Chip Selloff Rocks Tech Stocks | Open Interest 7/13/2026

The biggest single day selloff for SK Hynix ever. 30 minutes until the start of cash equity trading. I'm Danny Burger and I'm Vonnie Quinn Bloomberg. Open interest starts right now. But. Coming up on today's show, more tech turbulence. SK Hynix leads a chip sell off after its Wall Street debut, and investors face a packed week of catalysts with big bank earnings and key inflation data in focus. Plus, fresh strikes drive up oil prices as President Trump vows to take over the Strait of Hormuz. Let's get some individual stocks to watch. SK Hynix has to be the one we're all watching today. After Friday's historic listing where the ADR jumped 13%. Well, the stock fell the most on record in South Korea today amid growing investor concerns that the rally has become overstretched, trading at a 27% discount to those ADR notes. You mean to tell me a record listing of an ADR that literally everybody in the world knew about wasn't a bullish event for this market? Who would have thought? Um, the I trade, though, it's completely under pressure today. Had a second quarter earnings results. Starting this week we did get some sales numbers from TSMC. They were good at 36% quarterly jump in sales. Demand is strong. But traders say there will be no mercy for earnings. Misses this corner. Nvidia and Micron though shares down at least 5% for micron. Maybe it's the story of Samsung. Expectations are high. So even if you beat you're going to sell off on me. Well we've seen it before Danny. We'll see it again. Let's dig into the selloff now with Bloomberg Tech's Ed Ludlow. So Ed what happens. Yeah the Y on the Korean session is very difficult to answer. There are some local reports about maybe SK in the near term, presenting numbers that aren't as rosy as the market had assumed, certainly in the Korean session. People are asking the questions that maybe we did ask on Friday during the the start of trade of those ideas. But essentially whether this is this was the correction we were due in some names that had had terrific run ups. Right. You know, ESC is still up a 180% year today in Korea. It is down 30% from its prior peak. But it's a stock that on a 12 month basis was up almost 1,400%. You know, there's been a lot of focus on how cool they are to the memory story. But lots of people in the markets, Vonnie, and I think we did go over this at the end of last week. Right. Saying that a pullback was not just inevitable at this stage, but but it is something that's quite healthy and maybe it has larger consequences. I'd given your interview with SK Hynix, and the desire may be to bring more shares to the United States. I just wonder how much of this I trade, not necessarily the trade, but the spend by these hyperscalers really hinges on their ability to see stocks continue to rally that allow them this cheaper cost of capital. Yeah. It's why the conversation's already moving to this earnings season, right. Because capital expenditures are one data point. Um, what you said about the future, you know, it was it was the same with SpaceX, to be fair. But when we were in the Nasdaq Friday, the question is, when does SK think about or how regularly does that come back to the market? Sell ads. And you know, ironically, the point that uh, Chairman Che made in that interview was well, not until we see price stability in the ad here and we see some return. So like clearly in the first instance, you know, the fact that the ad is down almost 10% and following the Korean session is logical because of how that structured. But yeah, they might be waiting a little while. Yeah, we certainly are not there yet. And thank you so much. Again, a really fantastic interview on Friday Bloomberg Tech. I love the turn into Bloomberg Tech in about two hours time. Let's turn to Wall Street earnings, though five of the six largest U.S. banks are set to report tomorrow, offering investors an important read on lending in the broader economy. Let's get to Bloomberg Intelligence senior bank analyst Herman Chan. Herman, what? What are they going to do this to us? That's way too much. Five on one day is a lot, right? And then two of the earnings calls are at the same time. So we've got our hands full tomorrow for sure. We definitely do. Do expect it though to be a broadly constructive day let's say I would say so. There's really high expectations. We just talked about expectations going forward. Uh, the bank stocks are up about over 70% in the second quarter. And analysts are estimating earnings up, uh, 20% year over year. That's really led by trading investment banking and then lending activity as well. So really high expectations. We'll see if they meet that bar. If we see a disappointment where is it going to come from Herman. Yeah. If there is going to be a disappointment probably on the net interest margin side, given the fact that we have rates steady on the short term side for for the foreseeable future, until a potential rate hikes later in the back half of the year. Um, and then there's a lot of, uh, loan demand. So in order to fund the loan demand. You might have higher funding costs, particularly under deposit science. That's something that we're looking for throughout the banks that are reporting next week. Does credit quality largely look healthy? Because we have seen some Consumer Reports from thinking of Pepsi last week, that did start to show some consumer stress creeping in. Do you think any of that will show up among these banks? I think that's going to be a key question on the earnings call from the analysts, where analysts will probe if you're seeing a pullback in spending on the consumer side, given the fact that we've seen higher Andrea costs. And what does that mean for consumers that are paying back their their credit cards, paying back their mortgages. How is credit quality holding up. And are there any early indicators in terms of delinquencies and the like that that really point to a deterioration in the economy? What will we hear from the regionals that will differ from the big bullish bracket banks? That's right. So the regionals, a lot of the same factors that the big banks are seeing are also happening on the regional side. there's a really strong resurgence in lending, particularly in consumer, uh, commercial lending. Uh, your, your bread and butter, small businesses, small, uh, and then medium sized corporations are really driving growth and they're more comfortable with the, the backdrop where last year there was concerns about tariffs than the geopolitical concerns. A lot of the sentiment seems to indicate that these borrowers are are okay with where we are today and are taking a bit more risk in building CapEx and building plants, equipment, etc.. So that's helpful for for the region on bank space. All right. Herman Chang, thank you so much. No doubt we'll be speaking with you again several times this week. That's our mission of Bloomberg Intelligence. Brent moving higher after the U.S. and Iran exchanged fresh strikes overnight. President Trump telling Fox News this morning that the U.S. will take over the Strait of Hormuz. Joining us now is Bloomberg Washington correspondent Tyler Kendall. How exactly is the U.S. planning on doing this? Tyler. Well, Vonnie, we didn't really get much details from President Trump, though it does seem to indicate longer term U.S. involvement when it comes to the straight, since at this point, the standoff over the waterway only really appears to be deepening as we get conflicting information from both sides on the exact status when it comes to what's happening with traffic in the Strait of Hormuz. Iranian state media earlier today reiterated a threat from the IRGC, which said that they are going to close the strait unless the U.S. quote ends interference, as we know that the country has been dismayed by the fact that more vessels are using that U.S. coordinated route that hugs the coast of Oman instead of taking that path would get that would get them closer to the Iranian coast. There are a lot of different factors to watch here, because it is very clear that this White House's patience has worn thin when it comes to the status of the Strait, as over the weekend, Centcom confirmed that the U.S. military conducted three waves of strikes, ultimately aimed at degrading Iran's capabilities to interfere in target commercial shipping. But Danny and Bonnie were really seeing those ramifications already. Take hold of this latest wave of escalation in just the past few days, because basically all of that traffic, observable traffic has, uh, come to a halt, according to satellite imagery, though, our analysts at Bloomberg Intelligence analyzed the data. And they say for the last three days, the so-called dark crossings, when ships go through with their transponders off. Those are now exceeding those observable crossings, as commercial shippers show, that they're weary of what has been this wave of attacks. Peter Shore of Academy this morning, basically saying that it appears that Washington is approaching this with a priority of reestablishing deterrence, that is showing their military might to deter Iran from trying to control the Strait of Hormuz or preventing ships from going through Tyler. Does it essentially seem that any hopes for continued talks are dead at this point? Well, according to the white House, they're not. The president still says that he will let his negotiators negotiate. Negotiators move forward. But he doesn't necessarily think that it's going to actually yield some sort of tangible result. For months, the white House has said that it has been prioritizing a diplomatic solution to the conflict, but it has become very clear that Iran isn't willing to give up its leverage when it comes to the Strait of Hormuz, even without, uh, the the carrot of that sanction waiver that we saw the U.S. just remove last week. Amid this escalation, it appears evident that Iran is saying that its control over the strait would take precedence over that potential financial benefit that the country would get from selling its crude to market. Definitely something to watch here. But the U.S. military is making it very clear that more could be to come. We heard a threat from Centcom saying that if Iran does not issue this statement saying that the Strait of Hormuz is opened, there could be additional attacks. After more than 140 targets were hit over the weekend. According to the US military. But Danny and Bonnie, we saw Iran take the opposite tact. In fact, it hit one commercial LNG tanker over the weekend and instead said that the strait is going to be closed unless the U.S. cedes to its demands and price of oil higher by 3.5%. Tyler, thank you so much. Bloomberg's Tyler Kendall in Washington, D.C. that's the latest on oil markets, a check on broader markets being dragged down by semiconductors after SK Hynix in the Korean session, logging its big, biggest one day drop on record at one trading day after listing in these United States, the Nasdaq leads losses down by more than 1% as ten year yields creep ever higher were higher by about one basis .4.57, with 30 year yields back above 5%. Vonnie. Well, let's get a look at some other movers on our radar. Donnie Bloom energy down as much as 13%, although it's well off its lows now. This after Hunter Book Capital disclosed it is shorting the stock. Bloom energy told Bloomberg it's reviewing the report and will, quote, correct the records. Spotify, meanwhile, upgraded Jeffries ahead of second quarter earnings. Analysts say that they will likely beat estimates as its AI tools start to show improvement. Shopify up almost 3% there and a check on the travel sector as oil prices climb. As you can see, not looking too good for the airlines, although we're really only down about 1% apiece. Same for the cruise liners. Coming up on the show is a huge week