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Diesel and Heating Oil Prices Enter Dangerous Territory · The Financial Exchange Show

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  Speaker 1: is The Financial Exchange with Chuck Zotta and Mike Armstrong.
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  Speaker 2: Chuck, Mike, and Tucker with you here on a Jobs Friday.
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  Speaker 2: For all of you on the road right now going
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  Speaker 2: wherever you're going for Labor Day weekend... I hope the
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  Speaker 2: traffic is flowing swiftly, and I hope the grill is
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  Speaker 2: fired up wherever you're going. And if you're more of
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  Speaker 2: a pizza oven type guy on Friday, I can understand
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  Speaker 2: and respect that, too. So, again, thanks for joining us.
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  Speaker 2: We did get a jobs report at 8.30 a.m.
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  Speaker 3: This morning.
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  Speaker 2: Bang-up number for the upside here. when we look at 162,000
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  Speaker 2: jobs created versus estimates of 40,000 to 50,000.
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  Speaker 3: So good numbers there.
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  Speaker 2: Unemployment rate unchanged at 4.1%, and previous months revised up
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  Speaker 2: by a total of 55,000 for the last two months. So, Mike,
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  Speaker 2: this gets it, again, just where I've been for the
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  Speaker 2: entire year, which is... Boring, not exciting, but hey, the
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  Speaker 2: labor market's fine. It's not great. It's not terrible. If
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  Speaker 2: you overreacted and panicked when we had 22,000 or 23,000
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  Speaker 2: jobs lost in July, you shouldn't have panicked. Likewise, if
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  Speaker 2: you're doing a jig today, I don't think that's quite
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  Speaker 2: warranted either because this is the only month above 100,000.
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  Speaker 3: Since, I think, April. I think it's April. So, again,
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  Speaker 3: the labor market right now is telling you I'm not
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  Speaker 3: getting worse.
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  Speaker 2: I'm not getting better. I'm just fine. And that's okay.
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  Speaker 2: Not everything has to be the best or worst ever.
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  Speaker 2: Sometimes things are just doing fine, and they can do
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  Speaker 2: exactly that.
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  Speaker 4: Yeah, there's plenty of excitement this year from all sorts
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  Speaker 4: of areas in the economy. The labor market doesn't need
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  Speaker 4: to be the one that you get all hot and
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  Speaker 4: bothered about.
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  Speaker 3: Exactly.
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  Speaker 2: So in response to this, we do have stocks selling
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  Speaker 2: off very modestly. And quite honestly, this is one of
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  Speaker 2: those where it's like, oh, the Fed's.
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  Speaker 3: Going to hike.
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  Speaker 2: And so good news is bad news. Honestly, I got
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  Speaker 2: to be honest, I don't understand that right now. Even
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  Speaker 2: if the Fed does hike in September, A, it's one hike. B,
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  Speaker 2: the U.S. economy is strong enough to be able to
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  Speaker 2: stomach not just one hike, but probably a few without problems.
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  Speaker 2: And if you look at where the growth in the U.S.
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  Speaker 2: economy is coming from, it's not coming from rate sensitive sectors. Mike,
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  Speaker 2: is housing the leading thing in the U.S. economy right now? No,
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  Speaker 2: the housing markets kind of sucked for the last four years.
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  Speaker 2: The thing that is bringing the economy forward right now
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  Speaker 2: is AI data center construction, and that is not a
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  Speaker 2: rate-sensitive sector.
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  Speaker 3: It's just not.
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  Speaker 2: You know, if, give you an example, if tomorrow, or
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  Speaker 2: I guess if in two weeks, the Federal Reserve, if
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  Speaker 2: Kevin Warsh and the gang get together and they say, hey,
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  Speaker 2: you know what, we're going to hike not by a
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  Speaker 2: quarter percent, we're going to hike by 1%. Does Google
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  Speaker 2: come back like three weeks later and say, well, we
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  Speaker 2: were going to build a data center, but now the
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  Speaker 2: cost of capital is too high, so we're out?
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  Speaker 4: No, and it's unclear to me, by the way, if
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  Speaker 4: Google's cost of capital would actually increase if the Fed
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  Speaker 4: hiked rates by 1%.
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  Speaker 3: Yeah.
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  Speaker 2: You know, the only company where that might be the
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  Speaker 2: case is Oracle. And that's just because Oracle is in
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  Speaker 2: a different borrowing class than the other hyperscalers. And so
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  Speaker 2: I think Oracle's the only one that you could point
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  Speaker 2: to and be like, eh, things might be a little
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  Speaker 2: rate sensitive there.
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  Speaker 3: Like, I'll acknowledge that. Sure.
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  Speaker 2: But that's because Oracle's trying to borrow hundreds of billions
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  Speaker 2: of dollars during a time where their revenue is not
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  Speaker 2: hundreds of billions of dollars. And so it's a fundamentally
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  Speaker 2: different proposition than the Zuck coming down from his tower
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  Speaker 2: and saying, hey, who wants to buy some Metabombs?
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  Speaker 3: Metabombs. They're a lot more appealing than they actually are.
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  Speaker 3: They do. They do.
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  Speaker 2: So this is kind of where we are right now.
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  Speaker 2: I'm just not convinced that good news is bad news,
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  Speaker 2: even though the market's interpreting it that way. Mike, I
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  Speaker 2: do have one thing that I want to talk about
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  Speaker 2: with interest rates and how they're moving today.
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  Speaker 3: Please.
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  Speaker 2: So hotter than expected employment report. What would you expect
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  Speaker 2: interest rates to do? you might expect them to go up.
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  Speaker 3: You would, okay?
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  Speaker 2: 30-year Treasury is down four-tenths of a basis point. 10-year
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  Speaker 2: is up one basis point right now. Again, I pay
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  Speaker 2: attention to when the market response doesn't match.
