of our economy. And I think just fundamentally, HPCAI is the next path. I mean, it's getting more widely adapted.

And again, I think what Meadow was saying is that is the case. that's why they see a business opportunity. What did you say HPC AI? A high power compute and AI. I see. Okay. I'm always looking for a new, high power compute and AI is the next big opportunity. Well, you're right in the middle of it.

Appreciate you making the time today, Paul, to talk to us about it. Thanks so much. Great to see you again. Thank you. Paul Breger is the CEO of Tara Wolf. And we're just getting started here on Power Lunch today. President Trump ringing in the launch of Trump accounts at the White House this morning. Franklin Templeton CEO Jenny Johnson is there still and joins us on what it could mean for American families.

After the break, SpaceX is set to join the NASDAQ 100 tomorrow, just 15 trading days after its historic and mega IPO. Dan Ives joins us on what he thinks it means for the index and the trade. Tech stocks are jumping again to start the new trading week, as the NASDAQ 100 is a percent and a half higher or so. And the semiconductors are leaving the way with the stocks ETF up about 4 percent. Astera Labs, AMD, Qualcomm up about 6% each. So is the momentum trade back on after all? Was it declared dead too soon? Let's ask here to discuss that and the latest tech moves.

And so you're not even a tech strategy. Dan Ives is great here and it's great to see you. So let's start really, really small with the way that the chips are trading and everything like that. What does that tell you? Look, I think that's the sign you want to see. Because in my opinion, we've talked about it from everything we've seen in Taiwan and Korea, like chips are going to continue to lead this market higher because it speaks to the demand that you're seeing across Asia.

Demand the supply continues to be 12 to 1. But everyone says they're acting topy and, you know, best case scenario is it's consolidation, worst case scenario is it's something worse? I mean, we talked to Jonathan Krenzky about that last hour. And they've already gone up so much. Yeah, but I think even like when you look at Viti or many others, I continue to argue that investors are underestimating the earnings power and the scale and scope. of what we're seeing the AI revolution.

Look, it's our view, and we've talked about it. It's going to spread second, third, fourth derivatives across, you know, ultimately from the hyperscalers to software and others. But chips, it starts with the chips, and that's what you want to see. But as it spreads, this is what I've heard from people, is that the trade matures. The technology is deployed, and therefore you want to own Capital One instead of the semiconductor company, because Capital One's going to get a higher return on earnings from deploying it.

Well, I think it's a barbell approach. I don't think you could just own that. I think that's part of the spreading, even when you've seen with Caterpillar and others, but you need to own every sort of piece of this sort of cycle as it plays out. And we've said it's third inning in this AI revolution. I think that's why it's such an important earning season ahead. That's the validation, the monetization that you need. Well, there's a lot of earnings focus on the Nvidia's the world, AMDs, as there should be,

but also on Samsung. They don't do every quarter. It's every half year. We get these kind of updates. Samsung's up. States coming out. S.K. Heenix, launching a $28 billion IPO. How closely do you watch the Asian companies' numbers and what they do as sort of a predecessor, if you will, precedent, whatever word there is for what happens here? I think that's ultimately where it starts.

I mean, if you look from Samsung to SK to what you've seen throughout Korea on the memory stocks, look, as somebody like myself, that spends so much time in Korea, I think that's a market that, you know, for many years, investors almost, you know, they weren't focused on. Now, every day, what's the cost be up, what's it down? I think it just shows that is the epicenter. Because without memory, you're not going anywhere. And I think what you've also seen, those companies are, they're not just on a treadmill, they're going to continue to expand. But it speaks to our view. For the first time in 30 years, the U.S. is ahead of China when it comes attack. So when you see all these things that are happening, whether it's in Korea, whether it's

globally, it all starts with what we see what's happened in the U.S. And those memory players and Samsung, among others, that's why they're such big partners. Well, that was exactly where I was going to go with this, which is, you know, we might be first, but China's pretty good at being a copycat, for lack of a better word. And we're already hearing reports. I think Apple had asked for permission to use Chinese memory suppliers to help alleviate this crunch for some of their Asian markets. The innovation will find a way.