for economic data, and Fed Speaker Kevin Warsh heads to Capitol Hill. Will talk through the details of Michael McKee next. This is open interest. Now to high interest to look at what's making headlines around the world. South Carolina is facing a scramble to replace Senator Lindsey Graham after his sudden death over the weekend. Governor Henry McMaster will appoint an interim senator, while a special Republican primary could shake up the race ahead of November. The vacancy temporarily narrows the GOP Senate majority as both parties watch that seat closely. Meta is dramatically expanding its Louisiana AI data center, boosting the project's cost to over $250 billion. The campus will deliver at least five gigawatts of computing power and support 1000 jobs. The move also underscores Mark Zuckerberg's massive AI infrastructure push as meta raises towards superintelligence. And Fed Chair Kevin Warsh faces Congress this week as investors pressed for clarity on how we'll respond to inflation, jobs and growth. Warsh has rejected signaling future rate moves, but critics say he's also failing to explain the Fed's reaction function, leaving markets looking to other officials for guidance. It's going to be a busy week because alongside Walsh's Capitol Hill testimony, we're also going to maybe get a clear picture on this economy. We'll have CPI and retail sales and PPI this week along with a lot of bank earnings. Let's bring in Bloomberg International economics and policy correspondent Michael McKee. Mike, let's just start with the data CPI, PPI. What are we expecting. Well you remember the old days when we just talk about inflation. Because it could go either way that inflation or deflate. We might get that this week because CPI is expected on a month over month basis to drop for the first time in six years, the first month over month drop in six years. And that's because energy prices went down over the month with the so-called cease fire that is no longer in place. PPI on Wednesday, and that's going to give us some sort of clue as to pipeline inflation. Pressure is also expected to go down on a month over month basis. But the real question is what's happening with services. That's what the Fed's going to be taking a look at. We'll get some kind of picture with that with the Beige Book on Wednesday as well. And Thursday. Did you guys go shopping? I noticed you and Danny have, uh, you and Tyler have the same jacket? Maybe. Maybe you contributed to retail sales. That's something to watch as well. And then, of course, Friday we wind up the week of prices with import prices. But it is CPI that's going to matter. Uh, CPI and interest rates. And what we have seen with, uh, rise in the consumer price index, you can see it crossed over wages there. The yellow line is the December uh, market for uh fed rate increase. And right now we're at a little more than a one and a half. So, uh, that's gone up a little bit in the past few days. And depending on what we get done to set the record straight, Tyler and I did not shop at the same place or time. It was a coincidence. But I'm expecting you to add to retail sales. And, Matt, just next time, yes, I will, I will get a green stick. The semiannual testimony doesn't usually tend to move markets, but this one has the potential to. Michael, what kind of question might we really want to hear from Kevin Worsham? Well, you were just mentioning the idea that the market wants to know how they're at least thinking about how they're going to react to higher prices if they get that, because he doesn't want to give forward guidance. We've got 11 fed speakers this week, including Kevin Warsh. And that doesn't count duplicates. They're all going to be offering their opinions on this various stuff. Today we start with Chris Waller. So while the focus is on Kevin Warsh and he's not going to give guidance, we may get guidance from the others or some of the others. Uh, what you're probably going to get out of Kevin Warsh is maybe a little bit about how important it is to bring prices down. And also, I bet you're going to hear the words there's a task force for that. Oh, I'm sure you will. But that's an interesting point. That's what I wanted to ask you about with Waller today. I wonder if we're just going to be looking to him and other FOMC members to really divine what the reaction function of this Federal Reserve is. I suspect that Waller is going to be the counterpoint to Kevin Warsh going forward, since he has the sort of most, uh, the deepest economic chops. And since he's been right about several important turning points in the past, people will look to him for guidance on how the rest of the committee might be thinking until and unless Kevin Warsh gives us more of his own views, which at this point he doesn't want to do so. Waller is someone to watch going forward. I'd say Jay Powell, but he doesn't want to talk, so we probably won't hear from him. He is not going to talk. Also, the difference now between now and the FOMC is that there is actually a task force for that. There wasn't at the time there was no personnel. Michael McKee thank you so much. Coming up City's Stuart Keiser talks tech volatility and the high bar for earnings this quarter. Also what he's watching from the Federal Reserve. This is Bloomberg open interest. 40 minutes to go into the story of your cash equity trader being dragged down by chip stocks this morning, down more than 1% for the Nasdaq after SK Hynix booked its largest decline ever in South Korea. Brent crude that's up 3%. As Iran says, the Strait of Hormuz is closed. The US says it's not that they're going to take control of it. And the dollar unchanged this morning. Let's bring in city head of U.S. equity trading strategy Stuart Kaiser. So great to see you this morning. And look already we had seen some previous bleed over from the Korean session like chip makers have a bad day and the U.S. does poorly. I wonder if that relationship gets even more exacerbated now that we have this big listing in the form of high ADR in the U.S., it's going to be interesting because what the ADR does, it actually provides you US hours, liquidity and access to these stocks in the way you have in the past. And for that reason, you have a huge premium. I mean, the shares probably traded about a 25% premium in the U.S. relative relative to Korea. So yeah, it probably it does kind of create a little bit more reliance, but to some degree it gives you sort of us our liquidity in a way that you had it in the past. And hopefully more liquidity means more price discovery. And these things kind of calm down after a few days. Yeah. I mean, the shares were down 15% in Korea. They're only the ADR, only down 8.5% in the pre-market. Right. But it does speak to this idea of contagion, right. So Korea never used to affect the U.S. market. Not very often anyway. Suddenly it seems to be. Is that just because of the two chipmakers is the global chip trade? Yeah, it's a global trip trader. I would even brought it out as the global AI bottlenecks trade. You know, it's just massive amount of CapEx spending coming from the hyperscalers and Mac seven. And people are following that spending down the, you know, down the supply chain. And they're ending up in a lot of these memory stocks in Korea. And, you know, you've also added leverage to a lot of these trades via leverage ETFs and other approaches. So yeah I think it's that that theme has become globally interconnected in a way that it has a bit of the past. And and to your point, half of the Korean index is two stocks. So you know, that's the, you know, epicenter of that risk potentially given all the leverage and given just the huge amount of ownership households and otherwise to these chip stocks is what we've created is just chips becoming a high beta trade. Today, for example, there's no clear reason to sell off. Maybe after the euphoria of getting this listing of SK Hynix. But we do have a little bit of risk off because of what's happening in the Middle East. And I wonder if chipmakers become just that, just high beta now. Yeah, I mean, they definitely are. It's just it's a tricky world with this whole AI trade because it's not just the chipmakers, you know, are our quote unquote AI basket is the equivalent of 60% of S&P market cap. It's over 100 stocks. So I would argue the concentration right now is in the CapEx spending side of things. It's six companies in the US that will spend more than $1 trillion on CapEx next year. That is a very concentrated spend. But that spend then gets sort of it's a trickle down economics. It kind of spreads throughout the market. So right now the chip makers and the memory stocks are sort of the flavor of the day. But people are kind of hopscotch around. But again, I think if you're looking at where is the concentration is actually more in the spending than it is in the share price performance. I mean, you have the S&P up double digit year to date, the Meg seven or about flat on a year to day basis. And what does that do? That is the they are the spenders and that spending is then translating through earnings and price performance of other stocks. Stuart you had been very hard on the broadening trade right. The you know I guess rotation trade. Are you still as convinced that it's going to continue on for the rest of this year. Uh the the Max seven sort of I think, you know, the, the, the rotation out of some of that. You know, it's interesting. Yes. You are getting some rotation out of Max seven, but it's staying within the tech complex. Right. So it's kind of like a mini rotation or a half rotation if you look at what's not owned in the market is things like software as things like health care equipment. It's the non AI part of the industrials trade. It's a little bit of financials. So you know what you have to ask yourself if you're an investor is I'd like to rotate. But then I give you the list of okay this is what you have to buy. And just like uh, you know, maybe, maybe not quite yet. So I think what we've seen to my point earlier is a broadening out of the eye trade, but the rotation is kind of been limited still, you know, broadly within that space what would get you out of that trade? You know, there's a good there's a good way to get out of that, in a bad way to get out of that. I think, you know, the good way is the market keeps rallying and it just drags those laggards higher. The bad way would be you get a broad based de-risking and the favorite stocks get sold. We're obviously hoping for the first you know not the second outcome. Can I just ask not to split hairs. But is it even fair to call what's happening in tech a rotation right now? Because it feels like this back and forth between whether the chip makers or Mac seven are having a good day, it doesn't really seem to be a clear kind of consensus or winner emerging at this moment. Yeah. Look, I think the the rotation trade within tech would almost necessarily have to be selling semi's to buy software. And we've seen that for a day or two. We've not seen it sustainably. I think what you're describing, frankly, is the eye trade has become much more fluid and dynamic. And people will hopscotch around. Oh, mag seven, no dram, no memory, no, I'm going to analog semi, but it's all within sort of the same pool of stocks. So I think that is definitely happened. What we have not seen as people saying, oh no, I'm just going to get out of send me and go into software. Other than a day or two, it'll happen for a day or two really quickly, and then that'll sort of like dissipate pretty quickly as well. All right, Stuart, you're going to stick with us. We have to discuss earnings two with yesterday unofficially kicking things off. Uh we are just moments away from your opening bell as stocks fall a third of 1% for the S&P 500 falling two consecutive weeks of gains after this commercial break. Your