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  Speaker 3: What you would expect. Especially when it, again, did this morning, right?
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  Speaker 4: You had the 10-year up over 4.8 at 8.45 this morning.
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  Speaker 2: Doesn't it, at least here's what it signals to me,
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  Speaker 2: It signals to me that everyone who wants to be
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  Speaker 2: short duration in bonds right now already is.
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  Speaker 3: Okay.
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  Speaker 2: That's the message I get because if it really were, hey,
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  Speaker 2: growth is hotter and it caught everyone by surprise, oh,
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  Speaker 2: everyone sells their bonds because we got to get out
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  Speaker 2: of bonds. And you don't have that today. This is
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  Speaker 2: not a disorderly move. We've seen some where it's like, hey,
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  Speaker 2: 10 years up, 15 basis points or 20 basis points
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  Speaker 2: in a day, and you're like, okay, some hedge fund's
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  Speaker 2: going under.
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  Speaker 3: That's not what we're seeing today. Today, it's okay.
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  Speaker 2: The 10 years up, one basis point. It's not even
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  Speaker 2: worth getting out of bed for. It's not worth putting
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  Speaker 2: a new shirt on. Why would you do that? Dollar
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  Speaker 2: index is up a quarter percent today to 99.125. Gold
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  Speaker 2: down $ 68 an ounce to 44.71.
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  Speaker 3: We got crude oil.
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  Speaker 2: West Texas Intermediate is down 65 cents a barrel to 90.65.
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  Speaker 2: AAA national average for gas prices moving up today. Another
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  Speaker 2: only half a cent, 4.14 and change. Diesel, though, up
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  Speaker 2: 7 cents overnight to 5.85, a new cycle and all-time high.
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  Speaker 2: on the diesel price there nationwide and potentially some additional
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  Speaker 2: movement coming there as well. We're actually going to be
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  Speaker 2: joined in a little bit by Tom Cosa. He is
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  Speaker 2: the chief energy advisor for Gulf Oil and the co-founder
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  Speaker 2: of Opus. And so he's going to be joining us
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  Speaker 2: next segment actually to talk about what's going on in
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  Speaker 2: energy markets. I know that we've talked about them a
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  Speaker 2: lot over the last six months or so. Tom is
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  Speaker 2: eminently more qualified than Mike or I to talk about
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  Speaker 2: these things. So I think it's worth sticking around to
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  Speaker 2: hear what he has to say.
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  Speaker 3: Let's take a quick break here.
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  Speaker 2: And when we come back, Tom's going to join us
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  Speaker 2: to talk about energy markets next.
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  Speaker 3: As promised, we're now joined by Tom Closer.
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  Speaker 2: He's the chief energy advisor for Gulf Oil and a
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  Speaker 2: co-founder of Opus. And he's going to talk to us
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  Speaker 2: a little bit about what is going on in energy
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  Speaker 2: markets right now.
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  Speaker 3: Tom, appreciate you joining us today.
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  Speaker 5: Thanks for having me.
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  Speaker 3: Tom, when we look at the.
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  Speaker 2: State of worldwide energy markets right now, where do you
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  Speaker 2: see the most tightness and where do you see areas
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  Speaker 2: that there is still some slack there?
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  Speaker 3: In the system?
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  Speaker 5: Not much slack in the system. And as a matter
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  Speaker 5: of fact, I think a lot of people are getting
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  Speaker 5: it wrong. The focus is appropriately on the Iran war,
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  Speaker 5: but really beneath the surface of that, there's some other
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  Speaker 5: things happening. You go back to 1865 when the Gatling
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  Speaker 5: gun revolutionized warfare. And what we're seeing now is that
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  Speaker 5: drone warfare is really having a huge impact on energy infrastructure.
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  Speaker 5: We've lost about 7 million barrels a day of global refining,
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  Speaker 5: a lot of it in Russia, a lot of it
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  Speaker 5: in the Persian Gulf, some of it in the Red Sea,
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  Speaker 5: and even Libya. And we've lost it because people have
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  Speaker 5: discovered that it's possible to knock out a $ 5 billion
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  Speaker 5: refinery with a $ 10, 000 drone. So I'm watching this. that.
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  Speaker 5: I think that's the most telling thing that's happening right now.
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  Speaker 5: But we're seeing record prices today, the highest prices ever
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  Speaker 5: for diesel in the United States, which probably means the
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  Speaker 5: highest prices for heating oil in places where you guys
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  Speaker 5: are familiar with.
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  Speaker 2: Tom, when we look at diesel in particular, I was
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  Speaker 2: taking a look through the EIA numbers earlier this week,
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  Speaker 2: and in particular on the East Coast, it looks like
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  Speaker 2: we're getting towards some pretty dodgy places. Normally, I've kind
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  Speaker 2: of poo-pooed when we get down to these levels because
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  Speaker 2: there hasn't been these ongoing conflicts that represent potential supply disruptions.
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  Speaker 2: But what's your sense for how tight the diesel supply
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  Speaker 2: could get in the United States, but specifically on the
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  Speaker 2: East coast where it is used heavily for heating oil
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  Speaker 2: as well.
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  Speaker 1: Yeah.
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  Speaker 5: Well on the East coast, uh, it's actually not as
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  Speaker 5: bad as it is right now in the center of
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  Speaker 5: the country, which is odd. Uh, but the East coast
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  Speaker 5: has got some real challenges ahead. Uh, there's a refinery
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  Speaker 5: that Irving operates up in, uh, Newfoundland, New Brunswick, and they're, uh,
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  Speaker 5: going to be down for about two months. And, uh, very,
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  Speaker 5: very low inventories, but you don't have record prices on
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  Speaker 5: the East Coast. I think that comes probably later this fall.