And so it's, that's why it's not that we don't all see the need for memory chips now. aren't producers going to become desperate enough to look for alternative solutions or isn't the trade just going to kind of move out? I think it is great for Korea. I think it must feel so good to say two of our national champions are in the most important thing in the world right now. I just don't think it's going to last forever. Look, in China, I mean, if you look on robotics, physically, I'd say they're definitely well ahead where the U.S. is. Power, they continue to be huge players there and winners. But that's why Jensen always talks about trying to sell into China. Because if U.S. tech companies don't sell into China, guess what happens?

They just get, whether it's Huawei and others, they just get that much more powerful. But it speaks to the broader arms race that we're seeing between U.S. and China, why Sovereign and some others, you know, you start to get into sort of gray areas in terms of government and ultimately big tech. But what if they start then selling back here? I think that's the risk. Like, you know, okay, so let's say GM, General Motors, they sell a lot of cars, Tesla, sell a lot of cars in China. That's good for us. But if China starts selling BYD $20,000 EVs here, it's going to be bad for Detroit, maybe good for consumers. I don't know.

But you get the idea that if we sell a bunch of stuff there, what if they start selling a bunch of cheaper stuff undercutting us here? Then we kill our own golden goose. Sure. That's why it's the opportunity, to some extent for China, it's the risk for us. That's why when you go around Australia, look at how much BYD and the success that they're having there because of how cheap those cars are and how impressive. And I think also with U.S. and China, those relations, that's why it's his tug of war, where you want to make sure that, you know, you don't kill your golden goose. Do you have a name for the new enterprise yet?

We'll be announcing that hopefully next week. So we're super excited. Yeah, you know, on CMBC. So we're super excited to be doing that. And just, you know, what the future beholds and so happy for everything that we accomplish a webbush. It's very cool. Very exciting. Thank you.

Ives and co. Golden Goose, Inc. Oh, that could... No, taken. That's a jacket cup. It's always similar. Yeah, okay. You kick copyright on it. Okay. If he comes up with...

We ruled out, too, I think. Dan, thank you. All right, up next. Call of the crude awakening to Saudis, making their biggest oil price cut in decades and Citigroup, making a big call on oil. We have that and the analysts behind it.

Next. All right, welcome back. Let's talk oil, because there are a few pieces of news to hit an energy right now. First off, OPEC, again, opening up its taps, the group agreeing to boost its oil output quotas. Now, keep in mind, those quotas are just on paper. The volumes are kind of all screwed up. That's a technical term because of Hormuz shipping issues and more. Also in oil. Saudi Arabia just cut its oil selling price, selling barrels at a discount for the first time since

2020. That move designed to raise volumes and clear out excess inventory. You've also got Ukraine Russian energy assets in Russia, potentially adding to export numbers. All of this is leading to lower oil prices, WTI at 6850, which Citigroup wrote about oil today. And joining us now, the Citigroup Energy Strategist, Francisco Martocia, he just published that Brent Crude could fall to $60 to $65 a barrel by the end of the year and saying to sell any and all summer rallies. Francisco, it's an important call. It's a big. call. If we're at 60, Brent, that means we're probably mid-50s here on WTI. What is the basis for your call? Hi. Yes, we believe that Brent can drop into the $60 per barrel because the geopolitical

premium has eroded while fundamentals remain weak. The U.S. Iran Memorandum of Understanding has clearly reduced immediate supply disruption risk, while Ormots flows are normalizing at the time when flows bypassing the Strait of Almutts remain elevated. Atlantic Pays and Russia exports are roughly 2.5 million barrels per day higher compared to pre-war levels. The big miss in the market is really the Chinese pool on crude oil barrels, which is over 5 million barrels per day below pre-war levels. At the same time, the SPR flows have swung from roughly 1.5 million barrels per day

to apparel in demand to roughly 1.5, 2.5.2.4. a million barrels per day into commercial market. So, Frances, I'm sorry to cut you off, but I want to jump in more on the China side because I feel like doing what I do here, that's kind of the big variable. If there is one outside of now sort of the Hormuz quote, reclosing or whatever, it's going to be China. Is China's demand drop? Do you think that's long, forever now?

