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Will world leaders buckle under Trump's tariff threats? · The Financial Exchange Show

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Speaker 2: Good morning, Happy Friday, Welcome back to the Financial Exchange.
1:14
Speaker 2: If it feels like presidential politics news is flying at
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Speaker 2: you a mile a minute, you're not alone. I don't
1:21
Speaker 2: think even Paul and I and Chuck are able to
1:23
Speaker 2: keep up with it as fast as it's coming out.
1:25
Speaker 2: But we had stock surging yesterday again Asian stocks, global
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Speaker 2: stocks really moving upwards on comments from Donald Trump. We
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Speaker 2: have a you know, just a classic Valentine's Day love
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Speaker 2: story between Trump and Jay Powell coming up to talk about.
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Speaker 2: So lots to cover here on the Financial Exchange, but
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Speaker 2: I think we need to start with tariff talk because
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Speaker 2: that's been the main focus of frankly, this show over
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Speaker 2: the last week, is the lack of action there. Yesterday,
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Speaker 2: in an interview with Fox News, Donald Trump saying he
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Speaker 2: would quote rather not use tariff's against the world's second
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Speaker 2: largest economy and stocks, at least in Asia kind of
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Speaker 2: took off on that news of a softening stance towards China.
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Speaker 2: And I guess my question that I don't think anyone
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Speaker 2: has an answer to, is is this Donald Trump softening
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Speaker 2: towards China or is this the same as me saying
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Speaker 2: to my you know, six year old who's having a
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Speaker 2: temper tantrum that I would rather not put you in
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Speaker 2: time out, but you're still acting like a you know what,
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Speaker 2: and so I'm going to don't. I don't honestly know
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Speaker 2: the answer. And I think the main takeaway that you
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Speaker 2: can have at this point when it comes to the
2:35
Speaker 2: new Trump administration and their attitude towards trade, is could
2:40
Speaker 2: have been a lot more aggressive, right, That's the only
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Speaker 2: takeaway I have is they were very aggressive with a
2:47
Speaker 2: lot of stuff, you know, immediately placing on leave anyone
2:51
Speaker 2: who is working on DEI projects in the federal government,
2:54
Speaker 2: immediately changing a ton of stuff when it comes to
2:57
Speaker 2: the operation of this economy, freezes all sorts of items
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Speaker 2: that people kind of guessed whether or not they would
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Speaker 2: be this aggressive on. And they were the only one
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Speaker 2: that I can point towards and say definitively that people
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Speaker 2: were pretty certain there would be definitive action on and
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Speaker 2: didn't get it was trade. And so here's where we stand.
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Speaker 2: There's a new deadline out there of February first, and
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Speaker 2: we will see what comes to pass or doesn't come
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Speaker 2: to pass when that deadline comes and goes.
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Speaker 3: I can't wait for that deadline to get pushed back
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Speaker 3: next week.
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Speaker 2: Well, Chuck and I were talking about this yesterday, and
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Speaker 2: if it does, I think you do have to and
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Speaker 2: I myself am going to reposition my viewpoint on tariffs
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Speaker 2: and trade.
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Speaker 4: Now.
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Speaker 2: Chuck has been a little bit more convinced on this
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Speaker 2: subject than I have been. Oh, I've been a little
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Speaker 2: bit skeptical that this is going to go forward. But
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Speaker 2: if you come and go with this February first deadline,
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Speaker 2: then I think you do have to take a second
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Speaker 2: look at this and say, Okay, this is more of
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Speaker 2: a negotiating tactic. We will see what if anything goes
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Speaker 2: into place, but maybe we shouldn't bank on higher terrors,
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Speaker 2: higher import prices, and this is much more of a
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Speaker 2: negotiating tool than a serious threat.