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  Speaker 5: You know, the problem with heating oil and diesel is,
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  Speaker 5: you know, people get obsessive about gasoline and they do
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  Speaker 5: change their behaviors. They change their behavior, not necessarily when
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  Speaker 5: it hits a certain price, but when they think that
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  Speaker 5: they're getting ripped off. With diesel, it's much different. You know,
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  Speaker 5: I don't know what it would take to create demand destruction.
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  Speaker 5: You know, we've got the highest prices ever from, let's say,
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  Speaker 5: Oklahoma up through the Dakotas and Minnesota right now. And
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  Speaker 5: you're still going to be harvesting grains in the field
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  Speaker 5: and so forth. So it's frightening.
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  Speaker 2: And this is also coming right as the holiday shipping
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  Speaker 2: season kicks off. And it's not like I would see
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  Speaker 2: Walmart saying, well, we're not going to ship our stuff
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  Speaker 2: because the price of diesel is too high. They've got
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  Speaker 2: to get the stuff to the stores.
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  Speaker 5: Yeah, and you're going to see the fuel surcharges are
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  Speaker 5: going to be sky-high, as high as they've ever been.
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  Speaker 5: And everything that moves around throughout the country moves by
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  Speaker 5: virtue of some sort of transportation that tends to run
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  Speaker 5: on diesel.
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  Speaker 2: Tom, why are we seeing more tightness in record prices
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  Speaker 2: in diesel, whereas we're still 85 cents away on the
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  Speaker 2: gasoline side?
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  Speaker 3: Why is that not moving in tandem? You know.
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  Speaker 5: this weekend marks the end of what they call the
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  Speaker 5: mythical driving season. And when the final numbers are in,
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  Speaker 5: it's going to show that we probably, let's throw up
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  Speaker 5: COVID year of 2020. You have to go back to
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  Speaker 5: 2001 to find less consumption of gasoline in the country. Now,
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  Speaker 5: we're not sure exactly where people stopped driving or whether
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  Speaker 5: a lot of it was due to remote working and
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  Speaker 5: so forth. But the numbers that we're seeing so far
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  Speaker 5: for like June and July, we haven't seen demand this
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  Speaker 5: soft since 2001. Boy, that's a long time to go,
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  Speaker 5: you know, particularly since you probably added 30, 40, 50
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  Speaker 5: million people in that time.
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  Speaker 2: Tom, the more that I read energy analysts about what's
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  Speaker 2: gone on this year, the more I see them pointing
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  Speaker 2: towards China as a key influence both on the crude
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  Speaker 2: side and on the refined product side. Can you talk
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  Speaker 2: a little bit just about the influence that they've had
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  Speaker 2: in these various markets and how they've gotten us to
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  Speaker 2: where we are today?
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  Speaker 5: Yeah, you know, China has become, we used to talk
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  Speaker 5: about Saudi Arabia and then the United States as the
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  Speaker 5: swing producers. China is the swing buyer right now. And
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  Speaker 5: for one reason or another, and you don't know because
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  Speaker 5: it's a command economy there, They took their buying of
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  Speaker 5: crude oil down from about 11 or 12 million barrels
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  Speaker 5: a day before the war to maybe five or six.
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  Speaker 5: And nobody knows exactly why they did that. I think
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  Speaker 5: they probably had some economic slowdowns, but they haven't really
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  Speaker 5: ramped up since then. They're going to come back to
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  Speaker 5: the market. They're living off of crude oil that they
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  Speaker 5: purchased in 23, 24, and 25 when prices were cheap.
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  Speaker 5: But yeah, it's very, very difficult to figure out what
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  Speaker 5: they're doing there. They have some of the spare refining
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  Speaker 5: capacity in the world. And for one reason or another,
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  Speaker 5: they haven't chosen to use it. And that could help
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  Speaker 5: on the side of diesel and jet fuel prices. But
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  Speaker 5: China is a tough one to figure out. It's not
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  Speaker 5: as though there's a democracy there. So we're not sure
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  Speaker 5: exactly who's calling the shots.
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  Speaker 2: When we look at the onshore inventory depletion that's taken
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  Speaker 2: place over the course of this year, what are your
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  Speaker 2: thoughts as to how long it takes for that to
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  Speaker 2: return back to normal inventory levels? And I guess even
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  Speaker 2: before that, how do we know when we're going to
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  Speaker 2: even start to be able to build inventories consistently again?
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  Speaker 3: What do we need to look for?
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  Speaker 5: We're not going to be building inventory for a while. And,
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  Speaker 5: you know, one of the things, you know, there's been
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  Speaker 5: a lot of, there was a huge glut. You would
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  Speaker 5: hear people talk about a super glut back in January
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  Speaker 5: and February, and we probably would have had that. But,
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  Speaker 5: you know, and the estimates of how much oil we've
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  Speaker 5: lost to the Persian Gulf issue and Strait of Hormuz
• 15:40
  Speaker 5: and Red Sea, you know, they're anywhere from about 500
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  Speaker 5: million barrels to over a billion. One thing I would
• 15:46
  Speaker 5: stress is that you'll hear a lot of numbers bandied about.
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  Speaker 5: And wow, oil products, storage, production, they are not measured
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  Speaker 5: with precision instruments at all. You know, the one thing
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  Speaker 5: I would say that's interesting about the market is that
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  Speaker 5: the president, I think he stumbled into this. It wasn't
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  Speaker 5: three-dimensional chess, but he was very successful in verbally intervening
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  Speaker 5: and taking a lot of sizzle out of owning crude oil.
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  Speaker 5: If this were normal and this were 2008 or 2012,
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  Speaker 5: there'd be so much more financial money parked, you know,
• 16:24
  Speaker 5: hoping for higher oil prices. But he basically, you know,
• 16:28
  Speaker 5: kept putting out threats on crude social. So people, you know,
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  Speaker 5: basically bought that buying crude oil. But they have been
• 16:36
  Speaker 5: buying a lot of diesel and a lot of gasoline.