opening bell. Just seconds until we begin your trading day, you're watching Bloomberg open interest. I'm Dani Burger two consecutive weeks of gains. We're certainly starting on the back foot when it comes to Monday's trade. Nasdaq that's down more than 1% in your futures trade. SK Hynix having a really tough Covid in the Korean trade. After the cross listing on Friday. S&P hanging tight, trading down by 3/10 of 1%. While the Dow Jones is little change. We have Wisdom Tree. Uh, we make a lot of ETFs. 2020 vision 20 years. I'm going to guess it's their 20th year anniversary. Ringing the bell at the New York Stock Exchange. And meanwhile, uh, we have Pegasus, uh, down at the Nasdaq. I think they do something I related because everybody does, it seems, these days. Um, so that's what's happening down at the Nasdaq. Meanwhile, SK Hynix, let me show you what the Adders are doing this morning, because, again, we had a historic tumble down in Korea. We're just talking to Stuart Kaiser about this, the kind of high beta nature of SK Hynix, the bleed over to the U.S. trade. Again, I thought it was very interesting, his comments that now that you have American hours trading, that you bring in more liquidity and maybe it won't be as volatile, but for now, we're down 8.2%. Funny. All right, Danny, the eye trade under pressure. As you've been saying ahead of second quarter earnings results starting this week. Now, TSMC reported a 36% quarterly jump in sales as demand remains strong. We got the full data from TSMC Thursday. All right. And we're back with Citi head of U.S. equity trading strategy. It is Stuart Kaiser. Stuart I was just looking through some of your research about what options are implying for this earnings season. Um, it seems that we are implying less of an extreme move this time around, which in itself seems surprising given earnings expectations are so high. We have one day where like five banks are reporting tomorrow, it seems like there is, I don't know, odds that we will get something of a volatile earnings season. Yeah, I mean I think that has to be your base case. If you look at last quarter, 60 out of the S&P 500 stocks move more than 10% when they reported earnings. That is a stunningly high number. If you went back 4 or 5 years that number would have been 10 or 12. So single stocks are moving a ton. It's been a little hard to identify. You know which ones those me might be. Obviously the implied moves this quarter are lower than last quarter. But last quarter was also a record high. So the market is still, I think expecting a tremendous amount of volatility this quarter as they should. I mean, the bar has been reset materially high after last quarter. And as we've discussed I mean, you're kind of on a knife edge on a lot of these stocks. And if you look at, you know, Broadcom recently reported Samsung recently reported pretty strong results. If you just saw the numbers. And those stocks still moved 8 or 10% on earnings. So the bar is high and the positioning risks are substantial and people are very aware of it. So the implied move is maybe not what it was last quarter, but it is still a still very, you know, very high historically speaking the Russell 2000 up 20% year to date. All right. The gains end for the Russell. Given that we really don't know where interest rates are going. And they might be a little bit more sensitive to interest rate increases. And to your point they may be more sensitive because it's a new index. Basically, you know, at the end of June we rebalanced the Russell 2000. And a lot of the the top end of the Russell 2000 had basically become AI stocks. And those are now in the Russell 1000. So if you look at the Russell 2000, the top ten stocks were about 7.5% of that index at the end of June. Those are down now to about 3.3%. So basically you've cut the concentration out. And the implied volatility of those top ten stocks has gone from 90 to 50. So I would argue that, you know, the Russell 2000 right now is not the Russell 2000 of 2 or 3 weeks ago. But to your point, I do believe it's actually going back to how we would traditionally think about small cap. It should be more rate sensitive. It should be more sensitive to US economic growth, because we've taken some of that eye trade and moved it up the cap structure and left the rest. What I'm hearing for you is more reasons to go back to not loving the Russell 2000. Well, it depends if you think inflation is going to print what I mean Mike was talking about if we get a light inflation. Yeah. Maybe you get Russell moving. For me it's actually a really positive thing because you want the Russell 2000 to express a view that sort of independent of what the S&P and the Nasdaq do. And I would argue the rebalancing is, has moved the Russell back into its more kind of traditional, uh, you know, envelope of risk every time we see hostilities flare up in the Middle East and it's clear we're not done. We may have thought we were at one point, but we are not. Do you worry a lot that this could spark something very, very serious in the market. It's all about the price of oil. I think I think the equity markets, if you go back, you know, as far back as the initial attacks on Israel, the equity markets are generally saying this is an oil trade for us. If oil gets high enough that it taps us on the shoulder, then we're going to start paying attention. If that doesn't happen, equities are going to focus back, I think, on the I and CapEx story. So from here, I think you would need oil back into the mid 80s or higher. So you could easily get that. I mean, the tanks are low and the glut goes away and the straits still closed. Then what else happens? Yeah, I think what the equity market is telling you is they believe both sides of this do not want to do that next step of escalation. And unless that happens we're going to focus on $2 trillion in CapEx. But look from an equity perspective this is about oil. From an economics perspective, this is all about the price of gasoline. And the national price of gas is back below $4, which is incrementally positive. So it's a total risk. I don't disagree with you, but I think you need a tail type outcome in the price of oil to really get equity markets attention again on Iran. Yeah, we already lived through this and demand came down and everything was more or less okay. But we have seen earnings upgrades for energy and for tech stocks. It really seems to be the bulk. And a lot of people have cited the number of 20% earnings expectations higher by 20% year over year. Stuart, how high exactly is that bar. Is this something. We always beat it. Is it going to happen again this quarter. Well the bar is obviously very high this quarter after a tremendous beat last. You know my guess would be we get a beat of the numbers. But it looks more like traditional like you're kind of you know 5 to 7 5 to 7 in some type. But again it's going to come down to that CapEx spend because that just just trickles down, you know, kind of the rest of the market. Yeah. You're going into this would they higher bar no doubt, but also with very, very strong spending intentions. And I think and in for a penny and for a pound for a lot of those companies. And for that reason, I think ultimately this will play out well for banks this week. It's a pretty good operating environment for banks right now. Very good IPO pipeline, very good trading environment. Uh, Shikhar and etc. went pretty well for the banks as well. So we do think banks are going to report. Well. And then you know you mentioned banks and inflation. Later in the month we get the FOMC and tech earnings again. So talk about a big day. You get to the end of July. It's going to be a really big day for the market. Stuart what percentage of people that you speak to or that call you every day have already moved on from earnings season and are already talking about midterms and what happens after that? You know what, midterms. There was some interest in it a week or two ago on the view that with Iran risk coming down to your point, Trump is going to refocus on domestic policies. And folks were looking for how do I get exposure to that? How do I get exposure to the affordability theme or to the domestic growth theme? Being homebuilders was was one sort of talking point there. Uh, you know, that's going to get put on pause a little bit just because of earnings. As I mentioned, you have these these are trillion dollar stocks moving $10 a 10% on earnings is very hard to focus on the election when your portfolio is moving that much. So I think we had a little bit of focus on the election. Probably for the next two weeks will be earnings again and then back half of July into early August. Other than space. I think hopefully we'll focus on midterms. We're not going to get a quiet summer, are we? No. Definitely not. It's so disappointing. We. But we haven't had a quiet summer in a very long time. So maybe that checks out the World Cup and you'll get more sleep and it'll all be good. Oh, that's going to be a sad day for me. Stuart, thank you so much for joining. Such a pleasure to see that. City head of U.S. equity trading strategy Stuart Kaiser. All right. Just under eight minutes into your trading day, let's get a check on this equity market. Again, we're off the back of two consecutive weeks of gains. But this is an S&P 500, which in today's session is being dragged down by chip stocks a lot of them at seven though having a pretty good day. Again it's this back and forth that we've seen uh volatility between the two trades where Apple Microsoft Amazon they're doing well. Energy companies also having a good day considering what is happening in the Middle East with the Trump administration and Trump himself speaking on Fox saying that they will take control of the Strait of Hormuz. So large disagreement of the status of the Strait, whether it is open or closed. So Chevron, Exxon, all of those doing well, we also have some of the big financial names. Visa, Mastercard having a good day to to the downside. Again it's a chipmakers micron erasing eight and a half points from this S&P 500 itself which is down 17 points. Nvidia that falls 1% Broadcom AMD SanDisk. Again look at all these names. It's just a lot of chip names that are in the decline column when it comes to this overall market. Again tech under pressure because of what's happening with the chip makers. And that is the worst performing sector today. It is down 1.2%, but there's not a lot of declines. Again, this shows you just how poor breath is and how just the chip makers falling are able to really upset the entirety of this index energy. Having a good day again. The price of Brent crude moving higher at utilities consumer staples real estate followed closely by health care. Also having a not so good day with a decline of about one third of 1%. Coming up, we're going to gear up for the Mega Bank earnings day that will be occurring tomorrow. Hold on to your seats. Five companies go at once KBW Chris McGrady. We're going to talk with him about what to expect from those big banks tomorrow. You're watching Bloomberg open interest. All right. It's time now for our top call. Some of the analysts action in focus this morning. And we're going to start with Wells Fargo saying Disney is not built to compete with Netflix or YouTube on streaming volume. And argues the stock could have a 40% upside of the company exit the streaming business. The firm says Disney's library could generate more than $15 billion in annual licensing revenue without hurting its box office experiences, business or its brand, and that stock up more than 1%. Next up, JP Morgan, raising its rating on American Express, saying its affluent customer base and defensive revenue stream make it better positioned as geopolitical risks rise and lower income borrowers face more pressure. And finally, we have HSBC upgrading