Running of the Bulls, In-Home Data Centers, and Citadel's Ken Griffin 5/5/26

Summary

The Exchange | CNBC Episode: "Running of the Bulls, In-Home Data Centers, and Citadel's Ken Griffin" (May 5, 2026)

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Episode Overview

This episode explores the extraordinary rally across global equities, the latest dynamics in energy and housing markets, innovation in residential data centers, regulatory moves in AI, and culminates with a candid, wide-ranging interview with Citadel CEO Ken Griffin live from the Milken Institute Global Conference. Hosted by Kelly Evans, the show features expert guests including Ryan Dietrich (Carson Group), Halima Croft (RBC Capital), Alan Ratner (Zelman), Diana Olick (CNBC Real Estate Correspondent), Katie Stockton (Fairlead Strategies), and Ken Griffin (Citadel).

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1. Stock Market Bull Run: Is There More Room to Run?

Guest: Ryan Dietrich, Chief Market Strategist, Carson Group

• Bull Market Durability

  • Markets across the board are hitting new highs, including big tech, small caps, energy, and consumer sectors.
  • Dietrich argues that, based on history, this bull market is only midway through:
    "We've been bullish for a while...this bull market probably has a few more tricks up its sleeves. And yes, we're bullish for the rest of this year. But there might be reasons investors are happy going out many years." (01:55)
  • Historical averages suggest the current bull market could extend another 3+ years.

• Bond Market & Portfolio Construction

  • Rising yields are not necessarily a warning sign; rather, they may reflect stronger long-term growth prospects (04:12).
  • Dietrich emphasizes diversification beyond traditional 60/40 (stocks/bonds) allocations, adding commodities and alternative assets for inflation-resistant portfolios.

    "Bonds have not really done much to help portfolios for the last five years." (05:08)

• Active vs. Passive Management

  • Evans questions the case for actively managed ETFs, particularly for younger investors, asking why not just own broad index funds (05:08).
  • Dietrich agrees but says global diversification (including international and emerging markets) shouldn’t be ignored (05:49).

• European Equities

  • He highlights a surprising turn in developed international markets, noting Germany's breakout and potential long-term gains outside the U.S.

Key Quote

Kelly Evans: "It's quite another to say we have years left [in the bull market]...explain why you think that is."
Ryan Dietrich: "The average length [of bull markets that make it this long] was eight years. The shortest was five." (01:55)

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2. Oil, Geopolitics, & Commodities: Is a Supply Shock Looming?

Guest: Halima Croft, Head of Global Commodity Strategy, RBC Capital

• Strait of Hormuz & Oil Markets

  • Despite one ship making it through under U.S. escort, Croft warns the critical waterway remains essentially blocked, with only symbolic passage so far (08:14).

    "Before the war started, we were talking about 90 to 100 ships a day...We're getting to the one month anniversary of the ceasefire and we have not had anything close to a reopening of the Strait of Hormuz on a significant scale." (09:29)

• Consequences for Energy and Food

  • The closure is effectively shutting off 12.5–13 million barrels per day.
  • Croft flags upcoming peak summer demand as a key risk for diesel, jet fuel, and overall inventories (09:29).
  • Broader commodity impacts, especially on fertilizers, could disrupt global food supply for 2027 if the situation persists (10:23).

• Gas Prices and Consumer Impact

  • Although gasoline averages $4.48 nationally (and $6.13 in California), the pain on the U.S. consumer is yet to intensify, but summer could bring an "inventory wall" and a potential "summer shock." (11:33)

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3. Housing Market: Margin Squeeze and Price Dynamics

Guest: Alan Ratner, Managing Director, Zelman

• Home Prices & Affordability

  • New home prices are falling to near 5-year lows, exacerbated by high mortgage rates (15:02).
  • Builders have managed through "incentives" and price adjustments, but the existing market is slower to react as homeowners are "locked in" at low rates.

  "We really don't see significant declines. But maybe in certain markets on the edges, you will start to see prices move a bit lower." (15:47)

• Margin Squeeze for Builders

  • Builders’ gross margins have dropped about 10% in the last few years and face new pressures with potential fuel surcharges (16:28).

• Winners and Losers

  • High-end builders are faring better due to more affluent buyers; entry-level builders struggle the most with affordability as rates climb.

• Supplier Squeeze

  • Suppliers, including Home Depot and Lowe’s, are feeling even more pressure than homebuilders (17:48).

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4. In-Home Data Centers: SPAN, Nvidia & Pulte Group’s Node Experiment

Featured By: Diana Olick, Real Estate Correspondent

• The Innovation

  • SPAN is partnering with Nvidia and Pulte Group to create residential "fractional data centers" or "nodes" installed on the side of homes.
  • These are networked to utilize unused grid capacity and could provide equivalent compute power to mid-sized traditional data centers, rapidly and at lower cost (18:48).

• Homeowner Benefit

  • Pay a flat fee (~$150) for electricity and WiFi, potentially less than current bills, and possibly sell excess capacity back to the grid.
  • Safety and RF emission concerns are addressed:

    "They said, no, it would not have any of that kind of, you know, cell tension that would be around your house that you should be concerned about." (20:37)

• Outlook

  • Early days: currently piloting in new homes.
  • Over time, homeowners might even profit from the compute network, not just save money.

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5. AI Regulation: White House Considering Model Vetting

Reporting: Kate Rooney

• White House Action

  • U.S. administration contemplates vetting large AI models before public release (24:31).
  • Prompted in part by powerful cybersecurity models (like Anthropic’s Mythos) that could potentially be misused.

• Industry Response

  • Anthropic’s CEO Dario Amodei prefers an “automotive” oversight model over a heavy-handed FDA-style regime:

    "The FDA slows down medical progress a lot. So, that's a cautionary tale in the other direction." (26:03)

  • Challenge: AI model updates outpace regulatory cycles; few experts can meaningfully vet such models.
  • U.S. and global competitors (notably, China) are rapidly developing similar tools.

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6. Semiconductors & Market Technicals: Are We Overextended?

Guest: Katie Stockton, Founder, Fairlead Strategies

• Semiconductor Surge

  • SMH ETF and leading chip makers (e.g., Intel, Micron) are at all-time highs— a “parabolic” move (30:03).
  • Stockton cautions against counter-trending such strength but notes overextension signals:

    "Usually inadvisable to counter trend something at new all-time highs." (30:03)

  • Software sector, in contrast, is showing signs of potential recovery and less overbought conditions.

