Energy Secretary Interview, Low-Beta Stock Picks, Nucor CEO Exclusive 10/27/26

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0:49Tech stocks and hopefully your money are higher as Anthropic revives the AI trade. Welcome to Power Lunch, everybody. I am Brian with Kelly. We'll get that. Plus, the moves in oil. U.S. oil dipping below$100 a barrel. This as the war in Iran about to hit now its ninth month. Secretary of Energy Chris Wright will join us to talk nuclear, Iran, LNG, and more. Plus, steel. New course profit. More than doubled. stronger steel prices and volumes, lifting results, revenue topping expectations. The CEO is here. Looking forward to that. And the shares are up 6 % today. Plus, portfolio playbook. With the Fed decision ahead and mega cap tech earnings, which will be another test of the AI trade, investors are weighing whether to put in new money.

1:32Two portfolio managers join us with five stock picks they say belong on your radar. But first, let's start with the markets as chip stocks rally for a second straight day. Broadcom among the winners after announcing a$63 billion financing deal to help Anthropic buy its AI chips and networking gear. AMD and Micron also up, and there's plenty more to digest with many big cap earnings on deck this week. You can see it there on Wednesday, Microsoft and Alphabet. Thursday brings us Amazon, and then we get the Fed's decision on interest rates in less than 24 hours. Let's bring in Elizabeth Burden to make sense of it all.

2:06She's the chief strategist at Fortress. It's great to see you again. Good to see you. It seems like all that matters are CapEx numbers and these earnings still. But what do you think matters? I guess it turns out Anthropics filing matters, too, when it gives us that level of detail about the return on its business and so forth. Yeah. I mean, we've seen this before in the last year or so where things tend to jump around around earnings. And, you know, good news can be bad news and bad news can be bad news. But but there's a lot to kind of look through. But I do think, you know, one of the main risks that we see in the markets is this disappointment on maybe CapEx spend and AI and the productivity results coming from it.

2:43So you think the disappointment could be that the CapEx, that the spending is there, but the results are not or that they start to even pull in the cap? Because we can't talk about that yet. So I understand that that's that's years from now. The CapEx that they would even pull it in. Yeah. Yeah. So I think that, you know, back in March and April, we were talking about what the CapEx numbers might be and if those would change. That was a greater worry then. But I think now we're thinking about, you know, how does this translate into earnings and dollars and revenue? But any sort of reason to look for a hiccup, I think that's what investors are looking for right now and getting a little bit more cautious.

3:16You've seen risk indicators pull back in just the last two weeks where they've been kind of frothy throughout the last six months. S &P 500 hasn't done, I think the technical term is squat, in about three months. It's pretty much the same price as it was in early August. I think people are waiting on the elections. We'll see what happens. I know you're not super bullish. I heard you a couple weeks ago on this fine network. Not super bullish on equities. What's it going to take, though, to get you more interested in equities? I'm not not bullish on equities. I would just say that I'm more measured here.

3:48So you think about the S &P up through year-to-date, up through September. at 14, you know, 7 % of that is AI. So there's a large component of that being driven by, you know, a single theme and really just a single company that's not even public yet. So I think that there's some precarious positioning in there. I wouldn't bet against AI for sure. But when I think about S &P in general, if you look at earnings and the equity risk premium you're getting, essentially you can get 5 % in bonds or you can get an extra quarter of a point in yield in equities. Like, why would you gamble on, you know, that 0.25?

4:24Like, that doesn't make a lot of sense to me. At this point in the cycle, I'd be looking for additional ways to protect my portfolio. Do you have a strong point of view on kind of what the Fed does? Do you and your dad ever debate these things, by the way? Like three or four times a day, all day back and forth. Yes. And he's always like, you can't say that. So what do you think about kind of the wisdom of another rate hike and the likelihood of another hike or two here? Look, I really like Kevin Warsh. I think he should have hiked in July. I think that with 9 % odds, which I just saw on your screen a moment ago, there is no reason for 9 % being the hike odds for tomorrow unless we're getting forward guidance.

