Power Lunch - U.S. Energy Secretary Chris Wright joins the show 1/7/26

Episode Date: January 7, 2026

CNBC's Brian Sullivan sits down with U.S. Energy Secretary Chris Wright to discuss energy policy toward Venezuela after U.S. military forces ousted Venezuelan leader Nicolas Maduro and his wife over the weekend.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, stocks at record highs. Welcome to Power Launch on site Kelly Evans. I'm Dominic Chu in for Brian Sullivan, who is actually on assignment right now. The Dow and the S&P, both hitting new highs today, intraday at one point, but the Dow closing above the 49,000 level for the first time yesterday. Now to two market milestones to watch. Dow 50,000, of course, not really in play right now. But it was at one point earlier that the S&P 7,000 mark is maybe not in the realm of reason today, but it's very shortly killing.

Think bigger, Dom. We can get an 800 point after the move on the Dow. So 50 on the S&P. Nevertheless, after the start to this year, that's certainly now in focus. Let's start with the developments in Venezuela, where, as mentioned, our colleague Brian Sullivan, breaking the news today that the country will ship sanctioned oil to the United States indefinitely. He joins us now from the Goldman Energy and Utilities Conference in South Florida with a very special guest. Hi, Brian. Kelly and Dom, thank you very much. That's exactly right.

This is the interview of the day, the week, the month, maybe the year. Who knows? It is the U.S. Energy Secretary Wright, Secretary Wright, thank you very much for joining us. Appreciate it. Glad to be here, Brian. First off, I think most people are asking here, maybe the American people even outside of CNBC, is why? What do we hope to get with Venezuela and their energy and their oil? Well, first we want to stop the importing of crime and drugs into the United States of America.

We want to reduce the toehold or adversaries are gaining in the Western Hemisphere. I mean, there's a 25-page unsealed indictment for why Nicholas Maduro was indicted. Biden administration had a $25 million bounty on his head, but of course didn't do anything about it. So the problem of Venezuela for America and, of course, for Venezuela, has just continued to get worse. But what does oil have to do with that? What is the role of oil and energy in this? Well, what's the role of oil and energy in this?

Is Venezuela was a major oil producer, could again be a major oil producer, and is today still a significant oil producer? And I think it's the genius of President Trump to realize 25 years of a growing problem in Venezuela, nothing did anything to address that problem. He had a creative, out-of-the-box idea. first of all, to arrest an indicted criminal

and then say, hey, we're going to use oil in commerce instead of guns and soldiers to alter the trajectory of Venezuela going forward. I think it's brilliant. And I think the prospects of changing Venezuela from a country that's trafficking in drugs, guns, and humans and turn it into a prosperous representative country that's not a menace in the Western Hemisphere

and that becomes a prosperous American ally. I think most people would want Venezuela to be free. They want the people to have a better life. Used to be the richest country in Latin America. Now it's the poorest, or at least among the poorest. It's a broken, failed state would probably be a fair term. And oil production has gone from $3.5 million to $7,000 or $800,000 a day, whatever that number may be.

But what does taking their oil and then selling it have to do with helping to rebuild, put the dots together between that news, the money, and fixing? Venezuela? Oh, you bet. So number one, we're not taking their oil. We're not taking their oil. We have put a blockade on and prevented them from selling their oil. That's choked off cash flow. They get cash from selling oil and from selling drugs and from human trafficking. So we're going to, we choked off their revenue sources to get leverage over them. We're going to restart the selling of Venezuelan oil on global crude markets, put it into counts in the name of Venezuela, and bring those funds back into Venezuela for the benefit of the Venezuelan people.

We're just going to control the flow of those funds so we have leverage over the people in power to drive them in a better direction. Where then are we getting the 30 to 50 million barrels that the president initially referenced last night? And then this morning, the news that we broke was that that was going to continue indefinitely. Where then are we getting that oil? So we put that blockade on Venezuela. They're still producing oil. they can't ship it to the world.

So it's in floating storage and tankers, mostly illegal, sanctioned gray market tankers, and it's on onshore storage in Venezuela. So we are in dialogue with the Venezuelan government. Say, let's work together to fix Venezuela. We got rid of the head of the gang, Nicholas Maduro and his wife. They're in prison.

Work with us. Let's improve your country together. So we're going to now allow those tankers to flow, but we're going to market that crude. They fully understand this. They're a partner in doing that. We're going to allow that crude to be sold so that revenue can be generated, but then we're going to control the flow of that revenue to make sure it's going for productive reasons

in Venezuela. Let me be more direct. Is there a narrative in Venezuela that you are stealing our way? I have not heard that narrative. I've seen celebrations in the street, Libre Venezuela out. I think people are thrilled. They've lived under, between Chavez and Maduro, 26 years in a brutal dictatorship that's only devastated that country and hurt the whole hemisphere.