Or is it a short-term reaction to a billion-plus barrels of oil that they have in store? Orange. Look, we should make a distinction between the real demand, which, you know, we have constantly argued in China was plateauing and demand for inventory subparallant demand. If you consider last year, for instance, basically roughly 900 KBD of demand was for Chinese SPR, so clearly, you know, for strategic reasons. Now, will this 900 KBD for strategic reason return anytime soon in the market. We are not really sure about that. Clearly, you know, the incentive to store much of the oil at elevated prices are not there at the moment. So we are also worried about these bull calls on SPR refilling from China.

Francesco, I'm curious. I give you guys a lot of credit because you've often been bearish on oil at key moments when it feels like the rest of the community is more bullish. I think that goes kind of with the nature of covering commodities often, you just tend to see more upside the downside. But I would just like to know why you're able to kind of step outside and look at things. And is it that you're looking at the forwards? Is it that you're looking at activity in those important areas? What is it that gives you this sense of kind of breaking from the rest of the pack and saying, no, prices actually look like they're heading lower? Look, at this time, I don't think there's much variance in the pack because clearly the

for next year is on the oil side really calls for a heavy, you know, balances. And that was actually the case already pre-disruption in our moods. You know, we were actually calling for actually a smaller surplus this year compared to the rest of the street. We had 2.2 million barrels per day. Pre-disruption for next year, we are around 3 million barrels per day, which is not that different from consensus, which is between 3 to 4 million barrels per day surplus next year. So, yeah, I mean. Francesco, what is then the bear, the higher price case?

If you had to say, what's the risk to your lower price forecast? What is the bear case or the bulk case? Whatever, if oil goes up, what is that case? Clearly, you know, a renewed disruption to the state of our moods at a time when eventually China comes back into the market and SPRs flows into commercial. supply basically fades. Hopefully we may not see this because we believe the memorandum of understanding between the parties will hold, also for the second part, which, you know, will be about transit

faced through the state of our moods after these first 30 days. Francesco Martocio, Citigroup, Francesco, I know it's late there in Europe. Really appreciate you coming on. Thank you. Have a great night. Talk to you soon. Anytime. And good luck for the match. Bye. Thank you. Very much. Grazie,

Motta grazie. Up next, the Trump accounts are now live. Will they really become a wealth builder for American

families? We'll ask that to Franklin Templeton CEO, Jenny Johnson, what the impact of the program will be after the break.

President Trump ringing the opening bell to celebrate the launch of the Trump accounts today. These are

government-backed tax-deferred savings accounts. They come with a one-time $1,000 treasury contribution for eligible

children born between 2025, so not just babies, and 2028. It's an effort to give the next generation a finance. Well, actually, okay, 2025. I guess that is a baby. Anyway, can these accounts really help families build long-term wealth? That's the question for Jenny Johnson. She's the CEO of Franklin Templeton, one of the world's largest asset managers.

Jenny, it's great to see you. What has the day been like? And what are your expectations for this launch? Well, so first of all, I think that the most important investment decision a person could make is not, did you pick the right index? Did you pike the right stock? It's getting in the market. And what the Trump account does is it broadens the capability of people to have access to the market. So let me put that in the power of compounding. If you invest $5,000 a year, $1,000 a year for 10 years at age 20, when you retire at 60, you will have more money than a person who starts

to invest at age 30 and invest the same amount per year for 30 years. That's the power of compounding. And so if you look at what the Trump accounts, we're now starting at birth and being able to compound. I think it's incredibly powerful. And then the second thing is it actually, what has made this country great? What's made this country great is that we have capital markets that fund innovation. We're the most innovative country in the world. And now we can broaden the participation. And so that individuals will be able to look at it and say, hey, I'm an owner of that really exciting company. And I think that that right there is, you know, success. And we know that there might be $1,000 from the Treasury.

