World's Largest Data Center, Iran Ceasefire, & Investing in Taylor Swift

0:00Robert Croak:We're the Hartford, with decades of experience insuring millions of unique small businesses. When it comes to your small business insurance, one size absolutely does not fit all. Get a quote or find an agent today at thehartford.com slash smallbusiness. This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed-sponsored jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate seat. According to Indeed data, sponsored jobs have four times more applicants than non-sponsored jobs.

0:34Robert Croak:So go build your dream team today with Indeed. Get a$75 sponsored job credit at Indeed.com slash podcast. Terms and conditions apply. Welcome back to the Rich Habits Radar, our Friday episode of the Rich Habits podcast, where every Friday morning we're coming at you with the biggest headlines impacting you and your money. This episode is brought to you by VCX, the public ticker for private tech. My name is Austin Hankwitz, and I'm joined by my co-host, Robert Croak, and the three things sitting at the top of our rich habits radar this week include the U.S. and Iran agreeing to a two-week ceasefire, the Fed minutes dropping Wednesday afternoon revealing a deeply divided committee where some officials want to raise interest rates, and the announcement of the world's largest AI data center.

1:23Robert Croak:Robert, let's dig into our first story.

1:25Austin Hankwitz:Let's do it. On Tuesday night, President Trump announced that the United States and Iran had reached a provisional two-week ceasefire agreement, ending, at least for now, the 38-day war that has dominated the stock market for more than a month. The deal is conditional. Iran agrees to halt its blockade on the Strait of Hormuz and provide safe passage for oil and gas shipments. And in exchange, Trump pulled back on his threats to widen strikes, and both sides committed to begin direct negotiations starting today, Friday, April 10th.

1:55Robert Croak:The market's reaction was violent in the best way possible. On Wednesday, oil fell by more than 16 % per barrel. The Dow Jones Industrial Average had the best day of the year. The S &P 500 surged more than 3%, and the NASDAQ tacked on close to 4 % on the day. But here's the context that really matters. Even after that 15-16 % plunge in the price of oil, Oil is still 40 % higher than where it was before the war began in late February.

2:26Austin Hankwitz:And Noah Barrett, research analyst at Janice Henderson, told the New York Times that the two-week ceasefire is an important first step. And this is the key quote, we're not out of the woods yet. Iran has put forward what the Guardian is calling a 10-point ceasefire plan with conditions the U.S. has not yet accepted.

2:45Robert Croak:Talking about oil here, retail gasoline is still over$4 a gallon near four-year high, according to GasBuddy, which not sponsored, but GasBuddy is a cool app. I use it, Robert. It helps you find the cheapest gas around you. GasBuddy also said on X earlier this week that the national average could fall back below$4 a gallon within one to two weeks, assuming the ceasefire holds. So fingers crossed that's the case because, oh my gosh, I think I spent like nearly$100 filling up my Forerunner the other week and it was no fun. So Robert, what does the ceasefire mean for you and your money for everyone listening?

3:20Austin Hankwitz:Yeah, this means it's the single biggest macro unlock we've had all year. For six straight weeks, every rally was a ceasefire rumor and every sell-off was that rumor being denied. Now we actually get a deal on paper and the market is pricing it in fast. So if you zoom out, the S &P 500 is still in the red year to date, but very much better than down 10 % off all-time highs like it was just a week ago.

3:46Robert Croak:Now for my portfolio, the playbook this week was simple and everyone inside the Rich Habits Network got the play-by-play. I walked everyone through this on Tuesday during our weekly live stream. I rode this energy rally starting late January. I trimmed my position about two or so weeks ago, call it 30-40 % trim. And then I've now sold 85, 90 % of my total oil energy position after this news has broke. I realized gains between 20 % and 70%, depending on the specific name in the portfolio. If it's an ETF, like XLE, I think I was up 20 or 25 % on. VDE, I was up a ton on. Where USO, I captured like a 62 % profit.