So I've not heard that narrative at all. And of course, if it's that narrative's out there, it's untrue. We're just controlling the flow of revenues from their oil. So you've had conversations here all day with many oil executives. I've seen them come and go. You've been busy all day long. What are they saying? What do the Conoco Philipses and the Exxons and some others have to say to you

about what it would take to get them to go back into Venezuela, which arguably is still very unstable, and they would argue unsafe and potentially uneconomic. What do they want? Yeah, of course, if you're Exxon or Conoco and you've exited the country, you just need normal commercial business conditions, rule of law, and some security to go back in. That'll take some time.

That's some reform and some changes in the government. We're trying to engineer, without going through the failed state, you know, of just a collapse of the existing government, we're trying to engineer a transition of Venezuela to a place. that Americans want to do business in, want to invest new capital in, want to grow new partnerships with. Hopefully, we'll see some of those 8 million Venezuelans want to return home to their country. But that's a process. But on the other hand, you've got Chevron. They're there. They've been there for over 100 years. They're actually working in this regime. So with them, how can we

provide incremental tweaks or changes to allow their model to grow even more? But the goal is to have Venezuela and United States traded investment, thriving and strong debt to the benefit of both? Have the CEOs of those companies, the Conoco's, the other ones of the world, and I say Conoco, because I saw Ryan Lance here earlier, today ostensibly, I think, on the way to meet with you, what do they say? What do they want? Would they say, okay, maybe down the road we'll go into Venezuela, when and why? Why would they do it, and when are they going to do it? First of all, I spoke to all of them immediately. You know, this happened on January 3rd. I was on the phone with all three of the CEOs of the companies you mentioned immediately.

And first of all, I'd say just tremendous reaction. Chris, how can we help? What information can we get you? What data can we provide you? Can we put a team together to educate you on the resources there? How can we work with you to understand the situation in Venezuela, share our knowledge, and together see if we can help move this to a place where we'll reinvest and we'll go back in? But I think you will see involvement with them, help with them immediately.

Are they going to put billions of dollars building new infrastructure in Venezuela next week? Of course not. You've got to have transformation of the conditions there, but they want to be productive advisors and helpers in that process. Chevron is on the ground, so we're getting on the ground daily update. They are. Chevron's on the ground because in 2007, they kind of worked with the Maduro or Chavez administration, Chavez back then. Conoco and Exxon did not. They got cast out of the country and Venezuela kind of appropriated their assets, have sued it, is some of the money that might be raised from the marketing, the selling of

the Venezuelan oil, would some of that be earmarked to repay Conoco and Exxon for the ostensible – they've won legal judgments, but Venezuela is broke and has no money. Would some of that money go to them? And then certainly not in the short term. The short term right now, what we need to do with the revenue from those oil sales is stabilize the economy in Venezuela, stop the collapse of the boulevard, prevent Venezuela from the business. becoming a failed state. Conditions have gotten pretty brutal in Venezuela.

We want to see those start to swing back up. Give the people some hope and opportunity, stabilize the existing oil production, the huge debts that are owed Conoco and Exxon. Those are very real and need to be recompensed in the future. But that's a longer term issue. That's not a short-term issue. Is Delcie Rodriguez, who's now ostensibly the leader of Venezuela?

She was the vice president. She oversaw Pedavas, which is the oil company of Venezuela. Some people have talked to who said Rafael Ramirez, this other guy was kind of the guy that looted it. Is Delcian Rodriguez, in your view, Mr. Secretary, the right leader of Venezuela right now? Well, of course, ultimately, that's going to be up to the Venezuelan people, not up to me. But she is the interim authority in Venezuela that myself and others in the U.S. government are dealing with. And, yeah, we have some optimism. It's a petro state. That's why I asked, because oil and oil revenue would be, is seen by

most people I've talked to and things I've read, I'm sure you know this, as the economic economic way out to a better life for Venezuela? It is. It is what made Venezuela wealthy and prosperous in the past. It can do it again. But of course, if you have rule of law, a stable society, reasonable fiscal terms, and a government you can trust, the whole economy will boom and will grow. But you're right. Oil can underpin that. Oil can launch that. How much of this action capturing Maduro if any, has to do with rare earth minerals and or blunting China's economic impact in the region?