4:58So, newsflash, we've been getting forward guidance, even if it's not coming from the Fed chair. It's coming from, you know, the two other most important members of the Fed. So, you've got – Well, are they giving guidance or are they giving their opinion? That's what I don't know. Because if it's their opinion, it may be different than what the Fed chair thinks. That is true. But maybe they're giving guidance on their opinion, let's say. But let's also say that we've got 12 independent voters now. The only real reason that I can think why they wouldn't hike, maybe there was, you know, some communication last month where Orsh said, you know, I'll skip the next meeting if you're on my side for this one, right?

5:34You hike now. Now, that's really backing yourself into a corner right now because the data has not changed since July when he told us that he was going to be data dependent. Nothing has really gotten better or worse. We've seen more of the same. You can read into the markets anything you want. But labor looks about the same, if not a little bit more crackier. You've got PPI. You've got PCE. These are all PCE, CPI above three. So let me go back to my previous question then. Can the stock market not rally? What is this, a double negative? Will it take lower rates for the stock market to rally? Like, is the Fed in charge of the equity market now, or is it still the AI story?

6:13Is that a better question? I think it kind of depends. We've seen it shift back and forth throughout the year, and I think it's all things kind of in one. You know, we were just talking two weeks ago, are these rate levels too difficult for the equity market? And my answer there was no, that they're not. So we could get, you know, 100 basis points in rates, and we might not see cracks in the equity market happening. I'm just curious, I mean, not to speak to Fortress's positioning in this too, too much, but I'd love to hear about, I mean, like, is there more opportunity? Look what Rick Reeder is talking about this week, right?

6:47The most opportunity he's seen in the credit markets almost in his entire career. And I'm just curious if you kind of weigh in on that. Yeah, I think that we're really excited about the opportunities in the credit markets, right? In real estate credit and in corporate credit. There should be a lot. One, we've got a maturity wall upcoming. Two, I think we're seeing when we talk to our partners, we're seeing that folks that thought they were going to wait on a realization when hoping rates were going to come back down, they're not coming back down. Now they're like, well, I'm not going to kick the can.

7:18Maybe we actually have to transact here. So I think there is a real opportunity. And actually, it doesn't need a recession to have like a pretty good, you know, distress cycle. We're seeing more credits that are getting stressed and that creates opportunity. So I think it's a really good setup for that. I would say it's not a great setup for private equity. If anything, in private markets and real estate and credit, it's an opportunity there. And just to restate that, the reason why, and this is on the front page of the Wall Street Journal today, but, you know, high rates are just taking their toll on a lot of businesses that were bought during the low rate era in software, a lot of concentrated bets there.

7:50I think that's right. And then the last thing I'll say without getting, you know, too in the weeds on economics here. But if there's any doubt in anyone's mind that productivity is not going to pay out in the next 12 months, why would you be in the equity? You want to be in credit, right? I would just want to be in a more senior part of the capital structure there rather than having all my eggs in one basket, because then you've got more than just one story. All right, Elizabeth, sit tight for one second, because I'm going to follow up, but I've got a it's called the bond report. And speaking of technology, there's a report out that Meta's $25 billion stock sale, stock sale, ended five times over subscribe.

8:26Why are we talking about a stock sale in the bond report? Because normally companies have been issuing debt to pay for their AI hopes and dreams. Now, Elizabeth Burton, I know you're not a meta person. We're not asking you specifically about meta, but maybe do you expect to see more equity starting to pay for the trillions in spending? Because it's been a debt story largely until now. I'm going to punt on your question and answer a different one. I would say you're going to see a broadening out of where you're getting the financing from. So I don't know if it's debt or equity, but you're going to see more locations, not just the U.S., start kicking into being a participant there.

9:03I think that has to happen. Like what, Europe? They're going to find money somewhere? You've seen some of them. Where are they getting the money? They're broke. I'm not going to beat up on Europe today. I feel like the news headlines are doing a good enough job of that. But I do think you'll have to see it broadening out from more places. There was a comment from one of our clients that I saw on a note earlier that said they're worried about the amount of supply that needs to happen. And I'm not worried about supply coming to market. Do you remember when gluten-free was a big thing and you'd go to the carts in New York and they're like, our bananas are gluten-free?