• Profit-taking?

  • Certain names (e.g., SanDisk) may be entering consolidation; overall, sell discipline is key for short-term traders.

• Emerging Leadership

  • She’s monitoring battered sectors like software, health care, and Bitcoin for turnarounds in Q2.

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7. Exclusive: Ken Griffin (Citadel) — Global Risks, Markets, and Politics

Interviewed by Sarah Eisen (Milken Global Conference)

• Strait of Hormuz & Recession Risk

  • Griffin reiterates that if the strait remains closed for 6–12 months, a global recession is almost inevitable, though the U.S. is somewhat shielded:

    "If the straits remain closed...energy prices around the world will go materially higher. It will push the world into a global recession… the U.S., because of our energy independence, will fortunately be largely shielded." (35:02)

• Stock Market Disconnect

  • Markets are “focused on the here and now,” driven by record corporate profits, not future risks (35:41).

• U.S. Inflation & Elections

  • Inflation is not worsening, but remains "above target" and rate cuts from the Fed are unlikely; rate hikes are possible if labor strengthens further (36:10, 41:27).

• Political Context & Ramifications

  • Griffin is critical of how inflation has affected retirees and blames the pandemic-era stimulus for much of the damage during Biden’s presidency, though now, "Trump is president" and will be held to account if conditions don’t improve (39:38).
  • He predicts:

    "It's almost a certainty the Democrats will take the House...The Senate will be the big battleground." (40:57)

• Fed and Rate Policy

  • Supports Kevin Warsh as the likely next Fed chair, expects him to act independently regardless of Trump’s wishes for lower rates (42:08).

• AI and Corporate Transformation

  • Sees explosive growth and rapid advancement in AI— much faster than expected:

    "AI today is profoundly better than AI was just nine months ago...The AI dialogue in the C suite has really turned into how do we reengineer our businesses to be digitally capable..." (43:46)

• New York Politics and Business Location

  • Griffin sharply criticizes New York City leadership over targeted taxes (“pied-à-terre tax”) and political grandstanding (45:26).
  • Says this prompted Citadel to expand in Miami:

    "We will add far more jobs in Miami over the next decade as an immediate and direct consequence of the mayor's poor decision here..." (47:05)

  • Warns New York not to repeat Detroit’s fate through arrogance and disregard for its productive citizens (48:28).

Memorable Ken Griffin Quotes

• "Europe has depended upon American military strength...since World War II...The Europeans should be there for us in a more profound way in this moment in history." (38:59)
• "What really upset me about the video was the fact that he put me in harm's way...To turn me into a political puppet was just in poor taste..." (45:26)
• "Very few people have the gifts to run these large, complicated businesses. We need them at the helm of these businesses." (49:39)

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Timestamps for Major Segments

• Bull Market Outlook with Ryan Dietrich: 00:55 – 07:28
• Oil, Hormuz & Commodities with Halima Croft: 07:28 – 12:18
• Housing Market with Alan Ratner: 15:02 – 18:18
• In-Home Data Centers (Span, Nvidia, Pulte): 18:48 – 22:06
• AI Regulation Debate: 24:31 – 27:39
• Semiconductor Surge Analysis with Katie Stockton: 30:03 – 33:36
• Ken Griffin Interview: 34:36 – 50:33

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Summary Takeaways

• Markets remain euphoric, but experts warn about complacency regarding geopolitical and inflation risks.
• AI, both as a market narrative and as a disruptive force, is moving at unprecedented speed, raising both economic and regulatory questions.
• Physical and digital infrastructure (homes, data centers) is in transition as new technologies alter once-inert markets.
• Ken Griffin’s wide-ranging interview underscores how the intersection of geopolitics, economic fundamentals, and local public policy is shaping investment, risk, and opportunity in 2026.

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For in-depth analysis, visit CNBC.com and subscribe to "The Exchange" podcast.

Transcript

[A]

Is your business achieving its current strategic goals? Are operations as tight as they should be? Are finances in a realistic place for expansion? These are questions investors ask. That's why EY Parthenon brings an investor mindset to help executives reinvent business models for long term growth, reset strategic goals, optimize operations and get finances in order. Let us help you reimagine your enterprise EY Parthenon solutions that work in practice, not just on paper. Introducing Fidelity Trader plus with customizable tools and charts you can access across all your devices, try our most powerful trading platform [e-mail] trader+ investing involves risk, including risk of loss. Fidelity Brokerage Services LLC Member NYSE SIPC thank you, Scott, and welcome to the exchange. I'm Kelly Evans. It's another day of records from the small caps to big tech, the NASDAQ and Russell hitting new highs. In fact, it feels a bit like the everything rally. Semis, memory, utilities, materials, all trading higher. Even the consumer is in on the action. Cruise lines, hotels, retailers, casinos and restaurants all in the green. You can see some of the names on our screen there. The private equity space is rallying. Take a look at some of those movers as well. Blue Owl up 4 1/2 percent. Even energy up with oil prices down more than 4%. But names like Marathon and Williams are up a couple of points and the S and P is up more than 6% year to date. Now that's after its second best April ever. And our first guest says all of that combined with year three of the bull market suggests we have years left to run from here. So let's start right there. Joining us at our opening exchange is Ryan Dietrich. He's the chief market strategist at Carson Group and a CNBC contributor. It's one thing Ryan to say the rally can keep going. It's quite another to say we have years left. So welcome and explain why you think that is.

[B]

Well, thank you, Kelly, for having me back. And listen, there's a lot of ways to slice and dice is this bull market that we're in right now is three and a half years old and up right about 100%. When you look at the last five bull markets that made it this far, going back 50 years, the average length was eight years. The shortest was five. There were seven. One more comment on this. There were seven bull markets that made it to a double like this one just did. Those bull markets lasted another three years on average. There's a lot more to this, I think, but one of the things we've been saying for a while at Carson Group we've been bullish for a while is this bull market probably has a few more tricks up its sleeves. And yes, we're bullish for the rest of this year. But there might be some reasons investors are still happy going out many years now that sounds surprising, but you look at history, it's not as surprising as it might sound.

