What now? 6/23/25
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I'm Frank Holland and you're listening to CNBC's Worldwide Exchange. Our show is live weekdays at 5 a.m. Eastern. Listen in.

What now after the U.S. strike on Iran? That's the question for Wall Street and for the entire world. The weekend attacks on Iranian nuclear facilities is leading to a lot of talk from the administration, Iran, and other world leaders. Oil right now, it's lower, and futures, they're just very slightly higher. We're going to dig into it. It's Monday, June 23, 2025, and this is Worldwide Exchange on CNBC and streaming on CNBC+.

Good morning. Thanks so much for being here with us. I am Frank Holland. Let's get you ready for the trend day ahead. We got a lot of big news to cover coming up. We have global coverage of this Monday morning market action from equities over to energy. Our Steve Sedgwick is standing by in London with a look at the European trade. Linlin is in Singapore with the action in Asia. We have our Dan Murphy in Dubai with the latest in the energy space. But first, we need to take a look at U.S. stock futures. Take a look. As we just mentioned right now,

Bit of a muted start, but still higher across the board right now. The S&P and the Nasdaq about a quarter of a percent higher right now. The Dow looks like it would open up just about 50 points higher. We're going to take a look at S&P 500 pre-market gainers first right now. Take a look at those. Seeing here a number of financial companies actually here, at least one right now. Some movement in the last few minutes. Northern Trust right there up, shares up about 5%.

five and a half percent. Estee Lauder shares up about three percent. Down here, a company in the defense space, Textron, those shares up just about two percent. We're going to talk more about energy in just a bit. Also, the S&P 500 pre-market laggards as well. Take a look at those. You see Dow Inc. pulling back about two percent. This is a company heavily impacted by oil prices. Coinbase down about one percent. We've seen some movement, some downside movement in Bitcoin. That's reversed a bit today. And down here, you see Expedia and Smurf at Westrock.

among some of the worst performers smurf at west rock one of the biggest packaging companies in the world want to take a look at oil as we mentioned just a bit ago oil is actually lower maybe surprisingly for some investors take a look this morning actually just moved fractionally higher so seeing a lot of movement in the oil space over the last week though we see a three percent upside move when it comes to oil you can see here over the weekend a big spike

over the weekend. Also look at treasuries this morning, taking a look at those. You're seeing the bond complex, the 10 year 4.39. Genuinely not a lot of movement from last week after we saw that Fed decision. Obviously a pause, but also signaling two rate cuts for later in the year. Also seeing the two year 3.92, the long bond at 4.91. And we're going to take a look at gold as well. Take a look at the movement and another safe haven right now. Gold actually pulling back very fractionally right now over the week.

Maybe again, surprisingly, gold down more than 1%. And looking at the U.S. dollar, again, another safe haven asset. The dollar actually moving higher over the last week, up about 1.25%. Right now, up about 0.5% in the pre-market. We're going to take a check of some sectors very quickly. First, the defense sector, of course, after the U.S. strikes on Iranian nuclear facilities.

Taking a look right now, you see RTX shares up over 1%. Northrop Grumman also up over 1%. Similar story for Lockheed and also for Palantir. The ITA, Defense and Aerospace ETF, however, pulling back just about a quarter of 1% right now. And we'll look at tech. That seems to be a safe haven play when it comes to the equity space. At least it has been in recent months and years. Right now, taking a look at tech, very broadly right now, Microsoft shares up very fractionally. Amazon shares up about a

quarter of one percent. NVIDIA pulling back about a third of one percent. You can see your Tesla up about one and a half percent. We're going to talk a lot more about Tesla and the robo taxi launch over the weekend down in Texas and down here. Alphabet, those shares up about a third of one percent. OK, that is your setup. Now we want to turn our attention back to the energy trade and the whipsaw action and the price of crude. Let's get to our Dan Murphy live in Dubai. Dan, good morning.

Frank, good morning to you. Well, look, the United States and Israel may have just carried out the most extensive military strikes on Iran in decades, but oil prices are flat. We saw the U.S. benchmark jumping around 4% in early Asia trade, but

It does seem that this was a by the news sell the fact event. And what we're looking at now is oil, of course, staying pretty well bid for the month and traders perhaps more sanguine on the idea that we could see a full blown shutdown of the Strait of Hormuz, which is the major concern at this moment. Of course,

What we're seeing right now as well is the final decision on that shutdown really resting with Iran's National Security Council. The parliament has so far backed the decision to move forward with that straight-of-home move shutdown, but haven't necessarily acted on it yet. So it seems as if they're just considering which way to go. So watch out for any potential moves.

in that space. What we've also seen is the oil analyst, Andy Lippo, coming forward with some hard numbers for us, saying any blockage here could push oil to 100 US dollars a barrel and US gas prices up by about 75 cents a gallon. But this is the one to look at here, Frank.

In a worst case scenario, he said oil could hit 120 USD a barrel here and American drivers could pay up to $1.25 more per gallon for gas. Of course, that hasn't happened yet, but that is what we're potentially looking at on the table if we saw that shutdown taking place. And then as an extension to this, my good colleague Steve Leesman also pulled together a timeline of recent oil price shocks, which of course act as a tax

on the U.S. economy. As you can see, what we are seeing now isn't really close to those previous shocks, and that is good news for the U.S. consumer. So right now, the region bracing for how Iran could respond, and Israeli forces really wasting no time doubling down on Iran's ability to do so. Today, they've hit six airfields across Iran, destroyed

15 military aircraft and damaged runways, bunkers and fueling systems, according to NBC News. So the Israeli military really working here to deepen air superiority and disrupt Iran's ability to launch any kind of air retaliation. And that is, of course, what the region is on edge with at the moment, ultimately waiting to see what Tehran does next.