9:34You're going to start to see people that shouldn't be trafficking in this start to get a piece of it and start to play a part. It's a problem with bananas. They are gluten-free. They are gluten-free. Yeah, but they're just not advertised. This chair is gluten-free. We should eat that, too. You like pleather? Oh, you're trying to get me in trouble with animal activists? No. That's my goal, Elizabeth Burton, is to get you in trouble. Thank you. Great job. Thank you for joining us. Elizabeth Burton, chief strategist at Fortress, if we didn't say. And don't forget, we'll be down in Washington tomorrow for our special Fed show.

10:04For tomorrow's big decision, starting around 1 p.m. Eastern, we'll bring you to the decision, the press conference, the market reaction, and so much more. We've got a market flash on Boeing. Tough day for those shares. Worst day in more than a year after they cut their 737 max delivery target. It's down almost 10 percent right now. It's also down about 20 percent this year to erase last year's gains. And it's one reason the Dow is only up 13 points right now. Coming up, a big interview with Energy Secretary Chris Wright. We'll hit nuclear, oil and more. Stay with us here on Power Lunch.

10:39This message comes from Wise Business, the only account your business needs to scale globally. You're building a business with global ambitions, but hidden fees are eating into your margins. With Wise Business, you can pay overseas suppliers without exchange rate markups. Have customers worldwide get payment details in 22 currencies, so you get more of each hard-earned payment without hidden conversion fees. Be smart. Get wise business. Download the app. T's and C's apply. Tu sausage McMuffin with egg no cambió. Tu recibo, sí. El sausage McMuffin with egg extra value meal. Trae un hash brown y un café pequeño por cinco dólares.

11:19Solo en McDonald's por tiempo limitado. Precios y participación pueden variar. El precio de la promoción puede ser más bajo que el precio del meal. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast, or find Schwab Market Update wherever you get your podcasts.

11:55All right, welcome back. The Department of Energy continues to work to build out America's nuclear power capacity. And Secretary of Energy Christopher Wright is in Illinois today at a huge Exelon power plant where he's rolling out billions in new loan financing today and to power America's nuclear build out. We are proud once again to welcome Secretary Wright with us from the nuclear power plant in Illinois and welcome him on to talk about that oil, Russian diesel and maybe more. Secretary Wright, it's a pleasure to have you back on Power Lunch. Thank you for joining us. Brian, thanks for having me Alright, so you're there to talk about nuclear You're offering up a couple of billion dollars or more than that In potential financing What would the money be used for?

12:39Who would be takers of that money? And what would it get America's power grid? So, Brian, the deal here is with Constellation Energy They're the largest operator of nuclear plants in the country And the plan is to take 15 reactors at eight different locations and uprate them, meaning the plant behind me would get another 150 megawatts of power output. And for the total loan amount, we'd get 1.1 gigawatts of new power capacity, all from existing power plants. So it's significantly more energy, puts downward pressure on rates, allows more manufacturing, more jobs to be created in the areas served by these plants.

13:23Do we feel like this is a sea change? I think it's important that you're in Illinois because the irony of Illinois is that they've got almost more nuclear power than most states, maybe more than any state out there, but yet have been reluctant to build new nuclear capacity for a couple of decades. Do you feel like, Mr. Secretary, this is a real sea change moment and how America sort of re-embraces nuclear? It definitely is. In fact, the plant behind me a little over five years ago was days away from being closed. Yes, look, Democrat energy policies, subsidies for intermittent power had made it very hard to make the economics work even for existing nuclear power plants.

14:10President Trump has come in with we're going to add energy to America, not just energy production, but energy demand. Those two things working together has made America revive nuclear power. We're restarting three power plants, operating power plants all across the country. And soon you'll be hearing announcements about new reactors being constructed. So, yes, the nuclear renaissance is real, Brian. It's happening. Mr. Secretary, it's Kelly here. If you don't mind, I'd just like to ask you about some of the headlines today. I'm, you know, hopefully more in the know that Iran's leader, Supreme Leader, asking for some kind of meeting.