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Speaker 3: I've leaned more in that camp for a longer period
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Speaker 3: of time. This idea that I'll believe it when I
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Speaker 3: see it. You know, some of these tariffs that have
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Speaker 3: been mentioned are so broad based and so extreme in
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Speaker 3: nature that I always questioned whether or not they were
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Speaker 3: going to be put in. I could be proven wrong
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Speaker 3: in a week. That's how quickly things can change with
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Speaker 3: this current administration. But particularly a point that you and
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Speaker 3: I talked about earlier this week, Mike, because they've been
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Speaker 3: tied specific to Mexico and Canada to some of these
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Speaker 3: kind of social issues of you know, lessening fednyl distribution
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Speaker 3: across borders, and some of these other items on immigration,
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Speaker 3: it's lean me to believe further in the camp that
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Speaker 3: they're negotiating tactics, you know. Similarly here, even the language
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Speaker 3: as it pertains to China, it's, hey, perhaps we can
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Speaker 3: make a deal. Trump is you know, mentioning here when
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Speaker 3: he brings up these subjects, and it's it's a little
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Speaker 3: bit more skewing to the Negotia side when you kind
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Speaker 3: of parse through some of the details here.
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Speaker 2: Regardless, in terms of market reaction, yesterday, Hong Kong's Hang
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Speaker 2: Sang Index gained one point eight percent, the Hangshang Tech
5:08
Speaker 2: Index gains two point eight percent. In trading, the Shanghai
5:11
Speaker 2: Composite went up point seven percent. Asian currencies got a
5:15
Speaker 2: lift on the news as well, all gaining ground against
5:17
Speaker 2: the United States, specifically Chinese yuan, tay bot, Malaysian ring, yet,
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Speaker 2: Korean wan, and the Aussi dollar all gaining against the
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Speaker 2: US dollar on that commentary, yesterday, and so again I
5:29
Speaker 2: don't know where trade is going. I am still taking
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Speaker 2: the approach of February one is a pretty important deadline
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Speaker 2: here to see what actually occurs. And I'm not going
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Speaker 2: to jump on this bandwagon of hey, all is well,
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Speaker 2: because remember two in the first Trump administration. You have
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Speaker 2: to go back a while on this, but the early
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Speaker 2: days of the first Trump administration were very friendly towards China.
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Speaker 2: He had a state sponsored visit to China, they rolled
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Speaker 2: out the red carpet. There was a lot of good
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Speaker 2: news on those relations in the early stage, and then
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Speaker 2: he didn't get what he wanted and we went forward
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Speaker 2: with tariffs anyway. And so I don't know what to
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Speaker 2: make of the stuff on Mexico and Canada. I don't
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Speaker 2: know where it's fundamentally serious and where it is not.
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Speaker 2: But as good as the news has been on that
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Speaker 2: front for major importers and trade between the United States, China, Mexico, Canada,
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Speaker 2: and Europe so far, I don't want to take it
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Speaker 2: as eternally good news that nothing is going to happen
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Speaker 2: on that front, because history told us that that was
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Speaker 2: simply not the case.
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Speaker 4: But February one is the new deadline to keep in mind.
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Speaker 2: If they are going to do things at by February one,
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Speaker 2: it probably will see some hints mid next week.
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Speaker 4: It would be my guess.
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Speaker 2: Mid next week also a pretty busy period of time
6:44
Speaker 2: for non politics items that are coming up. We've got
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Speaker 2: earnings reports coming out next week, continuing a This week
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Speaker 2: was a light kickoff. You had Netflix with the biggest
6:56
Speaker 2: reporter this week. Next week you'll have Raytheon reporting on Tuesday,
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Speaker 2: A SAP also reporting Wednesday.
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Speaker 4: Are the heavy hitters.
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Speaker 2: You have Microsoft, Meta, and Tesla all reporting after the bell,
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Speaker 2: all three of those companies trillion plus dollar market value companies. Thursday,
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Speaker 2: you have Apple, Visa, and MasterCards. So between those six
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Speaker 2: companies you'll get both a pretty good idea of consumer
7:19
Speaker 2: spending in the fourth quarter. You'll get a pretty good
7:21
Speaker 2: idea of advertising what Microsoft is seeing on the AI front.