Frank. Our Dan Murphy live in Dubai. Dan, thank you very much. Turning now to the action in Europe and watching certain sector moves overseas. Our Steve Sedgwick has that trade. Steve, good morning.

Yeah, absolutely. Thank Frank. Good to see you. Just put fully on from what Dan was saying. The experts I've been speaking to for the last three hours said, why would Iran actually mine the Straits of Hormuz? They need that area because they need to get their own oil out to China, which is their major customer for their products. So if they stopped other people getting their oil product out, they really shoot themselves in the foot on this one as well. But as you can see, the European markets buy

large negative London above the flat line will come to why that is in a couple of seconds time but the fact is we were up on these European markets and then we came off but we came up perhaps not because of the geopolitical story because we had some PM eyes which were just underwhelming across the eurozone flatlining on the broader economy let's take a look at the oil majors and that is why the FTSE 100 still mildly in positive territory because the oil majors are up

just a little bit across the board. You've got the massive French company bossed by Total Energy's Patrick Pouillonnet, who, by the way, wants to export vast amounts of US LNG to Europe as an alternative to Middle Eastern products as well. You've got BP up 1.2% and Shell up by just about under 1% as well. But there is one sector which is suffering a little bit, and it's inevitable as well, that people will worry about travel. They'll worry about international travel. They'll worry about the

cost of traveling if certain routes have to be detoured as well. And that's the airline sector, as you can see down across the board. Back to you, Frank. All right. Steve Sedgwick, live in London. Steve, thank you very much. We now want to turn to the action over in Asia. Lin Lin's in Singapore with a look at that action. Lin Lin, good morning to you.

Good morning. So across the Asia-Pacific, we have seen that most bourses are lower. If we look at the major indices, though, the Hong Kong Hang Seng Index, as well as the A-share market in China, they've actually managed to eke out slight gains to end the trading day. Meanwhile, over in Japan, the blue chip Nikkei 225 lower, but only by 13 basis points. So like

what we are seeing in Europe, the moves appearing pretty muted, pretty contained versus the significant escalation we have seen at the weekend as markets now wait for the possible retaliation from Tehran as well. Analysts also telling us that markets are not

pricing in as a likely scenario here, some sort of a blockade in terms of the Strait of Hormuz at this stage. But that that can change very quickly as well. I just want to make a mention of Asian currencies because we have seen that the dollar index has edged up a little higher, perhaps that is that safe haven play. But many Asian currencies under pressure, keeping in mind that a lot of the countries here are net oil importers and

as oil prices rise, that can put some of that pressure in terms of widening current account deficits, meaning that more money is flowing out in order to pay for oil as well. And as what we've seen in terms of the Europe picture with oil prices high, although I note that they have moderated somewhat, we are seeing that oil and gas producers from Australia to South Korea to Japan, they are continuing to catch that

tailwind. Meanwhile, the travel sector is under pressure with the major airlines across Asia lower on the expectation, of course, of higher fuel costs as well. So on the whole, we're seeing Asia-Pacific markets still pretty cautious as arguably the conflict in the Middle East is entering that next phase. Frank.

Lynn, Lynn, thank you very much. Great to see you as always. Let's talk more about how the U.S. markets could react to all of this news today. Joining me now is Victoria Green, founding partner and CIO at G Square Private Wealth. She's also a CNBC contributor. Vicki, good morning. Good to see you.

Good morning, Frank. I want to get your reaction to not only the U.S. stock futures, but also the oil market, considering what we saw from the president. If you go on social media, of course, the president posting about the potential for regime change over in Iran, saying it's not politically correct, but basically positing whether or not that might be the right decision there. Surprised that we're seeing such a muted reaction again in equities and in oil after this.

It is. I was talking to the people over the weekend and I was like, oh, man, Monday morning, you know, oil spike, gold spike, equities down, you know, and then obviously we're seeing very immediate reaction to right now the market is pricing in. This is going to be a very constrained response. This is going to be similar to the Soleimani killing where they had a very targeted, restrained response on U.S. assets in the Middle East. They didn't target any direct assets inside the United States and it was all directed at military assets. So right now we are pricing in that this is not

which does leave you open to shocks down the road. However, we typically look historically at these types of events. It's not a huge market mover. Typically, maybe you move 1% the day of a major event and then 4% within about five days. But after that,

After that, you typically recover rather quickly. I think it takes only about a couple of months typically to pop back. The biggest risk is sustained spike in oil prices above 100, which would lift CPI, as you guys discussed earlier on this show. You could be seeing gas prices move from 325 to 425 a gallon if we see oil at 100. And if we do see the blockage of the Strait of Hormuz, that could see 120, 130, which could take us to that dreaded $5 gasoline again.