14:46There's kind of regional leaders gathering in Tehran, trying to figure out how do you how do you and how should we read all of these events as it relates back to the oil price? Well, look, Iran has done everything they can to disrupt energy markets. You know, not just in the Arabian Gulf. You've seen in the Red Sea in firing missiles at civilian commercial ships. It's been outrageous behavior. The world's getting frustrated by that. You saw the British prime minister was in the Middle East region just a few days ago. So hopefully Iran is contemplating changing their policies, waging economic war against the world so that they can build nuclear weapons and terrorize the region for generations to come.

15:33That's not a good plan, but that has been the plan they have pursued all out. President Trump said that's not going to succeed. The United States is going to stand in the way of that. And if we see an Iran come to their senses and back down, that would be tremendous news for everybody, not just for Americans and the world economy, but for the 90 million Iranians that have been tyrannized, murdered and brutalized by this regime. If things reaccelerate in the region, Mr. Secretary, and let's hope they don't, but if they did, do you and your team and the U.S. Navy and others have a plan to continue to help get all the necessary products out of that region, not just crude oil, but everything else that goes along?

16:18Absolutely, Brian. Look, that's every day the U.S. military, since this conflict started, we've been working about how to get products out in spite of Iran's behavior. We've seen an increase in the flow of refined products out of the Arabian Gulf region. That, you know, those are on just ships right now, but that'll help bring gasoline and diesel and jet fuel prices down. Depending upon what Iran does, those efforts will be ramped up even more. And I also wanted to ask you about these Russian diesel shipments, this shipment that is headed for the U.S. I think we can even show its progress. We've kind of been tracking it here on the show just because it's such a strange phenomenon to watch a country that is frustrating the world with its continued attacks on Ukraine, driving up all of these prices.

17:01And then we have to bring in diesel from that very country to try to ease our strain. So do you have any concerns about that diesel product coming in? Is there a way in which our refineries or some other ally could step up and fill the void? Well, look, it's a global shortage of diesel. It is a global problem. This is President Trump trying to use different diplomacy to achieve an end that has not been achieved. This war is almost five years old. It is a murderous, horrific war. It's not going well for Russia. It's been a disaster for Ukraine. and President Trump is trying to find a way to bring peace.

17:40Russia can't export diesel right now. They're short diesel themselves. So this one ship going out of their things, this is a sign. If you end the war, if you reduce the conflict, there's a little bit of an economic carrot, but they have to change their behavior to get any meaningful value for it. So look at it as an incentive to end the war that on the margin helps global diesel supply. So is there a chance, and there's been some, the FT had a report there might have been three ships. Is there a chance that this one ship will turn into more ships then, Mr. Secretary? It's quite possibly. We've done a temporary six-month suspension of sanctions, not on Russian oil, not on any other Russian products, only on diesel, which is the one product they have not exported for many weeks.

18:31So everyone calls this going soft on Russia. It is not. It's trying to put a carrot in front of Russia saying you can lower the conflict. You can produce a little more diesel than you consume. We'll let it flow to the world markets. I want to wrap with this, Mr. Secretary. Next week, I'll be in Europe. I'm going to talk about what I've been reporting on here for five years, which is Europe's growing energy crisis. U.S. LNG, liquefied natural gas, has largely saved Europe, kept the lights and the heat on in many ways. This year we go into Europe. They're below average on storage. Prices are soaring.

19:07There are some potential changes around wonky methane regulations in Europe. Do you anticipate that U.S. LNG will continue to flow at large rates to our allies and friends in Europe, who desperately, maybe more than any other time in five years, need it? Absolutely. U.S. is rapidly ramping up our LNG exports. They grew a lot this year. They'll grow a significant amount next year. We're there to help Europe get off of Russian gas, which is one of their goals. They're not off it yet, but the ramping U.S. supplies is going to allow them to do that. But Brian, I share your concerns. Their storage is lower than it should be going into this winter.