4:29Robert Croak:IPI, I realized a 70 % gain. Like really, really cool profits were made here. I made about 10 grand in the course of four or five weeks because of this. But if the ceasefire breaks in two weeks from now, I'll be thinking, dang, maybe I should have had more oil in my portfolio. But what's important to think about now and how I think about it, and you guys should be thinking about the same with these proceeds, where do they go? In my opinion, they go and they rotate into names that were beaten down, down, down, down because of this. Think Microsoft, think Amazon, these long-term names I want to have in my portfolio.

5:04Robert Croak:So that's exactly what I did.

5:05Austin Hankwitz:That is why active management and keeping an eye on what's happening in the markets is so important for people to be able to have this rotation that you do so well of explaining in the Rich Habits Network and help people get ahead of things and not have any shocks or surprises in the markets. So let's get into point number two today, and that is on Wednesday afternoon, the Federal Reserve released the minutes from its March 17 and 18 meeting, the meeting where the Fed held rates steady at 3.5 % to 3.75 % for the second consecutive time. And what those minutes revealed is a committee that is more split than we all realized.

5:44Robert Croak:Yeah, so let's jump into some quotes here. From the meeting's minutes, we've got the quote of many participants judged that in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations. That's good. That's what we want. We want the rates to come down. But you also had this quote. Some participants noted that if inflation were to prove more persistent than expected, it could be appropriate to maintain the target range for some time or even consider raising it.

6:21Austin Hankwitz:As of late March, some Federal Reserve officials were actively discussing rate hikes, not holds, not pauses, hikes. And that's the first time that language has shown up in the FOMC minutes since the 2022 tightening cycle.

6:36Robert Croak:Now, this divide is pretty stark if you look at the summary of economic projections, because according to the updated dot plot referenced by Axios, we've got seven Fed officials expecting just one rate cut in 2026 and seven other officials see rates be held steady throughout the rest of the year. That really illustrates, Robert, how perfect of a divide it is right now. Seven over here saying, no, we can cut rates by about one time, maybe two. But then the other seven are saying, no, we're holding it steady or even raising interest rates. That is just it's wild comparing to back in January. Go look on Polymarket here.

7:15Robert Croak:I think it was a two or five percent chance that there were going to be zero rate cuts, according to Polymarket. And now there's like a thirty five or forty percent chance of zero rate cuts in twenty twenty six. It is it's insane.

7:27Austin Hankwitz:Yeah. And it's crazy because Fed Chair Jerome Powell's term ends in May of twenty twenty six. And Kevin Warsh, who's Trump's reported front runner, is set to replace him. And Axios put it bluntly, Warsh will inherit a deeply divided committee and Warsh is generally considered hawkish, which means the transition itself could push the Fed's center of gravity towards tighter policy, just as the tariff in oil impacts are hitting consumer prices. The minutes also included this line from Reuters and the New York Times, who both flagged it. Policymakers said they would need to remain nimble as they weighed the war's impact on inflation, which continues to run above target, and hiring, which has been mostly flat over the last year.

8:11Austin Hankwitz:So it's a lot to talk about. So much is going on with the Fed right now. Austin, break it down. What does this mean for you and your money?

8:18Robert Croak:So we've been talking about and using this phrase now for years, which is don't fight the Fed. If the Fed is raising rates at the fastest pace in history, like they did in March of 2022, then of course the stock market experiences that 25-30 % drawdown that we saw in 2022. But on the flip side, right, we got of course AI, that's exciting, but then we kind of reflect upon, well, if the Fed is cutting interest rates, so easier monetary policy, and we avoid an economic recession, chances are the stock market just continues to drift higher. And we entered 2026 with that expectation. Again, we were expecting between one and two rate cuts in 2026 from the Fed.

