Morning Call 5/5/26

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 Oil drops, futures pop. I'm Morgan Brennan, and this is your morning call.
 Well, good morning, US stock futures right now are marginally higher. The Dow is coming off its worst day since late March. You can see right there a lot of green on the screen with all the major averages poised for a higher open screen.
 This morning, Nasdaq looking to bounce back from its first down day in for as well. We're going to check on oil because we have seen futures move higher as oil has moved lower.
 You can see that right there on the screen WTI though is holding above a hundred bucks a barrel about 100 just under $104 per barrel right now, but down about 2%.
 This is after the second highest close for WTI yesterday since the war began. And if you take a look out on the curve, you're seeing a move higher in those futures contracts for WTI as well.
 So continue to keep an eye on that here in the last 24 hours. Brent is also down about one and a half percent, $112.75 per barrel.
 If we turn out of the treasury market because we've seen a lot of action in the bond market as well. And you can see ahead of today's March, March Jolt report, which is out at 10 a.m. Eastern Treasury yields are taken a bit of a breather after a move higher yesterday.
 That's really across the curve. The two year treasury yielding 3.93%. We have been getting closer to testing that 4% level here in recent sessions overall.
 10 year treasury 4.424% here as well and just keep an eye on the third year treasury because that is back above 5% in terms of yields here.
 And we're basically flirting with the highest levels we've seen on the longer dated part of the curve here since last summer.
 We've got a number of big stock movers ahead of the opening bell as well, including Palantir with a big boost to its warrior sales forecast.
 We saw another beaten race quarter game stop as some big name investors and prediction market traders weigh the odds of a successful eBay acquisition and Pinterest.
 That is really the big mover this morning pre market strong current quarter guidance is sending those shares up 16% right now.
 We've much more on all of the stories coming up throughout this hour and other things as well. But first we're going to turn our attention back to the Middle East.
 What's become a very uneasy ceasefire between Washington and Tehran as more ships from the US Navy to cargo ships and tankers reportedly being attacked by Iranian vessels in the Strait of Hormuz speaking yesterday President Trump calling the events a quote mini war.
 But saying the now four week old truce is holding up nicely.
 Well, let's get down to Dan Murphy and Abu Dhabi with the latest and Dan I really want to focus here on what we've seen specifically in the UAE in the last 24 hours because UAE said air defense systems engaged 12 ballistic missiles yesterday three cruise missiles four drones all fired from Iran.
 We've seen attacks on tankers and also an attack on an oil terminal that was part owned that is part owned by V tall group as well.
 You've talked about it on the show quite a bit the fact that UAE has seen these outsized attacks from Iran which is of course part of the reason why arguably they pulled out of OPEC last week as well.
 What's the latest?
 Well Morgan I think you've characterized it really well I think it's better say the conflict has certainly entered a new phase now.
 Hormuz and the diplomatic stalemate was already a major problem.
 The question is now whether this escalation makes a bad situation worse and if it prompts the president to strike Iran or to push for more talks.
 What are the why this has happened will the UAE as we've discussed has emerged as American Israel's regional friend in this fight and that's made this country a prime target over the last three months.
 Iran fired 15 missiles and four drones towards the country overnight one drone hitting the Fajera oil industry zone and it sparked a major fire there and injured three Indian nationals.
 Now this strike on Fajera Morgan is especially significant because it's not just any old oil site.
 It's one of the UAE's key workarounds to the straight of Hormuz so by targeting that Iran is really widening the playbook here beyond shipping and going after alternative supply routes and critical infrastructure once again.
 In terms of how the UAE has responded to this well leaders here are maintaining a defensive stance but they say they reserved their right to respond.
 And Morgan I can also tell you anger is really growing on the ground here that Iran is still threatening the safety of civilians with its missiles and its drones.
 Okay Dan Murphy. Thank you. Stay safe. We've got global market reaction now. Let's get to Steve Sedgwick and London for that. Hi Steve.
 Hey Morgan good to see you very interesting moves on the European markets you'll notice actually that the three exchanges at the bottom behind me they're all rallying but London which was closed yesterday just catching up from the declines we saw in the previous session.
 Lots of individual corporate users were including on the world's biggest banks HSBC now profit at HSBC came in short in the first quarter after the company said it expected credit related charges of more than $1.3 billion.
 It's that private credit markets area that all the big banks are beginning to have a little bit more focus on and that's where the concerns are building elsewhere.