19:52I think they're being a little cavalier about that. If they have a cold winter, it'll be rough times in Europe this winter. I don't want to see that happen. I want to see American exports ramp up as rapidly as they can and Europe to fill up a little bit more on their natural gas supplies before winter cold arrives. U.S. Energy Secretary Christopher Wright in Illinois at a nuclear power plant announcing billions in new loans to help build out the nuclear program. Mr. Secretary, really appreciate your time, sir. Wish we could be there. Thank you very much. Thanks, Brian. Thanks, Kelly. Thank you.

20:28And by the way, Kelly, what he just said about US LNG, you got to look at stocks like Chenier, LNG, Venture Global, even Shell, which is actually one of the biggest LNG traders and sellers in the world. So look at a Shell, look at a Total Energies TTE. Those are the names that you would want to watch if you believed that US LNG will continue to flow to Europe. That's an important point. And you heard his warning. He said they're not as prepared as he'd like them to be. We did a segment on your show in 2022. I was in Rotterdam. I don't know if you remember this. It was like 40 degrees and raining.

20:59But talk, this is not a new, this is not a new issue. We've been talking about this for four years. Yeah. And, you know, Europe has been saved by mild weather. Yeah. This year, they had the hottest summer on record. They don't have as much air conditioning as we do, but they have some. And it was enough to bring down those natural gas levels. Dicey. Coming up, a power check right here on Power Lunch. Our next guest has some picks for you in this turbulent market time. Isn't that gas on the list? We're back in one.

21:30This message comes from Wise Business, the only account your business needs to scale globally. You're building a business with global ambitions, but hidden fees are eating into your margins. With Wise Business, you can pay overseas suppliers without exchange rate markups. Have customers worldwide get payment details in 22 currencies so you get more of each hard-earned payment without hidden conversion fees. Be smart. Get wise business. Download the app. T's and C's apply. Tu Sausage McMuffin with Egg no cambió. Tu recibo, sí. El Sausage McMuffin with Egg Extra Value Meal trae un hash brown y un café pequeño por cinco dólares.

22:10Solo en McDonald's por tiempo limitado. Precios y participación pueden variar. El precio de la promoción puede ser más bajo que el precio del meal. Hey Fidelity, how can I remember to invest every month? With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs. Oh, that sounds easier than I thought. You got this. Yeah, I do. Now, where did I put my keys? You will find them where you left them. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC, member NYSE SIPC.

22:52Welcome back. We have seen the volatility index up a little bit. 22 % over the past couple months could be an opportunity. Why? It's creating some entry points. And our next guest is looking at some lower beta stocks in mid this period of time. Joining us now to break it down is Michael Landsberg. He's the CIO at Landsberg Bennett Private Wealth. It's great to see you. A lot of different ways we can come at this discussion. There are a couple of individual names that you like? And do you like them because you see them as less volatile generally? Yeah. In this environment, the VIX has picked up a bit, both on the stock side, the move index and the bond side.

23:26I think there's more volatility. And I think most people, most investors seem to be overweighted. The tech names, they've got their overweighted beta. So I want to look for some lower beta names. I think those sectors are good sectors. I just happen to think these names are names that also haven't, you know, I think there's still opportunity. All right. Quest Diagnostics. Kerouac, Dr. Pepper, Ascendis Pharma. So those are three of them that jump out. I just want to ask the following question. Why not NVIDIA? We love NVIDIA. It's our largest holding as a firm. It is, okay. But I don't know if there's a viewer out here who doesn't own NVIDIA.

23:58And so typically what happens is they probably own too much of it. And it makes sense to take some money off the table and reallocate to some other things that aren't AI. But let me just push back on this a little bit too. And again, my looking over my shoulder is showing here, right? Because this would have been, you know, back up the truck and fill it with NVIDIA probably would have been a great strategy three years ago. But in all seriousness, why cut the winners? Why reallocate to something like this? Is Kerwin Dr. Pepper going to make me NVIDIA money? It's probably not. But remember, NVIDIA had a 60 % downtraft in 2022.

24:28A lot of investors don't have the ability to stomach that. And typically what happens is NVIDIA's made a great run for 10 years. How many investors bought it 10 years ago and didn't sell out? I mean, we bought NVIDIA in 2019. It was the first time we bought it, January of 2019. We didn't buy it for AI didn't exist for AI. It was GPUs for gaming, and all of a sudden it morphed into that. Most people don't have the ability to stay with those things. So yeah, if you could buy it and leave it alone for 10 years, then stay with NVIDIA. If you're more of a human and you're going to get out of it and be emotional, it doesn't hurt you to take some money off the table.