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  Speaker 5: And over in Europe, they call it gas oil, which
• 16:42
  Speaker 5: is their heating oil and diesel oil. And there's a
• 16:45
  Speaker 5: lot of speculative money that are bet on higher price
• 16:48
  Speaker 5: outcomes there.
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  Speaker 2: What are the things that we need to watch for
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  Speaker 2: in order to know that the worst is over when
• 16:55
  Speaker 2: it comes to gas and diesel prices?
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  Speaker 3: What should we be paying attention to?
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  Speaker 5: Wow, it's going to be tough. I think we're in
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  Speaker 5: for a lot of trouble on diesel prices. I do
• 17:06
  Speaker 5: think on gasoline that we've moved through a driving season
• 17:10
  Speaker 5: which didn't have much lift. So I think the worst
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  Speaker 5: is over, although you're going to see some higher prices
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  Speaker 5: in the next few days. I think it's kind of
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  Speaker 5: the grand finale of the season. I'm really worried about
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  Speaker 5: diesel and heating oil. The whole world is short. You know,
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  Speaker 5: even though I mentioned that statistics for oil aren't very reliable,
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  Speaker 5: there's pretty much widespread acclimation that the world has never
• 17:33
  Speaker 5: had lower diesel and heating oil stocks going into a
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  Speaker 5: winter than we have right now. So I think people
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  Speaker 5: need to prepare for that. I hate to say this.
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  Speaker 5: You know, it takes away from my, you know, any
• 17:46
  Speaker 5: potential as being a motivational speaker. But I think you
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  Speaker 5: may see stupid, stupid numbers for diesel and heating oil. Six, seven,
• 17:56
  Speaker 5: eight dollars a gallon. We're already seeing numbers in California
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  Speaker 5: right now that are like Boeing aircraft. 747, I think
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  Speaker 5: it was yesterday. And, you know, the rest of the world.
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  Speaker 5: can get acclimated to those numbers somewhat because they don't
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  Speaker 5: regard high fuel prices as the third rail of politics
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  Speaker 5: like we do. But it looks scary. Better for gasoline.
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  Speaker 5: Gasoline prices, I do think, will drop in the remainder
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  Speaker 5: of the year. But diesel and heating oil and, to
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  Speaker 5: a lesser extent, jet fuel looks pretty scary. If you
• 18:31
  Speaker 5: see a hurricane, go into the Gulf of Mexico or,
• 18:34
  Speaker 5: you know, a storm that's like cat two, three or four. Yeah.
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  Speaker 5: Forget it. I mean, you're talking apocalyptic numbers after that.
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  Speaker 2: Well, Tom, hopefully it doesn't come to that, but I
• 18:45
  Speaker 2: appreciate you joining us today. I appreciate all the information.
• 18:48
  Speaker 2: I know our listeners do too. So thanks so much
• 18:50
  Speaker 2: for taking the time.
• 18:51
  Speaker 5: Yeah, sorry if I brought anybody down, but that's my job.
• 18:54
  Speaker 2: No, listen, you've been saying some of the stuff that
• 18:57
  Speaker 2: we've been talking about for the last month, so it's
• 18:59
  Speaker 2: good to have it come from a source that is
• 19:02
  Speaker 2: more reliable than just what we're reading. But I appreciate
• 19:05
  Speaker 2: you joining us again.
• 19:06
  Speaker 5: If you live in New England, buy a sweater or
• 19:08
  Speaker 5: a slinket. That's what I would say.
• 19:10
  Speaker 3: There you go. That is Tom Kloza.
• 19:12
  Speaker 2: He is, again, the chief energy advisor for Gulf Oil
• 19:16
  Speaker 2: and the co-founder of Opus Oil. talking to us about
• 19:19
  Speaker 2: what is going on in the energy market today. We're
• 19:23
  Speaker 2: going to take a quick break, but when we return,
• 19:26
  Speaker 2: we've got Wall Street Watch and trivia coming up.
• 19:40
  Speaker 1: Bringing the latest financial news straight to your radio every day.
• 19:44
  Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
• 19:50
  Speaker 3: Time now for.
• 19:51
  Speaker 1: Wall Street Watch. Tracking the stocks, the data, and the
• 19:54
  Speaker 1: headlines driving markets so far today. Right here on the
• 19:57
  Speaker 1: Financial Exchange Radio Network.
• 20:01
  Speaker 6: Well, markets are in negative territory after the August jobs
• 20:06
  Speaker 6: report revealed 162,000 jobs were added last month, well above
• 20:11
  Speaker 6: estimates of 55,000. The unemployment rate held steady at 4.1%.
• 20:17
  Speaker 6: Right now, the Dow is down over two-thirds of a
• 20:20
  Speaker 6: percent or 365 points lower. S & P 500 down
• 20:24
  Speaker 6: about half a percent. NASDAQ also down about half a
• 20:28
  Speaker 6: percent or 124 points off. Russell 2000 is mostly flat.
• 20:33
  Speaker 6: Ten-year treasury yield is up one basis point at 4.776%.
• 20:35
  Speaker 6: Dan Oil down about three-quarters of a percent, trading at
• 20:43
  Speaker 6: $ 90 a barrel. Lululemon tanking 17% after the activewear retailer
• 20:50
  Speaker 6: cut its outlook for the second time this year after
• 20:53
  Speaker 6: another quarter of declining sales. Elsewhere, Volkswagen jumped 7% overseas
• 20:59
  Speaker 6: after the automaker's board approved a plan to double job
• 21:03
  Speaker 6: losses to 100,000 and have its model portfolio as it
• 21:08
  Speaker 6: continues to contend with tariffs and Chinese competition. And movie
• 21:13
  Speaker 6: theater chain and popular meme stock AMC Entertainment is seeing
• 21:17
  Speaker 6: its stock jump about 8% after the company's CEO criticized
• 21:22
  Speaker 6: Robinhood's stock tokens that follow the price of stocks. Like AMC.