Yikes. Nobody wants $5 gasoline. What you're saying is kind of mirroring what we heard from Andy Lipow. Our Dan Murphy just kind of laid some of that out. I think his outlook was $120 a barrel gas oil, excuse me, potentially if the Strait of Hormuz is blocked. Let's talk about this for a second because, you know, energy is really your wheelhouse. About 21% of global oil supply goes through the Strait of Hormuz.

What happens to other companies in your mind in the market if somehow there's some type of blockage? Are there certain sectors you think become less investable with the idea of an increased cost of fuel, potential inflation here in the U.S. due to higher fuel costs as well?

Sure. Discretionary would probably be hit. You know, as you've discussed, airlines are at risk there. The consumer would suffer with higher gasoline prices. That drags on everything, right? That drags on everything from shopping, groceries, even to eating out. You know, that has a huge impact on consumer behavior here. Then it comes into the trajectory of what does the Fed do? Obviously, if you see a spike here in inflation, that may cause the Fed to have

to wait a little bit before they would even consider cutting rates. So there are multi-order effects here if we see that spike. Now, we do also caution, you know, it typically doesn't stay at 100. If you look back at recent times that we've seen oil spike to 100, like the Russian invasion of Ukraine, it only stayed there for about a month or two and then came back down. We have already spiked 28% off of our May 5th lows. We were about $57 on WTI coming into June, and now we're trading in 70. So we have

seen a significant move up. But as of right now, we're not pricing in worst case scenarios. Obviously, the equity market's not pricing in worst case scenarios. Everything right now is pricing in. This is going to remain contained. We're not looking for regime change. We're not going to see direct attacks in the United States. It's going to be a restrained response. Well, Vicki, with that in mind, I know I bounced this off you. We're going to be talking to someone from Ned Davis Research coming up later in the show. They gave us some of their research

When it comes to the Dow reaction, when it comes to crisis events, if you look on average after a crisis event, the Dow pulls back about 7% in the first five days. And then 22 trading days later, it's up about 4% if you look at the reaction of COVID, Russia, Ukraine, SVB collapse, kind of similar patterns. So just kind of if you put it out here that this pattern might repeat itself and we're going to see a dip and then some type of rebound after, again, 22 trading days, where would you put money at to work today?

Yeah, I'd still like the energy trade. It's a hedge here, especially U.S. EMPs. If you see higher realized oil prices, a lot of them have taken some rigs offline. You start seeing $80, $90 crude, $100, then you're going to see rigs come online. You're going to see increased production. Most of them are not heavily

hedged. Don't mind some of the large integrated oils, your Exxons, your Chevrons. And so the EMP is going to be a pure play on WTI. You've got some great on integrated. The ones I'm a little risky on are service companies. Some of them have significant international exposure, which could be derailed if we see a closing of the straight there. But energy is not bad. Obviously, industrials and defense could be a good hedge here. But I would be by the dip. But I'd be by the dip of U.S. assets as long as we don't have sustained shock.

the consumer should survive. And any dip here is going to be marginal and short. Victoria Green, great to see you as always. Thank you very much. Thanks, Rick. All right. Still ahead here on Worldwide Exchange, more oil market reaction, the immediate focus for energy traders, plus awaiting possible military retaliation from Iran. Whether first move, it could be in the cyberspace and later digging into the most influential corner of the market. All about big tech's next move. A very busy hour still ahead when Worldwide Exchange returns. Stay with us.

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Welcome back to Worldwide Exchange. Oil prices hitting a five-month high in the overnight session before pairing those gains as the U.S. strike on Iran's nuclear facilities raises concerns about supply disruptions in the Middle East. That could include worries Iran could retaliate by attempting to close the Strait of Hormuz, where about 20-21% of global oil supply flows.

Joining me now is Jorge Leong, head of geopolitical analysis at Ryostat Energy. He previously worked for BP and OPEC, where he was a main author of the group's World Oil Outlook report. Long resume there, Jorge. Great to have you here. Thanks for joining us on a day like this. Look at the oil market. I want to ask you, we're not seeing a big reaction in the oil market, at least currently right now. Is that a surprise, especially after the social media post by the president alluding to the potential, at least, for regime change in Iran?

Thanks for having me, Frank. Pleasure to be here. Well, it is a big surprise in the fact that prices have not increased dramatically today. My expectation was that we were going to see a $3, $4, $5 price spike. We did see early morning a spike of around $4 per barrel. Now, I think what is happening here is that the market is pricing in in a scenario where things de-escalate gradually, sort of similar to what happened in 2020 after the killing of General Suleiman.

Now, the worrying thing is that the other extreme scenario where there is a threat to close the Strait of Hormuz, I think it's still realistic. Things could go south very, very rapidly. Yeah, I want to point out we are seeing oil actually move to the upside right now. WTI is up about a quarter of one percent. And very important note that both Brent and WTI are both above 70 bucks a barrel, which seems to be kind of a key sentiment level for both.

I want to go back to some of the talk from the administration over the weekend. We heard from Vice President J.D. Vance over the weekend. And when he was on Meet the Press, he was asked, what's the red line for the administration? And is it the Strait of Hormuz if there's some type of blockage? And he seemed to say no. You know, he seemed to say the nuclear program, that's the red line. And basically said it would be up to the Iranians themselves if they want to create problems in the Strait of Hormuz. And saying it would create economic problems for them, mirroring what a lot of other people are saying. I want to ask you.