 In Bev the brewer reported 5.3% organic growth in the first quarter operating profit more than double what analysts were forecasting volumes defied expectations for decline growing for the first time since the start of 2023.
 And LVMAT reportedly exploring the sale of multiple divisions according to the financial times the French luxury group could be looking at selling its fashion label mark Jacobs as well as its stake in Rihanna's Fenty beauty brand back to you.
 Let's get a check on shares of Palantir again which are lowered despite the company reporting first quarter results that beat estimates revenue growth of 85%.
 This is the fastest pace ever at least for Palantir as a public company commercial revenue though that more than doubled sales to the US government rose more than 80% as well.
 Palantir also lifting its revenue guidance for this quarter and for the full year and you can see those shares are down about three.
 There we go. Three about three and a half percent right now. CEO Alex carp telling CNBC he expects the US business to double again next year growth the company is achieving with fewer employees is something he's told me repeatedly in recent quarters.
 He says Palantir has more free cash flow this year than revenue last year. So let's talk about the results with Dan Ives from web bush who I think it's the middle of the night for you Dan because you're at the milk and conference this week.
 So appreciate it. Stock seems to be lower in part because US commercial for the last quarter missed your thoughts.
 Yeah I mean look I think these are stunning results when you look at them overall but look there was about 20 million of it one deal that went from commercial that should been commercial that went to government so when you put all together I mean they they crush numbers you to my government business now from an AI perspective.
 That's really firing all cylinders and look at the guidance not just for next quarter but for next year look I just think this is just further validation that the use cases are continuing to play out and Palantir's front and center in this AI revolution.
 So how to think about that versus the rest of software right now we had some fiery things is usually does carp to say about the rest of the software sector.
 Look at more and you know well I think to some extent Palantir their own was in a whole nother category they're the only ones right now.
 From a software perspective that are actually seeing the validate use cases and you're seeing enterprises line up in terms of you know the thousand plus customers and what to my deals 15 20 30 million dollar type deals every other software company is trying to catch up.
 They're trying to say how could we get to where Palantir is talking I can tell you being a milking you over the course of the day that's a big question that a lot of companies are asking me
 terms what we're seeing in software what we're seeing how Palantir is doing it and other companies aren't an example many are aiming for.
 You and I have had this conversation before but it does feel like it is accelerating right now and that is the emergence of the US government as a major significant sustainable meaningful company.
 So many people meaningful customer for a lot of these tech companies I mean Palantir obviously on the forefront but even when you see some of the AI you know frontier lab names who are now being brought into the mix in a bigger more meaningful way just in the last couple of days with a pentagon as well how big is that opportunity.
 It's a golden goose and I think the reality is I mean obviously despite the contrast with Anthropic everyone's going after this revenue because we're talking about ultimately hundreds of billions of dollars you know and when you think about over the course of years trillions in terms of the what's going to be spent and that's why every tech company is going after it because you are seeing the beltway you're seeing Pentagon go all in on AI and obviously Palantir stands front and center but many others.
 But many other tech companies going to be huge beneficiaries here I think for a lot of these software companies government business could double over the next two or three years.
 Yeah I mean there's also reports out there that the US is floating the possibility of a regulation that would require a review process for some of these new models from the AI companies as well how likely do you think that could be.
 I think that price marks worse in the bite there because I didn't the reality technologies happening too quickly and they're not going to be able to ultimately put a break on it.
 A lot of it's going to be the self regulation that we're going to see and I don't think in any way that that's slowing down use cases adoption.
 We're in third inning of his AI revolution and what we've seen with earnings we saw Palantir we're going to see where I'm in Vidion next few weeks I think it just further validation for this bull market and tech.
 So I was with the CEO of Booz Allen Hamilton last week Horacio Rizanski myself and a small collection of journalists.
 They obviously big defense contractor biggest provider of AI enabler of AI to the US government as well about a quarter of their business is actually cyber and he said some pretty start things.
 He basically said the agentic threat is far ahead cannot be defended against and that you know our systems cannot be yet defended against these new types of bot swarm attackers and they're certainly working on this.
 I know a lot of the other cyber names are to but when you put that in the context of something like mythos and what we're seeing with agentic AI the sell off that we've seen in software that has extended cyber stocks how to think about that.
 I think it continues to be the most disconnected trade I've seen in my career in terms of cyber security because crowd strike pal out those e-scalar.