• 21:28
  Speaker 3: I'm Tucker Silva.
• 21:29
  Speaker 6: That is Wall Street Watch.
• 21:32
  Speaker 2: Mike, let's talk a little bit about mortgage rates climbing
• 21:35
  Speaker 2: to their highest level since July 2025. According to Mortgage
• 21:40
  Speaker 2: News Daily, we actually saw a little bit of relief
• 21:42
  Speaker 2: yesterday as the 30-year fixed rate mortgage came in at 688,
• 21:45
  Speaker 2: down from 691 the day before. But the fact is, hey,
• 21:49
  Speaker 2: we started this year with mortgage rates down around 6%.
• 21:53
  Speaker 2: We actually got to 599.
• 21:55
  Speaker 3: At the end of February.
• 21:56
  Speaker 2: And we're sitting here today about 1% above that low,
• 22:00
  Speaker 2: and that has certainly been a drag on the housing
• 22:03
  Speaker 2: market this year.
• 22:04
  Speaker 4: Yeah, no doubt. We did spend most of 2023, 2024,
• 22:07
  Speaker 4: and half of 2025 in this same general 7% range.
• 22:08
  Speaker 4: There was even a brief period back in 23 where
• 22:10
  Speaker 4: we hit nearly 8% on that, or we might have
• 22:12
  Speaker 4: hit a couple days over 8% there.
• 22:13
  Speaker 3: But I think we got to 795 and change. I'm looking.
• 22:28
  Speaker 3: I got 794 on Mortgage News Daily, October 16th.
• 22:32
  Speaker 4: Yeah, I see October 19th, 803. But in any case. Oh, yeah,
• 22:38
  Speaker 4: I'm only on the weekly. Yep, you're right.
• 22:40
  Speaker 3: In any case, we are substantially lower than that.
• 22:44
  Speaker 4: But there is clearly still a big psychological impact here
• 22:48
  Speaker 4: and dollar impact of, mortgage rates pushing up against 7%.
• 22:54
  Speaker 4: On the seller side, it is causing a lot of
• 22:57
  Speaker 4: folks to sit this one out and wait for more
• 23:01
  Speaker 4: buyers to appear with a lower interest rate. And on
• 23:04
  Speaker 4: the buyer side, it's a lot of missing inventory out
• 23:10
  Speaker 4: there to consider. So I don't think this will be
• 23:14
  Speaker 4: devastating news for the housing market. I'm not anticipating any
• 23:18
  Speaker 4: sort of big price swings on homes.
• 23:20
  Speaker 3: It can't get slower.
• 23:22
  Speaker 4: But yeah, there's just, you know, it's not good news
• 23:25
  Speaker 4: for builders. It is not good news for really anyone
• 23:27
  Speaker 4: operating in the housing sector that relies upon transaction volume
• 23:32
  Speaker 4: to move their business forward.
• 23:35
  Speaker 6: Leaving your IRA to your children may sound like the
• 23:39
  Speaker 6: obvious choice, but how they've received that money could have
• 23:43
  Speaker 6: important tax consequences. Cushing and Dolan has a new guide,
• 23:47
  Speaker 6: Why Name Your Estate an IRA Beneficiary. Under current rules,
• 23:51
  Speaker 6: most adult children who inherit an IRA must withdraw the
• 23:55
  Speaker 6: money within 10 years. That can mean taking retirement distributions
• 23:59
  Speaker 6: while they're still working and earning income potentially creating a
• 24:03
  Speaker 6: larger tax bill. That's one reason why your IRA beneficiary
• 24:07
  Speaker 6: should be part of your overall estate plan. Who receives
• 24:11
  Speaker 6: the account, how they receive it, and the tax consequences
• 24:14
  Speaker 6: that may follow all deserve careful consideration. Get Cushing and
• 24:19
  Speaker 6: Dolan's new guide called Why Name Your Estate an IRA
• 24:23
  Speaker 6: Beneficiary by calling 866-848-5699.
• 24:24
  Speaker 3: That's 866-848-5699.
• 24:31
  Speaker 6: Or you can request the guide from their website, LegalExchangeShow.com.
• 24:36
  Speaker 1: The proceeding was paid for and the views expressed are
• 24:38
  Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
• 24:40
  Speaker 1: or Armstrong Advisory may contact you offering legal or investment services.
• 24:43
  Speaker 1: Cushing and Armstrong do not endorse each other and are
• 24:45
  Speaker 1: not affiliated.
• 24:47
  Speaker 2: Mike, really fun piece to talk about here from MarketWatch, actually.
• 24:51
  Speaker 2: One that I hadn't really thought about in depth. Will
• 24:54
  Speaker 2: a data center hurt your home's value? Research says no.
• 24:57
  Speaker 2: Sellers disagree.
• 24:58
  Speaker 3: So.
• 24:59
  Speaker 2: Let's talk about the actual downsides of data centers first.
• 25:05
  Speaker 3: They're ugly. They are ugly, but not necessarily.
• 25:09
  Speaker 4: They don't have to be, but most of them that
• 25:11
  Speaker 4: I've seen are pretty ugly.
• 25:13
  Speaker 2: I've seen ones that look like high schools. It's like, okay,
• 25:17
  Speaker 2: it's fine. How much of this would be okay if
• 25:20
  Speaker 2: you just dressed it up with a few stone columns
• 25:23
  Speaker 2: or something like that?
• 25:25
  Speaker 3: They use a ton of power. Yep. Got it.