Capital One to buy, saying the bad news is already priced into the stock. The firm sees earnings picking up as the discover integration moves forward over the next couple of years. Donny Varney That upgrade comes just ahead of a pivotal week week for bank earnings. Five of the six largest U.S. banks are set to be reporting tomorrow. Joining us now is KBW head of U.S. Bank research Chris McGroarty. Chris, thanks so much for joining. Great to see you. And what I'm sure is the last calm day of the week. Exactly. Let it begin. Let it begin. Look, capital markets activity is booming. The consumer looks largely healthy. We've had record M&A volumes. Is there anything not to like this earnings season? There isn't. But that makes us nervous right. Expectations are high right. The banks the big banks in particular have outperformed uh for good reason. The fundamentals are, you know, excellent earnings estimates are up 15% from a year ago. And the stocks are up 30. So expectations are high. The bar is high, but we think they think we think they will deliver. So how will they guide? Because I mean sure this volatility can continue. But it's been particularly spectacular right. How will they guide in terms of you know like trading equity trading deals everything that that will be you know intra quarter they generally don't go too far out. But I would say broadly speaking we've been on the good side of volatility. Right. If you go back in time we'd we'd ask ourselves when things like Iran and the war happen, who's going to get stuck with some bad trading losses. For the most part, the banks have ended up on the good side of volatility. So trading results we think will be up 15% year on year. Investment banking we're going to hear about pipeline. So that'll be the outlook commentary we heard last quarter there at records. And we want to hear that follow through. We've had a lot of the big deals already come into this market. Is it your assumption that we are still in this era of mega deals, and that the banks are going to be capitalizing off of that, or will we see some smaller things come through the pipeline that can still support the record volumes that we've had thus far here today? I mean, absolutely, the big deals are getting the attention. There's there's plenty in the pipeline. And I think, you know, beyond just the transactional nature of making, what, $100 million in space is the trickle down effect. So managing the wealth and managing the money of these companies and these individuals, that's where you get the permanency. That's where you get companies like Morgan Stanley just don't make a ton of money this quarter on these IPOs. But it's it's the longevity. And as an analyst, we look at the persistence and the repeatability of these revenues. Who will give us the most color on deposit costs? I mean Bank of America and JP Morgan are the numbers one and two. I would be listening the most to them. I think as you get through the week, you'll see the regionals talk more about outlooks for deposit costs. That's the second major theme, the number one theme. We talked about capital markets. The second theme is just the outlook for deposit costs. Because for the traditional bank net interest income, net interest margins are 70% of your revenue. And if the end of the second derivative are flat lining of deposit costs are happening, you're going to have to really think about the outlook into 27 for margins. Are we are we at a point of inflection and perhaps rolling over? Well, how much is that complicated by I know you and the team's view is that we're not going to get cuts this year, nor next year. How much pressure is that adding on on the margin? It's more difficult, right? The good thing is the assets are still repricing higher. So the margins are still, you know, up steady to up. I think as you go into 2027 budgeting season and looking at next year, I think that will be I think if we see stable rates, you're going to see deposit costs creep up. And I think the stocks will trade on that. So talk to us a little bit about where you're expecting the bar to be a little bit higher and be met as opposed to perhaps disappointing. So I know some of the regionals for example, you're looking for really nice performance. The regionals are set up to make a lot of money, right? The mid to high teens ROTC is what we haven't talked about is credit quality. Last quarter it was private credit that is absent from the conversation right now, which as an analyst makes me a little nervous. We why is it because they still have been really tied to, like the booming data center debt that's been taken out? And we've seen stories of banks trying to offset some of the exposure we have. Why won't that be present in this conversation? I think it will be. I think we'll we'll have to dig a little bit. But I think in general, analysts, investors focus on 1 or 2 things. And those two things we talked about deposits and capital markets. But I think in terms of what could wreck the rally, what could really deter confidence. It's any conversation around credit. And so there's higher for longer narrative that has the that has the potential over time to weigh on credit concerns or higher rates, make it a little bit more difficult on credit. Um, so at the same time, um, I know that you also like Morgan Stanley over Goldman Sachs heading into the earnings season. Why is that? Well, first off, they're both excellent at what they do, right. Goldman is the number one in investment banking and trading. Uh, Morgan Stanley's got this powerful 10 trillion wealth management business. Our difference is, is really what you, um, in terms of repeatability, we think Morgan Stanley's business model deserves a higher multiple. They're both trading at very high multiples. Goldman at three times what Morgan Stanley at four times four times tangible book. But it was more just a nuance like they're both going to have blowout quarters. I think there's probably more likelihood that Morgan Stanley's earnings beats run rate into earnings projections going forward. But they're both kind of outstanding quarters for Citi bank of America JP Morgan. So we're talking about 20 to 25% gain year to date right. Using that's not really pricing them fairly that perhaps there should be more gains there. They're expensive by historical standards right. The largest banks are trading roughly 13 times next year. And the smaller banks are trading at 25% discount. You go back in time. That was flipped on its head. Right. The small banks would get a growth premium. The large banks get a direct or regulatory discount. We think because of the regulatory momentum, that's that's a that's apparent in the system right now. And the repeatability in the scale that these large banks have. We think they deserve high multiples. And when you think about it broadly outside of the bubble of financial sector. Financial services 1415 times earnings. Isn't that expensive compared to other sectors? So it's uncomfortable as a bank analyst to put a 15 or 16 multiple. But they are growth companies in some capacity. We had heard for uh diamond saying uh, uh in May, late May, he basically said, we are on the lookout for deals. We are on the lookout of adding more capacity for JP Morgan. Do you think that there are a lot of opportunities out there? Do you look around and maybe some of the smaller the regionals and see. Yeah, there are real M&A targets for some of the big players right now. There's no holes in JP morgan's franchise. Right. They are at scale in all their businesses technology, investment banking depositories. They can't buy another bank because they're above the cap. Could they fill out the wealth management asset management payments. Absolutely. So could some of their peers. But I think broadly the regionals, they are scale buyers, right. They are looking up in terms of scale. They're doing a great job. But we are at a moment in time where the the regulatory world is allowing banks to do deals, and they're allowing them to do them quickly. And I think they'll capitalize on that. Just want to let everyone know. So you love PNC among the Super Regionals flag star, popular Hancock Whitney. Among the slides you have downgraded. Uh, first citizens. First citizens is is a name we stepped aside from, uh, this quarter. And those were all calls into the quarter. The PNC is the likes. Um, First Citizens is the number one bank in terms of regionals that has grown tangible book over a one, three, five, ten. So they are working for shareholders every day. Our decision to step aside was really based on the conversation earlier about deposits. They have a nuanced, um, headwind from the SVB acquisition, a couple of years where they have to pay back the government, and so they have to raise more deposits more quickly and at a more expensive rate. So that's impacting the margin outlook a little bit. But again, great company very cheap valuation continuing to buy back stock. All right Chris you better get home get some sleep. Great. You're going to have a long day tomorrow. That is Christopher McGroarty of KBW joining us. Coming up, Delta CEO Ed Bastian says his airline will do just fine with higher fuel prices. More from that interview next. This is Bloomberg open interest. Welcome back to Bloomberg open Interest to check on your equity market about 20 minutes into your trading day. And just keep in mind where we're coming from two consecutive weeks of gains, a lot of enthusiasm over SK Hynix listing in the US on Friday. Even the chairman telling Ed Ludlow, when things calm down, we're going to be issuing more shares today, my friends, is not that day. The Nasdaq falling more than 1.5% being led by chipmakers. Look, nothing specific out there. No news that would necessarily derail this trade. But considering we are trading more risk off, it has become a high beta play. The S&P down by 4/10 of 1%. The Russell 2000 also down by 30%. Stuart Kaiser pointing out that the Russell 2000 has become more of an interest rate play because we had a rebalancing and a lot of the AI names went up into the Russell 1000. So thus you have something that's more interest rate sensitive, and it makes sense why you'd get some interest rate sensitivity. Today yields are moving higher with the price of oil moving higher too. I don't see oil on this board unless I'm going blind. But the price of oil is moving higher today. I can promise you that gold that is falling by 1.7%, as is Nvidia. And again, look at look at these huge declines in the chipmakers. SanDisk down 10.4%. Micron 6.5% SK Hynix. The US ADR is down 6.9%. Not as bad as the South Korea session. Much more leverage in the system there. Although we are getting more these ETFs coming to America Carnival, that is surprisingly higher by about a third of a percent. But most of the travel names are off today. Given the price of oil continues to climb over uncertainty in the Middle East and the status of the Strait of Hormuz. Delta Airlines are among those declining, down 6/10 of 1%. And of course they had their earnings last week. They beat expectations. But the shares had fluctuated on their outlook. And Delta CEO Ed Bastian says that higher fuel prices, though they're not deterring travel. He spoke with Lisa Abramovitz earlier on Bloomberg Surveillance. Our consumer has the ability to sustain this level. In fact, we saw it in the quarter. We made that 9% operating margin with fuel prices much higher than where they are in the existing, you know, the existing landscape. So I think I think oil is going to stay sticky for longer. I'm not sure it's going to be in crude, though. I think the refined cost of a cracker spreads are where you're going to find is going to take a lot longer for that to come down. Our international travel season is looking very, very healthy. Businesses international. As I just said, American