8:59Robert Croak:And then now because of this oil shock, because we decided to invade Iran and go to war in the Middle East, the price of oil just jumped dramatically, which put our annualized inflation rate from about 2.2, 2.3 to 3.4, 3.5. Well, a three handle is not what we need. And that is why the Fed's over here saying we're not going to cut interest rates if inflation is above 3%. That makes no sense. That's only going to make inflation run even higher. So the entire bull case of 2026 was predicated on the Fed cutting rates two, maybe three times this year as inflation normalized. And the market was pricing in a June rate cut for months now.

9:42Robert Croak:But these minutes are telling us the truth as to what's really happening behind closed doors. Not only is a June cut not happening, but a September cut might not happen either. And so as you think about these companies, these unprofitable technology companies, growth stocks, maybe small caps, all of these types of names thrive on cheap money. because lower interest rates means that these companies can go into debt, borrow money to grow their businesses as cheaply as possible. But if interest rates are higher, then these companies have to spend more money on interest paid to the bank, which does not hit their bottom line.

10:20Robert Croak:So if the Fed flips from when we cut interest rates to, yeah, if we cut interest rates, that rotation now, you see investors say, whoa, I don't know if I want to have unprofitable tech or biotech or small caps or whatever in their portfolios, they rotate out of that stuff and say, where's my healthcare? Where's my consumer staples? Where are these defensive names that aren't that cool and fun? They now become sexy.

10:44Austin Hankwitz:Yeah, and I think this really illustrates everything you've been covering since last year about having that migration and moving the money around so you're ahead of the curve of all these things because we can't predict wars and we can't predict any of this, but we can certainly be ahead of where we believe things are going. And I think that brings it to a point for me that everyone listening needs to stop thinking about the market and start thinking about rate sensitive versus rate insensitive. Because everyone should already be thinking like this, but now we have a great example to reflect on.

11:17Austin Hankwitz:What year to date has been in the green and what has been in the red? If it is red, is it because they're impacted directly by war or more likely impacted by the Fed not cutting the interest rates? And growth names and small caps are more impacted than massive, boring, and profitable healthcare and defense sectors because of this more expensive money. Austin, before we jump into our third story, support for the show comes from VCX, the public ticker for private tech. For generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans could be a part of that journey through perhaps the greatest innovation of all, the U.S.

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12:51Robert Croak:getvcx.com carefully consider the investment material before investing including objectives risks, charges, and expenses. This and other information can be found in the Funds Perspectus at GetVCX.com. This is a paid sponsorship. GetVCX.com is really interesting right now because I'm looking at the top 10 holdings. Anthropic makes up almost 21%. Databricks at about 18%. OpenAI at 10%. Anduril at 7%. Anthropic just surpassed, Robert, OpenAI in annual recurring revenue,$30 billion now. Anthropic is the AI darling. Like it's pretty interesting. So again, get VCX, all the disclosures, understand the risk, go listen to our interview with Ben Miller, CEO of Fundrise, creator of VCX for the full breakdown.

13:41Robert Croak:He does a great job explaining what's going on. And Robert, let's jump to our third story. So rounding off now with a third story, the world's largest AI data center was finally announced and it's on a Department of Energy property. So while everyone was obsessing over the ceasefire that took place this week, a massive story dropped on Tuesday that I think is going to matter for the next 10 years. The U.S. Department of Energy formally announced that SB Energy, which is a soft bank company, is partnering with the federal government to construct what's now being called the world's largest artificial intelligence data center on leased land at the Department of Energy's Portsmouth site in Ohio.

14:23Robert Croak:The facility is part of this broader Stargate AI infrastructure project that's being built out right now by OpenAI, SoftBank, Oracle, and MGX.

14:33Austin Hankwitz:Wow, that's crazy. The largest data center ever announced on leased land. So imagine those farmers or whoever owned those properties of how lucky they are. And this is the first time the federal government has leased Department of Energy land specifically for private AI infrastructure. The Portsmouth site was historically used for uranium enrichment, for nuclear weapons, and it has pre-existing high-capacity grid connections, which is the single scarcest resource for new AI data centers.