 I mean these are coming as they're going to be at the forefront of protecting a you're going to see cyber security budget up you know we think 40 50% over the next few years because what's happening agents and I think it just shoes.
 They painted all software comes with the same brush that is a wrong way to view it and I think more more you can see these things emerge and you see significant acceleration from software coming second half of the year as I think now we go into the software phase of AI.
 Okay Dan Ives thank you great to kick off the hour with you we're going to do double duty will see you a little bit later when you rejoin at the morning call crew in the meantime.
 We've got a lot more to come here a morning call an alternative asset manager melt up we've got to check on the beaten down sector and why those shares are up double digits over the past month.
 Plus it's not just prediction markets growing doubts about game stops chances of closing its deal with eBay for eBay we got a big name investor sounding the alarm and later a partnership renewed.
 Why shares of Intel are popping in the pre market courtesy of Apple the full story a very busy hour still ahead you don't want to miss it morning call be right back.
 Welcome back to morning call let's get a check on shares of UPS and FedEx both fractionally higher this morning that's after each close down between nine and 10% yesterday.
 Also saw the trucker stock swoon some of the other logistics names as well and this after Amazon announced a new initiative yesterday to open up its supply chain networks to other businesses shifting basically think transportation logistics not just for the customers that sell through its site and through its platform before everybody.
 Amazon says major retailers including proctor and gamble 3M lands and American eagle outfiters have already signed up for the new program and the street is already reacting with some calling it quote watershed moment for North American freight I can tell you somebody who has covered this industry for a dozen years every headline about Amazon building out a transportation logistics network has sent shares of companies like UPS and FedEx lower because of the speculation and the concern and the fear that they would get into this market and ultimately.
 We become a competitor and never came to fruition that changed yesterday this is a big thing to watch and keep in mind transports have been trading at record highs as well so we will continue to track it we're also tracking what's been a slow melt up for alternative asset managers.
 Socks like areas management blew out Apollo this are all up around 20% over the past month did you know that this is industry and decided insider suggest we may be nearing a turning point when it comes to all and their massive software exposures.
 In software you'll see a similar dynamic there'll be companies disrupted there'll be companies that are really important systems of record infrastructure with management teams who are
 authentically focused and they'll end up on the other side creating very valuable businesses but in the short term what you're seeing is multiples come down because the market just doesn't know.
 If you've been in business as long as we have to hear those numbers the software exposure in private credit in BDCs is 250 billion so the magnitude of what's taken place over five years in a software sector is overcome in one year and that catbacks and the big story out there right now is the manner in which the
 IG market the context and the texture of that's changing.
 All right commentary from C-sweets from two of the largest players in private markets from milk and yesterday on CNBC joining me now is Wilma Burgess with Raymond James and associates and I want to dig into this entire sector with you and what we're seeing with these stocks bouncing back but first your reactions what we just heard from Apollo and Blackstone.
 Absolutely great to see you software concerns are understandable we've done a deep dive into the portfolio of blue owl and we really felt very good about it once we looked behind the curtain a little bit so we looked at a small sample of loans and we re-value them and we calculated a pretty
 still reasonable LTV loan to value of around 70% so we saw a good equity question even for some of those risky loans and that was a very small sample of risky loans in the portfolio.
 Overall I think these companies are saying that the loan to values are still around in the 40s in their overall portfolio so still feeling very good.
 Yeah so so the sell off the jitters the fears the debate that we've seen bubble up about you know contagion and cockroaches etc overdone.
 And certainly we're seeing very good results in one q 26 and more importantly we're seeing normal results which I think is what people wanted to see a lot of doomsday type scenarios baked into these stocks and so just to see good growth.
 And positive results in one q is favorable will continue to see that throughout the quarter you mentioned blue owl would you be a buyer of these stocks even with the bounce back we've seen.
 Absolutely yes I think there's a lot more bouncing back to do for blue owl and the other so yes.
 In terms of putting money to work with these BDCs and into their funds you think we're going to start to see that as well and we've obviously seen investors try to pull money out and you know caps on that process do you think that reverses flow now.
 So we've seen very favorable fundraising in the institutional channels and of course the institutional channels they're more familiar with these products they understand some of the loans in the background more so than retail investors have access to.
 And so seeing them continue to invest money there I think that's a pretty positive sign and we should see retail flows start to to reverse here.