But everyone looking to set one of these up, check with your employer. A lot of employers are offering a $1 match. We hear SpaceX, Gwen Johnson. She's making a contribution of so. So there's different aspects of this. You wonder if it could become an employee benefit like a 401K where they say, a 401k match every year. Maybe we'd do something like that. Jenny, just tell us one more time. What was that stat about if you start at zero versus if you start at 30? I think that was an

interesting one. Sure. So first of all, Franklin Templeton is matching our, any of the employee Trump accounts. So that's exciting. And I agree with you. I think it's a great way to get additional value. So if you invest for 10 years, starting at age 20, $5,000 a year, just earn a 7% return every year, and just stop at age 30, you will have more money leaving that compensation. compounding in the market than a person who starts at age 30 does $5,000 a year for 30 years and gets 7% of return. That is the power of compound. That's why I always say to people, actually the most important investment decision you could make is just getting in the market to start to invest. Well, it's like the sort of the riddle, I guess.

Math question, Jenny. You say, I'll give you a penny and double it every day for 30 days or a million dollars. Most people say they take the million dollars. I think it's $7 million if you took the penny and doubled it every day. compounding interest, as Warren Buffett said, maybe the greatest sort of invention or magic known to man. You can sell these accounts with a penalty, just like a 401K.

Should the government ban selling them at all? Just basically say you're in it until you're 18, unless, you know, obviously some catastrophe, whatever. Otherwise, because my worry is that people are going to sell it because they need the money now, and they're not going to ride out that interest that you just talked about. Look, you can't let Perfect be the enemy of good. It is possible that some people will do it.

I actually think a much more important thing. I just attended a lunch today at the Rose Garden with CEOs who had all pledged to contribute to double the Trump accounts and had a good conversation with Penny Pennington at Ever Jones about how they are so focused on financial education. And I think that that has to be part of this. I mean, my big worry is that even at age 18, people pull the money out. What you really wanted to do is that 18, roll it over into an IRA and continue to appreciate compounding tax-free until your retirement. But sure, some people are going to pull it out. Some people are going to let it roll.

And to me, one of the things we have to remember is people retire, Social Security may not be able to fund all of us for retirement. And so what a great way if you start saving early because ultimately that will come back onto society if we can't fund it. So if we can get people educated early, understanding the value of investing early, and leaving it in and compounding it, then everybody's going to be better off. I think, to Brian's point, it's hard because you sort of feel like, well, what's this amount really going to do over time? But, you know, you've got to be a little patient on that front. Exactly. You would be. I look at the 401K. I honestly, I'm like, yeah, okay, I get it. Now it's been 20 years and I get it. There's been some rumors or now some talk about what else could be done in this vein.

Could there be, quote unquote, Trump accounts for adults, too? I mean, what are the possibilities? Yeah, I think there's some discussion about kind of this concept of Trump IRAs. I think the Treasury is still sort of working through. What does that mean? You know, as you already mentioned, 401K has been a tremendous innovation. But again, you have to be participating with an employer. And there's been a lot of progress in helping smaller employers be able to offer 401K.

because, again, compounding that without paying taxes until you actually use the money later in life is hugely powerful. So I think there'll be more to come. Well, that is an exciting idea in terms of democratizing access to the financial markets and helping remind all of us, really, kind of the power of being there for the long run. Jenny, thanks so much. Really appreciate it. Thank you. Jenny Johnson of Franklin Templeton. All right, for now, let's get over to McKenzie Seagallos with a CEDVC news update.

The official Department of Government Efficiency website shut down this weekend after reaching the July 4th deadline that President Trump imposed to end all operations. Doge claims it saved $215 billion from its mass layoffs in funding cancellations. Elon Musk, the leader of Doge's efforts, originally set out to save $2 trillion. Klaus Schwab, the founder of the World Economic Forum, is trying to make a comeback. He sent the forum's board a list of demands, legal threats, and a request for an advisory role, according to the Wall Street Journal. Schwab resigned his chair last year after a public clash with the board over misconduct allegations.

And now France is trying to get FIFA to overturn a penalty call. After FIFA reversed the one-game suspension of a key U.S. player, the French Football Federation is trying to undo a yellow card issue to star player Michael Alise during the team's game against Paraguay

on Saturday. Brian, sending it back to you. All right, looking forward to tonight's game against Belgium. Who do you got, McKenzie, Sagan, United States or Belgium. The U.S. Come on. I don't know where Belgium is.