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Speaker 2: A pretty wide spectrum of information from publicly traded corporations
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Speaker 2: starting next week on how they are viewing the last
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Speaker 2: quarter of twenty twenty.
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Speaker 3: Four, something that we should add probably on the Trump
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Speaker 3: side of things, he had additional commentary on this idea
7:41
Speaker 3: that he would put further pressure on rates in the
7:44
Speaker 3: federal reserve and we'll talk about that, you know, in
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Speaker 3: a later in the show. And also this idea that
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Speaker 3: he puts some pressure on OPEC to low lower energy
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Speaker 3: prices out there. Some of these things, you know, in
7:56
Speaker 3: particular on the OPEK one, it's like, yeah, you can
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Speaker 3: tell them all you want to lower prices, but good
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Speaker 3: luck controlling the constituents there well.
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Speaker 2: And furthermore, you know, as we've talked about quite a bit,
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Speaker 2: Ope's just not the powerhouse.
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Speaker 4: It once was.
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Speaker 2: Right, we are the biggest, they don't really have the
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Speaker 2: ability to bring down You're the biggest X they did
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Speaker 2: thirty years ago. And so yeah, to your point, you
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Speaker 2: can tell them to do ask them to do what
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Speaker 2: you want. Maybe you'll get a response, maybe you won't.
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Speaker 2: But the idea that OPEK alone can unilaterally bring down
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Speaker 2: oil prices like they once did, don't.
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Speaker 4: Don't get me wrong.
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Speaker 2: They are still a massive hitter, and the Saudis can
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Speaker 2: influence pricing. But with what Donald Trump wants to do
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Speaker 2: with drilling, exploration and deregulation of federal lands across the
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Speaker 2: United States, I don't know that that brings down oil prices,
8:46
Speaker 2: but it seemingly puts a cap on the potential upside
8:49
Speaker 2: of prices pretty significantly, because while Exonmobile might not be
8:54
Speaker 2: interested in drilling new wells at seventy bucks a barrel,
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Speaker 2: shoot that thing up to ninety and they'll be uh
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Speaker 2: clambering for the opportunity.
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Speaker 3: The other puzzling piece that I found was his commentary
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Speaker 3: in regards to putting taxes and tariffs and sanctions on
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Speaker 3: goods sold by Russia to the United States, and I
9:10
Speaker 3: to gratched my head and said, what the heck do
9:12
Speaker 3: they even sell? So a quick search indicates that the
9:15
Speaker 3: Navier they did about fifteen billion of exports to the
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Speaker 3: United States. Just for context, when we were talking about
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Speaker 3: the Mexico and Canada stories earlier this week, you're talking
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Speaker 3: about one point three trillion of you know, exchange and
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Speaker 3: trade between those two countries. So I'm just pointing out
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Speaker 3: how small cave are I have to look in terms
9:35
Speaker 3: of let's see if I can grab some of the
9:38
Speaker 3: goods here in terms of what they were.
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Speaker 4: Well, Paul's going to do that.
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Speaker 2: We're going to take a quick break when we come
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Speaker 2: back a little bit about Donald Trump's virtual visit to Davos,
9:49
Speaker 2: Switzerland and what was brought up there.
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Speaker 4: That's next year on the Financial Exchange.
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Speaker 4: Well.
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Speaker 2: Normally, the the Dovos Switzerland Annual Symposium is a pretty
11:13
Speaker 2: big subjective conversation here on the financial exchange. This year
11:17
Speaker 2: there's just been too much going on. But Donald Trump
11:20
Speaker 2: had a virtual visit there over the last couple of days. Yesterday,
11:23
Speaker 2: some shots across the bow at some big banks seemingly surprising,
11:29
Speaker 2: is it Brian moynihan, the CEO of Bank of America,
11:31
Speaker 2: with some commentary about their business practices. But today it
11:35
Speaker 2: was really all excuse me. Yesterday was really much more
11:39
Speaker 2: about trade and once again a very clear verbal warning
11:44
Speaker 2: to other countries about trade and his intent on terraces.