• 25:28
  Speaker 2: When the hardware goes bad, you've got to throw it out,
• 25:31
  Speaker 2: and that creates some waste of electronics and stuff like that.
• 25:35
  Speaker 3: They can be loud, from what I understand? Yep, can
• 25:38
  Speaker 3: be loud. They can use a lot of water.
• 25:40
  Speaker 5: Yep.
• 25:41
  Speaker 3: And those are kind of the big things.
• 25:45
  Speaker 2: So here's how I land on this, is most of
• 25:47
  Speaker 2: the actual problems, aside from the noise, don't actually affect
• 25:52
  Speaker 2: you if you live right next to them.
• 25:53
  Speaker 3: Right, they're going to affect you if you live.
• 25:54
  Speaker 4: 15 miles from them or 30 feet from them.
• 25:58
  Speaker 2: Like the, the power usage, unless the data center is
• 26:01
  Speaker 2: coming with like a new, you know, power turbine for,
• 26:04
  Speaker 2: you know, not gas or coal or whatever.
• 26:08
  Speaker 3: It's not affecting you if you live next to it.
• 26:10
  Speaker 2: The waste from it, like, okay, Chip got burnt out
• 26:14
  Speaker 2: and we've got to throw it out? Well, they're not
• 26:15
  Speaker 2: going to put it in your yard.
• 26:17
  Speaker 4: It's unlikely that it's going to result in a toxic
• 26:20
  Speaker 4: waste spill that falls into your well. Correct.
• 26:24
  Speaker 2: So this leads me to my set of questions that
• 26:27
  Speaker 2: I want to ask you, Mike, and not just you,
• 26:29
  Speaker 2: but all of our listeners, in terms of what would
• 26:31
  Speaker 2: you rather live next to? Because I think this is
• 26:35
  Speaker 2: an interesting way to assess this. Mike, would you rather
• 26:38
  Speaker 2: live next to a data center or a coal power plant?
• 26:44
  Speaker 3: Data center. Data center or nuclear power plant? I'm a
• 26:50
  Speaker 3: little bit neutral there.
• 26:51
  Speaker 4: I don't know enough about living next to a nuke,
• 26:53
  Speaker 4: but probably a data center.
• 26:55
  Speaker 3: Okay. Data center or oil refinery? Data center. Data center
• 26:59
  Speaker 3: or skyscraper?
• 27:02
  Speaker 1: Data center.
• 27:04
  Speaker 3: Push.
• 27:04
  Speaker 5: Push.
• 27:05
  Speaker 3: Yeah, I'm a bit of a push on that one.
• 27:06
  Speaker 3: It's going to block the sun. That's skyscraper. Oh, it's true. Yep, yep.
• 27:09
  Speaker 3: Skyscraper's going to block the sun.
• 27:11
  Speaker 4: Yep, yep.
• 27:11
  Speaker 3: Good point. What if it's a tall data center? They
• 27:14
  Speaker 3: don't exist. Oh, that's true. Data center or mall? Oh,
• 27:20
  Speaker 3: data center. That's not even close. That's the easiest one
• 27:22
  Speaker 3: out of all of them. You want the mall traffic
• 27:24
  Speaker 3: right outside of you? Oh, forget it. Data center or
• 27:27
  Speaker 3: Amazon Logistics Hub? Push. The Amazon Logistics Hub aren't as
• 27:32
  Speaker 3: busy as you think they are.
• 27:33
  Speaker 6: I could just walk and get my package.
• 27:35
  Speaker 2: Data center or landfill?
• 27:38
  Speaker 3: Data center. So my point on this is like when
• 27:41
  Speaker 3: push comes to shove and you talk about the stuff
• 27:43
  Speaker 3: that people really don't want to live next to. Data
• 27:46
  Speaker 3: center might be like 10th. It doesn't rise to that
• 27:49
  Speaker 3: level in my opinion. Yeah.
• 27:50
  Speaker 4: You know, I think the concerns that people have are
• 27:52
  Speaker 4: much more regional ones about water usage, electricity usage, and
• 27:55
  Speaker 4: what that's going to do to, you know, me and
• 27:58
  Speaker 4: my region and my costs.
• 28:01
  Speaker 3: Look, I think all else equal.
• 28:02
  Speaker 4: If you have an empty field in your backyard and
• 28:05
  Speaker 4: you put a data center and nothing else changes, I
• 28:08
  Speaker 4: would expect my home value to drop with that in mind.
• 28:13
  Speaker 4: That's not how the world works. All else is not
• 28:15
  Speaker 4: held equal. And in many cases, your electricity costs could
• 28:18
  Speaker 4: go up, but your property taxes could go down. And
• 28:22
  Speaker 4: that is where these data center builders need to do better.
• 28:26
  Speaker 4: They need to sell Americans on why you should allow
• 28:29
  Speaker 4: this in your neighborhood because otherwise they're not going to
• 28:32
  Speaker 4: get very far.
• 28:32
  Speaker 2: Let's take a quick break. When we return, we are
• 28:36
  Speaker 2: going to be joined by the one, the only, Paula
• 28:39
  Speaker 2: Monica from Barron's next.
• 28:42
  Speaker 1: From markets to money to business and financial news, watch
• 28:46
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• 28:49
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• 28:52
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• 29:00
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• 29:03
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• 29:06
  Speaker 5: Ladies and gentlemen, the weekend.
• 29:09
  Speaker 6: Well, if you missed any of our shows from this week,
• 29:14
  Speaker 6: you can find them on our YouTube page. We stream
• 29:16
  Speaker 6: the show live every day, but also archive every hour
• 29:19
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• 29:29
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• 29:30
  Speaker 3: Joining us now is Barron's Paul LaMonica.
• 29:33
  Speaker 4: Paul, happy Friday. Thanks for joining us. Happy Labor Day weekend.