Your family is split against itself. You've got a mom. They're all in America. It's from Belgium. My mother's family is Belgian. Who is she? Whoever that is. I'm teasing.

Mackenzie Sagalos, she's like caught up and she's like, please go. McKenzie, thank you. Ovoire. I can't speak Flemish. Big technology stocks up again to start the week, but is the second half of the year going to be to by a very different group of stocks. Omar Agujar, CEO of Schwab asset management. We'll join us to talk about that more. And Omar, don't worry if you can hear us. We won't ask you about soccer.

We're back right after this. All right, welcome back. The Dow Jones Industrial Average hitting a record high today. Coca-Cola, Visa and Travelers all hitting new highs inside the index. And the equal-weighted S&P 500 is outperforming the normal cap-weighted index. What does that mean? Well, it means. Well, it means that the rally may be moving beyond just a handful of mega-cap big tech leaders. And your next guest says that kind of broadening leadership is exactly what you want to see. And it's a healthy sign for the market. Joining us now is Omar Aguilar. He is a CEO of Schwab Asset Management, where he oversees nearly $2 trillion in assets.

Omar, it's great to have you back on the program. We have been waiting for this broadening of the market for two years every time we, We say it. I feel like we get a reversal. Is this time real? Is it here to stay? Well, great question. Great for having me. And by the way, if you want to talk about soccer, we can have another half hour on that since I played for 15 years. And clearly it's been a very exciting time. Yes, you know, we believe that breadth has always been an important, healthy part of the equity markets. We have been looking for these opportunities, you know, over the course of years to emphasize to our clients,

you know, the need for diversification begun the mega caps at the Max 7 and the changes that we have seen. We believe that this time, you know, while we may not necessarily see that cycle to be exactly where we want it to be, because normally, you know, when you see small caps, as mid-caps, to do better than large caps, tend to be linked to the monetary policy cycle.

You want to see lower rates to try to see those companies to do well. That being said, you know, the, the projections of earnings growth beyond the large mega cabs seems to be just doing well. And I think that's a pretty healthy part for the market. And when you see that on the heels of the A& capital expenditures, we can probably see a little bit more upside going into the second half of the year. I'd like to get your views on the red card. And also whether or not that was a deserved penalty kick in the Norway game yesterday.

But we don't have to go there. Omar, I don't want to enrage you. I don't want to enrage you on a Monday. What then do you advise? You're the CEO of Schwab Asset Management. So how do you change your then advice to your clients? Or is it not a change of advice as much of a let's move the way we invest slowly from here on out? Well, we overemphasize our values, which is, you know, stay invested. That's number one. You know, we are going to see potentially more volatility going into the second half of the year. There will be changes in leadership. We expect more rotation like the one we saw last year and still continuing into the beginning

of this new quarter. So volatility will be there. It's a natural part of equity markets. We emphasize a state discipline. What that means is being able to diversify and being able to rebalance at the right time and at the right place, where we actually see in many cases that bias that people have on not necessarily selling the winners or try to cut losses on their loses too early, try to overemphasize that discipline of continuous rebalance

and making sure that they're not overexposed to certain parts of the market continues to be a key component to that. And, of course, try to look for opportunities where areas that they may not have enough exposure and look beyond those. You know, we're talking to our clients today about the cycle of AI, you know, going from that big, large, hyper-scalers, going into now the recipients and who is using these AI build that potentially increased productivity,

our earnings growth over the next, you know, 12 months. That part is the next phase of looking for opportunities. So stay invested, diversify, and stay disciplined. And we can talk bonds for a second, which fits into all of this, because you guys actually have an interesting point of view, which I think will become a little bit more mainstream, but it is not right now that you still think we could have cuts, fed cuts more so than hikes.