24:59NVIDIA is probably a bad example. It is our largest position, but there are some names that have definitely gotten ahead of themselves. Some of these AI names are up 500, 600, 700 percent in a year. You could take a couple bucks off the table and reallocate. NVIDIA has basically been dead money for five months. I mean, it's not a long time. It's not five years. I get that. We've got short-termism here. I totally get it. And if you traded it, you could make some money, but same price. But when I look at companies that have a huge potential for alpha, right, I look at biotech, because we don't do enough with biotech, because they're trying to cure horrible diseases.

25:29And if they get good test results, stocks can double in a week or even a day, or they can go to zero, by the way. Ascendis Pharmaceuticals, it's a Danish company, so it doesn't get a lot of play here. What about it that you like? It seems like this is one of those companies that has a lot of potential upside. It does. If they get it right. They got three drugs now, so it's not one of these biotechs that has nothing that actually is making any money, has any revenues. They do have three that are out there, but the potential, we'll look at it over the next five years, it has a 10x potential in revenue, and that doesn't mean stock price, but we do have some home runs there because it's a smaller company.

26:04You're going to do$200 million, looking to go to$2 billion in revenue. Those are big numbers because they're also playing in spaces that people aren't there. There's rarer diseases. There's diseases that people that get that can't get enough of a big pharma to go in there and solve those problems. It's also quasi-takeover candidate at some point because it's not Merck. It's not Pfizer. It's not Lilly. Because a lot of those big pharma don't have an R &D pipeline. They're buying those companies to get that pipeline, with the exception of Lilly, of course. Just want to circle back to your top holdings.

26:34And again, our viewers have seen the names on the screen that you talked about. So there's, again, a place for low volatility there. You've got Lilly, you've got Apple, Broadcom, Microsoft. I don't see Google up here. I don't see Amazon. I don't see Tesla. Only asking because we've seen the Mag 7 has totally broken down and kind of broken apart. We are going to hear from, is it Microsoft and Google tomorrow, Amazon Thursday? So why have you gone, in this case, with NVIDIA, Apple and Microsoft as kind of the big three and Taiwan Semi two for tech here? If you think about it, Apple and Microsoft are, you know, Apple in particular is not really an AI story.

27:06We kind of look at it as a consumer product story. We think that continues to do well. NVIDIA is the engine that makes everything. The chips kind of come from them, so you have to. Taiwan Semi, I wish we did more manufacturing of chips in the United States. We don't. And they have, you know, a leading space there. But there's other areas we think are good. We've never been big Tesla fans. Just the multiple, I can never understand that. And we try to buy some things that we think we can understand and explain to clients. Cool cars, the stock multiple is kind of crazy. But other areas of the market we think are attractive.

27:34I'm a big cybersecurity guy. I'd rather own cybersecurity than I would all AI because the smarter AI gets, the better cybersecurity has to be. And CrowdStrike is one of your biggest positions as well. Michael, thanks. Really appreciate it. Michael Landsberg of Landsberg Bennett Private Wealth. All right, coming up, we're going to be joined by the CEO of a company whose stock is up more than 60 % this year. It is not a tech. It is not an AI play. Do you know? I mean, there's look at the tease. Look at the look at the quiz. It's pretty hot rolled steel stock. It's almost like that's a new corporate.

28:08Wait. Anyway, we're back with more right after this.

28:16Welcome back to Power Lunch. Time now for your market navigator, regardless of what the Fed does tomorrow. Most experts agree a rate hike is maybe on the horizon, maybe sometime down the line in December. But our next guest is banking on a few stocks that he says could benefit from those higher rates. Joining us now is Chris Campitzis. He's the managing partner at the Barnum Financial Group. This is an interesting story here because there's a lot of debate about whether the Fed should do it, not do it, what kind of data it's looking for. But you say that it doesn't matter. The current environment is good for a certain type of stock.