Express, our loyalty programs, our cargo business. We have so many different lines of business, including here in the U.S., our domestic travel, It's all doing very, very well and I don't see fuel prices deterring that. Delta CEO Ed Bastian on surveillance. They're speaking with Lisa Abramowitz and it's incredible, Dani, how optimistic he sounds. They really written out this quarter really quite well. And if that was the end of us, great. But it looks like we might be kicking off again. Well, the thing that's good news for Delta is the fact that they've really geared their business to be one that's premium. They've really lent into business now also having basic business, which I hate. And I could spend an hour on why I think that's horrible. But they are more immune. Their consumer is more immune, even if oil prices go higher. We have seen people continuing to travel. If they're able to afford it, they have pricing power. And that's what this market is all about, whether it's from the memory chip makers to the airplane to the cruise ships. Right. Do you have pricing power? Yeah, certainly. Coming up in the next hour, we're going to continue the conversation on the economy. RBC economist Francis Donald will join us in a very busy week, along with a line up of power CEOs. 30 minutes into your trading day. Welcome to Bloomberg open interest. I'm Danny Burger alongside Vonnie Quinn. It's a market that's being struck by lower tech, lower chipmakers. SK Hynix is worst day ever in the South Korea trade, and we begin the show with that tech turbulence. SK Hynix leads a chip sell off with a packed week of bank earnings and inflation data ahead. Fresh strikes driving up oil prices to US. President Trump vows to take over the Strait of Hormuz. And as the air power race heats up, we're going to hear from the CEO of Sunrun, the CEO of Jeff Bezos General Fusion Plus, Blizzard's global head of power. We begin, though, with a busy week ahead. U.S. CPI is due tomorrow, and we're going to get fed Chair Kevin Warsh kicking off his two day testimony on Capitol Hill. We'll get PPI. We'll also get retail sales and big bank earnings. Joining us now is RBC chief economist Francis Donald Francis. Really wonderful to see you. And let's just start with CPI. What are your expectations for what the data delivers and how far forward we can carry it. And if it if it is somewhat based on the price of energy coming in. Well, of course energy is a big reason why month over month inflation is going to look a little bit different. But that's not the story here. The story is not energy. It is what is happening with services, inflation. Every measure of services inflation that we have is just too high, most of them above 3%. Even Fed Wharf is famed trimmed mean is in the high twos. We have to move away from the idea that energy was ever the problem. It's a problem. But the real issue is that this uptick in demand led inflationary pressures, the old fashioned ones, Danny, that we used to worry about back in the day. And those are the inflation measures that the fed cannot ignore. So. Well, there'll be a lot of attention on CPI which will look a little bit better on the headline. I want to see what's underneath the surface. So, for instance, what will be the transmission mechanism the fed will use to try to work on services inflation in particular. Will the consensus be that you can do that with maybe shrinking the balance sheet, but that that's going to be a far fetched for, uh, Kevin, I think. So the issue is going to be paying attention to some of these other indicators. I mean, we have an economy that is running at 2%. There's a significant infrastructure build out, but we also have a very tight labor market, the unemployment rate at 4.2%. If I told you ten years ago we'd be at 4.2%. You'd think the Federal Reserve would be hiking into that environment. So there's a lot of pressure underneath the system that is suggesting this is resilient growth. Uh, that is supporting the broad economy in an economy you don't want to bet against. I think we are often asking when we look at this data, what does this mean for the fed? And of course that does matter. But we should also be asking, what does this mean for businesses that need to have, as you mentioned, early, Vonnie. Uh, pricing power. What does this mean for companies that need to put forward earnings? And I think as I look at the inflation data this week, I'm going to be focused less on what does this mean for Kevin Warsh and what does this mean for how businesses are going to be able to price out a consumer. This feeling a little bit more inflation pressure than they were at this time last year. I understand the data matters less for the fed, but Frances is still even more complicated, and we don't totally understand how this fed will be reacting to the data. Given that this is a Federal Reserve chair, Kevin Warsh, who doesn't want to give that forward guidance or detail, any of that. We're going to hear from Chris Waller today, along with, I believe, 14 other speakers from the FOMC this week. Is that how we understand the reaction function? Do those speeches become all the more important because of the restraint coming from Kevin Warsh? There's going to be an enormous amount of focus on the Fed's response function. But if you listen to listen to Kevin, where she told us, go back to the fundamentals. Think about what the data means for the economy first, and that's what we're trying to do. If inflation is too high, is it putting pressure on consumers? If it's putting pressure on consumers, it's going to put pressure on businesses that are serving consumers. That's the fundamental question in play. And moreover, as we think about broad market reactions, what it means for everything from equities to bonds. We should also be thinking about is this an environment that's going to create, um, challenges that weigh on these companies not is 25 basis points going to make a huge difference? Is Kevin Warsh going to make the argument that it's okay, AI is going to fix everything because productivity is going to increase substantially? Certainly that's the question that's going to come up to play. So too is energy. And he should also be watching food costs in this environment. We have more upside ahead on those factors as well. And fundamentally when we think about inflation in the second half of this year, we're still much more worried about upsides and downsides. I is one of those stories. It's Remarkable to look at this jobs market that continues to hold up. Frances. And I just wonder if hiking rates is now divorced from the jobs picture. Just picture. Just given that this economy in this jobs market is not as concentrated in industrial sectors as it once was. Do you think that will still be a present conversation, a reticence to hike because of what it does to the labor market? Or again, has this economy moved on? I think you've put the nail on that. It is about a cyclicality that is coming through in this labor market right now. This is a labor market that is very healthcare centric. Most of the jobs coming through from structural changes. I it is not one that is as best of an indicator of what's happening in the cyclical economy than has it been in the past. So how we as economists, how we as central bankers, how we as businesses respond to it has to change in an environment where it's no longer to consumers have jobs. It's are they making enough money in that job to pay for this cost of living? Will the midterms have any impact on what the fed chair decides to try to convince the rest of the FOMC of out? I think you're going to find every central bank banker in the world is going to say it is absolutely irrelevant. In fact, that's the angle that they're going to try to take in that. But does the midterms change the path of fiscal policy? Does matter. If you get more fiscal policy, it is more inflationary. And the fed may have to lean against that. But it's still early days. And of course, much of what's happening on the fiscal side now is just continued upward pressure on the economy. Does the magnitude of that change with the midterms? That's a question we can start asking. But does it change the bias or the decision making function of the Federal Reserve? I think almost all central bankers would push back against that. For instance, when it comes to the state of the consumer, we get retail sales, but we also get a lot of the big bank earnings. Are you going to be paying attention to those? What are you looking out for to kind of understand where we where we are at this moment. Oh, we get bank earnings. We get NFIB small business optimism, which is going to tell you more about what's happening with labor demand. We're going to get a ton of housing market this date this week as well. You got Philly fed Richmond manufacturing data comes through. Economists have a lot of questions about how much more this consumer can take. And hopefully the data that we see this week gives us answers. But there's certainly a huge mosaic of information that's going to be coming through. And it's going to be putting those stories together from how much inflation is still in the system, how much more can consumers take? How will the fed react to that, and how is it impacting businesses from banks all the way to consumer stocks? That is what's ahead for us this week. So certainly lots of information. We'll have to dissect it one piece at a time. Just your average sleepy summer week. Frances, thank you so much for joining us. Really great to see you. Frances Donald of RBC. Let's get a check on your markets ahead of that very busy week. Again, Frances outlined it all there. We get earnings, a lot of data, a lot of fed speak. And we also have to contend with what's happening in chip stocks that seems to be blowing around this market. The Philadelphia Semiconductor Index down 3.6%. That drags down the Nasdaq down nearly 1.5%, whereas the S&P is down by a third. Brent crude that higher. Vonnie by uh 3% to this morning. Yeah it's coming off its highs. Let's get a look at some single stocks moving at this hour. Donnie SK Hynix ADR is falling out of the chipmakers historic U.S. listing Friday. The Korean listed shares posted their worst decline ever. Meanwhile, TSMC did report a 36% jump in quarterly sales, in the latest sign that global demand for AI computing remains strong. Initially, shares were trading higher but now starting to fall with the rest of the AI trade and watching energy. Of course, as oil rises on renewed strikes between the U.S. and Iran. President Trump telling Fox News this morning that the US is taking over the Strait of Hormuz. For more on the Middle East, Bloomberg Washington correspondent Tyler Kendall now joins us from the white House. Tyler, there does seem to be widespread disagreement as to the status of the Strait of Hormuz after renewed escalation over the weekend. What do we know? Danny, at this point, we saw a trade in attacks over the weekend. And then today we're seeing a trade in heightened rhetoric between the two sides. Earlier today, President Trump maintaining that the U.S. will guard at the Strait of Hormuz, in his words, and seem to imply that there could be some sort of longer term commitment by the U.S. when it comes to the waterway, saying that the U.S. would want to be reimbursed down the line for helping to secure safe transit. Now, Iran has disputed that the Strait of Hormuz is opened, even as Centcom puts out some numbers, saying that they are still helping guide ships through the Strait of Hormuz. It's hard to track it at this point, because we know that observable crossings, when ships have their transponder and radars on, is hard to track at this point, according to satellite imagery. But our analysts at Bloomberg Intelligence looked at the data, and they say for the past three days, they have seen an uptick when