I don't think rare earth minerals really factor into that. But, you know, the biggest thing was the threat to the American people, the importation of drugs and huge quantities into the United States, the trafficking in arms, terrorist organizations that are funded and harbored within Venezuela, the kidnapping of American citizens and then trying to trade them and leverage them It's the criminality of Venezuela is why we went in. The Drug Enforcement Agency arrested Nicholas Maduro and his wife, of course, with the assistant of the Department of War, but this was a stunning operation.

I could not be more proud of the American military today. My God. It was a remarkable operation. It is amazing, the quality of cooperation, the bravery of our people. And just to think about this, we could transform the trajectory of a significant nation in the Western Hemisphere, with no soldiers on the ground for a few hours for arrest. Is Cuba in that thinking at all? Is transforming Cuba in that thinking? Well, indirectly, yes. Cuba has also been a criminal state with mercenaries all over the world

up to no good that has also been quite disruptive to the United States. They have this weird relationship with Venezuela. They get floated economically by free oil from Venezuela. That won't be coming anymore. That will be disruptive. for Cuba. And of course, they were the mercenaries. They were more loyal to Maduro than the Venezuelans. They were his security services. They were his security services. So then Cuba's electric grid is largely powered off of diesel fuel. It's very old. A lot of that fuel comes from Venezuela. Without the fuel, there's no electricity. What happens to Cuba? Am I putting the pieces together here? I think you are. I think we're going to see very significant pressure

on Cuba. You know, again, a socialist kleptocracy that's impoverished its people. Cuba was another wealthy, thriving nation, and look at how low it's gone down. So if internally the conditions getting tougher there, force internal driven change in Cuba, all the better. Final question, this has nothing to do with Cuba or Venezuela, but Greenland has also been obviously out there as a topic. I know that you work hand in hand on the rarer side with your colleague and friend, cabinet member, Interior Secretary Doug Burr. So some of this might be for him. I know that. Can you give us a status update on where we might stand with any negotiation around Greenland, some of their critical minerals? And does the

offshore wind pause have anything to do with Greenland and Denmark? No, I don't believe there's any connection there with Greenland or Denmark. Yeah, Doug Bergam's been a fantastic partner with mine on energy, on energy security. And the broader, how can we use energy and commerce instead of guns to influence world geopolitics. That's also, of course, that's the vision of President Trump. Let's use commerce, not conflict, to make the world a better place. And that's the idea. I said last question.

I lied. Is that then what this Venice was? Because you know what people are going to say, another war for oil like Iraq 20 years ago. Is this a war for oil? Of course not. Of course not. First of all, with a war, we would need a bunch of troops on the ground. We don't have any troops on the ground.

This is using commerce and energy to influence the trajectory of world events. We're going to try to take a poor, collapsing, kleptocratic nation and make it into a thriving American ally that's no longer a criminal threat to us. And we're doing that through commerce and energy. And we take the oil, not take, and we sell it, and that money goes into bank accounts that will ultimately largely, if not entirely be used to benefit the Venezuelan people. Absolutely. Correct. That is the plan. We are just controlling the marketing and the flow of funds, funds into Venezuela, so those funds can be used to better the conditions of the Venezuelan people and reduce the risks to the American people of the giant criminal activity coming out of that country. We're not stealing anyone's oil.

Secretary of Energy, Chris Wright, really appreciate you joining us here, long, extensive interview at the Golden Sachs Energy Conference here in South Florida. and maybe I will see you at the Big White House on Friday at 1,600 Pennsylvania. Thank you. Sounds great. In exciting times, Brian, we've got a president who's bold, creative, and doesn't like war. He wants peace and commerce and he wants to change world trajectory, and he's not bound by the ways everyone's done things in the past. Secretary Wright, thank you very much. Really appreciate your time.

Thank you very much. Kelly and Dom, I'm going to send it back to you, and I will see you in a few minutes with one of the guys that's running this conference here for Goldman Sachs. Yeah, we'll look forward to his reaction. Brian, and thank you. It was a great interview. Lots of headlines already kind of moving markets around a little bit, including the price of oil. And perhaps, as Brian alluded to, more to come on this front at the end of the week. We're on Dow 50,000 watch on S&P 7K. It doesn't look like we're going to get it today, but we're just a stone's throw away. What could possibly propel it there? How many days could it take? I wonder if that's an open bed over at Kalshi. Guggenheim's

Anne Walsh joins us on the other side of the break. Welcome back. The president just making some news on the defense industry, and this time it has nothing to do with Greenland. Let's get over to Amon Javvers with the news. Amon? Kelly, that's right. The president just posting on social media targeting defense contractors

saying he wants military equipment for the United States and its allies produced in larger numbers and much faster. The president says in order to do that, He's going to ban stock buybacks and he's going to limit executive compensation for defense firms. Here's what the president said on social media just a short time ago. He says, I will not permit dividends or stock buybacks for defense companies until such time as these problems are rectified. Likewise, for salaries and executive compensation. Military equipment is not being made fast enough.