28:51Yeah, absolutely. With the Fed tomorrow, will they raise rates? Will they keep them where they are? Most people are anticipating that they don't raise, but we don't want to confuse a pause with a pivot. It's anticipated that rates, as you mentioned, will get hiked at some point before the end of the year with inflation still being a concern here. And it's quite possible that bond yields rise even without a rate hike as the market tends to look ahead. So we look at what sectors have been underloved this year that might hold up well in a slightly rising rate environment. And for us, that's financials.

29:28Within financials, one name that sticks out is Citigroup. All right. Now, Citigroup is a money center bank. It's on a lot of shopping lists already. Why does that provide a better, compelling case for investment than, say, other big money center banks? Yeah, for three reasons. Number one, rate sensitivity between their high interest rate credit card opportunities, as well as variable rate corporate loans. That gives them an opportunity to reprice those loans efficiently and quickly. Valuation, cities trading right now at less than 10 times forward P.E. ratio. And in addition to that, we've seen a diverse business mix that's growing on all cylinders, loans, deposits, wealth, services.

30:16And in addition, management has been supportive and begun buybacks, which supports earnings per share. So we see this as a compelling opportunity here. And what about anywhere outside of those money center banks? Can regional banks, small regionals be in that mix as well? They can. One name that sticks out is PNC Bank. So sometimes PNC is confused as a smaller regional bank, but it's actually the eighth largest bank by assets. And what's interesting is that roughly 22 percent of its deposits are non-interest bearing, giving it inexpensive funding that it can redeploy here into higher yielding loans and investments.

30:57When you combine that with its commercial lending exposure, I think you have a real opportunity for improved margin and net interest income here. All right. Chris Campitzis over at the Barnum Financial Group. Thank you very much. Citigroup and PNC, the stock picks, Brian. I'll send things back over to you. Dominic Chu, thank you very much. All right. You know what else is hot? Not the weather. Heading to winter. Heating bills. They've been red hot. But Suburban Propane, they say they've got some good news for you regarding your pocketbook and your heating bill. And that CEO is here next.

31:34All right. Temperatures, they're starting to drop. And it is possible your heating bill could also drop. I know that's hard to believe, but I want you to listen to this. It's not our opinion. It's the EIA, the U.S. government's Winter Fuels Outlook. They expect heating bills overall to rise 21 percent, but that's for homes using heating oil. They'll also rise a lot less, but still rise about 4 percent if you use electricity as your heat source. But if you use natural gas, which is about half of U.S. households for heat, things look better. The EIA says gas heating costs should fall about 9 % from last year, and propane heat costs also dropping, not by a lot, but by about 3%.

32:15Again, not a big amount, but it is something, especially considering how much overall energy costs have been going up. Joining us now, Michael Stavall. He is president and CEO of Suburban Propane, New Jersey company, publicly traded. I don't want to focus as much on, Michael, the company itself as the macro issue, Because a lot of our viewers live in Maine, they live in New England, they're using heating oil. Their bill is going to be out of their minds when they fill up their tanks this year. How have propane costs stayed relatively consistent? Well, look, we're very fortunate in this country that we're producing record levels of propane.

32:54Propane is a byproduct of natural gas. So in these liquid-rich basins where we're producing a lot of natural gas and associated gas, we're getting a lot more propane. So we're producing upwards of 3 million barrels a day now. That's 20 percent more than just a couple of years ago. So we're in a really good position with propane supplies. We're coming into the heating season with about 105 million barrels in inventory right now, which is 10 percent higher than the five-year range, which is a great position to be. Because this is crazy. And natural, I know people were focused on oil with everything that's going on around Iran and Hormuz.

33:33The price of natural gas just keeps going down. If we could bring up a five-year chart of natural gas, it's at like$270. It's$30 equivalent in Europe. How is it still so cheap in the United States? I know we have a lot of it, Michael, but can you help us make sense of that? Well, you know, it is an interesting thing because globally, the amount of geopolitical events that are happening around the world is definitely challenging global supplies and pricing. Natural gas and propane seem to be bucking the trend right now. We've just recently seen a bit of an uptick with propane prices just this month.