[A]

Even though you look at history from another point of view and say it's a midterm year, I've heard that year three is often bumpier or it's a seasonally difficult time and you know, the leadership is narrow and it's all about the build out and that's kind of the only game in town.

[B]

No, those are great points. I mean midterm years we do know are the most rocky, usually not that great. I think some of that was pulled forward with the volatility we saw in the first quarter, you know, but then you think about this. This is President Trump's sixth year, right? And you want to get fun with numbers. You go back 50 years, we've had five other presidents had their second term in the, in their second year, the second term. So their sixth year, Margo's higher every time. Now listen, that's a small sample size. I wouldn't get too worked up over that. But the reality is AI build out. You just said we saw the GDP number last last week, 2%. Consumer was actually pretty weak. A huge part of that once again is the AI rollout. We're optimistic though the second half of this year, Kelly, we're going to see some better labor market data and maybe the consumer can start to come back because we think the economy is still in better shape than most people give it credit for.

[A]

So you know, I think that there's a couple of ways to, to build on this. And, and I think one of the questions that's coming along with it is what's happening in the bond market. And I understand that it's not the end of the world, historically speaking, for the five, the 30 year to be above five and whatnot. What does it tell you the way that bond yields are rising is that just because are they telling the same story which is actually all of this is happening because long term growth prospects look better, look better than they once did.

[B]

Now we're in that camp now. One of the thing, I think one area we've been a little different than a lot of places here at Carson Group all this year we've been saying we're not well Actually for the last two years in a higher volatility inflation world. Right. But also higher growth world. So you can have growth with higher inflation. I think most people don't quite remember those periods. Late 90s was a pretty good example of a time we saw that. So these higher yields, the way we've constructed our portfolios, we've been underweight duration we've been underweight bonds. We call it diversify your diversify buyers. I think a 60, 40 bucket. Right. 60 stocks, 40% other stuff used to be bonds. Well, not in this world that we've been living in at least since 2022. We have some things if you drop it hit your foot, it hurts gold manage futures. You know, different things like that have done commodities in general done really well in the other bucket. I think in this world of a little bit higher inflation, more volatile inflation world, you still want to be. Oh, you want to have those things in your other bucket. Not just be just simply bonds because boy, bonds have not really done much to help portfolios really the last, you know, let's call it five years or so.

[A]

Interesting point. I was also struck by word that apparently actively managed ETFs are rising in popularity. They say this is to some extent with older generations who want a little bit like you said of that managed volatility. You know, they want stock exposure but they don't want downside. Right. As they're about to, you know, kind of hit their required minimum distributions and things like that. But I just look and go just stick with the S and P. I mean you're the way that the. As strong as the market's been, why give up any. Why give up anything in active management fees when you can just, you know. So I understand if someone, maybe they're 58 years old, they don't want to hear that. But I think for younger age groups it's hard to see an argument for not just going with a low cost broad index fund.

[B]

I don't disagree with you. You know, working on an RIA we preach for the long term now there's. Everyone's a little bit different obviously when it comes to that. But again that's why we've been overweight equities. But I think you mentioned S and P. S and P has done obviously very well. I think this is still a global bull market. I mean last year obviously a lot of parts of the world did better than the US US still did fine. S&P up 16% last really complaining. But this year we're seeing more that Continuation. We do think the US Might do a little bit better in the rest of the world the second half of this year, but owning some emerging markets, owning developed international, owning things around the globe in this global bull market that we're in. One quick one on this. I mean Germany just last year, early last year broke out above levels. It was trading out in 2007. So to think like Europe is super extended because of the run it's had, we'd say no in a lot of ways, you know, developed internationals rally might just be starting for a lot longer than people think here.

[A]

You need to come back so we can argue about this a little bit because that's the one I just can't wrap my head around. I look at what's happening with the German economy, what we might be doing, you know, to their car exports now on top with the drama around the Strait of Iran and Strait of Hormuz and other things. But you markets are more dispassionate than that. They you know, I believe you. If you're saying you think we see, you know, long term breakouts there now.

[B]

We do and I mean quickly on that. I think a lot of us because expectations, I mean this time a year ago, well let's call 18 months ago, nobody and I and maybe you could argue us in that camp really thought let's go overweight develop international, let's go evenweight developed international. We even weight developed international since maybe March of last year. Not saying we're huge bulls on it, but the expectations just got so low and the economic data came in a little bit better. I mean look at earnings. I mean I know it's a broken record. Everyone's about earnings. But look at earnings around the globe. I mean they are strong around the globe and Europe's doing just fine on that front too. So those are positives.

[A]

All right, Ryan, appreciate you joining us. Kick things off today. Remarkable rally here as we're discussing Ryan Dietrich with the Carson Group. Banks the price of oil is actually falling today. It's down a little bit to 102 for WTI and 110 for Brent as Defense Secretary Pete Hegg says the cease fire is holding despite those attacks from Iran on the uae. And shipping giant Maersk says one of its ships has crossed the strait successfully under US Protection. Let's bring in Halima Croft global head of Commodity strategy at RBC Capital and a CNBC contributor. Halima, great to see you again. And I guess the the US has carved out this lane where I don't know if they, you know, they cleared the mines. There's this lane where they're trying to kind of send ships through. Maybe they're having some success with that. So is this the beginning of the end?

[C]

I mean, Kelly, they're talking about the lane that's close to Oman. But many shipping companies are saying that it is still not safe to go through the Strait of Hormuz. We're talking about one ship making it through with US escort. Before the war started, we were talking about 90 to 100 ships a day making it through the Strait of Hormuz. So that is just one ship, not a signal yet of a broader reopening. And Kelly, your point about the cease fire holding, if you're sitting in the UAE and you are under now rocket fire, drone attacks, you might question whether this is really just the US not firing. Is this really a full cease fire? So we really have to wait and see over the next couple of days whether the Iranians pull back from their attacks in the uae. Was this just a couple of days of intense fire? But it's really important to say we're getting to the one month anniversary of the cease fire and we have not had anything close to a reopening of the Strait of Hormuz on a significant scale.