It must be built now with dividends, stock buybacks, and overcompensation of executives rather than borrowing from financial institutions or getting the money from your government. Longer term, this is good for both executives and shareholders because it will be great for our country. The president in this lengthy social media posts saying that the executives of the defense companies are simply making too much money. He says, until they do so, that is, build the military equipment faster, no executives should be allowed to make in excess of $5 million, which, as high as it sounds is a mere fraction of what they're making now. So a really pointed social media post here aimed at the defense sector. You heard the president complain about this as recently as the past 48 hours in which he's talked about some of the military equipment used in

the operation in Venezuela and complaining that the U.S. defense sector takes years in some cases to build particular aircraft and other items that were used in that raid on Friday night. He wants that whole timetable sped up dramatically and he says he's going to limit the ability of those executives to get paid high salaries and the compensation and stock buybacks as well. So we'll watch for the particulars of this, exactly how is the president going to enforce this? That's left unsaid here. Presumably this is some change to federal contracting. He could change the terms of federal contracts for these defense contractors to include these carve-outs and prohibitions.

We'll see what the White House has to say on the details of it. Yeah, Eam, I said, you know, this time it doesn't have anything to do with Greenland, but does it on some level? The president expressing his frustration with the equipment used in Venezuela and kind of suggesting that the defense industry do more with its plans and equipment for what purpose, right? He doesn't answer that question, but it does make you wonder, you know, if he's looking with an eye towards, again, future involvement, future cases in which the U.S. might need to make need of that. Yeah, and that's why you build military equipment and why you build it at a fast pace. you know the president has just has said you know time and time again that the defense industry is is too slow he he often praises American military know-how and hardware he also often praises

the technological accomplishments of American military material but he also complains frequently about how long it takes to build some of these things and you know noting at one point that some of these airplanes take longer to build than it took the united states to win world war too, right? So in any kind of stepped up confrontation, you would need the ability to mass produce things in an industrial scale that the United States, in his view, just doesn't have right now. All right. We are watching, as you can see on the screens there, Amin. Intraday moves to the downside for many of the top defense contractors out there. Maybe dampening this a little bit is the idea that as a whole, the industry is measured by the ETFs that track it. Some of those

ETFs are at record highs as we talk about the moves lower in some of these defense contractors. So we'll keep a close eye on that. And by the way, stocks are still approaching at or near at some point's record highs right now. So with all of that, we'll turn back to those broader markets with stocks hitting those highs in early trading today. Anne Walsh is the CIO of Guggenheim Investments. She's here with us right now to kind of break all of this down. I know you've been sitting here listening to a lot of this stuff that's been going on from Secretary of Energy, Chris Wright, and his comments with Brian to what's been happening with these defense contractors, all in the context of a market that is at or near record highs.

As a CIO, is it at all confusing, kind of where the markets are at right now, and if so, why or why not? So thanks for having me. Happy New Year. I spent a lot of 2025 thinking about the Trump administration and their policies, particularly as regards the U.S. economics, whether it was tax, tariffs, deregulation, immigration. I think for 2026, we probably have to add another one of those

policy pillars for the Trump administration, and this time it's going to be geopolitical. And we started off the year, obviously, with the police action in Venezuela, with the removal of Maduro. We're obviously talking a bit around the edges right now about Greenland, and of course we're coming up on USMCA, renegotiation, All of this is going to be writ large as we go through 2026. And so I think one of the themes for the year can be expect the unexpected from this administration.

What's interesting about the unexpected part, geopolitics is always somewhat unexpected. But over the course of the last couple of decades, at least right now, many of those geopolitical risks that have been at least in play as catalysts potentially for downside market moves have oftentimes been short-lived. They've been in a situation where we say this could be a flare-up, it could be in the Middle East. I remember the Qasem Soleimani and the assassination there. We thought that might kick off a whole round of real unrest in the Middle East that never really, truly came to fruition. So if we are in that mode right now, just how much do geopolitics worry the markets that are at or near record highs again? So geopolitical headlines tend to be market moving in very short periods of time, as you just mentioned. But they tend to get priced in, and then the markets go back to watching the things that are more drivers of price action, for example, profits, margins, valuation, and other metrics.

