State of the Markets, Diesel Prices at Record Highs, Regional Bank Merger 9/8/26

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Brian Sullivan (1:05)

A big week for your money all as the pressure points pile up. Welcome to Power Lunch everybody with Kelly and Brian. Oil overseas again closing in on 100 bucks a barrel or even going above that mark in some countries. This as diesel fuel costs soar to a new record and borrowing costs keep rising. But with stocks still close to records.

Just how resilient is this rally?

Kelly Evans (1:28)

Plus a big bet on the future of banking, regional banking maybe, WaFd and Everbank striking a nearly $4 billion deal to create a $75 billion lender. What scale, deposits and a coast to coast footprint could mean for growth? WaFd CEO Brent Beardall joins us exclusively today.

Brian Sullivan (1:44)

All right, lot to do but let's start off with the markets and your money because kind of a mixed day on Wall Street. The S&P 500 and the Dow, they are down a bit. The NASDAQ 100 kind of bouncing back and forth fractually higher. Oil prices though, they are on the rise although they are lower than they were earlier in the session as news around Iran and Russia hits investors. Traders also may be reassessing, re-evaluating the interest rate outlook after Fed Governor Christopher Waller signaled that he could support not raising rates but only if inflation does keep cooling, by the way, the next Federal Reserve Meeting in just eight days. So, there is much happening all ahead of that and more. Let's start right there. Joining us on set, Craig Johnson, Chief Market Technician of Piper Sandler and Omar Aguilar. He is CEO and CIO at Schwab Asset Management. Omar, start with you. What are your clients most interested in, most worried about right now?

Omar Aguilar (2:41)

Well, they're following very closely all the geopolitical news. That seems to be like the big part of the headline.

They're very concerned about the impact to inflation. They're concerned about what all prices fluctuation eventually will do. And they're concerned about what these long yields may do to their stock portfolio. Those seems to be like the big headlines. It is interesting to see that the market seems to be thinking there is a jump ball for a rate hike. It's 50-50.

It used to be higher. And then after the last couple of weeks, it has gone down to just a jump ball. But our client seems to be still fairly optimistic, as the typical thing says, cautiously optimistic. But at the same time, they're worrying about the inflation potential.

Kelly Evans (3:28)

But they're smart, Craig, because how much would you say just the rise in fuel prices has now scrambled the equation as it relates to stocks and the Fed and bond yields and everything else?

Craig Johnson (3:38)

Kelly, I'd absolutely agree with you that that has been the case, as we've been seeing energy prices moving higher, oil prices moving higher. We're continuing to see the interest rates pushing up, pushing up from a technical-

Kelly Evans (3:49)

By the way, I'm surprised that didn't happen today, right? We wake up, we see these headlines about the jump in W-10. I go in and I look at the 10-year and it's lower. Is it just a weird long weekend thing?

Craig Johnson (3:59)

There's sort of a disconnect that seems to be happening, and that's what we are highlighting in our note here today, is we are watching interest rates, watching oil, watching these pieces move up. And then you think about what sectors you should be overweight. And you know, Brian, we've talked energy for quite some time, and energy stocks, they are leadership in this market. I don't know if that's a great scenario.

Brian Sullivan (4:19)

But nobody wants Conoco, Phillips, Marathon, Amoy, all new highs today.

Today, these are stocks that are hitting almost new highs every day. IXC, XOP, OIH, all the ETFs, SUP, they continue to make new highs, and yet it feels like, Craig, nobody cares.