11:48
Speaker 2: But again at this stage, I'm just unsure of what
11:51
Speaker 2: to do with this. But let's let's quote what he said.
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Speaker 2: Come make your product in America, and we will give
11:58
Speaker 2: you among the lowest taxes of any nation on earth.
12:01
Speaker 2: But if you don't make your product in America, which
12:03
Speaker 2: is your prerogative, then very simply you will have to
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Speaker 2: pay a tariff. That is pretty clear language, right, Like again,
12:12
Speaker 2: that is very obvious and clear language that hey, we
12:14
Speaker 2: want you to manufacture your stuff here in the United
12:17
Speaker 2: States if you want access to the American consumer. Big
12:20
Speaker 2: questions as to whether or not that will be followed
12:22
Speaker 2: through one There are other countries. There are other places
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Speaker 2: on Earth, by the way, that can demand the same
12:27
Speaker 2: thing and actually be successful. Right if you're Brazil, sorry,
12:31
Speaker 2: but nobody's going to listen to you. They'll just say, Okay,
12:33
Speaker 2: we'll deal with your tariffs and if people want the products,
12:36
Speaker 2: then go for it. In Brazil is a large nation.
12:40
Speaker 2: The European Union could probably demand the same thing. They
12:43
Speaker 2: have a wealthy group of consumers. You want to sell
12:46
Speaker 2: your product here, you make it. Here are your face tariffs.
12:49
Speaker 2: India and China could probably do the same to some extent,
12:51
Speaker 2: and you could have a real competing tariff war should
12:55
Speaker 2: they go through with all of this. I was just
12:57
Speaker 2: kind of doing some brainstorming, like, you know what areas
12:59
Speaker 2: of the world could actually go through with this. Your
13:01
Speaker 2: opin Union would obviously have a much more difficult time
13:04
Speaker 2: doing so.
13:04
Speaker 3: Yeah, you got to get a lot of people on
13:05
Speaker 3: the same ada.
13:06
Speaker 2: Than India Agina just because of the political situation there.
13:09
Speaker 2: But nonetheless a very clear message at Davos of we
13:13
Speaker 2: want to see investment in the United States. And here's
13:17
Speaker 2: where I will take the pro trade approach to the interpretation.
13:22
Speaker 2: Here this is Donald Trump once again leaving the door
13:26
Speaker 2: open to negotiation. One, I don't think you can actually
13:29
Speaker 2: stand by the fact that you'll have the lowest corporate
13:31
Speaker 2: tax rates across the globe.
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Speaker 4: Because I'm not sure.
13:35
Speaker 3: I'm not sure if you can.
13:37
Speaker 2: Very clearly he wants to lower the corporate tax rate
13:39
Speaker 2: and that's going to probably be a priority when he
13:42
Speaker 2: is negotiating with Congress as to what tax bills get passed.
13:47
Speaker 2: So I think you can read into that. The second
13:50
Speaker 2: piece is, look, XYZ country, you go make a big
13:55
Speaker 2: investment in the United States.
13:56
Speaker 4: Like again, it's not that.
14:01
Speaker 2: Soft Bank speaks for the South Korean government, but they
14:04
Speaker 2: just announced a half a billion dollar or was it
14:06
Speaker 2: half a trillion dollars a trillion dollar five hundred billion
14:10
Speaker 2: in the United States. Is Korea going to get more
14:14
Speaker 2: favorable trade treatment because of that deal than others?
14:17
Speaker 4: I would bet yes.
14:18
Speaker 2: And so again this to me doesn't sound as much
14:22
Speaker 2: like a threat as it does a negotiating opening of
14:25
Speaker 2: the door to say want to avoid tariffs, come invest
14:29
Speaker 2: in the United States. I don't know if it'll pay off.