Based on what you know about Iran in the past and their history, is there real potential for them to block it? And do you really believe that the U.S. would stand down and let them do it? Well, that's a great question. I don't think, well, there is the option. They could try to close the Strait of Hormuz. Now, from the geopolitical point of view, I'm not so sure this would be the best strategy for Iran. Bear in mind that 95 percent of Iranian crude exports are flowing to China. And the last thing that you want

to do is upset your only trading partner, that is China in this case. So that's one important element. The second important element is that the economic well-being of Iran will be massively hit if they try to close the Strait of Hormuz. So it will be an extreme decision that would not be beneficial for Iran itself. Jorge Leon, great to see you. Thank you very much. Thanks for joining us.

As we have a break, we're watching the action of Bitcoin higher this morning after a brief sell off on Sunday. Taking a look at the moves right now. You're seeing Bitcoin back above one hundred one thousand, about one hundred and one and seven twenty five right now, about two and a half percent. Crypto stocks, however, not so lucky. Taking a look at those, we're seeing some downside moves when it comes to those. Much more worldwide exchange coming up right after this.

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Welcome back to World Wide Exchange. The world watches for Iran's next military move on the U.S. strike on Saturday. The Department of Homeland Security is warning of cyber attack threats. A bulletin says low-level cyber attacks against U.S. networks by pro-Iranian hacktivists. They're likely adding the risk of an omnipresence since the U.S. killed an Iranian military commander back in 2020. Joining me now on the Iranian cyber threat is Gil Messing, chief of staff at Israel-based cybersecurity giant Checkpoint Software. Good morning, Gil. Thank you for joining us.

Thank you for having me. So we were talking about this actually last week about the Iranian cybersecurity threat. When we're looking here specifically in the U.S., what do you see as potential targets?

So first of all, we have seen pro-Iranian groups attacking in the United States. It used to be small businesses to critical infrastructures, anything in between. But now, if we're basing what we've seen so far in this war and looking at the United States, they're probably going to shift some of their attention and focuses to targets in the United States. Anything as easy as connecting to security cameras, which is basically everyone, but also to try and attack more high

value higher assets for the United States now we should understand what they're looking for is a mix of actual damage but also some disinformation or intimidation and even leaking of information so the range is pretty it's pretty wide and what they're going to try to do is show some success

We have seen in the last 24 hours some pro-Iranian groups trying to do more denial of service attacks on American websites. Very marginal, not significant. But you can see that this shift is happening, and we should expect it will be part of this new status of the world. So part of a new status of the world. So as we go forward, how can U.S. companies, how can the U.S. government, state and local, federal, all across the board, how can they protect themselves from these threats?

So I want to keep it as simple as possible so people can actually feel it and do something about it. And I would distinguish it to employees and networks. I'll start with the networks.

First of all, everybody needs to be vigilant and understand that this is actually happening and they could become a target. It's time to raise the guards. The guidance will be much higher. And in simple terms, try to see what your critical assets in the network are, what they're connected to. Again, security cameras can be connected to networks, could be a risk. And also try to see that you have the actual, the latest patches, the latest software, the latest version of each software. So you know that the previous vulnerabilities, now they're patched.

And on the employees levels, we've seen that these groups are trying to attack the companies through their actual employees, spear phishing on their emails, social media, even instant messaging apps. They're trying to approach to them, impersonate to be somebody else, at the end of the day to steal their passwords and through these passwords to get into the companies.

So if you raise your guards higher, both on the networks and the employees, you're much safer. And again, stay vigilant, see what's happening, get latest updates. And again, knowledge and awareness is about 50 percent of solving this whole thing. So I'm happy we're doing this and raising this awareness because, as I said, we've seen it before and we can see it again. American companies could become a target of this status in the Middle East. All right. We're going to leave it there. Vigilance really the key there. Gil Messing from Checkpoint. Thank you very much. Great to see you. Thank you.

And as we had a break, we want to mention that Fred Smith, the legendary founder of FedEx, he passed away over the weekend. He was really a disruptor long before that term was coined, really innovating air delivery and reimagining the global supply chain. Just a bit of color here. One of the most famous stories about him is that he went to Vegas.

And he won a few thousand in blackjack to save FedEx from bankruptcy. I actually got to talk to him a few days ago. He told me that was like ninety nine point nine percent true. The story is very colorful. I can't tell it all on TV, but he says it was ninety nine point nine percent true. Just to give you a sense, the kind of guy he was, a business person, a Marine and just someone who was a business leader and really a dean of the business community here in the U.S. Again, FedEx founder Fred Smith passing away at 80 years old. And we're back right after this.

The market has two big scenarios. One is a sort of potentially a really, really good outcome. And the other is this really, really bad outcome. And there's sort of a stalemate in markets of which way you go.

That was David Zervos from Jefferies on CNBC's special report last night on U.S. markets facing a crossroads following the weekend U.S. strikes on Iran. Welcome back to Worldwide Exchange. I'm Frank Holland. We're going to get you ready for the market day ahead. We're going to start off with U.S. stock futures this morning. You can see right here U.S. stock futures in the green across the board, maybe surprisingly for some people. Right now it looks like the Dow would open up.