it comes to those so-called dark crossings exceeding the number of observable crossings for the first time since the Memorandum of Understanding was signed last month. At this point, we have to see where it's going to go from here. Iranian state media has been out with some pretty tense statements this morning, saying that they will dispute any U.S. interference in the Strait of Hormuz, as we know that more of those vessels were looking to take that route. That is coordinated by the U.S. and hugs the coast of Oman. Bonnie and Danny, at this point, it also seems like Iran is reaching out to some of its regional allies. Importantly, we saw Iran's foreign minister hold a meeting with Oman over the weekend, which is something to watch for sure, as we know that those two countries have previously said that they would be looking at some sort of framework to basically oversee transit when it comes to the Strait. Tyler, can I ask you about domestic policy for a moment? I mean, while being mindful of the fact that a senator has just died and, you know, without any notice, there is going to be a rush to try and fill Senator Graham's seat. Right? There's a lot to be done to Save America Act, transportation, farm programs, all sorts of defense spending, and so on. What happens next? Uh, you're right, there is so much to watch here. Varney. With the passing of Senator Lindsey Graham, when it comes to the domestic agenda, Republicans now have a 52, 47 majority. And it's made even slimmer by the fact that Senator Mitch McConnell isn't right now voting due to, uh, his own health concerns. There's so much on the agenda at the moment. Keep in mind that Senator Graham is the head of the budget committee, and he really helped to shepherd through the legislative priorities that we actually saw get through this Congress, perhaps most notably the one big, beautiful bill. There have been questions here about whether or not Republicans will pursue a third reconciliation package, though that, of course, faces an uphill battle. But that seems to be something that was put on the table in order to get provisions of President Trump's Save America Act, that voter ID law that he's essentially hinging all other priorities on. Uh, that's the domestic agenda. We also know that Graham, of course, was on the Senate Judiciary Committee. Uh, the attorney general, Todd Blanch, has his confirmation hearing this week that could also potentially be slowed down now that there is not that vote in support of him for getting out of committee. And then lastly, Vonnie and Daniel, of course, on the foreign policy front, Lindsey Graham was known to be this defense hawk when it comes to foreign policy questions here about what that means, particularly when it comes to aid for Ukraine. Considering that he had just completed his 10th trip to the country over the weekend since the war began. And we're all just remembering a remarkable career from the late senator that spanned decades, both in the military and public service. Tyler, thank you so much for joining us. Bloomberg's Tyler Kendall reporting from the white House. Coming up on the show, Sunrun is taking a step beyond solar rooftops in a venture that could turn sun powered homes into a mini AI data center. We're going to get the details from Sunrun CEO Mary Powell. This is Bloomberg open interest. Now too high interest to look at what's making headlines around the world. Wall Street is quietly preparing for a deepening Saudi UAE split that could disrupt trillions in Gulf investment, pressure oil prices and complicate business across the region. Banks and private equity firms are drafting contingency plans and reviewing contracts as political tensions increasingly spill into commerce. Sheehan is targeting a Hong Kong IPO as soon as next month after winning approval from China's securities regulator. Fast fashion giant could raise 2 to $3 billion, making its third attempt to go public after failed listing efforts in the US and in London. The NFL just got a new billionaire owner. Tech investor Vinod Khosla is buying the Seattle Seahawks in a deal reportedly worth $9.6 billion. It's a price tag that would shatter the NFL record, dwarfing the roughly $6 billion sale of the Washington commanders just three years ago. The blockbuster deal still needs NFL approval done in such a high price tag, and you gotta wonder if it's the top. I mean, they just won the Super Bowl. Where where do you go from here anyway? Elsewhere, the solar energy company Sunrun is making a move into IE. The company is launching a pilot that uses its network of homes with solar and batteries to help AI computing power. Joining us now to explain is Mary Powell, the Sunrun CEO. And Mary, great, great to have you on. Look, it's quite novel, this idea that you basically will pay homeowners to power many little I, uh, I data centers directly into their homes. How does this actually work out? Like will you own the computer processing network? Does the homeowner own it? And how much money could they realistically get from this? Well, first of all, it's so nice to chat with you. And this is a really important development. I mean, we are all about serving over a million homes across America and helping them generate their own electricity. So we provide the ability for our customers to generate their own electricity, to store their own electricity. And now as we think about distributed compute, and we think about the fact that the need for energy is hitting all time highs nationally. Demand is expected to grow 40% over the next decade. And at the same time, we know that I compute needs energy, needs power on top of that. So one of the things that we found is that we could really, potentially be a really important part of that solution with our customers by providing their homes with nodes that then allow them to, in essence, provide many data center capabilities and get compensated for that. So to your point, the customer would host it, and then the customer would then get paid for the value of meeting that demand that I demand. So what are the financial terms of any agreement with. You know. Customer eight Mary. Well, again, we're doing this as a pilot. So we're starting with, um, you know, a pilot program with customers. And we wouldn't be doing it if we didn't think, obviously, that it's something that could really take off and the values, you know, could really range. I mean, it could range from a couple hundred dollars to more than that in a month, depending on, uh, how much that node is, is needed. Because, again, they're not providing power from their home. What they're doing with that node is actually providing the answers, the eye answers to questions through that node in their home. And again, we provide them the ability to generate their electricity, to store their electricity, and to become so much more in the driver's seat around how they generate, consume and use energy. And so what we want to do is give them another way to use that energy if they choose, and to get compensated for it. I'm like envisioning this future where I has replaced all of our jobs, but we're still making money because our homes are now AI data centers. Kevin Ward yeah, that's true. So I'm feeling I see I kind of see the future of where we're going. Mary, what about contracts for what you're going to do with this compute with this capacity that you have? Have you already been talking to, like any of the tech giants to maybe sell some of this specifically to them? Yeah, we're having a number of conversations with potential off takers. There's a lot of excitement in this space, as we all know. Um, and there also is a market, uh, for this kind of demand. So, uh, that's all part of why we want to do this really extensive pilot so that we can learn, develop it further, and, and really scale with it. Mary. Subscriber additions were down about 25% in the first quarter. What are you seeing in the most recent quarter? Well, we are we are continuing to progress on all the things that we said we would do. And we're really focused again on the right kind of growth. That is why Sunrun is the strong one, uh, in the space. And we are the vertically integrated operator that is providing incredible energy independence and control for Americans all over the country. So we're really pleased with the growth that we're seeing. It's exactly as we set out to accomplish, and it has really picked up then, though, Mary, excuse me, has demand picked up then? Is that what you're saying? Demand is really strong for the product. Uh, make no mistake, the demand for what we're selling has never been more intense. Utility rates are rising. Reliability is going down. And what Sunrun provides is a way for customers to have control and independence. Mary, so sorry if I can just jump in because it's hard to ignore that. Maybe the market doesn't doesn't fully buy at your shares are down 33% year to date. Um, you did have your partnership with Tesla and were new home. That kind of helped pick things up, but it does feel to be this deep skepticism, whether it be about your big debt load or this narrative that you're becoming more of an AI company. Um, what are you going to do to convince this market that this demand, this change, this pivot to AI, that it is real? There's been a lot of volatility in our space for sure. And what is so important is to just continue to do what we've done, which is focus on what a great company does. And a great company provides incredible products and services to customers. A great company generates cash and makes sure that they're doing it in a way that is profitable, and a great company innovates. And what we're talking about today is the additional innovation, which is value on top of what we already provide customers all across the country and what we already create for Sunrun. All right, Mary, thank you so much for joining us, Mary Powell of Sunrun. And we're going to have more on powering air ahead. A start all star lineup of executives to speak on this. The CEO of Jeff Bezos back startup General Fusion Plus we'll hear from Lazard global head of power, energy and infrastructure. I want to bring you some breaking news coming from the president on Truth Social. I'm speaking about the Strait of Hormuz, saying that he is reinstating the blockade against Iran. Again, posting this untruth social, saying that the Strait of Hormuz is open and remain open with or without Iran. We are reinstating the Iranian blockade, so named because it is only stopping Iranian ships or customers from entering or leaving. All other countries will have fair and open use over the Strait of Hormuz. Trump also saying that the US will be reimbursed 20% on cargo ship through the strait. Vonnie, the detail is missing and whether Iran will agree with this is missing too. We know the Iranians in recent days have struck ships going through the Strait of Hormuz. The U.S. has tried to deter that with launching their own attacks against Iran. But the U.S. is saying this. It takes two to tango. Will Iran allow any ships through the Strait of Hormuz? Well, I just wonder what he means by the U.S. will be reimbursed 20% on cargo from Hormuz. Who will be doing the reimbursing? Is it the shipper? Is it? I don't know, it sounds like a told me. Is that a toll? Well, he certainly has. And there is this pile of money sitting that Iran is waiting to get back in the U.S.. The state said that they would be paying Iran, uh, not directly from the US, but that would be going to corn and agriculture. Perhaps it's that lump of lump of cash that goes to the U.S. again, energy prices moving higher on that news. Brent crude up 5% more after this commercial break. Let's get another check on oil. Following that breaking news, we did have Brent hit $80 a barrel after President Trump said the Hormuz Strait will remain open with or without Iran. He also said the