[A]

What comes next for you, Halima, to kind of figure out, okay, if this is the beginning, you know, of the if I'm just saying what, what would you expect to follow? You know, in other words, kind of what tells you we're building on this versus we're just going to get three ships a month through. And the situation remains cataclysmic by any other stretch. You know, from a historical point of

[C]

view, I mean, I think one ship going through with the US Escort is almost a branding exercise. It's more symbolic than substance. And what I really worry about, Kel, is, you know, we're losing 12 and a half to 13 million barrels of crude every day that normally would have made it to the world market being effectively shut in at this point. So the question is, is we get up on peak summer demand season as we approach Memorial Day and we still have this straight, effectively shot. What does that mean for diesel? What does it mean for jet fuel? What does it mean for our inventory stocks of refined products as well as just crude?

[A]

Right. And I know we talked to you as the energy expert, but you know, with aluminum prices and all these different things that have to, I don't know if you can update us at all on that situation as well, because it's not just gasoline and energy products we have to worry about.

[C]

I mean, I think the story that we really have to be talking about is what does this mean for food prices? And I just returned from this major FT global commodity summit a couple of weeks ago in Lausanne, Switzerland, and the most scary presentations are almost those on the soft commodities. And what does it mean if you can't get the straight reopen for planting season for 2027? What does it mean for a country like Brazil if it doesn't get access to the necessary fertilizer as we look out into next year? So again, I think it becomes a food story for 2027 if we don't have a plan to really fundamentally reopen the straits. And again, I would say one ship is a nice sound bite, but again, we used to have 100 chips going through that critical waterway.

[A]

And to your point about gasoline prices, 448 is the new national average right now, obviously higher. 613 in California. The weird thing, Halima, maybe not weird, you know, because people keep pointing out the reasons why, but that it hasn't had much of an impact on the consumer or on the economy in a broad, significant way. Even Windham Hotels that CEO yesterday told us no impact. You're seeing a lot of the consumer oriented parts of the market today. They're all in the green. I just wonder about that.

[C]

I mean, I wonder what happens when we get into summer. I mean, I think that's going to be the real test as we get into sort of peak summer demand season. If we don't have a resolution that gets a material improvement in terms of again, crude and diesel and jet fuel on the market. Are you really hitting an inventory wall? And we've been basically comforted in the market by the fact that we've been able to draw down inventory. But we're going to start to see those numbers really hit the screen soon. We're working off that big release of stockpiles. We've also been in the shoulder season for demand. What happens when we hit summer? Are we basically bracing for a summer shock?

[A]

All right, we'll leave it there. Alima. Really appreciate it.

[D]

Thanks.

[C]

Thank you.

[A]

LeMacroft with RBC Capital Markets Markets. Oil per barrel might be down a little bit today, but soaring energy prices and rising mortgage rates are hitting the housing market. The housing XHB ETF is coming off its worst day in more than a year. We'll have more on that. Plus later on an exclusive interview with Citadel CEO Ken Griffin live from the Milken Institute global conference will get his take on the Fed rates and more. The Exchange is back after this.

[E]

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what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back. The X HB is higher today on the back of better than expected new home sales. And get this, prices falling to a nearly five year low. But it's been a rough go for the sector. With the ETF down more than 16% from its recent 52 week high, it's off more than 20% for the ITB. What is all of this telling us about the state of the housing market? Let's ask Alan Ratner. He's the managing director at Zelman. Alan, welcome. I've been waiting to see if prices would fall because you would normally think rising mortgage rate means falling home prices. Are we actually at that juncture now?

[H]

Hey Kelly, thanks for having me in the new home market. We've been at that juncture for a few years now. You know, builders have done a good job of adjusting prices. Now a lot of that's come in the form of incentives buying mortgage rates, rates down, but you're starting to see some base price adjustments as well. So I think the industry has done a pretty good job of doing what they can to try to Bridge that affordability gap and find the demand where, where it's available. The existing market has definitely been slower to adjust and I think a lot of that has to do with the fact that, you know, right now homeowners are sitting with mortgage rates at very low rates and there's very little incentive to move unless you absolutely have to.

[A]

Oh, I understand, I hear it all the time. But do you think that home prices nationally are going to fall or is that probably out of the question?

[H]

I think any declines you're going to see are very much going to be on the margin. We're not expecting to see large declines in home prices on the existing side unless we start to see some real distress. And that's, you know, if that happens, that's going to come in the form of job losses and it's going to take time to work its way through the market. Right now we're not seeing that. In spite of all the macro noise and headwinds out there, we're seeing, you know, the consumer holding in pretty well. So in the absence of distress, we really don't see significant declines. But you know, maybe in certain markets on the edges, you will start to see prices move a bit lower.

[A]

Going back to the builders, this feels like a recipe for a margin squeeze. If they're facing falling sales prices and rising input costs.

[H]

Yeah, it's a really tough dynamic for them. Their gross margins are already down about a thousand basis points from the highs two or three years ago. And we think there's additional pressure to come up to this point. They've done a really good job of pushing back on the suppliers and the trades. You know, really the tariff costs did not flow through to the builders or the consumers. They were able to push back on those. It remains to be seen what happens with fuel here. I think the risk is, is that the suppliers push, try to push through some fuel surcharges as the year goes on and the builders are not going to be in a great position to absorb those without seeing margin pressure.

[A]

Who do you think is best and worst positioned?

[H]

So right now we're seeing relatively better trends at the higher price points, move up active adult, you know, more discretionary buyers that have benefited from this case shaped economy. So I think those builders are generally holding a better pricing and a margin standpoint. The entry level companies are in a tougher position because they really have to solve for that affordability number that that first time buyer needs in order to qualify for a loan. And the higher rates go, the more expensive it becomes to Buy down those mortgage rates.

[C]

Yeah.

[A]

And I, we talk always about the top level builders, but we also have the suppliers. And I'm just curious how those trends have been and even for like a Home Depot and a Lowe's.

[H]

Yeah. You know, on the supplier side, as I mentioned, the builders have done a really good job of pushing back on those companies in terms of, you know, them trying to push cost increases along. So they've seen probably even larger margin pressure or greater margin pressure than the builders have. And unless we see some relief on mortgage rates, I don't really see that dynamic changing anytime soon.

[C]

Yeah.

[A]

And it's low, you know, lowest price in two and a half years, I think for Home Depot, lowest share price here. So, yeah, they're certainly feeling some of the pain for now. Alan, thanks. We'll check back in soon. Appreciate it.

[H]

Thanks for having me.