Up about 50 points higher. The S&P and the Nasdaq both up right around a quarter of 1%. We're going to take a look at the Nasdaq 100 gainers in the pre-market. Take a look at some of those names. Baker Hughes right here. You can see right here at the top of the list. Those shares up about 1.5%. A player in the energy space. Tesla shares after that robo-taxi rollout over the weekend. Up about 1.5%. Palantir, a defense name, up about 1.1%. Applovin and Diamondback running out your best performers. Then we have the other side of the coin, the Nasdaq 100 laggards.

Taking a look at those global foundries pulling back nearly 3 percent strategy, pulling back about one and a half percent. We mentioned crypto is actually up this morning, but some crypto stocks are still pulling back. ADP Arm Holdings and NVIDIA and video on here as well, pulling back nearly a half a percent in the pre-market. Take a look at treasuries, often a safe haven in times like these. Treasury yields pretty much staying steady.

over the last week or so. Right now we're showing you oil first, excuse me. Treasury yields right now pretty much holding steady. The benchmark at 4.38%. We should actually go back to oil. Want to mention some of the moves in oil right now, specifically WTI over the last week. Taking a look, you see over the last week, WTI up 3.3%, right now up about 0.5%. We mentioned earlier in the show that moves in the oil market were pretty muted. We are seeing a move to the upside.

in the last few minutes. Right now, again, WTI up nearly a half a percent. Also looking at another safe haven, gold, the moves in the gold market. Now, this chart, it may be a bit surprising. Over the last week, gold's actually down 1%. Right now, down fractionally, just under a quarter of 1% in the pre-market. And a look at dollar, we have seen more inflows

And to U.S. currency, the dollar over the last week up about 1.5%. You're seeing the big move to the upside here and some moves to the upside over the weekend after those Iranian strikes. Right now, the U.S. dollar up, excuse me, the dollar index up about three quarters of 1%. And we want to check a few sectors. Of course, we want to check the defense sector this morning. Taking a look, a lot of green on this board. RTX up over 1%. Northrop Grumman up over 1%. Palantir, as we already mentioned, up over 1%. However, the ETF that tracks defense and aerospace actually pulling back about a quarter.

of 1%. And looking at big tech this morning, often a safe haven trade in the equity space. Taking a look at some big tech names this morning. Microsoft shares pretty much flat, up fractionally. Amazon up about a quarter of 1%. Down here, as we mentioned before, Tesla up about 1.5%. And Alphabet shares up nearly 0.5% in the pre-market.

All right. That's your setup for the morning. Now we want to move over to Capitol Hill and its traders await Iran's next move and whether it's military or cyber attentions also turning to Washington and what this weekend's Mideast escalation could mean for policy questions in Congress. Emily Wilkins now joins us from D.C. with much more on this angle on the story. Emily, good morning.

Good morning, Frank. We have Republicans on Capitol Hill. They are widely supporting Trump's attack on Iran with top Republican leaders backing the strikes. But a major challenge is set to come later this week when senators are going to vote on the record as to whether Trump needs to get approval from Congress to go to war.

Now, the measure from Senator Tim Kaine, which was introduced more than a week ago, would require Trump to get approval from Congress before the strike and that constitutional authority that Trump would need to get from Congress if he wanted to go further. Senators, including Lindsey Graham, said that Trump has the power to authorize the attacks. But of course, it remains an open question right now as far as what Congress is going to do next, as well as what the White House is going to do next, as well as what Iran is going to do next.

And not all Republicans are on board with moving forward. Congressman Thomas Massey said the strike was not constitutional. He is co-sponsoring a war powers resolution that's similar to Senator Kaine's in the House. Other lawmakers also raised concerns about the constitutionality of the strike, including Congresswoman Marjorie Taylor Greene. She took to social media to break with Trump, tweeting that, quote,

Every time America is on the verge of greatness, we get involved in another foreign war. And then she added, this is not our fight. Lawmakers are returning to D.C. this evening, and they are expected to get a briefing on the situation tomorrow. But the main focus is expected to remain on the Trump mega bill. Now, that bill does include $150 billion for defense spending as of now. We'll, of course, be watching to see if any changes are made as a result of the attacks.

And Frank, of course, I think a lot of moving parts here in this story with Congress back in town. I think we're going to be seeing a lot more discussion and a lot more action from the Hill. Yeah, I believe discussion is only just beginning. And by the way, in the pre-market, we're seeing a number of defense stocks higher, perhaps on the expectation there could be a boost in that defense spending. Emily Wilkins live in D.C. Emily, great to see you. Thank you very much.

Let's talk now more about what could happen next in Iran and the possibility of the U.S. becoming more involved beyond the strike over the weekend. Also, while we're seeing a bit of a muted reaction in the markets. Joining me now is Michael Singh, senior fellow at the Washington Institute and former senior director for Middle East affairs on the National Security Council under President George W. Bush. Also with us, Ed Klissel, chief U.S. strategist at Ned Davis Research. Gentlemen, good morning. Thank you for both joining us.

Michael, if you don't mind, I'm going to begin with you. What do you just make of that social media post from the president over the weekend calling or kind of talking about potential regime change in Iran? And also based on reports, how effective do you think these U.S. strikes really were?

Well, thanks for having me on. Look, the effectiveness of the strikes, to take your second question first, I think remains to be seen. From what we saw from the Pentagon, it seems as though the strikes were devastating and that they hit their targets quite precisely.