And so what ends up happening is the buy-the-dip mentality returns and these very limited opportunities exist to reposition portfolios. I think in these circumstances, you ask about what positions we would take in this circumstance, and that would be diversification. Risk mitigation, when you're talking about a lot of headline moving elements, and that could be everything from the elements we've already talked about. But also, this week, we could get the trade and tariff decision from the Supreme Court. That's definitely going to be impactful, I think, one way or the other. So I think that being diversified and being ready is probably the best insurance, if you will, in terms of protecting portfolios and also being able to take advantage of opportunities. That Supreme Court ruling is a biggie. I mean, it could affect GDP.

It's going to be a big one one way or the other. So do you guys kind of gaming that out? Well, the market right now is expecting about a 30% chance that the Trump administration prevails and that the tariffs are remained in place. So the contrarian... So a 70% chance that they don't. Exactly. The contrarian view is the 70% chance that the decision goes in favor of the Trump administration. And so what we're doing in expectation is, as I think, most investors, I mentioned diversification.

We are prepared for some volatility around the result. And again, the contrarian view is the Trump administration prevails and that the tariffs remain in place. But do you take it as a buying opportunity either way? I mean, if we lose the tariff revenue, you could say, well, it could be a win for businesses, but kind of a loss for the fiscal situation, an amount of bond yields go up on that and stocks go down. Or, you know, because you said geopolitical things, too, they get priced in right away, and then, you know, the world kind of moves on. Well, exactly.

And so what do you do when you're having this kind of, you know, I call it the signal to noise ratio being very, very high? In this case, in this case, there will be a lot of noise, but look through to find the signal. And so what we do in this circumstance is look at the fundamentals. What are the fundamentals right now? And the fundamentals are actually fairly good. We've got an economy that's moving towards an equilibrium state. We've got, you know, movement in the Fed towards lower rates generally. We can talk about that a little bit more.

But the idea is, is that the fundamentals look, you know, like valuations are going to probably normalize. So from that perspective, there's opportunities. The headline risk will be washed through the system as other decisions are made, whether the Trump administration finds other ways to create different code sections upon which they can assess tariffs, or, you know, in the alternative, that Congress has to take action to reduce spending. We'll see about that. Yeah.

We also have the month, at the end of the month, we also have more budgetary conversations that are going to be happening in Washington, so there's a lot that's going to continue to unfold, and all of this will then, as I say, wash through the system and become priced in, and we're going to look for those opportunities to find that fundamental value. Yeah, well, and there's the 10-year moment ago, 414. So I like what you said, you know, that's going to be important, whether that keeps falling and underpins the trade. And thanks.

We appreciate your time today. Anne Walsh, C.I.O. of Guggenheim investments. Speaking of bond yields, they are pretty much lower today, stable, though. Almost every Treasury security across the curve is seeing a bit of a bid, and that's translating into lower rates. Private sector job growth data for ADP this morning, that came in a bit lighter than economist forecasts, and that adds to somewhat demand for safe haven assets like U.S. government debt. Also, some geopolitical uncertainty around the Venezuela events. We had the job openings data, which was down from the prior month. In fact, lowest levels

since September of 2024, all of that helping temper the pessimistic ISM data from the previous month, which topped forecasts. The benchmark 10-year note yield, trading within a range that's been in place since roughly early September, the high end around 4.2% and the lower bound just around 4. All right. Kelly, thanks for the bond report there. Coming up, the massive announcement from President Trump on home ownership just in the last hour, and what is doing to those stocks, details right after this commercial break. Welcome back. Lots of news from Washington today. this time the president posting on truth social that he is immediately taking steps to ban

large institutional investors from buying more single family homes. Diana Oleg is following this story. Diana? Well, Kelly, stocks of the big public landlords, as you can imagine, are taking a hit invitation homes and American homes for rent, both down sharply between three and five percent now, but they had been off as much as 8 percent earlier. After President Trump posted on social media that record high inflation has pushed Americans out of the dream of homeownership, especially younger Americans, it is for that reason, he said, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations. I will discuss this

topic, including further housing and affordability proposals and more at my speech in Davos in two weeks. Now, the key in that statement is that he would need Congress to pass that. Large institutional investors, it should be known, own roughly three percent of single- single-family rental homes. They are concentrated in certain markets, which can push buyers out. But the vast majority of rental homes are owned by small to mid-sized landlords. Now, I've reached out to the public landlords and some private companies as well. So far, no comment. But Jarrett Seaberg of TD Cowan put out a note saying, this comes now is an indicator of how worried Team Trump is about the impact of housing affordability on the midterm election. He said he does