[A]

Alan Ratner with Zelman. Speaking of housing, there's been a lot of pushback in local communities against data centers. So one company has an interesting answer. Just put a small data center on the side of your home in video and a major public home builder are trying to do just that. Diana Olich brings us this fascinating story and this week's Property Play. And I've always thought if you can do bitcoin mining, Diana, could you do data set? That's what the big guys are doing. Could the little guys do the same thing?

[F]

Why not? Kelly, look, it's an unlikely partnership. Span, which is a startup that makes smart home electrical panels, is teaming up with Nvidia and Pulte Group, a major home builder. Span is now making small fractional data centers, or nodes they call them, that can be put on the side of residential homes. The idea is to take advantage of unused electrical capacity on local grids, which the SPAN smart panels Find 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 hyperscalers and AI cloud providers, just tap into the node network like a regular data center. Now, SPAN collaborated with Nvidia using its technology in the system. Span claims it can install 8,000 units about 6 times faster and at 5 times lower cost than the construction of a typical centralized 100 megawatt data center of the same size. Now, Pulte Homes is in the early testing phase with these systems, which they've already 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 Electric and WI Fi, which Spann said would be roughly 150 bucks, though that's a lot less than your and my electric bill with the WI fi included. So for much more on this story and my podcast with the CEO deploying $100 million to put home closings on the blockchain, go to the free Property Play Newsletter, cnbc.com property play Kelly, it's going on the blockchain. It's going on the side of your house. It's everywhere.

[A]

I have a million questions. We try to just pick the first couple.

[D]

So.

[A]

So you pay how much? And then you put. Are there any. Are there any concerns about this much activity going on right at your house? Or no?

[F]

Okay, so two separate questions. The 150 bucks is kind of an average of what the deals are going to be. It's going to depend municipality to municipality, whether the deal goes through your utility provider or through span. Exactly. But they're saying it's going to lower your electric and WI fi bills substantially because it's like solar, where you're selling capacity back to the grid. As for is it safe, I asked the same question because I don't even sleep next to my cell phone. You know, I keep it on the other side of the room. And they said, no, it would not have any of that kind of, you know, we talk cell tension that would be around your house that you should be concerned about. Do I have the scientific readings on that? No, but that's what Sven told me.

[A]

And how big would this.

[F]

So you saw the pictures. It looks to be, I don't know, I mean, it goes next to your H Vac. So it's kind of like, I don't know, a couple of feet by a couple of feet. It's not a big box. It just goes next to your system outside. There it is.

[I]

Yes.

[A]

And so it's not that you would make extra money, it's that it would just keep down.

[F]

You would save money.

[A]

You would save money.

[F]

I mean, who knows? Because it comes with a backup battery and in some cases they also give you solar. So you could be selling back to the grid. You could be selling all this compute capacity to the hyperscalers. And over time, if this becomes popular, it becomes a big thing. Who knows if you could begin making money and not just saving money, but again, it would take a lot of these.

[A]

This is the story of the day. I want everybody's take on this. I want to know if people are going to try. I think, should we try this anyway?

[F]

That's going on. New homes now. New homes first. Existing homes.

[D]

Hmm. All right.

[A]

Something to read when you're looking at that. The new home price might be down. We can get a data center attached. Diana, thanks very much. Really appreciate it. Diana Olek Air regulation is meantime back on Washington's radar. The White House may now vet AI models before before they are released to the public. Is it simple oversight or is it government overreach? That conversation is next.

[E]

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[I]

Hi, I'm Angie Hicks, co founder of Angie. When you use Angie for your home projects, you know all your jobs will be done well. Roof repair done well. Kitchen sink installed, done well. Deck upgrades done well. Electrical Upgrade done well. Angie's been connecting homeowners with skilled pros

[A]

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So we know the difference between done and done well.

[A]

Angie the one you trust Define the ones you trust. Find a pro for your [e-mail]. We got the NASDAQ and the Small Cap Brussels hitting record highs today with a broad rally. The S and P is up 8. 10 of a percent. The Dow is actually lagging today, but it's still up about 300 points. Meantime, the White House is considering vetting AI models before they are released to the public. What would that mean for Silicon Valley and what would it mean for users? Kate Rooney has more in today's Tech check.

[I]

Kate hey Kelly. So from what we're hearing, the White House is planning to create some sort of working group and issue a possible executive order to review AI models before they are released to the broader public. This is according to a source familiar with those plans. New York Times is first to report report these details and it is not clear yet how the government and how officials would actually implement this. But this morning, one agency under the Commerce Department, which is the Centers for AI Standards, did take one step in that direction. A new report there does. Excuse me, the report that we mentioned at the top does actually appear to mark a shift in the White House stance on regulating AI overall and what has been a lighter touch approach. But it does come as the landscape and stakes for cybersecurity and I have shifted dramatically. The big driver, Kelly, is Mythos, that powerful cybersecurity model by Anthropic. It was rolled out to a smaller group of companies versus the broader public. And then JP Morgan CEO just this morning did support that limited release that was meant to give companies a head start on what bad actors might do with this technology. Diamond was on stage with Anthropic CEO Dario Amadi and Andrew Ross Sorkin, who was leading that interview. Amaday has been a proponent of more standardized guardrails around this, but he did push back on the FDA as any sort of model for this.

[B]

We don't want a wild west where

[E]

you can just do anything.

[H]

Right.

[B]

We chose to do what we did

[A]

with, with Mythos, but there's.

[B]

There was literally no law, no requirement, you know, preventing us from just offering this thing the wild with no safeguards.

[E]

So should there be?

[B]

That's not. Yes.

[A]

So that's not.

[B]

That's not going to work. Now, the example you gave to the fda, I think the fda, you know, slows down medical progress a lot. So, you know, that's a cautionary tale in the other direction.

[I]

So Kelly, no fda, but he actually said the automotive industry would be a much better model. He said, can't really just start a company without making sure there are brakes involved. Cal, back to you.

[A]

Also, there's so many updates to model. You know, it's a version six point, one point, two point, whatever. So with this be just for kind of big new formative products like a cloud, or would this literally be for every iteration of a lot of the existing models and the ones that are to come?