• 29:36
  Speaker 4: All set to jet.
• 29:38
  Speaker 3: Out of New York. Are you sticking around?
• 29:41
  Speaker 7: I'll be sticking around here and fighting off this cat
• 29:46
  Speaker 7: that has decided she wants to join the show right now.
• 29:50
  Speaker 3: Good luck with that. That is not going to be easy.
• 29:54
  Speaker 4: Paul, for the last few years, when we talk about
• 29:57
  Speaker 4: the stock market, frankly, artificial intelligence and the hyperscalers have
• 30:02
  Speaker 4: been kind of absorbing all of the oxygen in the room,
• 30:05
  Speaker 4: not leaving a whole lot of media time for anybody else.
• 30:09
  Speaker 4: But you point out in your piece today that health
• 30:11
  Speaker 4: care stocks are ripping this year. What are we seeing
• 30:15
  Speaker 4: from health care companies in 2026 so far?
• 30:18
  Speaker 3: Yeah, it's interesting.
• 30:19
  Speaker 7: The past couple of months, health care has outperformed the
• 30:22
  Speaker 7: broader market. And I think a lot of that has
• 30:25
  Speaker 7: to do with it's sort of a good place to
• 30:29
  Speaker 7: be right now if you're playing offense or defense on
• 30:33
  Speaker 7: the offense side. earnings growth is really starting to pick up,
• 30:39
  Speaker 7: thanks in large part to GLP-1 drugs, as well as
• 30:44
  Speaker 7: other medications and advances with regards to cancer treatments. We've
• 30:49
  Speaker 7: seen the Moderna and Merck news and how those two stocks,
• 30:53
  Speaker 7: Moderna particularly, really soared on some of the optimism there.
• 30:58
  Speaker 7: But there's also been merger activity in the biotech sector,
• 31:02
  Speaker 7: which is fueling gains. And then on the defensive side,
• 31:06
  Speaker 7: these are still your kind of classic bond proxy dividend yield.
• 31:12
  Speaker 7: They're great for conservative investors looking for income. They tend
• 31:17
  Speaker 7: to be more sellable. steady growers, even in a volatile
• 31:22
  Speaker 7: economy because of an aging population. So you have demographic
• 31:26
  Speaker 7: trends that make them a little bit less subject to
• 31:30
  Speaker 7: some of the macro concerns that might be plaguing investors
• 31:34
  Speaker 7: in more growth-oriented stocks. So it is kind of like
• 31:37
  Speaker 7: the best of both worlds right now. And then the
• 31:39
  Speaker 7: valuations are reasonable also.
• 31:42
  Speaker 4: Talk to me a little bit about the GLP-1 companies,
• 31:45
  Speaker 4: because I have to imagine they are sitting on a
• 31:48
  Speaker 4: boatload of cash, given what we are seeing with those sales.
• 31:52
  Speaker 4: Are we starting to see some merger acquisition activity in
• 31:54
  Speaker 4: the space?
• 31:55
  Speaker 3: What are they doing with these boatloads of cash?
• 32:00
  Speaker 7: Eli Lilly is a company in particular that is making
• 32:05
  Speaker 7: acquisitions using some of the strength that it has as
• 32:11
  Speaker 7: a result of its GLP-1 franchises. I think that that
• 32:16
  Speaker 7: is something that you're going to see going forward. They
• 32:19
  Speaker 7: are not the only company, Lilly, that is making acquisitions.
• 32:22
  Speaker 7: We have seen Companies like Gilead Sciences, a prominent biotech,
• 32:27
  Speaker 7: also making some moves in acquisitions, GSK as well. There
• 32:33
  Speaker 7: is accelerated interest, I think, that many companies in big
• 32:39
  Speaker 7: pharma and the larger biotechs recognize that they have a
• 32:43
  Speaker 7: lot of cash on hand. And in some respects, it's
• 32:46
  Speaker 7: easier to buy promising new drugs that are in the
• 32:51
  Speaker 7: pipeline than and develop them than it is to kind
• 32:55
  Speaker 7: of use R and D to develop them themselves. I mean,
• 32:57
  Speaker 7: obviously they're doing both, but sometimes acquisitions are a quicker fix.
• 33:02
  Speaker 4: Paul, uh, you mentioned them briefly, but Moderna, as well
• 33:05
  Speaker 4: as I think it was Merck had, uh, big releases
• 33:08
  Speaker 4: on cancer treatments just in the last few weeks.
• 33:10
  Speaker 3: Moderna, I remember that day, I think their.
• 33:12
  Speaker 4: Stock doubled or more than doubled in, in a single
• 33:15
  Speaker 4: day's movement with the release of their cancer treatment. Um,
• 33:19
  Speaker 4: what are you hearing when you, you know, read through
• 33:23
  Speaker 4: things and understand what they are doing in the cancer space?
• 33:26
  Speaker 4: Because I've read a few times that, you know, some
• 33:30
  Speaker 4: are saying we are on a bit of a cusp
• 33:31
  Speaker 4: when it comes to cancer treatment and we could see a.
• 33:34
  Speaker 3: Lot more of this.
• 33:35
  Speaker 4: Is that an accurate description to describe the moment we're in?
• 33:40
  Speaker 7: I mean, I think that is the hope. You know,
• 33:43
  Speaker 7: there are, you know, analysts and fund managers and obviously
• 33:48
  Speaker 7: people in the medical community who have much more expertise.