Maybe that gets that tenure back down to where it was before the Iran war broke out. All of this would be really a positive, I have to imagine, for stocks, for this whole broadening idea and everything else going out with the market. Well, I think the biggest, you know, the big two things in fixed income today is one is, yes, we expect to have no rate changes, you know, to the end just yet. You know, the inflation story that we have seen most throughout the year that raised those expectations for rate hikes seems to be moving away, especially because all prices. energy prices, and in general, you know, the push that we have seen for inflation expectations have actually come down. You know, inflation expectations that are a key driver of yields for fixed income is now on the way down, and therefore that gives us a little bit of more breeding room to say that

we potentially see no rate cuts and no rate changes, you know, throughout the end of this year. That actually gives us a sense of, you know, with that and the labor market being a little softer than what the people expected, the possibility that inflation, is not going to play that big of a role going into the second half of the year. All right. Trump accounts, we've got it. So, you know, you're taking the U.S. over Belgium, Omar, tonight, or what?

What was your position? When you were on the field, what did you play? I did play, you know, center mid. I was, you know, in soccer terms, number eight, and I enjoyed it. And, yes, we are favoring the U.S. for sure. I think they have a great team. and I think they have the right, you know, players to be able to be that very strong Belgium team tonight.

It should be an exciting game. The most important thing about the World Cup is just the amazing environment that is created along these games and the emotion that goes around it. That's right. And the reason I love the World Cup so very, very much, is that it's one of the only sports the World Omar where the United States is an underdog. That we're excited because we beat Bosnia and Herzegovina,

and we may beat Belgium. And if we don't beat Belgium, Nobody's going to be surprised. They're going to say, well, of course, it's Belgium, we got Locoku, got, you know, DeBrona. They have to beat us. You don't get that in other sports. It's amazing. Omar, thank you.

It is very true. You know, the pressure is on Belgium for sure to beat the U.S. But, you know, I think the U.S. has a lot of things on their arms. And they have a lot of heart and they have a lot of talent. Well, they need an Omar to take it home. Omar, thanks very much. Really appreciate it today. Omar Aguilar.

Is it time to bet on the banks? The financials are higher across the board. Schwab. We were just talking to Omar up 4%. And should you buy ahead of earnings? Mike Mayo is with us next. The big banks are banking some big gains today. Bank of America, a fresh intraday record.

City, J.P. Morgan, Golden Sachs moving higher. So should you buy the financials ahead of next week's earnings? Let's ask the man who's been ranked the number one large bank analyst for six years in a row, Mike Mayo, the senior banking analyst at Wells Fargo. Mike, good to see you. We just had Chris Katowski on about a week or so ago, and he was downgrading the investment bank simply on evaluation, says, yes, they're great. They're just now starting to look kind of like historically

expensive, you might say. He favors the asset managers instead. When it comes to your banks, the large banks and your coverage universe, are you universally positive going into earnings, or how do you feel about them? Well, the joys of summer, Rocky Road ice cream, USA free kicks, and second quarter bank earnings all hit the sweet spot. I am bullish on banks. I think this will be the third year in a row that bank stocks outperform the market. And you're seeing record capital markets this year, accelerating commercial loan growth, good cost control, and credit quality remains really good. So this is one of the best environments I've seen in three decades. You have generational deregulation. You have animal spirits. And things have

not gotten out of control. So I see this going on for, you know, well, well, long time to go. So we're in like the third or fourth inning. You know he should join forces with you know who. The new investment bank project. The J&I. Absolutely. So tech and banks together in the third inning of what could be a multi-inning stretch. Four banks you say, Mike, trade only at 10 times their 2028 earnings estimates while still showing 50% EPS growth during that period of time. So again, their multiples below 10 times.

City, which of course has been a favor of yours for a long time. State Street, fifth third, key corp. Are these then the most exciting areas for you? Is there any area where you might say to people, or what about the big banks when we hear from them to kick off the season? Well, look, I mean, how can you say those four banks? Yes, we highlighted those four banks in our report today, trading it 10 times earnings a couple years forward in a 20-PE market.