[I]

Well, it's a great point because it's really dog ears when we look at these models. You have these incremental updates versus a model as powerful as Mythos. It seems like it would be the step function changes. But again that there's these technologists, the people that are actually in charge of updating these models have such a specific, specific niche. I mean, they've described it as, you know, there are only a handful of AI folks with the technological background. They talk about it as sort of the NFL players. There's only a handful that can actually do this. It's not clear how they would work with the government. What is required of the AI labs to disclose the takeaway and from what I'm hearing is that the government wants a heads up on this. They don't want to be surprised by a model like Mythos. And Anthropic is really not the only one working on this. I'm told. OpenAI has a cybersecurity model that's catching up. Amadou on stage said that China was about six months behind other labs or maybe one to three months behind. But they're coming. So it's not going to be just Anthropic and Mythos. There are others really chasing them and other countries, possible adversaries out there working on the same things. Right.

[A]

Exactly. And all the more reason to make sure that we stay current while, you know, having some oversight. Kate, really appreciate it. Thanks. Kate Rooney, thanks. Over to Contessa now for the CNBC news update.

[D]

Contessa.

[C]

Hey there, Kelly. The Education Department has opened a civil rights investigation into Smith College's admittance of transgender students. The probe is focusing on whether the women's school in Northampton, Massachusetts violated anti discrimination laws by allowing transgender women to enroll. College said it received notice of the Title 9 investigation but does not comment on pending government investigations. U.S. regulators have opened an inquiry into Morgan Stanley's investment banking program in Hungary, according to the Wall Street Journal Journal, which reports regulators are looking into allegations that unlicensed junior investment bankers in Budapest are working on deals for clients in the US And Europe. Firm hired the bankers from across Europe two years ago as a part of an effort to move the jobs overseas. CNBC has reached out to Morgan Stanley for more comment. And Xbox is overhauling its leadership in a bid to improve shrinking sales. The Microsoft unit CEO told employees she's bringing in new executives with consumer and technical expertise that the company just lacks. Last week, Microsoft reported its fourth gaming revenue decline in the past six quarters. And Kelly, that's the news right now.

[A]

Back to you, Contessa. Thank you very much. Contessa Brewer. Coming up, intel hitting a new all time high on reported chip talks with Apple. But look at those shares up another 14%. If you're a little worried, you got to hear from from Katie Stockton. She's going to talk about why we could be due for some profit taking after this massive run. We'll dig into that next. Welcome back to the exchange at 525 on the VanEck SMH ETF. Unbelievable. It's up nearly 4% today. Intel is leading the gains. Those shares are rallying for 14% as Apple reportedly considers using its chips in US made devices. My next guest has a little bit of a warning here about the chips being overbought. Says we could see some profit taking soon. Katie Stockton is Fairlead Strategies founder and Managing Partner. She's also a CNBC and pro contributor. Katie, it's good to see you. How would you describe this action in the SMH broadly here?

[G]

Well, I mean it's really parabolic, the up move and that's both in absolute and relative terms. The strong positive momentum is still obviously there. We're seeing it today even in SMH and a lot of its constituents. And that in and of itself is not a reason to sell or counter trend these semiconductor stocks. In fact, it's usually inadvisable to counter trend something that is at new all time highs. And yet we have been watching the dynamic between the semiconductor sector and also the software names and it's getting pretty interesting because we have, when we look at the ratios of the SMH to The S&P 500 and IGV, which is a software ETF relative to the S&P 500, they're now sending countering messages. So in other words, the SMH ratio is quite overextended based on the demarc indicators, whereas the IGV ratio is overextended on the downside. So you have to wonder if maybe this kind of pear trade that we think is certainly out there among institutions, meaning long, semi, short software, will start to unwind a little bit in the short term and there. And of course we be very sensitive to any downtick in the momentum.

[A]

Right. Would you say the same thing about the memory names? Obviously another huge day for sandisk. I know you've looked at the chart of Micron, similar patterns there.

[G]

Well, it's interesting those names have not been the primary source of these counter trend signals in absolute terms. I think this week we have one in SanDisk that is suggesting we'll get into a consolidation phase there. But we don't have one for Seagate, we don't have one for Western Digital nor Micron. So kind of interesting that these semiconductor names that are focused on memory are not the subject or subject to these cell signals in the way that broader space is. That all said, we are seeing gaps up day after day and Micron I think is the poster child of that. It's the first gap off of a pullback that you want to add exposure, not the third or the fourth typically. So what we can do is just have a sell discipline. And if you're short term and trading these names, we don't want to see Micron come back into these gaps very quickly. And for us that usually means within a few days. As an example, today's low is around 605 and a half for Micron. Someone who owned it as a trade, they probably want to see it uphold that gap in the coming week or so.

[A]

Want to call out, Katie, a few other things. I'm not sure I'll have time to get to all of them. But you mentioned software. You're actually looking there for a compelling turnaround and a newfound source of leadership. Wouldn't that be we're about to hear next hour from ServiceNow. So we'll see if that bears out the health care sector similar thing. You see potentially a corrective low and maybe some support for Bitcoin.

[G]

Well, I think you're seeing that we're a little bit more interested in these turnarounds. You know, areas of the market that have been down, trending or in cyclical down moves like bitcoin, like health care, like parts of software because those are less overstretched in their appearance. They have fewer sell signals. And of course within these segments of the market you have improved intermediate term momentum. So you can apply it to really all of those downtrending segments have seen their weekly MacD's improve with the strength that we saw in April. So it's a bit more interesting to us as a way to position for any upside follow through in the second quarter. We still have to view some of these moves potentially as counter trend, even in the likes of Oracle, but something that might be tradable.

[A]

All right, Katie, thanks for joining us today. A lot of different places where you could be seeing these inflection points. Appreciate it very much. Kenny Stockton with fair lead. Up next, Citadel's Ken Griffin joins us live from the Milken Global Conference with the single best investment opportunity he's seeing right now. The Exchange will be right back. Welcome back to the Exchange. Tensions between the US And Iran reigniting over the past few days. Although the cease fire according to US Officials is still in place. Last month Citadel's Ken Griffin warned the Strait of Hormuz closure could trigger a global recession. Has his outlook changed since? Let's head to Beverly Hills to find out where. Ken Griffin joins us from the Milken Global Conference in an exclusive interview with our very own Sarah Eisen. Hi, Sarah.

[D]

Hi Kelly, good to see you here from the Milken Conference. And with me is Ken Griffin, the founder and CEO of Citadel. We just got off stage together and here we are on cnbc. It's good to have you as always.