U.S. is reinstating that blockade, and that the U.S. will be reimbursed 20% on any cargo that goes through Hormuz. He said that the reimbursement will be at the rate of 20% and it will begin immediately. The US being the guardian of the Strait of Hormuz. And as you can see, stocks not reacting too much to this. But certainly Brent money is higher. Yeah. Up on nearly 5%, 4.3% to be exact. I wonder where Europe stands on all of this were coming off the back of NATO, and whether they would participate in any guarding of the Strait of Hormuz. Um, coming up, we're going to talk to General Fusion CEO. Jeff Bezos plan to start off General Fusion is making its Nasdaq debut today, giving investors a new way to bet on fusion Energy, a market some industry forecasts say could exceed $1 trillion a year by 2050. Joining us now is fusion CEO Greg 20. And congratulations, Greg. You're trading now on the Nasdaq G force. And shares are up 29% from the IPO price right now. What are you going to do with the proceeds? Look, it's a totally exciting time for us here today. Uh, to be the first publicly traded fusion company in the world. It's pretty awesome. Um, for for us, getting to the public markets meant a whole bunch of things. But in particular, you know, getting the capital that we could move the ball forward with our world leading commercialize ABL fusion technology. Uh, we did that with Pipe Capital, and we're pretty excited to be able to have that come into the company, uh, which will fund our roadmap and some really incredible milestones in the next couple of years. There are a lot of startups in this space, maybe even more than 50, that have been scrambling for funding. And you yourself, you talked about in 2025, about a quarter of your staff had to be laid off because of running short in funding. And I wonder, just for fusion companies, given how novel it is, given you haven't gotten to commercial viability yet, if you kind of have to go to public markets, if private funding has more or less dried up. You know, we've had great support from private investors all the way through. And so what we wanted to be able to do is advance the technology with that private capital to get us to a point where we have some real, tangible milestones to fund as we move into the public markets. And so, uh, we built a machine recently called LM 26. That machine is going to demonstrate some industry first milestones and move us really to the front of the pack. And so being first to the markets and the public markets allows us to access capital in ways that in the private markets don't allow for. And so we're pretty excited to be first. Uh, we're going to be able to sort of hit these milestones in the public markets, and that will bring additional capital in the future, for sure. Greg, in December, Trump Media and Technology did a deal and agreed to merge with fusion developer Tay Technologies or Tia technologies. Have you had any discussions with the administration? How interested are they in this technology? Fusion is a game changer. Uh, countries all around the world are racing to put fusion energy on the grid. It's energy security. It's an opportunity. And the export market for fusion is, you know, trillion dollar market opportunity. So it's huge. Uh, so CTE and others, uh, continue to raise capital or enter the public markets. I'm not surprised it validates that fusion is now. It's happening. Uh, and I won't be surprised if others bring the come to market as well. Um, it's not quite. Now, Greg, I mean, just the idea of when you actually get this up and running. Estimates are anywhere from 2013 to 2035, so maybe we have a decade to go. Things like fusion, that's already a large industry at this moment. So how do you convince one of the big utility giants, one of the tech giants, to partner with you, to invest on you to, to sign any agreements when they could be waiting a decade at this point for power that they desperately need now? Yeah. So there's going to be near-term, uh, gaps in terms of, uh, power to satiate the demand that's there. We see that every day in the news. You know, AI, electrification, industrial heat, these types of things are drawing huge amounts of energy from the grid for us. We're thinking about stepping in with our first vaccine in 2035. That timeline is not that different from what you're seeing from Mars. And so what that means is fusion can step in and play an important part in taking up the future growth of energy. And so, you know, fusion really can deliver clean, limitless, almost limitless energy. And so the opportunity is much, much bigger than that of fission. And now also a safety profile that doesn't have long term radioactive waste. Chance for meltdown. You're not using fuels that can be weaponized. So it's a big difference. So another one of your competitors and sorry to talk about all your competitors, but Commonwealth Fusion Systems got some investment from Nvidia and also alphabet. Have you courted large public companies like that. Anyone interested in investing in you? Yeah, we have, uh, some really great commercial relationships with a handful of utilities, industrial heat users all around the world. We work with them on a regular basis. And really, what's important right now is to move the technology forward. That's the primary goal with that's a general vision. Move that technology forward. The markets are definitely being made. We have signed several agreements with, uh, potential customers of the future. But for us, it's, you know, move the technology forward. The market will be there. The demand for energy continues to grow. Uh, those tailwinds, I think, are going to persist for quite some time. And a lot of these large tech players are kind of building, like power, their own private power resources. They build these data centers. And along with the data centers, they are building the power resources right next to them to I know that's a huge appeal of fusion. You don't have to worry about those transmission lines. You can be right there. Is that how you're thinking of how you'll be constructing that? Maybe when we first see General Fusion up and running, you're going to just be right next to some of the big data centers. Yeah. The beauty of fusion is that it's safe. When fusion fails, it fail safe. And what that means is that you can now place the energy right beside the demand, and you don't have to have a large exclusion zone or anything like that, because you're not working again with anything that has long term radioactive waste or, uh, chance for a meltdown. And so being able to put that energy source right beside a data center or city or anywhere else that, you know, dense energy is required. That's the beauty of fusion. And that's why it's such a huge market. You know, Greg China at everybody's lunch when it came to EVs in the end. Right. And even and solar obviously. And I'm curious given that it's part of the fifteenths, you know, five year plan. Are you concerned that China is going to do the same thing eventually with fusion technology? Uh, there is a global race happening. Countries all around the world pursuing fusion national labs, academia, private companies. We've been at this for 20 years. And so we've got a kind of two decade head start, and we're moving at a pace that is accelerating. And so, you know, whether it's China or Germany or UK, it's great to see fusion being worked on in all these different countries. We're a Canadian company developing fusion rate in Canada. We're excited to be on the Nasdaq. And what this all means is we're exporting the technology all around the world, and we've got a unique approach that's very practical. Uh, very economical, doesn't rely on superconducting magnets or lasers or any new materials. That's going to be a huge advantage as we move forward into commercialization. And I know you have more of a mechanical approach. Um, Greg, I've seen it called by critics as a steampunk approach to fusion, which I feel like is kind of a cool thing to say. I don't know why a critic would choose something so cool to describe, but General Fusion is doing. But those critics would also say, look at some of the research that you've published. It shows that you don't get hot enough, that your components don't get the actual fusion that you need. What do you say to those that kind of push back against the technology itself, that it's not viable? Not now, and it will take a long time before it's viable in the future. Yeah. So to create a fusion power plant, you got to recreate the conditions of the sun inside of the machine. And there's lots of different ways to do that. We chose a way that uses mechanical means, you know, so that we can use existing materials, existing type technologies and not be, you know, not need to work with superconducting magnets or lasers or new materials. And so, um, we just recently commissioned a machine called LM 26. That machine is designed to achieve fusion temperatures. Uh, and recently we published, um, and communicated that we'd would hit eight point 4,000,000°C with that machine. And as we progress that program over the next couple of years, we aim to achieve fusion conditions. And then the path for us is simpler because we're working with mechanical means. And so it's actually a big advantage to be using steam and pistons, liquid metal when it comes to commercializing the technology. Again, I'm really thinking you should just adopt steampunk, embrace it, put it, put it in your official marketing materials. Greg, thank you so much for joining us. General fusion CEO Greg 20. Let's get a check on your markets over an hour into your trading day. Still trading lower down 1.2%. Brent crude getting a jump after the president posting on Truth Social that they will be reinstating the blockade against Iran, just Iran specifically. While he says allowing other commercial vessels to pass through the strait. Still though, dragging this market down of semiconductors down nearly 3% in this morning's trade. Vonnie. Yeah. And let's get some individual stock moving at this hour. So if you look at Paramount's guidance, we're saying it's up more than three and 3% a dozen states or thereabouts preparing to sue to block Paramount from buying Warner Brothers, according to a person familiar with the matter. The antitrust challenge comes even after the deal received clearance from the Justice Department. Disney shares have been under pressure this year, but Wells Fargo says the media giant could see upside of about 40% of its exits, its streaming video business. Elsewhere in the world, the tech meta committing to spending an additional $40 billion on this data center campus in Louisiana that upped its total expected investment. Now it's above $250 billion for the site coming up. Lazard says the cost of gas power in the US is at a 17 year high. The firm's global head of power, energy and infrastructure, George Phillips, joins us around the table next. This is Bloomberg open interest. A new report from Lazard finding that the cost of power for natural gas fired plants in the U.S. has now reached the highest level in 17 years, and prices are set to climb even further as demand surges from new data centers. Joining us now is George Belichick, Lazard global head of power, Energy and infrastructure. George, thank you so much for joining us to be here with both of you. And a really good report. And I was struck by it's not just natural gas of things like solar to the prices going up across the board. Is this just because of demand, because of data centers, or is something else behind? The price is rising. So it's a mix of of demand supply chain issues, um, the impact of tariffs. But, uh, we think chiefly demand, um, and the demands were flowing through equipment costs, but also labor costs. That's something that folks don't pay attention to that much is just the incredible need for