 A big theme that also came out of these interviews that that happened on CNBC yesterday was just the massive massive AI CapEx build out in the fact that that's just not going anywhere.
 I totally agree yes I think blue owls business in digital infrastructure and data centers is very strong.
 We also did a deep dive in that alongside our data center analysts and credit analysts felt really good.
 They have great relationships there with meta with Google with Amazon and all these hyperscalers and they've been supporting their growth for 10 years back even when they were not sure to be winners so they have great relationships.
 And certainly they have great ability to build out and deliver these data centers on time and under budget so we think they're in a good position.
 Thank you so much for joining me great to have you here on set.
 Thank you great to see you.
 Well straight ahead we got the booming business of space.
 We check in with the CEO of Firefly.
 First on CNBC interview that stock is lifting off right now premargued it's up 9%.
 But first I think we'll get shares of Berkshire halfway.
 Reports that the company has selected it's Gen Rechairment to succeed a Jeep Jane at its critical insurance arm.
 So Jane is expected to stay in his role for the foreseeable future morning call we'll be right back.
 Welcome back to morning call Nvidia CEO Jensen Huang taking the stage at the milk and global conference last night speaking with her own Becky quick on a number of topics including fears around whether AI will reduce the number of jobs in the US.
 Wang says workers should have confidence about AI's prospects.
 The first thing that AI is doing right now is creating an enormous number of jobs.
 It is AI creates jobs AI is United States is best opportunity to re industrialize ourselves because it takes three types of plants chip plants.
 Computer plants AI factories that we're in and so three types of manufacturing plants.
 Probably several trillion dollars of re industrialization we can do as a result of this.
 The second thing is more powerful than using market forces to drive re industrialization.
 Wang adding that his greatest concern is that all the talk around AI may be scaring people and preventing them from actually engaging with the technology.
 Well let's watch shares of Firefly Airspace because jumping on the back of earnings right now up 9% posting record quarterly revenue up nearly 45% from a year ago also maintaining its sales guidance.
 This morning's gains adding to fireflies more than 50% jump so far this year.
 For more I'm joined in a first on CNBC interview with Firefly CEO Jason Kim Jason it's great to have you back on the show.
 I want to I want to dive with you for a second before I start getting into earnings results and everything that you have under the hood in your portfolio.
 The Jensen Wong comments about re industrialization space and defense around zero for this right.
 That's absolutely right we are very proud of our partnership within video as you know we're the first company to successfully land on the moon.
 And do the 14 days of service operations but now with blue ghost mission to we're going to go back to the moon.
 We're going to land on the far side of the moon first for the US and then we're going to have an orbiter that has an ocular sensor on it as part of our commercial service that we're going to be able to sell.
 Lunar imaging data and mineral survey data as well space domain awareness because the moon is the ultimate high ground.
 And the partnership with NVIDIA is great because the sensor that we're using for Lords to live a more national labs.
 It has a NVIDIA jets in module on there and so we're going to be able to take our site tech algorithms are AI algorithms.
 Work them on to that module and be able to do quicker analysis of what's going on around the moon and on the moon.
 So we're really excited about that and partnering with NVIDIA.
 Wow really cool.
 Okay you brought up the moon you jumped right into it. We just got done with the Artemis too.
 We actually saw the astronaut crews ring the opening bells at both of the stock exchanges here in New York last week.
 It's definitely captured the hearts and minds of not only I think Americans but the world as well.
 How big now is this lunar opportunity especially after NASA restructured Artemis?
 It's huge you know everything that we're doing on the earth and around the earth.
 We want to reproduce at far fly on the moon.
 And so when you think about you know cargo and like terrain vehicles and rovers we want to take that to the moon.
 Because not only have we landed on the moon already with Blue Ghost mission one but we have designs for larger landers.
 So in addition to the higher frequency of launch cadence of landers that NASA wants.
 We also have greater magnitude or size of our landers that we can build and take more tonnage to the moon surface.
 You're going to need that if you're going to have a permanent presence on the moon.
 And as the NASA administrator Jared Ixman said.
 It's going to be like a junkyard the first few years because we're going to just be taking as much we can.
 But eventually it's going to look like we envision in the sci-fi books where you're going to have moon bases.
 In the meantime there's the defense piece of this too.
 We just saw more golden dome contracts go out in the last I don't know 12 24 hours.