expect Congress to enact legislation as part of bipartisan housing bills in. in both chambers to codify Trump's order despite previous Republican opposition. And this from Senator Elizabeth Warren, obviously a vocal opponent of President Trump, she said she's been pushing for this for years and said Congress should work on legislation to stop corporate investors from buying up homes. Back to you guys. Diana, this is just contextually, I just want to make sure that our listeners and viewers understand kind of just how maybe significant or not as significant this is. over the course of the past 20-plus years, there has been a lot of uproar about institutional

ownership of real estate, residential real estate. How much are these institutions a part of they say single-family home housing market right now, buying up these homes to then turn around and rent them? Are they a significant reason behind some of the uptick in real estate and housing costs? Well, as I said, 3%. They are 3% of the single-family. rental market owning about 450,000 homes. That may sound like a lot of homes, but if you do the math on 3%, it is a pittance of how much the single family rental market encompasses the full housing market. Most single family rental owners are either mom and pop owners, as in you own two or three

homes that you have an income from, or some investors that would own between 10 and 50 homes. Institutional, large-scale investors are determined as owning more than 100 homes. Blackstone's invitation homes, which it then spun off, as well as American homes for rent, own roughly $100,000, 100,000 homes each. And then there are other private investors who own significant portraits like Pretium, which is progress residential. So it sounds like a lot, but again, 3% just of the single family rental market. But when you talk about certain neighborhoods in places like Atlanta or in Phoenix,

where these investors own the vast majority of a neighborhood, that can keep buyers from getting in, absolutely. All right. An interesting story developing now for sure, and it's having a market impact. Diana Oleg, thank you very much for all of that. Coming up on the show, are you missing out on gains

by only looking at the United States? Our next guest will tell you some areas she sees some value abroad right after this. Welcome back to Power Lunch. We talked about the U.S. markets hitting record highs earlier today, but international markets are booming as well. So just take a look at this map. China, South Korea, Mexico, Brazil, all outperformed the U.S.

over the course of the last 12 months. Europe is also on a tear with the German Dax and the U.K.'s Futsi 100, both hitting new all-time highs earlier this week as well. So let's discuss the setup for international socks with our next guest. Joining us now is Jatania Kandari, the deputy the CIO of solutions and multi-asset over at Morgan Stanley Investment Manageant. She's also the portfolio manager of Morgan Stanley's passport overseas equity portfolio. Chetania, thank you very much for being here with us on Power Lunch. Maybe we'll start with a kind of umbrella-type question with regard to how a CIO involves the international markets in their portfolio strategy, just how important should they be right now?

Sure. I think the big picture question here is what is the share of the U.S. market in global indices, right? 65%. The last time U.S. was this high, it was in the 1970s and that share came down. Europe has come down from 15% to less than five. Japan is also in the heydays were, was at a very, very high. level at 40, 40%, 40%, 45% of the market gap. And at this stage where all these markets have come to such low shares in the overall global index and with the macro fundamentals, both in terms of growth, policy, and also the dollar, where the view has been that this is a weakening run for the dollar after having done so well in the last 15 years, one of the best runs it's had from a duration percentage. perspective, the case for international looks compelling. Like, when all of this dust settles, do you really want to own this much in the U.S., 65% of

the global index, or do you want to reroute some of that position and rebalance in some of the other areas in the world that are seeing compelling opportunities? So I think from a CIO level, I think that shift is important, that broadening both within U.S. and outside the U.S. is the key strategy for us, both at the asset allocation level, but also, you know, from a equity portfolio perspective. So, Jatania, the American exceptionalism trade was very well placed over the course of the last, say, four or five years, certainly since the end of the pandemic. If it's the case that you are making to diversify a little bit more away from those U.S. markets, what are the top picks? And where should you be allocating

some of that money more towards in the global market? Yeah, so I think within, I'd go from, you know, the highest capitalized market, which are the more developed markets, I think their thematics really matter. So understanding the AI supply chain, both from, you know, the ecosystem in the U.S., but the ecosystem in China as well, which is equally broad and thriving, picking those opportunities, at, you know, the AI supply chain level. I think the other big opportunities, industrials, whether it's in defense, in electrification, in economy,

again, lots of North Asian markets and even individual countries that have a lot of these industrial sectors. Financials outside the U.S. are also a very, very interesting sector where in emerging markets, you've seen monetary and fiscal orthodoxy and real rates that are high and central banks that have been much more orthodox and have tightened preemptively, now getting into a rate-cutting cycle,

which will lead to a new credit cycle with loan growth and in other pockets of Europe where you have the yield curve as a big driver of the net interest margins, but also increased MNA and loan growth coming, MNA activity leading to loan growth in some of the European financials and, of course, in Japan, too with the eel curve steepening. So financials, industrials, the AI ecosystem and how that shapes

up in the two hemispheres, the west and the east, are interesting themes. We have geopolitical hedges, be it in gold and silver, in energy, in mineral assets, and materials that are spread across the world. And I'd say like, you know, country-level interesting ideas, whether it's that has gone through its tightening and gone through its excessive valuations and it's kind of bottoming here, or even Latin America with, you know, the current Venezuelan situation. I think there are, there seems to be two strategic goals for the U.S. government here. One is, you know, just prioritizing the Western Hemisphere and the Western supply chain because you have a lot going on there.