labor around some of these projects. Have we solved the energy crisis for data centers yet? I mean, when there are all these various models that some we're going to have them attached to them on site and some are going to use the grid and some I mean, where are we on that? We're a long way from solving anything in the area. I mean, it's it's going to be a topic of conversation for a very long time. There's tremendous need for power. And we really haven't begun to, uh, to really address the problem. And one of the things, again, that I found really interesting in this report is just that building new power infrastructure is difficult and expensive. I mean, you were just talking about the labor needs there. So existing infrastructure, the value of which goes up. But we've seen Giovanni's Point, a lot of these big tech companies invest in new projects. Um, Stargate, for example. Chevron has one in the Permian Basin, Google and next era. And I know that's a deal you worked on next area specifically. I could go on. There's a lot of these. So why are you still seeing this huge investment being made, despite the fact it is complicated and extremely expensive to get a new power source up on line. So you just, uh, the data center ecosystem system needs the power. These things are being built. They need to be run with electricity support. And there is almost an unstoppable trend line, uh, here, where the power is going to be needed over time. We've been doing this study for almost 20 years. This is the 19th edition of the study. And we saw this tremendous ramp down in renewables costs. But even in the case of renewables, because of this demand pressure costs have gone up over the last few years and storage costs are rising as well. Where are we? Um, you know, being able to use things like, you know, mini nuclear reactors and so on, like we need different types of solutions here. That's part of the big. A big part of our study is that you need to be welcoming to all sorts of technologies. So, uh, renewables remain the cheapest resource. Uh, natural gas is obviously critically important. And we think in this country, not in the next few years, but in the next decade, late in the next decade, nuclear will scale and will be really, uh, quite impactful. And in the meantime, capital markets have been open for players that are looking for ways to fund this. Um, just earlier, there was a deal announced with Blackstone, a JV around power. And I wonder how sustainable you see that as, as capital markets, debt markets would have you remaining open saying, yes, I know you're doing a lot of CapEx already on things like chips and memory, but we'll continue to supply the funding and spreads will remain well-behaved in order to do that. Yeah, the capital markets, the public capital markets are wide open for this space. So utilities have super liquid access to the capital markets. All energy companies do established energy companies and the private markets have developed over time to allow for all sorts of different, um, uh, capital resources, insurance, capital, infrastructure capital and private equity capital. So your report found that the cost for solar rose to $69 a megawatt hour and onshore wind increased to $68, both up more than 10% from a year ago, the highest since at least 2014. When does the government need to step in? In China, the government stepped in and fixed the problem. I think the place for the government to step in is in two areas. One, we need permitting reform to make it easier and quicker to, uh, get things built. But with respect for the stakeholder interests that are protected by permitting. So that's the first area. The second area and the current administration is doing this, is trying to figure out a way to, uh, to scale the supply chain to accelerate the construction of nuclear in the country. Uh, but there needs to be effort undertaken at the state level also, because probably these nuclear plants, large scale nuclear plants need to be built inside rate base, which is a state regulatory question. And so trying to navigate that again, the report underscores this. It's a lot of haves and have nots. The gap between the winners and losers seems to be widening. Because of that is the era of smaller scale independent energy providers. Is it effectively over over that the biggest players, because of their dominance and their ease of navigating, are going to be acquiring more small companies and less small ones are going to be starting up? Yeah, it's there's a place for a lot of different things in the system. We do believe that our study tells us this, that there are benefits of scale and efficiencies, um, associated with consolidation. And you'll see a lot of that in the industry. So for the ratepayer that's under great pressure. It makes a lot of sense for there to be a consolidation transaction with utilities, because some of the benefits of the transaction could be shared with ratepayers. And you can see this in the renewables industry. There are a lot of small renewables players. They'd be better on bigger platforms. How will LNG production be scaled up in the next five years? In the United States, I mean, it's already been scaled up massively. So there's a lot of places to build on the Gulf still to expand in the Gulf. And, uh, and then also in western Canada, uh, we think with the, uh, the Carney administration, uh, there's going to be a lot of movement to enabling LNG export out of more out of Western Canada. And so a lot of gas production here will be sold on the water, but we have a lot of gas. So even with the power demand and all of the gas going into the LNG market, we think there will be upward pressure on gas prices, but that will enable the production of more supply. So it does feel to get back to the regulatory environment that there's this contradiction. You saw it in the one big beautiful bill keeping tax incentives in place for some of these cleaner energy suppliers because you want the resilience and the independence of the grid. But at the same time basically saying you can't use Chinese suppliers. Is that a big issue for this market? It's it's creating issues with supply chain. Part of I think what we're seeing in the cost pressures, and we know this is definitely the case in the battery area, that the inability to access Chinese supplies increased costs. But it's also this inability to access Chinese supply is producing, uh, a movement of the supply chain to other regions of the world. How old are you? Um, so things are going to get better and things are going to get cheaper. The consumer is going to be the ones to benefit. And that, you know, all will be well in the world. I'm an inherent optimist. So I, I feel pretty good about about things even, um, even in the middle of a lot of disarray in the world. And I would say in this area, the, uh, there is a confusion around the data center demand and that it's going to just put a lot of pressure on the consumer and actually at the utility level because of the scale benefits. It's it's actually a it's a, it's something that can ease right. Pressure for customers. All right. We ended on that. Thank you so much for visiting us, George. But it's like Lazard coming up. Gold and silver are under pressure as higher oil prices fuel higher for longer rate fears. This has been a big open interest. It's time for our metals spotlight. Gold and silver are falling as renewed U.S. Iran strikes push oil prices higher, adding to higher for longer rates. Here is joining us now is Bloomberg's metals reporter Jack Ryan. Jack can we blame everything on Iran. Or is this partially a result of what might happen with the Federal Reserve as well? Yes. I mean, ultimately it's been a similar story throughout the year, really. Its headlines come through showing some sort of escalation in the Middle East, and then we get a selloff. Um, and today we very much had that it dropped briefly below $4,000 an ounce again. Um, and really, it's just about these oil prices feeding through into what the fed is seeing, potentially feeding to into higher rates this year. And that's punishing gold. And you can see that through ETFs and through various other ways of holding gold. Well one of the very bullish theses around gold specifically had been those ETFs. So maybe some of the flows stop there. The other one jack though had been central bank buying. Has that started to add. Why is that not helping hold up. Um or at least put more of a floor underneath the price of gold. It's a good question. And central bank demand has actually been relatively robust. It's really, I think the only bright spot in the gold market at the moment is that central bank demand. Uh, they've got about 250 tons in the first quarter, which was the fastest in a year, actually. Um, but I think it's the the power of the ETF outflows. I think that's really the kind of marginal price set are in gold at the moment. And that's why we're seeing this weakness. So Jack, a while back silver and gold bifurcated. Right. They went in different directions. Why are they going in the same direction now? Silver has had, uh, a much more dramatic ride than gold. Uh, it's been much more volatile generally. Uh, there was a lot more speculative and retail interest in us relative to kind of the rest of the investor flows. And so kind of once that came out in January, it hasn't had the same level of support. Um, some people have pointed to a potential weakening in the industrial demand picture for silver as well. Um, and that's why I think we can see silver acting as it normally does, which is when gold goes one way, silver goes twice as far in the same direction. And that's kind of what we've seen over the last couple of months. Jack, just in terms of what some of the strategists are saying that you've been discussing, given that gold has started to become somewhat of a problem child, have we seen downgrades in expectations. Or is there any hope for the precious metal? Yes. Well, I mean, uh, or investment banks, I should say, have been kind of cutting their forecast throughout the year, really just bringing you in line with where the prices are, the overriding kind of thesis, you guess, which is what you got through last year, is pointing to these bigger themes of dollar debasement, uh, rising debt, this kind of stuff. So most analysts are still actually bullish. Um, but as I said, they've been cutting their forecast throughout the year. And a lot of people see this kind of, uh, this dynamic of rising rate expectations on ETF outflows. A lot of people say don't stand in the way of this while this is happening. Um, because we don't know exactly. Yes. Where whether $4,000 an ounce is support for gold. Sure. Don't catch your falling knife. You've heard it before. Jack, thank you so much for joining us. Bloomberg's Jack Ryan on gold as prices hovered just above $4,000. Let's take a look at what's ahead for the market this week, because it is a really busy week tomorrow. We're going to get big bank earnings. Those kick off with results from Goldman Sachs, JP Morgan, Wells Fargo, Bank of America and Citi Barney. And we're going to get some inflation data. The latest CPI print up first. And then of course we get PPI. And the fed chair Kevin Warsh set to testify in the House tomorrow. And we're going to get a huge amount of fed speak. Maybe they just do the heavy lifting for Kevin. Worship doesn't want to say much Wednesday. Then it will be Morgan Stanley's turn to report earnings. They go out it alone and then we're going to get another round of warsh. But that time in the Senate followed by PPI data. And then finally on Thursday results from Netflix after the closing bell and markets after two weeks of gains struggling to put anything into the green. Today we are down one and a quarter of a percent on the Nasdaq and down 4/10 for the S&P 500. This is Bloomberg open interest.