What you wait for, though, in these situations is the bomb damage assessment or the battle damage assessment. And that, since we don't have troops on the ground who can actually go physically look at these sites, that really depends on putting together lots of different pieces of intelligence, you know, signals, intercepts, more satellite imagery. You know, if you can get images from inside the country and so forth.

to figure out exactly you know what percentage of the stuff at you know for example the deeply buried fordose site that you're showing did we get did we get all the centrifuges what happened quite critically to the stockpile of enriched uranium and so forth so that will be coming in in days and it'll be refined frankly over weeks um as we pick up that kind of information

Look, on regime change, I think President Trump is essentially sending the same kind of message that the Israelis are sending, which is, look, the purpose of these strikes is quite narrow. And the strikes themselves were quite precisely targeted against nuclear facilities only. But Iran has a lot more to lose. It has obviously economic targets that could be hit, including energy targets. It has regime targets, including leadership targets that could be hit.

This is a way, I think, to deter Iran from contemplating a response against U.S. assets or against U.S. forces in the Gulf by, again, reminding them they have a lot to lose. And, Michael, by the way, crossing the wires from Reuters, U.S. bombing probably caused very significant damage.

to underground areas of Iran's Fordo site. So we're going to continue to watch for that. Ed, I want to come over to you. You've given us some research we're going to get to in just a second, but surprised at all by the market reaction. We saw oil actually fractionally lower. Now it has moved higher. The future is kind of muted. We're not seeing any big moves in any particular area.

I think there's a couple of things to consider. One is, you know, we had a week of the conflict starting and the market was down last week. So that that that reaction has already taken place. And secondly, more importantly, as people had the weekend or part of the weekend to digest the information, the economic impact on the U.S. could be.

be fairly small uh the biggest risk is to global oil markets and uh and that even remains to be seen when the straits of her moves will be will be closed which would be the biggest risk so

Until we get some more information, the markets have the ability to maybe sit back and see. And we've seen several crises over the past several years, and maybe investors have learned maybe not to overreact to any one piece of news. And a bull market since 2009 happened.

has taught people to buy the dips for better or for worse. And that could be what's going on as well. Yeah, we're showing some of your research. We're going to get to it in just a second with you, Ed. Michael, I want to come back over to you. Over the weekend on Meet the Press, Kristen Walker did a really great interview with Vice President J.D. Vance. One of the things she asked about is what exactly is the U.S. red line? And the vice president said that the red line was the uranium enrichment by Iran. But when she asked specifically about the Strait of Hormuz,

He didn't really say that was a red line. In fact, he said that would be up to the Iranians to decide if they want to create disruptions there. Do you actually believe that? Do you think that the U.S. would allow just disruptions in the Strait of Hormuz considering the impossible impact on the oil market? And then also, what about China?

Well, look, I mean, this is a huge question in the region, because remember, in 2019, during the first Trump administration, Iran attacked Saudi oil facilities. And President Trump essentially said, look, that's not our problem. And that was a real break from U.S. policy for the decades preceding that point. And so I think folks in the region are worried about this, that if Iran targets energy infrastructure,

but not U.S. bases, not U.S. forces, that you wouldn't necessarily see a forceful response by the United States. And you wouldn't see a forceful response even by China, which you asked about, because China, while it would be impacted, tends not to be able to or be interested in projecting force that far afield. And so it would really be up to the countries and the region themselves to deal with

Look, I'm skeptical because I think if there were something that really affected energy markets, obviously that is a U.S. interest quite directly that gets impacted. And the government can't simply ignore that. So, yeah.

So, Ed, I want to come over to you, give you the last word. We're just showing some of your research about the impact of the Dow after crisis events in the first five trading days. On average, the Dow pulls back about 7 percent. Then over the next 22 trading days, it rebounds by about 4 percent. You look at COVID, Russia, Ukraine, the SVB collapse. You see a similar pattern. With this in mind, are you talking about investors kind of being trained to buy the dip? What sectors would you buy the dip on if you think this pattern is going to hold going forward? Where do you see the opportunities?

So we like growth sectors for the most part. Consumer discretion is our single favorite, but more broadly, growth over value with the idea that if this doesn't, if this is a, you know, we had a knee jerk reaction last week to the conflict and moving forward, investors kind of clear their heads. And we go back to the world of modest economic growth, slowing earnings growth. So investors pay a premium for the growth stocks that can deliver the earnings and

that's where we'd want to be focused on. So are you talking growth when we're talking about tech or is there a specific area you're talking about? Our single favorite area is consumer discretionary. The idea that U.S. consumers is going to remain resilient, but we would not push back too hard if somebody wanted to buy, say, the tech sector or communication services as well. We got a good conversation there. Michael Singh and Ed Clisso, great to have you both here. Thank you very much.

All right, coming up here on Worldwide Exchange, critical Middle East shipping lanes are now in focus. And what's at stake if Iran shuts down one of the most important waterways for oil in the entire world? We're back right after this.

Well, I think that would be suicidal, Kristen, for the Iranians themselves. I mean, their entire economy runs through the Strait of Hormuz. If they want to destroy their own economy and cause disruptions in the world, I think that would be their decision. But why would they do that? I don't think it makes any sense. I don't think that it makes sense for them or for anybody else. What would make sense is for them to come to the negotiating table.