Deaccalation of tariffs with near-shoring 2.0 in Mexico, with, financial aid to Argentina. These are great signs that the U.S. is prioritizing that region. And it's also like the whole resource security that they're seeking. So lots of pockets globally. Right. But do you like the pockets that include Brazil, Mexico, and then further aflung India, Eastern Europe, the North Asian AI supply chain. That's been a bright spot. Jatanya, we'll leave it there for now. Thanks so much for your time today. We'll check back in soon. Jatanya Kandari with Morgan Stanley. Let's get over to Leslie Picker now for the CNBC News update. Leslie. Hey Kelly, Minneapolis Mayor Jacob Fry is calling for ICE to leave his city

after a 37-year-old woman was shot and killed by an ICE officer during a federal immigration crackdown in the city. Federal officials say she was trying to weaponize her vehicle to run over the officers when one fired defensive shots, but Fry, who said he's seen the video of the incident, said it was not self-defense, but an agent, quote, recklessly using power that resulted in somebody dying. Alan Jackson, the attorney representing Nick Reiner in the fatal stabbings of his parents, Robin Michelle Reiner, said this afternoon he could not elaborate

on the circumstances that required him to withdraw from the case. He informed the judge earlier that he was no longer representing Reiner, who has not yet entered a plea on the murder charges. A public defender will replace Jackson. And another artist has pulled out of the show at Kennedy Center in D.C. after President Trump's name was added to the building last month,

Grammy winner banjo player Bayla Fleck announced his withdrawal today, saying performing there has become, quote, charged and political. Don we'll send it back to you. All right. Thank you very much, Leslie Picker for the news update there. Coming up next, the big question with all the plans for the AI buildout, how is there going to be enough power for all of it? Brian Sullivan sits down with Goldman Sachs's head of America's natural resources equity research on the other side of this break to discuss that and much more.

Keep it right here on Power Lodge. Welcome back to Power Lodge, where we're keeping an eye on oil prices, which are down today. As traders continue to react to the increased crude supply from Venezuela, our own Brian Sullivan, spoke to the U.S. Energy Secretary Chris Wright just earlier this hour on how he's working with U.S. oil companies in Venezuela. I think you will see involvement with them, help with them immediately. Are they going to put billions of dollars building new infrastructure in Venezuela next week? Of course not.

You've got to have transformation of the conditions there, but they want to be productive advisors and helpers in that process. Chevron is on the ground, so we're getting on the ground daily update. And Brian joins us once again now from the Goldman Energy Clean Tech and Utilities Conference down in Miami. This time, Brian, with Neil Mehta, I understand. Yeah, head of America's natural resources, equity research at Goldman Sachs. So we're just going to get right to the stock part of this program. I mean, when talking about Venezuela, talking about oil, talking about everything all day long,

let's get down to the meat. Make your clients and our viewers and listeners some money. Let's start with Valero. Yep, Neil. And first off, welcome, and thank you for having us. Thank you so much for your conference. It's been a heck of a day. Valero, stocks on the move today, the idea that if we have more Venezuelan oil,

they will likely process it. Is that a good thesis, or is the stock overreacting? First of all, Brian, thank you so much for being here. We have over 900 clients here. It's our best conference yet, and having CNBC and having Chris right here today has been a real treat. I'd say on refining, it is the part of the hydrocarbon complex that we are the most constructive on. When you look at the supply demand over the next five years, we're only going to add two million barrels a day. Net, in that same period of time, demand is going to be. up four or five million barrels a day. So the market is tightening and margins should be structurally higher than history. Positioning is pretty negative on the space right now. And for

Valero, they are the low cost producer in the Gulf Coast. Now you asked an important question about Venezuela. It's very unclear how these flows will play out, but it does seem like there's more heavy heading to the Gulf Coast. To the extent it is a half a million barrels a day, that's enough to dislodge some of that local crude. And it should accrete to Valero in particular, which has the ability in assets like Port Arthur to run that really heavy Venezuelan crew. So Valero's on our conviction list, and we're very positive on the story.