 You're a recipient as well took a little while to start seeing some of this money and some of these contracts go out for golden dome.
 But now it seems to be picking up the pace. Let's talk about that.
 Yeah, we're very honored to be part of the golden dome architecture.
 It's something that I highlighted in fourth quarter of last year when we did the strategic acquisition of SciTech.
 And what SciTech did was it bolstered fireflies opportunities and our footprint in national security in a big way.
 Now far flies a prime contractor on the forest program, which is a no-fill AI battle tested software ground processing capability that's been supporting the conflict in Iran and other conflicts around the world to help keep our warfighter safe and our allies safe.
 And so we're going to continue to do more of that.
 But we can leverage that technology for things like golden dome because golden dome is going to need a lot of AI because the threats are.
 They're very fast. They have a lot of speed. They have a lot of maneuverability. They also have a lot of lethality. And so we got to keep ahead of that with things like AI.
 And finally, I want to get your thoughts is on what this SpaceX IPO potentially means for the sector overall because there's a lot of chatter around the re-rating of space stocks.
 And finally, we've seen firefly, you know, up 50% since the start of the year. But I'm also hearing chatter from entrepreneurs and companies in the space about what it's doing to the labor market with more people staying on at SpaceX to realize the gains in their shares as well.
 Well, we're very complimentary to companies like SpaceX. There's not one size that fits all.
 As you can see from our alpha rocket, it's a small lift rocket. It could take one ton to orbit and two tons to suborbital. And it's got its place in the market, especially with national security.
 We're launching tactically responsive space launches in 24 hour timelines like we did in Victus Knox, but just we just completed Victus DM as well.
 So we're just stacking up the tactically responsive space launches. And there's more hypersonic launches coming our way as well.
 So those are things that are very complimentary to the heavy and super heavy launch market. But you can say the same thing for the moon as well.
 There's a time and place for different types of sizes of lunar landers and we build the 250 kilogram to surface lunar landers.
 But we also have a scalable design for larger landers that can take three tons and eight tons.
 So we're really excited about the future. There's not one company that's going to do it all in the future.
 It's going to be an interoperable future where everybody's going to work in collaborate with each other.
 And so there's a lot of great jobs for everybody in the future to do space missions.
 Okay, Jason Kim, a firefly. Great to have you on. Appreciate it.
 Thanks, Morgan.
 Well, as we had to break a few more earnings movers to watch on semi shares. Those are pulling back.
 Q2 revenue estimates just topping streets expectations. First quarter results did beat.
 But you could see shares down about 4% right now. And even bigger drop though for dual-lingo shares.
 Those are down about 12.5%. First quarter monthly active users missing estimates.
 Q2 bookings forecast also falling short. Morning call. We'll be right back.
 I'm Morgan Brennan. Welcome back to morning call. Let's get a check on US stock futures,
 which are higher this morning with all the major averages poised to open in the green this morning.
 This of course after a down day for the major averages yesterday.
 Energy as President Trump brushes off recent attacks by Iranian ships on US Navy cruises and cargo vessels.
 In the Strait of Hormuz, if you take a look there, we're taking a little bit of a breather this morning for crude but still at elevated levels.
 WTI's down about 2% right now just under $104 per barrel. Brent is down 1.5% just under $113 per barrel.
 For WTI specifically yesterday, we saw the second highest closed since the war began.
 Also keep an eye on those contracts dated contracts out further into the year because those have been moving higher as well.
 If we get a check on some of today's morning movers, those shares of Palantir, those are lower despite reporting.
 First quarter results that beat estimates growing at the fastest pace ever as a public company since 2020.
 Also lifting revenue guidance for this quarter and for the full year. Another beaten raise quarter for Palantir.
 That seems to be the trend shares are down about 3.5% right now though.
 Pinterest, on the other hand, surging on a first quarter earnings and sales beat also boosting current quarter sales guidance.
 Past the $1.1 billion that the street was expecting, company says AI driven efficiencies are helping offset some ad buying headwinds.
 You can see shares are of 16% on that right now.
 In its first reports and ceiling $110 billion deal for Warner Brothers Discovery, Paramount Skydance shares are popping twos.
 About 1.5%. This was an earnings beat thanks to part to growth in the streaming business.
 And the company saying that cost-cutting has also helped offset declines in the TV business.
 And check out shares of Sonos. Those are also higher. Reporting 8% pop in revenue for the second quarter.