14:32
Speaker 2: I don't know if it'll happen, but that seems to
14:33
Speaker 2: be the shot across the bow here. The other piece
14:35
Speaker 2: that was, as you alluded to before the break Paul
14:38
Speaker 2: brought up, was a call to Opek to say, look,
14:44
Speaker 2: we need to bring oil prices down, and it's the
14:47
Speaker 2: best strategy we have to end the war in Ukraine.
14:52
Speaker 2: Don't know what success there's going to be there with
14:54
Speaker 2: Donald Trump trying to convince Opek to bring down oil prices.
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Speaker 2: Certainly they still have the power to do so to
15:00
Speaker 2: some limited extent. But that was the other call that
15:04
Speaker 2: you saw from Donald Trump and seemingly making energy a
15:08
Speaker 2: key factor in his plans for twenty twenty five. He's
15:13
Speaker 2: made a big deal of this. Hey, this is how
15:15
Speaker 2: we're going to bring down inflation. This is how we're
15:17
Speaker 2: going to deal with the energy crisis, this is how
15:20
Speaker 2: we're going to deal with a number of key priorities
15:22
Speaker 2: in the United States. Is cheaper energy, And I wonder
15:26
Speaker 2: what you make of it.
15:27
Speaker 3: My I have a theory here that it seems like
15:31
Speaker 3: since Trump has been president his first term and now
15:33
Speaker 3: his second term. It feels as if he's always been
15:35
Speaker 3: very conscious of what the market, how the market perceives
15:38
Speaker 3: his actions then tried to be very favorable to the market.
15:42
Speaker 4: Is that a.
15:43
Speaker 3: Reasonable I think?
15:44
Speaker 4: Okay?
15:45
Speaker 3: And similarly here, if you're looking at the inflationary picture,
15:48
Speaker 3: which basically, amongst other things, got him into office for
15:51
Speaker 3: the second term, it would have to be the number
15:53
Speaker 3: one on the list if you were trying to rank out.
15:56
Speaker 3: Is the reason why he unseated Biden is because of the.
15:59
Speaker 4: Inflation economy and what the economy was was inflation exactly.
16:02
Speaker 3: Inflation really just was extremely challenging for a lot of
16:07
Speaker 3: American consumers out there. We've talked about this a lot
16:10
Speaker 3: on the show. What psychologically has the most significant impact
16:14
Speaker 3: on US consumers in terms of their feelings towards inflation. Oftentimes,
16:19
Speaker 3: though it's not the biggest ticket from your monthly budget
16:22
Speaker 3: at your household, it is oil and gas prices and
16:24
Speaker 3: what you see on the street corner at Exonmobile or
16:27
Speaker 3: wherever you're picking up your gas. It has a very
16:29
Speaker 3: significant impact. And it seems like from all the messaging here,
16:33
Speaker 3: I do feel as if this is a huge part
16:35
Speaker 3: of his agenda and it ties into his real focus
16:38
Speaker 3: on trying to improve economic sentiment. Is at any cost necessary,
16:44
Speaker 3: try to get oil and gas prices down. Now, we
16:46
Speaker 3: talk about a lot on the show that inflation is
16:49
Speaker 3: not just oil and gas. In fact, quite honestly, the
16:52
Speaker 3: Federal Reserve strips out the impact of energy and food
16:55
Speaker 3: costs when it's studying inflation. So there's a lot of
16:58
Speaker 3: other things that's being overly simple just to say, drive
17:01
Speaker 3: down oil and gas prices. But it does have a
17:03
Speaker 3: lot of favor in economic sentiments. So it does seem
17:07
Speaker 3: like that is a huge focus here with all this commentary.
17:10
Speaker 2: Speaking of interest rates, Donald Trump says he knows interest
17:13
Speaker 2: rates better than Fed Chief Powell. I don't think Powell's
17:17
Speaker 2: been great at it, but I would challenge that presupposition quote.