• 33:53
  Speaker 7: I cover the stock market. I am not an oncologist
• 33:56
  Speaker 7: by any stretch of the imagination. It would obviously be
• 33:59
  Speaker 7: fantastic news if these companies are able to develop tailored
• 34:05
  Speaker 7: sort of medications that are really targeted that can help
• 34:10
  Speaker 7: eliminate the numerous forms of cancers that are out there
• 34:16
  Speaker 7: that are the cause of death for many. I think
• 34:21
  Speaker 7: that we are still probably a ways off from having
• 34:26
  Speaker 7: some magical cure, if you will. Investors need to keep
• 34:30
  Speaker 7: that in mind and not get overly optimistic. Cancer drugs,
• 34:34
  Speaker 7: like any other drugs for chronic illnesses, You know, you're
• 34:39
  Speaker 7: going to have trial results. You're going to have the FDA,
• 34:42
  Speaker 7: you know, approvals and approvals around the world, other regulatory
• 34:47
  Speaker 7: agencies that are going to make many of these stocks
• 34:51
  Speaker 7: incredibly volatile over the coming years. I don't think we're
• 34:54
  Speaker 7: going to get to, you know, a scenario where, you know,
• 34:59
  Speaker 7: a company like Moderna, Merck or other big biotechs and
• 35:02
  Speaker 7: pharma companies are able to say definitively we've defeated cancer.
• 35:07
  Speaker 3: No, certainly not.
• 35:08
  Speaker 4: Paul LaMonica from Barron joins us today to talk about
• 35:10
  Speaker 4: the healthcare sector. It's both offensive and defensive nature.
• 35:14
  Speaker 3: Thanks so much, Paul. Have a great Labor Day weekend,
• 35:16
  Speaker 3: and we will catch you next week. Thanks a lot.
• 35:18
  Speaker 7: Have a good one, guys.
• 35:20
  Speaker 3: Chuck, what do you have for us for Stack Roulette?
• 35:23
  Speaker 2: Tesla begins offering rides in a car without a steering wheel.
• 35:28
  Speaker 3: Oh, great. I saw a video of this, actually.
• 35:30
  Speaker 5: Yeah?
• 35:32
  Speaker 3: It's literally just a seat with.
• 35:33
  Speaker 6: A tablet in front of you, and the car is driving.
• 35:37
  Speaker 2: They're rolling these out in Austin now to test them.
• 35:40
  Speaker 2: We don't have a sense of exactly what the numbers are,
• 35:43
  Speaker 2: or we don't know if there's anyone operating these from
• 35:49
  Speaker 2: a remote location or helping if they get into trouble.
• 35:53
  Speaker 2: So we don't know the specifics of exactly how it's
• 35:56
  Speaker 2: going to work right now. But these vehicles, the CyberCab,
• 35:59
  Speaker 2: they were first unveiled about two years ago. And it
• 36:03
  Speaker 2: looks like they're going to try to make a run at...
• 36:06
  Speaker 2: actually getting them operating.
• 36:08
  Speaker 4: Yeah, and to be fair, I know I was critical here,
• 36:10
  Speaker 4: but if you are going to be serious about having
• 36:14
  Speaker 4: autonomous cabs, then you need to make them cheaply. And
• 36:19
  Speaker 4: the steering wheel and gas pedals are an unnecessary cost
• 36:22
  Speaker 4: if it is entirely an autonomous vehicle. It obviously limits
• 36:26
  Speaker 4: who you can sell the thing to, but it is
• 36:30
  Speaker 4: kind of, I think, a necessity for Tesla and probably
• 36:32
  Speaker 4: for Waymo if they want to actually make this a
• 36:35
  Speaker 4: fundamentally serious business model is stripping out a bunch of
• 36:38
  Speaker 4: the features that are frankly not necessary if you're not
• 36:41
  Speaker 4: using it for a car that a human can drive.
• 36:45
  Speaker 2: I guess the question that I have is like, what's
• 36:46
  Speaker 2: the downside of having the wheel and pedals as a backup?
• 36:52
  Speaker 3: Cost. That's it.
• 36:54
  Speaker 4: I mean, it's more functionality that you have to build
• 36:56
  Speaker 4: into the vehicle that you wouldn't otherwise have to pay for.
• 37:00
  Speaker 2: And so I guess the calculation they're going to eventually
• 37:02
  Speaker 2: get to is, is the cost of that complexity cheaper,
• 37:07
  Speaker 2: or is the cost of that complexity higher than the
• 37:10
  Speaker 2: cost of needing to get a tow truck every time
• 37:11
  Speaker 2: the thing stops working?
• 37:13
  Speaker 3: Right.
• 37:15
  Speaker 4: Yeah, I guess I don't know the answer to that question.
• 37:18
  Speaker 4: I guess Waymo would probably be the best potential answer
• 37:22
  Speaker 4: to that, right? How often do you actually have to
• 37:24
  Speaker 4: put a human being in the driver's seat of these
• 37:27
  Speaker 4: vehicles in order to get them out of there? Yeah.
• 37:30
  Speaker 3: Yeah.
• 37:31
  Speaker 4: Because honestly, you might be towing them anyway because they're
• 37:33
  Speaker 4: all electric vehicles. And so they really get stuck and
• 37:36
  Speaker 4: screwed up. I guess you can send somebody out there
• 37:40
  Speaker 4: with a diesel generator and charge it back up. But
• 37:43
  Speaker 4: by the time you do that, it might just be
• 37:44
  Speaker 4: better off towing the thing to your lot and fixing it.
• 37:48
  Speaker 4: Taking a look around at markets, we've got the Dow
• 37:51
  Speaker 4: off 300 points, half a percent. S & P off
• 37:54
  Speaker 4: 32 or four tenths of a percent. NASDAQ similarly down
• 37:57
  Speaker 4: four tenths of a percent as we close today. Out
• 38:00
  Speaker 4: the week, close out the show. We'll be back at
• 38:02
  Speaker 4: it next week with a big inflation week. So tune in,
• 38:05
  Speaker 4: have a great Labor Day weekend, and we will see
• 38:07
  Speaker 4: you on Tuesday.