All right, welcome back to World Wide Exchange. Turning back to energy and a critical choke point in the global oil supply, the Strait of Hormuz. According to Iranian state media, the country's parliament is endorsing the idea of closing the Strait of Hormuz with the final decision in the hands of Iran's National Security Council. The U.S. is calling on China that relies heavily on Iranian oil to prevent any disruption. And according to one analysis, some oil supertankers are already being rerouted.

Joining me now is Craig Fuller, CEO of FreightWaves, a leading provider of global supply chain market intelligence and news. Craig, good morning. Thanks for joining us. Hey, Frank. How are you? All right. So, I mean, what's going on when it comes to the supply chain? We know what's going on when it comes to the administration and what they're saying about Iran. When we're talking about companies in the supply chain, how are they viewing this whole tension and this conflict right now as when it comes to shipping not only oil but other products?

Well, they're veterans at dealing with instability and chaos. And so this has been something, you know, if you think about it, we've been in a level of chaos of supply chains really since Donald Trump's first administration. We had the first trade war. We had the first set of tariffs and then we've had COVID. We had the freight recession and now we've had

the second round of tariffs. And now we have this issue. So this is something that the industry is dealing with, has dealt with and is prepared to deal with. So one of the things that we've been talking about throughout the show is a really great interview from Meet the Press with Vice President J.D. Vance, where he said the uranium enrichment, that's the red line, not necessarily blocking the straight up for moves. When we're talking about the potential for U.S. involvement there, what does that do to not only prices, the

to perhaps surcharges that some of these companies might charge and overall just the cost when it comes to companies that want to ship goods. Yeah, I mean, the big impact here specifically is on oil shipping, is on energy shipping. So that's really where I think the pressure will be. But really, it impacts China far more than it does the United States. You know, China receives

the vast majority of its largest level of imports are from that area of the world, where the United States only receives about 5%. So it's far more drastic to China than it is the U.S. And so the question is, does the U.S. actually benefit as a net beneficiary of actually closing the straits? Some people could argue that because U.S. has such a

large level of oil exposure that it very could be that the United States doesn't get impacted drastically and may even benefit as a country from the closure. You know, it's interesting, Craig, because we had you on before a couple months ago. I mean, probably about a year ago or so when we talked about, you know, issues in the Red Sea, raising the cost of just about everything, perhaps leading to supply shortages. What's happened? Why are we looking at that risk just as seriously now?

Yeah, I mean, look, I think generally anytime we're talking specifically about container shipping, because I think really the risk of closing the hormones is really related to energy prices. But when you look at the Red Sea and you look at we're talking specifically about container issues and the fact that this could impact.

container prices, both on shipping costs of transportation, but also on the goods that flow through there. But this is something that the industry has been dealing with. The Houthi attacks have exposed a lot of that. And a lot of the international container ships have actually sailed around

uh, South Africa to avoid, uh, going through, uh, an exposed area. And so I think this is something that the industry is prepared to do with. One thing that I would say is the container ship lines have never missed an opportunity to actually, um, exploit a crisis, uh, but providing high surcharges. So, um, again, I think, uh, the supply chain industry is prepared and ready, uh,

It could impact consumer prices, but here in the U.S., it's far less of a concern. Yeah, I'm not going to use your word. You said exploit, but certainly I think a lot of people are looking for potential surcharges from many of those container shipping lines. Craig Fuller, CEO of Freightways, always great to see you. Thanks for coming on today. Appreciate it. Thanks, Frank. All right, coming up here on Worldwide Exchange, speaking of oil, some big moves and names you know in the energy patch.

We're talking Apache, ExxonMobil, Chevron, among some of the names moving higher here in the pre-market. Total Energy is over there in Europe as well, up over half a percent. Also checking financials this morning, taking a look at some of the moves there. You see some muted moves, honestly. Goldman Sachs up about a quarter of one percent. The rest of the group just muted moves to the upside and to the downside. We'll be right back after this.

Welcome back to Worldwide Exchange. A few corporate stories to get you caught up on this morning. We're going to start off with Apple. You can see Apple shares pretty much flat in the pre-market. The company's reportedly held internal meetings about making an offer for AI startup Perplexity. The Bloomberg report says Apple has not discussed a bid with Perplexity itself. We're also watching Apple supplier Foxconn and NVIDIA. They're reportedly in talks to deploy humanoid robots at a new Foxconn factory in Texas. Reuters says NVIDIA is going to supply the servers.

Google has offered to tweak its search results to better promote rivals in an effort to avoid a possibly big EU fine. That's again, according to Reuters. And driverless Tesla is hitting the road in Austin, Texas over the weekend in its robo-taxi launch, though with what the company is calling safety monitors in the front seat. First trips are being limited to a narrow portion of the city with riders including investors and social media influencers running.

who live streamed their trips, taking part in all of this. Somebody who wasn't there, though, somebody who wasn't there was Dan Ives. He's sitting next to me. We're going to talk to him about it. But first, one more quick check on US Stock Futures.

We mentioned in the green across the board all morning long, muted, but still in the green right now. Looks like the Dow would open up about 50 points higher. Key for the markets today will be the direction of the most influential group of stocks in the market, the MAG7, accounting for more than 31% of the S&P 500 total market capitalization. This morning, you can see right now, take a look at MAG7 stocks.