34:11So as we're getting closer and closer to the heating season, we're finally starting to see some of the propane pricing react to the way crude oil has moved. But crude oil has been up about 80 percent since the start of the conflict in Iran. And propane pretty much stayed steady until just this month. We've increased about 30 percent. But we're still relatively cheap on a MMBTU basis. I'm just curious, how does your company make money? You know, because I think of you kind of as almost like a pass through, right? It's not. But I'd just like to hear, again, a little bit more about that. It's a, you know, just to understand kind of what's going on behind the scenes.

34:48So we're a retailer. All right. We have a million customers in 42 states around this country. Very rural at rural energy source. We're delivering propane to where the demand is, where the people are. And the beauty of propane is it is truly an on demand deliverable energy source. So our thirty three hundred employees are out there delivering propane to our customers. And so we're a retailer. We take the wholesale price and tack on our margin, our cost of delivery. And that's how we make our net profit. And you are a publicly traded company, so you've been increasing the dividends. I know you just increased the distribution, so it's a partnership.

35:25I don't want to get too wonky. When you look out, though, and you're the former CFO, right, you're looking at the numbers, anything on your radar that says natural gas prices and thus propane costs are going to soar in the next year or two? You know, look, I learned a lot of things over the past 25 years being here at Suburban Propane, one of which is you can't predict the weather. And the other thing is you can't predict commodity markets, right? So every day it seems like we have something disrupting our energy markets around the world. So I'm not going to sit here and think that we see a dramatic increase in natural gas or propane prices.

36:00In fact, I think what we've seen up to this point is we've been relatively resilient with our pricing structure. You know, you mentioned in your opening remarks there about heating oil. This is a great opportunity for consumers in the Northeast to consider switching from heating oil to propane. How do they switch? I was going to ask exactly about that. It depends on the type of equipment. Kelly's asking for a friend. It depends on the kind of heating equipment that they have. It could just be a simple changing out a regulator. If they have a boiler, they'll have to change out the boiler and put a furnace in.

36:30But, you know, it's really not a very intrusive construction activity. And it could be done in a matter of a week, frankly. But a furnace sounds expensive, right? A couple thousand dollars? It's going to be a few thousand dollars, yeah. But when they start getting that heating oil bill. But I think it's dramatically. I mean, if you look at the BTU comparison of heating oil versus propane on a BTU basis, propane is about a third the value of heating oil right now. So think about that and your energy costs. Yeah, you get more for less, basically. Yeah. Interesting. And it's a lot cleaner. Which is important as well.

37:05I think right now people just have this sense of anxiety about it. So if you can kind of check all those boxes. There are some people in our control room right now, and they know who they are, that use heating oil. They're listening very closely to this interview. You might get accosted. Yes, Patty. It's like, yes. You might get accosted on the way out. Michael Stavala, CEO of Suburban Propane. Thank you. Thank you. Appreciate it. Thanks for having me. The AI trade is also firing today. Check out the top performers on the NASDAQ 100, including the neocloud Nebius, Estera Labs, CoreWeave, all neoclouds as well.

37:37Western Digital, those are all higher after selling off last week. We'll have more Power Lunch right after this.

37:48Welcome back. The price of propane might be a little bit down this year, but the price of candy is up. Trick-or-treaters might be out of luck finding king-size candy bars this year as well. The price of Halloween candy is up 15, 1.5 % from last year. A 100-piece bag, Brian, get this, 100-piece bag of candy, which all the parents are buying right now for the trunk or treats and this and that, is 71 % more expensive now than it was five years ago per finance. And there's some people that don't like the full-size candy bars because they criticize their neighbors for doing it because it makes them look bad for not doing the full size.

38:23I've never believed that. I'm glad that my neighbor does it so that I don't have to, so that the kids get some generosity and I didn't have to go figure out how to buy a bunch of king-size candy bars. Favorite candy is what? Reese's Peanut Butter Cups. That's all you need to know. Yours? Fed Day, Charleston Chew. Thanks for watching Power Lunch, everybody. Closing bell starts now. What's a Charleston Chew? This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S.

38:56and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.