That's not expensive. Okay, not anywhere close to be expensive. So I'd say a rising tide lifts all shifts. Now, some ships will be lifted higher. Again, capital markets is going to be the only. going story and we expect many of the capital market players to flow past consensus expectations. But I think the evolving story is the accelerating middle America loan growth, capital expenditures picking up. I'm not talking about the hyperscalers. I'm talking about your plain old bread and butter

commercial borrowing. And so that's yet one more tailwind that's, you know, in favor of the banks. Do you like regional banks broadly or just a couple of these that stand out for valuation? Look, our theme has been Goliath is winning, led by Citigroup. That theme is still working. But I'd say incrementally, I think some of the regional banks and the banks that have been left behind the catch-up trade should perform better. So that's Key Corp, that's Fifth Third, that's U.S. Band Corp, and that is Bank of America, which you highlighted. So they will get a catch-up bid while the others should have good fundamentals that's a little more priced in, not fully, but a little bit more so. So the only caution I have is for some of the pure play brokers, I think they rally into their earnings and on the earnings news.

It could be, you know, buy on the expectation, sell on the news for some of the highest high flyers. All right. Well, hamburgers, hot dogs, and Mike Mayo. That's how we know it's a 4th of July summer season. Mike, thanks for making the time. Really appreciate it. Mike Mayo from Wells Fargo. And also the World Cup.

And up next, could tonight's huge soccer game break all? the viewership records. We'll show you some American players. Coming up next. Tonight, the U.S. plays Belgium in the World Cup, but it's not a game without controversy. The U.S. clear to the World Cup, clear to U.S. player to play tonight,

even though he got a red card in the last game. That means he should not have been able to play in tonight's game. Belgium fought that decision, but lost its appeal. Bottom line is, one of our stars will play tonight. Join us now to talk about that, media, and more. Alex Sherman. All right. So Belogen is playing. So do you think this number, including Telemundo, will do a 45 million rating? Yeah, if you add up both Fox and the Fox properties in Telemundo, look, the Bosnia game,

which is sort of the last game the U.S. played, is the best comp for this. That number, I think, will be about 40 million or so when all the numbers are totally added up and finalized. So, yeah, it wouldn't be a stretch to think that maybe this one gets 45. If it did 40, then I'm way off on 45. I should have said 55. I mean, we'll see. Like, the incremental gains from each game here, if the U.S. wins, obviously, you would think that there will be a surge of momentum.

I'm not exactly sure at this stage how big the jump will be from round of 32 to round of 16. But once, if they hit the quarterfinals, I mean, then I think it's stratospheric. Then we're going to start talking about things that look a lot like the AFC and NFC championship. When we win tonight against Belgium, we're going to go to the quarterfinals. How big of a success has this World Cup been so far? I mean, I know the ticket prices are stupid. I get it. But the TV numbers have been monstrous.

They've been monstrous. And I think there was a little bit of skepticism coming in in terms of will this be able to match up to the other. marquee American events because the ratings have been so high in the past year, in part due to a calculation change on Nielsen's end that has juiced the numbers for everything, but also in part just because there's very obviously enormous appetite for live event spectacle sports in this country. And the NBA finals were so strong coming into it with the Knicks and the Spurs that I think there was some concern that that may overshadow the World Cup. And it clearly has not. It has been an appetizer in to this event that, again, will continue to grow in numbers,

no matter whether the U.S. wins or not, but certainly if the U.S. wins in this country, we will see absurd TV ratings like we've never, ever seen before in this tournament. But what are the takeaways? Because we can't just have a World Cup event again. Correct. So this is the question that I think is the most interesting, right? Which is, what are the long-term effects of this? And I think you could make a very strong argument that the media companies that own European soccer are very happy about this.

The big stars in this tournament all play in the EuroLeague, and that has been growing in attention in this country. And I would suspect that the World Cup will be another lift for Americans that want to get into European soccer. Yeah. MLS, I'm a little bit more skeptical on. Obviously, Messi plays in the MLS, so you'd have to think that at least

messy games are going to get more attention. But we'll have to see if any stars break out that currently play in the MLS. That I think is going to be the key to the major attention going to that league, which of course is still baked in the Apple ecosystem. That's where you can see all the MLS games. We didn't even get to theversive news. But anyway, Alex Sherman, thank you very much. Thank you.

Appreciate it. And thanks for watching Power Lunch. Closing bell starts right now.