[E]

Great to be here, Sarah.

[D]

So Kelly started off with talking about some of the risks as the Strait of Hormuz has remained closed. And there are questions about when and how this war ends and how investors should be digesting all of it. How are you thinking about it?

[E]

So we're very focused on how long the stalemate will persist for. And the United States has done an extraordinary job from a military perspective of containing the Iranian military. Unfortunately, we have yet to reopen the straits and that's going to take a period of time that's just very hard to estimate or to determine. The upshot? If the straits remain closed for another 6, 912 months, energy prices around the world will go materially higher. It will push the world into a global recession. The United States, because of our energy independence, will fortunately be largely shielded from the worst of it.

[D]

So does the market action make sense to you? The fact that the stock market is back to all time highs?

[E]

Look, the stock market's looking at the incredible earnings success that American companies have enjoyed. Another great earnings period so far. American businesses across virtually every sector putting up record profits. The stock market's very focused on the here and now success story being written across American firms.

[D]

But do you think it's underestimating risk of inflation, consumer demand?

[E]

So, so inflation. We have now lived with inflation for, for six years. It's been a long journey on the inflation front. And the good news is, is that inflation is not accelerating in a meaningful way at this point in time, but it's still clearly above, above target. I think if you look at the state of the labor market, you look at the inflationary risks created by the war. The ability for the head, for the Fed to cut rates is certainly diminished in this environment. But the market is really focused on the continued success story that American companies have had in growing their bottom line.

[D]

So you think that longer this last global recession, but not U.S. recession.

[E]

So, so we end up in a global recession. Clearly that's going to hit us Growth prospects may push the United States into a recession, but of all the countries in the world, we will have one of the greatest stories of resilience. The real problem is a country like Pakistan or Bangladesh which has lost both access to the long term fuel sources they've had from the Middle east and the high cost they will incur to replace that lost energy. It's the developing countries that are really going to face the brunt of the pain from the war in the Middle East.

[D]

Do you think the President's doing the right thing with this war?

[E]

With this war? I believe the President has done a great service to humanity by curtailing and containing Iran's nuclear ambitions. The combination of the strikes on their nuclear facilities last year, this strike or this war this year, has set back Iran's nuclear ambitions by years, if not a decade or more. And a nuclear free Middle east is really important both to regional security and ultimately to the security of Western countries, Europe or the United States, which could be impacted by a nuclear warhead in the wrong hands. And I think we should be very thankful that the President has really worked hard to contain the nuclear ambitions of the Iranian people.

[D]

And yet it is so unpopular in this country.

[E]

I don't think the President's really made his case to the American people properly that this is about not only regional stability in the Middle east, which has important ramifications for the entire world, but is also important to Western societies. He should have made that case, I think, much more aggressively, much more publicly at the start of or before the start of this round of escalation with Iran.

[D]

Yeah, to the American people, but also to the European leaders, it seems as well.

[E]

Well, the American people, I think, would listen to the President more than the European people would. And Europe needs to help carry some more of the water on these important geopolitical issues.

[D]

You think it's a mistake that they're not helping more open the straits?

[E]

Absolutely. I mean, Europe has depended upon American military strength and capability since World War II. We helped maintain stability and peace during the Cold War. Europe has benefited from the Americans willingness to spend on their defense. The Europeans should be there for us in a more profound way in this moment in history.

[D]

So I do wonder if you see, I mean, because of, it's unpopular, because gas prices are high, because we've been in this sort of long period of inflation. Now if you see political ramifications, we're heading into the midterm elections and whether that, that presents a risk.

[E]

So there's, there's no doubt with the high inflation that we had during the Biden administration and much higher than inflation that we're seeing today, that the American, the American people and in particular retirees and those who are living on fixed savings accounts have really seen their purchasing power diminished. Yes, I mean, we, we took away from people's retirements in a profound way. Due to the economic policies of the Biden administration. Now Trump is president. People want to see that return to having more purchasing power at the cash register. You know, if you look at the price of eggs, you look at the price of fast food, you look at the price of housing, look at the price of almost anything in life, it's materially higher than it was just seven years ago. And so when gasoline prices go higher, I think it's really triggering to the American people that the inflation genie is back out of the bottle again. And I think Trump has to deal with that reality that the American people have just had it when it comes to inflation. And unfortunately, I think he's being disproportionately blamed for the diminution in purchasing power, the story of which was really written during the pandemic days of the Biden

[D]

administration and all the money that got injected into the economy afterwards. So, I mean, do you see the Democrats taking Congress?

[E]

So it's almost a certainty the Democrats will take the House. That's the nature of almost every midterm election cycle, is the House seats swing in favor of the opposing party. The Senate will be the big battleground in this midterm. The Republicans will almost certainly keep the Senate, but that will be the political battleground in this election cycle.

[D]

You mentioned within the inflationary context, the Federal Reserve markets priced out rate cuts for this year. Do you think there's a risk of rate hikes in this kind of environment?

[E]

There's. There's always a risk of rate hikes when inflation has gone above target, and it's been persistently above target now. And the labor markets are strong. And there's signs that the labor market weakness that we worried about just three or four months ago is largely dissipating. If we do see the labor market strengthen, we do see prices continuing to be, or inflation above target, I think you could have a conversation about hikes later this year. Not my expected case, but a stronger labor market would certainly open the door

[D]

to that possibility, even under a new Fed chair, Kevin Warsh, who looks likely to be confirmed. Confirmed and is coming in appointed by a president who has made it very clear he wants lower interest rates.

[E]

Look, I think President Trump made a great choice with the nomination of Kevin. I think Kevin's incredibly qualified to do the job. And I think, most importantly, I think he is well versed in economic policy and theory. I think he will make the decision that's the right decision for the American people when called upon to do so.

[D]

The independent decision raised independents Questions about the Fed recently. I mean, the President, just this week he posted a meme of Jay Powell falling into a dumpster.

[E]

Yeah, I can't explain what happens between Jay Powell and the President. It just befuddles me.

[D]

You know, I think wants lower rates,

[E]

the President wants lower rates, but the President also wants to control inflation.

[D]

Right.

[E]

And. And I think Powell's caught in between a rock and a hard place to say the least.

[C]

East.