Seeing some movement. Nvidia shares actually pulling back, pulling back about a half a percent right now. You see Alphabet's up nearly a half a percent. Tesla, though, Tesla shares up over 1%. Joining me now, Dan Ives, Global Head of Tech Research and Senior Equity Analyst at WebBush Securities. Also with me, Sarah Kunst, Managing Director at Clio Capital. We had a great conversation with you guys.

about Tesla a week ago. So we got to start right there. Dan, you weren't there personally. I'm sure everybody was a little disappointed you weren't there personally, but you had one of your associates and your team there. What did you make of these rides of few vehicles in a very limited geo-fenced off space? I mean, I thought it was extremely smooth, everything we saw, not just from a safety perspective, maneuverability was way impressive. I thought actually better than even Waymo coming out of the gates. I mean, Frank, going in, I thought

It would be an 8 out of 10. I think it was a 10 out of 10 relative to our experience, two 15-minute drives that our team had. And I think the other thing is that this is just the start because I think a year from now, 25 to 30 cities, it speaks to this trillion-dollar autonomous valuation that we believe alone will be for Tesla.

So, Sarah, coming over to you, I mean, I'm going to take Dan's words. It's just a start. Other companies are ahead of it, including Waymo. Also, Amazon has its own self-driving company that they're rolling out as well. What did you make of what we saw and heard over the weekend? You know, I actually just saw a report that apparently people are capturing videos of them speeding, swerving into the wrong lanes. And look, I'm not a great driver. You can ask my mom.

Also not a computer car that's supposed to lead a company to a trillion dollar market cap. And so, you know, the whole sort of premise of robo taxis is that they are safer and more efficient than having real drivers in the car because there's a lot of cost to them. So, you know, is Tesla behind Waymo? Yes. I've lived in San Francisco for a long time, so I've seen almost every iteration of self-driving cars testing. I still have a lot of concerns about the fact that they don't have LIDAR.

that they're not releasing a ton of safety data. Time will certainly tell. I agree with Dan that it is the beginning. But I think that the reality is that they're pretty far behind most of their competitors. All right, Sarah, I'm going to stick with you for a second. Let's talk about the broader tech trade. We were showing some of the MAG7 stocks pretty muted this morning. What does that say to you about the tech trade right now? Does that say that investors are not looking for a safe haven or do they maybe no longer see these names as safe havens?

I think it's really hard to find a safe haven right now. You know, and one of the risks, I think, in this sort of uncertain geopolitical environment is that if cyber warfare becomes a part of that story, some of these software names might look a little bit less safe. You can't really...

bomb Microsoft, but you certainly can hack them, right? And so I think that there's some of that. The reality is a lot of these have been trading at relatively high multiples. There are still names I like in there. I like Meta. I like NVIDIA. But I think that it's a time of uneasiness, and there's not a lot of enthusiasm to buy into something that you're already overweight in.

So, Dan, that leads us to the cyber trade right now. We had a guest on last week calling Iranian cyber professionals some of the most sophisticated, whether it's defense or offense. With that in mind, do you have some top picks in the cyberspace just to kind of play some of these geopolitical tensions and the potential Iranian threat? Yeah, look, I think cybersecurity is going to get a huge bid today because it's just going to give another talent cyber arc pal out there.

CrowdStrike. And I think Zscaler is another one. I mean, I think, look, this is just going to speak to just more tailwinds that you're going to see for cybersecurity plays. I always think Palantir is going to get more and more of a bid because they're going to benefit, I think, on both sides. But I think it just shows that, you know, Sarah had some great points. I believe it's actually a risk on. I think you're going to see tax

Really? Is going to be on today because ultimately it's going to be viewed as the black swan event in terms of Middle East is removed relative to a week in Iran. And that is I think that's been a concern for investors. And I was thinking about what's happened in the Middle East with AI.

I mean, in terms of UAE and everything. Do you share her opinion that software names might be seen as less safe right now in this current environment? And maybe that's why we're not seeing as big a move in some of those big tech names like a Microsoft big software player alphabet. Yeah. Look, I actually think, I mean, when it comes to software, it's actually even more of a safety name.

because when you look at names like Microsoft, you look at Oracle, I get what Sarah's talking about on the valuation, but I actually think these are names that have huge valuation upside, and especially given what we're going to see, you're going to see more and more of an appetite. And I want to say what Sarah talked about with Tesla, you know, look, I look forward to having some barbecue with Sarah down in Austin.

To show her the maneuverability, I thought it was actually pretty impressive. Look forward to talking with her there in Austin. Yeah, we'll have to set up you guys to get some ribs and all that kind of good stuff. Sarah, I want to come back over to you right now with this week, a lot of tensions, a lot of apprehension, even though we're not really seeing it in the market, but a lot of geopolitical tension. Is there one of those big tech names or even outside the MAG7 that you see as potentially the best play?

I like Meta. I think that it is reasonably priced. And the reality is that, you know, love him or hate him, you are using Zucks platforms to consume this information, right? Nobody right now is logging off. And so the reality is that WhatsApp is sort of the default text message server for most of the world. And, you know, you have things like that.

All right. Sarah Coons, we've got to leave it there. Dan Ives, thanks for joining us as well. Great insight from both of you, as always. By the way, no conflicts for either one of you for any of the stocks that we just discussed. As we mentioned, futures are higher across the board. That's going to do it for Worldwide Exchange. You've been listening to CNBC's Worldwide Exchange. You can always catch us live weekdays at 5 a.m. Eastern.

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