Well, when the news of Maduro's arrest and capture came out, the initial market reaction was the stocks like a Valero up, but the Canadian stocks down because of name like a Suncor, a lot of the Canadian oil, for lack of a better term, is fairly similar to Venezuelan oil in terms of its viscosity and how thick it is and density. Suncor is up a little bit today, but it did fall earlier in the week on that news.

Was that an overreaction by the market? We think it was an overreaction. To your point, Western Canadian crude has backed off by $3 this week as a result of the Venezuela headlights because it will mirror what happens on the Gulf Coast, and it does compete on the Gulf Coast against the Venezuelan crude. Suncor has very little sensitivity to changes in that local price, the Western Canadian crude price,

because it has a large refining business, so it's fully integrated. Suncor came to our conference and absolutely crushed it in terms of their operational update, beating our estimates by 6%. And continues to have very strong momentum. Under a change agent here, under Rich Kruger, who's really driving the business in a positive way. So for those who are worried about widening Western Canadian differentials, don't worry about Suncor. The story we're very much behind.

You know, Dom and Kelly and the break coming in, they teased the data center build out, the need for AI power to energy, et cetera, and a large part of that has been what they call the IPPs, the independent power producers, constellations of the world, the Vistra energies of the world, the NRGs of the world, and they've got some contracts, but you get my broader point. They have made investors a lot of money over the last year or two. Is all the money-making done in those names? Well, I think we have to go broader. We have a bullish view on utilities, the regulated utilities. We actually have a neutral view. on the independent power producers at this moment.

We love the electrification theme, though. So we are still very much a supporter of a number of stocks that have exposure to it. One example who presented at the conference is Cameco, which... Uranium company. Uranium company, largest uranium producer in North America. And nuclear is going to be a necessity to meet all of this base load power needs that data centers are going to provide. We anticipate a 2.6% kager in power demand between now.

in the end of the decade. Nuclear has to be part of the solution, as Secretary Wright spoke about earlier today, and Camico is a great way to get exposure. As for the IPPs, stocks have done very well at this point, and so we're looking for a better entry point before re-enged. Waiting to see if they pull back. So going back to nuclear because Secretary Wright also was on the board of a company called Oklo, Nuclear Startups. Well, no, I think Oklo stock is up like 1,200 percent in the last year or two, so it's made a fortune. There's a lot of optimism around on SMR, small module reactors, fusion versus fission. Chemical, more of a uranium supplier to more traditional nuclear, if you will.

Are you guys bullish on the startup nuclear space or the more traditional nuclear space? There's going to be a built-in conservatism in the way that we, as Goldman Sachs, will recommend a lot of stocks. Brian Lee, who is my colleague who covers the small modular reactors, many of whom we're presenting at this conference here today. and yesterday is of the view that the technology is very promising, but from an investment perspective, we need to see more. We need to see greater clarity towards a free cash flow inflection, and in many of these cases, these businesses are pre-revenue. So in the case of both New Scale and Oaklo, we have a neutral view on the stocks. We are more constructive on the traditional AP-1000 type technology, the Westinghouse technology that a chemical provides.

The more traditional nuclear reactors. That's right. Neil Meta, hey, really appreciate you having CBC at this conference. It's a great honor to have you here, and hopefully it was a productive day for you. I would say so. It's been a pretty interesting day. And I think Neil makes a great point, Kelly and Dom, that basically pre-revenue, it's kind of like some of these rare earth companies that we've been talking about for a few months. If you're betting on them, they may work, but they may also not.

We just don't know. So there's some views on energy stocks. Back to you. Brian and Neil, thank you so much. Really appreciate it. And we're back right after this quick break. All right, welcome back to Power Lunch. So did the U.S. invade Venezuela?

Well, according to Polly Market, the answer is no. Even after the U.S. forces captured Nicolas Maduro, now some users are slamming the company for refusing to settle more than $10 million worth of wagers in that market. Polymarket says it will only pay out the contract if the U.S., quote, commences a military offensive intended to establish control, end quote, over any part of Venezuela by one of three deadlines. Capturing the country's president, apparently does not meet that specific bar of quote-unquote, which is why I use the error quotes, invasion. This is now going legal at this point. Who knew that prediction markets were going to be such a boon for lawyers?

I think, but I think it's going to have to be that way going forward because this is going to become the blueprint. You have to put out their contracts or betting terms that are either narrowly, narrowly defined. Then just have your AI read it. You did admit. You brought up AI. It's been a whole hour. It's been too long.

Dom, thanks very much for being here. All right. Thanks very much. Closing bell, guys. Starts right now.