 Adding that it's filing for tariff refunds, totaling $40 million on clear when they will receive those based on the conference call commentary.
 But that got some attention from the street as we do start to see those refunds be realized as soon as the end of this week shares a sonos of 9% right now.
 Let's check on some of the morning's latest headlines.
 Abbles reportedly in early talks with Intel and Samsung about producing its next generation of in-house chips, possibly diversifying away from longtime partner Tywan Semi.
 Investor Michael Burry, a big short fame, is selling subscribers to his sub-stack that he sold his entire position in GameStop over concerns of the amount of debt that it would need to take on to make its offer for eBay a reality.
 And we're watching the prediction markets on calcium pricing in just 22% chance that a deal between eBay and GameStop gets done this year.
 If we take a look at GameStop shares this morning in the midst of all of this, you could see basically flat right now.
 Well, Elon Musk and the SEC have settled a lawsuit accusing Musk of waiting to do, waiting too long to disclose his initial purchase of Twitter back in 2022.
 A trust in Musk's name will pay one and a half million dollars civil fine with Musk emitting no wrongdoing.
 So a pittance compared to some of the numbers we've seen tossed around in the universe of Musk.
 If we stick with Musk though, and another courtroom battle in Oakland, California yesterday, open AI co-founder and president Greg Brockman saying his stake in the chat GPT parent is now worth nearly $30 billion.
 The disclosure prompting an attorney for Musk to question if Brockman and Sam Altman's motives are focused more on enriching themselves than developing AI to benefit humanity, Brockman saying, quote, the compensation is secondary to the mission.
 Well, let's get to the latest developments in the Iran War.
 Oil prices are pulling back as we just mentioned, but still elevated as the US and Iran wrestle for control over the straight of Formus, shaking their fragile four-week old ceasefire.
 The US launching a new operation this week aimed at freeing up the straight to shipping operation freedom shares of Merisk arising yesterday.
 And as you could see right now as well, after saying that it's US flagged cargo ship, the Alliance Fairfax exited the Persian Gulf via the straight accompanied by the US military.
 One of two, apparently yesterday, according to SENTCOM, breaking Iran's chokehold on the straight could ease both global fuel prices and economic concerns, but may also risk reigniting full-scale fighting from the early days of the war.
 These next couple of days are really, really critical in terms of the direction that we're headed for this conflict.
 So joining me now to dig into all of it and read a send at Founder and Director of Market Intelligence at Energy Aspects and Retired Vice Admiral Kevin Donigan, former commander of the US Fifth Fleet.
 He's now a senior distinguished fellow at the Middle East Institute.
 It's great to have you both here and Admiral, I'm going to kick this off with you.
 What is perhaps a very simple question, but I have yet to hear a simple answer to it.
 And that is why does Iran still have this fleet of small speedboats that are able to conduct these attacks and cause so much havoc right now?
 Morgan, that's a great question. And the way that I look at it, the lens that I look at this from, is the challenge of the Straits of Hormuz is it's just about 21 nautical miles wide.
 So think about geography as being one of the key reasons.
 And the other thing is that the Iranian still have, I'll call it a lingering threat.
 So we know their Navy was decimated, their Air Force was decimated, and we know that their sensors were taken out, so they're pretty much blinded.
 But they still have, you know, they still have geography to their advantage, and they have a residual capability related to drones and missiles.
 And these small boats can hide in crevices and cracks in the terrain that's around there.
 And so what they've done is force a shift in traffic flow north of the normal highway that's used for the ships to come and go and really close to the Iranian coast.
 So it's not just 21 miles away, it's just a matter of a mile or two away from their coastline that they're asking ships to travel.
 And what the US did yesterday, and through the night the day before, was open up a new passageway that they say is to be used for free flow of commerce.
 And it's south of this normal highway.
 They cleared it first of mines. And then as you saw, we're successfully in getting the first ships that had been stuck in the Arabian Gulf through that new passageway.
 Meriton's priority is a lot like air superiority. It's the US has it, right? The blockade is still in effect.
 And now they're working to open this new passageway and now encouraging other ships to start using it. And time will tell.
 It won't be an instant turn on, but we can expect to see more ships than just the two move through it.
 And we're going to the fact that the fact that I realized that crude oil prices are still elevated. We saw a big jump yesterday.