[D]

Should he have stayed on as governor? What do you think of that decision?

[E]

Look, I think with the dynamics at play with respect to the DOJ investigation into Powell and the Fed, I, I absolutely understand Paul's decision to stay on, to see this through from the vantage point of being on the Fed board.

[D]

You do?

[E]

I do.

[D]

That's probably why he did it.

[E]

And I was, I was with a group of executives, about 300 corporate CEOs and I will tell you, they all applauded Powell for his maturity, grappling with the situation, his willingness to serve the American people and the leadership that he has shown all of us during his time on the Fed.

[D]

The other big theme that everyone's talking about here and that will impact our trajectory is AI and just where we are in the adoption of it and whether the trillions of dollars that is being spent right now will ultimately be worth it. What do you think?

[E]

So here's what we know. We know that AI today is profoundly better than AI was just nine months ago. The rate of change within the AI, the AI toolkit has been breathtaking. In fact, it's far exceeded even my thoughts as to how fast it could evolve. And I have a pretty long background in software development myself. So I think that most of us have been caught a bit flat footed with the rapid rate of development that we've seen in AI now thus far. How much has it impacted the real economy? Modestly. But. But corporate America for the last few years has, has deeply embraced the use of technology digitization optimization to profoundly improve their businesses. The AI dialogue in the C suite has really turned into how do we re engineer our businesses to be digitally capable and digitally front footed in a way that has markedly improved productivity and profitability in corporate America. So although we have yet to see the real impact of AI in the bottom line, we're certainly seeing a meaningful impact of a more thoughtful use of technology on the bottom line across corporate America.

[D]

Okay, I have to ask you about New York City and what you're going to do after the mayor posted that video outside your apartment. One of your apartments in New York City and demonized you, advertising his bed of terror tax. How did you react to that when you first saw it?

[E]

I actually had to see it a second time because the first time I couldn't believe what I was watching. And I'll tell you, it took a moment to digest what I was watching. What really upset me about the video was the fact that he put me in harm's way. You know, he seems to have forgotten that the CEO of another American company was assassinated just blocks from where I live in New York. And to put any citizen in harm's way is just inappropriate for one of our political leaders. I have no longstanding fights or issues or dynamics between Mandami and me. To turn me into a political puppet was just in poor taste, really poor taste. The tax itself is a tax that discriminates against a narrow group of people is also disconcerting. You know, our company is thinking about making a six billion dollar investment in New York City.

[D]

350 park, right?

[E]

Are they going to now have a special tax rate for those that own office buildings who live out of state? Like, where's this stop in New York? New York's got a problem. New York has to put the spending back in control. They've got to show the people of New York City and New York State that the enormously expensive and large government that they have created over the last 30 years actually delivers value to the taxpayers.

[D]

Are you going to go through with that building?

[E]

We probably will go through the building when it's all said and done. But I got to tell you, it's a real topic of debate. The only decision that we've made with no regrets in the last few days is to expand the size of our office footprint in our new Miami headquarters.

[D]

Just in the last few days, you made that.

[E]

Yes, we.

[D]

Reaction to New York.

[E]

In reaction to New York, we filed the permit with the city of Miami. We've added several hundred thousand square feet of new space in our new building. We will add far more jobs in Miami over the next decade as an immediate and direct consequence of the mayor's poor decision here with respect to his. His posting of that video.

[D]

I believe you met with Governor Hochul afterwards as well. What was that like?

[E]

That was. I'll sum it up. I'll sum it up as no comment. Sum it up as no comment. Okay, sum it up as no comment.

[D]

But you'll probably go through with the building. I guess the question is, you know, you.

[E]

I mean, here's what's disappointing, right? The comments from the Governor's office after this was that Mandami scored political points.

[D]

Spokesperson said that? Yes.

[E]

Wow. Like, that's real leadership.

[D]

Governor Hogan, they're playing both sides, right?

[E]

I'm being as sarcastic as I could be here. You know, what New York City needs and what New York State needs right now is a government who takes on the bloated, wasteful government that puts an incredible burden upon the lives of all New Yorkers. And with 1% of New York taxpayers paying 45% of all the taxes, cities in a precarious position if they make those who create value feel like they're best off moving their businesses and their lives to other jurisdictions.

[D]

Is New York City different? New York? We have best talent. We have the best everything. I mean, I know you left Chicago because of some of this stuff, but

[E]

I used to hand politicians a photo album of Detroit. Why Detroit? Detroit was the most wealthy city in America per capita in the 1950s. Detroit was the powerhouse of our country.

[D]

And then.

[E]

And then a photographer a few years ago did a phenomenal photo book of the carnage of New York City. The rotting buildings this empty stages, the vacant and dilapidated homes. It's an absolutely heartbreaking book to see. How is it the most successful city in America wound up in bankruptcy and despair in just 50 years? I don't think any city should be so arrogant as to believe that it is immune to economic realities and to the hard, cold fact that when people that drive success are told they're not welcome or invited, that they will leave. We were in California.

[D]

Yeah.

[E]

They have a proposed bailout initiative to create a wealth tax here in California. Larry Page's child is now a classmate of my children in Miami. And a substantial number of the business leaders in California have fled to Texas and to Florida and to other states in just a few months. Now, people go, well, like, you know, the progressive left goes, good riddance, but who's going to pay the bills? And with them goes jobs. With them goes management experience. You know, what we forget is that very few people have the gifts to run these large, complicated businesses. We need them at the helm of these business.

[D]

Elections have consequences. Ken, thank you very much for speaking out on this and for all your candid thoughts on all these top mind issues for investors and everyone else.

[E]

Ken Griffin, Sarah, great to be here.

[D]

Yes. Kaz, Ken Griffin, Callie, back over to you.

[A]

So much to both of you. Power Lunch is going to pick up our coverage of Milken and the markets

[F]

right after the break.

[E]

Hey, Fidelity. How can I remember to invest every

[D]

month with the Fidelity app. You can choose a schedule and set up recurring investments in stocks and ETFs. Huh.

[E]

That sounds easier than I thought.

[A]

You got this?

[E]

Yeah, I do.

[A]

Now, where did I put my keys?

[D]

You will find them where you left them.

[B]

Investing involves risk, including risk of loss.

[E]

Fidelity Brokerage Services, llc. Member nyse, SIPC.