15:03Robert Croak:TechCrunch reported that Google just confirmed it's working with Crusoe to build a 933 megawatt natural gas power plant in North Texas to power their new AI facility. Meta announced it's adding seven more natural gas plants to their Hyperion data center in Louisiana, bringing that single site to enough electricity to power the entire state of South Dakota.

15:26Austin Hankwitz:Intel is joining Elon Musk's TeraFab AI chip complex alongside SpaceX and Tesla. TeraFab is Musk's attempt to build a vertically integrated chip manufacturing complex in the United States that would serve Tesla's robotic ambitions, XAI's data centers, and the broader Tesla AI roadmap. And Intel is bringing its foundry business into that orbit in a major deal.

15:50Robert Croak:So here's the number that puts us all in perspective, Robert. Big tech collectively spent more than$200 billion on AI infrastructure in 2025. OpenAI alone is projecting to spend$17 billion this year, $35 billion next year, and$45 billion in 2028. Goldman Sachs estimates that AI infrastructure capital expenditures across just the hyperscalers will exceed$450 billion this year. So Robert, we've been talking about the picks and shovels game for a while now. So here's what I want people to understand. And Robert, please explain this to everyone, right? The$450 billion is leaving their bank accounts and entering someone else's bank account, right?

16:34Robert Croak:So what does that pick and shovel process mean? What does it mean for everyone's money here?

16:38Austin Hankwitz:Yeah, it really means that contrary to what all the naysayers say, the AI build out is not slowing, it's compounding. This is one of the only macro themes that is completely independent of the Iran war, the Fed tariffs, and any of the other stuff that everyone is obsessing about. For your portfolio, the picks and shovels trade is still the best risk reward in the market from everything we look at. The companies that win regardless of which hyperscaler wins are power generation, grid infrastructure, cooling systems, and the utility stocks that are inking these massive data center contracts. Think NextEra, Constellation Energy, GE Vernova, Vertiv, Eaton.

17:19Austin Hankwitz:These are some of the names that benefit the most from this capex spending regardless of whether OpenAI, Google, or meta wins the model race. DTCR is a great ETF to review for exposure to all this stuff. We like it. Check it out.

17:34Robert Croak:Yeah. And not just that, but Amazon, because we filmed these on Thursdays, just came out today with their annual shareholder letter. We've got it pulled up over here. One million robots operating across their fulfillment network. AWS AI revenue is now at $15 billion. Their chip business hit a$20 billion annual run rate. They expect$200 billion just from Amazon here in AI infrastructure this year. I mean, talking about a long-term winner in AI, Amazon, all day long. I've got 500 shares of the stock right now, my portfolio. Hopefully I can ramp that up to 1 ,000 if I'm lucky. But like this to me seems like the biggest no-brainer alongside the DTCR name that you would call that, Robert.

18:17Austin Hankwitz:Yeah, there's just so many of these companies that are leading the charges, the Microns and the NVIDIAs and the Intels and all of these companies. And it's just important for everyone to keep an eye on what is happening in the markets. And that's why these Friday episodes are so important. So I want to get into my radar points. I'm excited about them because, you know, when you see these headlines, a lot of times I just don't agree with them. So it's always fun to share them on these episodes. For me, number one is Tesla's Q1 deliveries missed the mark. Love the headline. Tesla delivered 358 ,000 vehicles in Q1 of 2026, missing Wall Street's consensus of 365 ,645, so they missed by about 7 ,600 units.

19:02Austin Hankwitz:Tesla produced 408 ,386 vehicles in the same quarter, meaning they built over 50 ,000 more cars than they actually sold. That's a record inventory build and a clear signal that demand is not keeping up with production. European sales have also collapsed nearly 39 % amid growing brand backlash and increased competition from Chinese EV makers offering lower cost models. And the way I look at it is many investors own this stock because they're so enthusiastic about the future products like the Cyber Cab, Autonomous Robo Taxis, and the Optimus Humanoid Robot. But to date, 73 % of the company's revenue still comes from selling passenger vehicles.