 How, what is it going to take to actually see those prices come down in a more meaningful way? Is it going to be like a full opening of the straight-of-form moves, an actual resolution to this conflict?
 Or is two ships a handful of ships a day enough to ease the markets in the meantime?
 No, I don't think it's enough to ease the markets if anything. I'd say prices are not high enough, right? We're losing close to 12 million barrels a day, every day almost remains disrupted because production is shut in across the region.
 And Iranian production is actually starting to come up as well. So, you know, I'm surprised and remain amazed that the futures market continues to discount just how much supplies we are losing.
 The physical market has, right? We've priced 150, 160 dollars, and I do think it's a matter of time that the futures market catches up.
 In terms of the flows, I mean the two ships that have gone through to be clear are not necessarily starting a flow of oil tankers, right?
 These are very much humanitarian reasons. And you know, that's what we've seen, some of the cruisers have been stuck and that's why we're trying to get them out.
 If anything, we continue to see and the attacks that happened yesterday around reminding everyone that they are very much in control of what passes.
 They are asking for details. Every ship we speak to is extremely concerned about passing through Hormuz right now and just not willing to take the risk.
 So, Admiral, in light of that, how sustainable is it for the US Navy to accompany these ships through the Strait of Hormuz right now?
 And I know you mentioned the cracks and crevices that some of these small speedboats can hide in, but I mean, isn't there a way we can actually do a better job of targeting some of these, you know, what is the word I'm like before?
 Weapons, systems, capabilities that Iran continues to have.
 Yes, and I think that's what part of this does, right? This operation to gain that last bit of maritime superiority, which is related to their lingering capability is going to take a little bit of time to get at as you saw Iran will fire for effects, so to speak.
 They don't have the sensors. They launched at ships that weren't really in the Straits or transiting the Straits and they launched at fixed targets on the ground.
 That was their retaliation because it's really all they can kind of see in the area, but you're right that the flow of the ships going through.
 It isn't all of a sudden going to be all the tankers are going to start moving through, but this is this is a big breakthrough because the passage that were used is a new passage.
 It's the south of the normal scheme. It was declared free of minds, and now we'll see if we can start moving not just the ships out because this operation was designed and advertised by a Brad Cooper and Simcom to start out by relieving the pressure of the ships that were stuck there, but to eventually restore what's normal rules of order, free flow of commerce, both directions.
 Finally, I just have to ask you about what we're seeing in terms of Iran continuing to target critical infrastructure. We saw it yesterday with the UAE again. That's the other piece of this puzzle, and part of the reason that so many executives come on our air and talk about higher for longer for oil and other commodities prices and for getting supply chains back to a place of quote unquote normal.
 Absolutely, and I think what was interesting is it wasn't just the attacks on ships. Like you said, Fujara was unfortunately attacked again, and we had seen over the last couple of days, potentially a bit weak in a bit, UAE had been carrying about six or seven VLCCs through hormones carrying their oil from offshore fields to Fujara, and I think that is probably now going to stop given what has happened.
 And I think that's why I go back to what I was saying. Iran is really telling the world that it is still very much in control of hormones and the straight there. And the thing about infrastructure is very similar to what we get told about tankers.
 It just needs one attack, right? And then everybody is very mindful of should be be investing, should be be restarting any of these facilities. And I was just in the region having come back.
 A, I do think the damage that the infrastructure sustained in the region is bigger than we appreciate. And to the recovery time is just going to be that much longer because people still think even the currencies far as extremely fragile and they don't want to take the risk.
 Okay, thank you both. Appreciate it.
 Morning, call me right back. Thank you.
 Welcome back. Let's get a marketplace on meta Bloomberg reporting that it's working with JP Morgan and Morgan Stanley on a financing package for a data center in El Paso, Texas to the tune of $13 billion, mostly in debt.
 Amid continued demand for data centers, there has been increasing pushback from local communities about these facilities. But one company is offering potential solution and Diana Olick has the story in this week's property play. Hi, Dai.
 Hey, Morgan. Yeah, it's an unlikely partnership span, which is a startup that makes smart electrical home panels is teaming up with Nvidia and Poltig Group, a major US home builder span is now making small fractional data centers they call them nodes that can be put on the side of residential homes.
 So the idea is to take advantage of unused electrical capacity on local grids, which the span smart panels find. Now, a network of these nodes talking to each other across the country is the equivalent of a mid-sized traditional data center. So these could actually negate the need to build as many of those huge data centers.
 Paper scalers and AI cloud providers just tap into the node network like a regular data center now span collaborated within video using its technology in the system span claims it can install 8,000 of these units about six times faster and at five times lower cost than the construction of a typical centralized 100 megawatt data center of the same size.
 Multi homes is in on the early testing phase, looking at the capabilities and economics of these nodes, which have already been deployed in a handful of communities. Okay, so why would a homeowner want this? Well, because they would just have to pay one flat fee for electricity and Wi-Fi, which span said would be roughly about 150 bucks total.
 A lot less than probably your usual bill now for much more on this story and the latest property play podcast with the CEO of a company looking to put every home closing on the blockchain.
 It is all in the free weekly newsletter go to it CNBC dot com forward slash property play. So you put it on the blockchain. You put the blockchain on to the data center, which goes on the side of your house Morgan, it all just works together. Oh my gosh, this is so fascinating. I can't wait to read all about it.
 Diana, oh, thank you. Well, straight ahead. The morning call crew team up the trading day. We're back in a moment.
 Time for the call sheet where we look at topics driving the trading day ahead crew members today, Dan, I was global head of technology research at web bush, Lizanne Sanders chief investment strategist at Charles Schwab and Gina Martin Adams chief market strategist at HP wealth.
 Great to have you all here. Lizanne, I'm going to kick this off with you, war jitters, ceasefire jitters. How's this factoring into the market right now?
 Well, I think it's not that the market isn't paying attention to the war right now. I think the focus may be rightly so has been on earning season, which has been quite strong and that that shifted a little bit of that.
 Really direct intraday correlation with what oil prices we're doing and you know, got a very strong beat rate so far. The only rub with earnings. It's very, very concentrated just three stocks represent about 70% of the dollar based growth and earning alpha bet Amazon and met us. So that's something to be mindful of looking ahead.
 Yeah, Gina, what's the bond market telling us right now, especially as we do see some yields playing with at least yesterday highs. We haven't seen since last summer.
 Yeah, it's really interesting while the equity market has had the lovely distraction of earning season and certainly the tech sector really powering forward stocks. The bond market has been a little bit more worried about what's going on in the Middle East.
 It's pretty clear that the correlation between the two treasury yield and oil prices is very, very tight and that short end of the curve has been reacting to the bond market.
 At the same time, you've got still elevated inflation expectations, at least in the short run, not a lot of risk that this lasts for five years, but one to two, the bond market is certainly still pretty concerned about that.
 Yeah, Dan, want to get your reaction to what Lizandra said about how concentrated the market is, especially since it is these big cap tech names that you're so focused on.
 Yeah, look, I mean, but I think it's great points, but the reality is if you'll get earnings season, it's actually just further validation of the Zai revolution.
 You'll see it again when the NVIDIA in the next few weeks will see from AMD, you know, in terms of today, and I think that continues to be the focus of investors. That's where the growth is. That's right.
 I think tech stocks are up another 12 to 15% rest of the year.
 Lizanne, what's going to matter more as this week unfolds earnings, or is it going to be some of the econ data with labor data and fed speed coming as well?
 Well, it could be both, but I think the labor market data is really key. There's still the hope out there that the Fed has an impetus to cut.
 I think the only reason why the Fed would cut would be significant deterioration in the labor market.
 By the way, I think the only reason why they would cut would be significant acceleration in the inflation rate.
 And that means that on the cutting side, they're focused on the employment side of their dual mandate and on the hiking side, they're focused on the inflation side of the dual mandate.
 I think most likely they stay on hold for the bulk of the year.
 Gina, your thoughts, especially as we see economic data suggesting this is an investment led economy right now.
 Yeah, I think the Fed's going to be a really interesting story later this year and into 2027, not necessarily because they will or will not cut, but because they are going to address the balance sheet.
 We also see the new Fed chairwarsh as likely to really dig into inflation and the inflation target, where are we on inflation?
 What do we use as the inflation target? And what does that mean for policy?
 We will have an unprecedented policy review well before it's due with this new chairman.
 He's pretty keen to do something new. So I think by 2027, we're going to be talking about a very different Fed policy landscape.
 Okay. We've got eight seconds left, so we're going to leave it there. AMD after the bell.
 I know you're watching that, Dan. I appreciate having all of you here are call crew.
 That's it for us here on Morning Call, Squawk Box starts now.