17:22
Speaker 2: I think I know interest rates much better than they do,
17:24
Speaker 2: and I think I know certainly much better than the
17:26
Speaker 2: ones who's primarily in charge of making that decision. If
17:29
Speaker 2: I disagree, I will let it be known. So we
17:33
Speaker 2: have another battle brewing here. I drew a big heart
17:36
Speaker 2: around Donald Trump and J. Powell just to indicate how
17:38
Speaker 2: much they seem to like each other. Over the last
17:40
Speaker 2: course of the few years, but we have a battle
17:42
Speaker 2: brewing here, and quite frankly, there's only really one way
17:48
Speaker 2: that it can go, which is Donald Trump is going
17:52
Speaker 2: to express his dissatisfaction with the way things are being managed,
17:59
Speaker 2: and J. Powell and the Fed are going to need
18:01
Speaker 2: to completely ignore it. Is really the only way that
18:04
Speaker 2: it can go. Now they, I do think, genuinely will
18:10
Speaker 2: ignore it. And what I mean by that is, let's
18:13
Speaker 2: say Donald Trump is right that lower energy prices do
18:17
Speaker 2: bring down inflation, which far be it from me to debate.
18:21
Speaker 2: I don't know where energy prices are going to go.
18:24
Speaker 2: But if you get headline inflation, which most recently read
18:27
Speaker 2: two point nine percent a year over year, down to
18:31
Speaker 2: two percent by the end of twenty twenty five, and
18:35
Speaker 2: even if you know core inflation is still running like
18:38
Speaker 2: two and a half percent, it very well would be
18:41
Speaker 2: justifiable for the Federal Reserve to bring down interest rates,
18:43
Speaker 2: and I think they probably would in those circumstances, because
18:46
Speaker 2: this Federal Reserve really clearly wants lower interest rates to happen.
18:50
Speaker 2: They are still worried about the recession, they're worried about
18:53
Speaker 2: the labor market, and they want that to happen. The
18:56
Speaker 2: problem you have is we're not seeing much evidence of
18:59
Speaker 2: that yet, and the most recent trend on inflation has
19:02
Speaker 2: been towards the upside. CPI has been showing some not
19:06
Speaker 2: worrisome prints, but some heavier prints on inflation. And as
19:10
Speaker 2: you pointed out, oil prices alone are not going to
19:14
Speaker 2: change the Fed's mind, nor should they, because they are
19:17
Speaker 2: not going to be the greatest indication of where overall
19:19
Speaker 2: prices are going, where housing prices and other actors either
19:23
Speaker 2: items that really drive inflation go quick break. Wall Street
19:27
Speaker 2: Watch is up next.
19:41
Speaker 1: Like us on Facebook and follow us on Twitter at
19:44
Speaker 1: TFE show. Breaking business news is always first right here
19:48
Speaker 1: on the Financial Exchange Radio Network. Time now for Wall
19:53
Speaker 1: Street Watch a complete look and what's moving market so
19:56
Speaker 1: far today right here on the Financial Exchange Radio Network.
20:00
Speaker 5: After notching its first record close of the year, markets
20:04
Speaker 5: today are slightly dipping into negative territory as Wall Street
20:08
Speaker 5: continues to monitor fourth quarter earning season and developments on
20:12
Speaker 5: possible tariffs from President Trump. At the moment, Dow is
20:15
Speaker 5: off by a quarter percent, or one hundred and fifteen points,
20:19
Speaker 5: SMP five hundred is down only two points, and the
20:23
Speaker 5: Nasdaq down merely five points. Russell two thousand is off
20:26
Speaker 5: by three points, so it's pretty quiet out there. Ten
20:30
Speaker 5: year treasurevealed is flat at four point six two percent,
20:33
Speaker 5: and crude oil off about a quarter percent, trading at
20:35
Speaker 5: seventy four dollars and forty four cents a barrel. Boeing
20:39
Speaker 5: shares actually up by a quarter percent now after the
20:42
Speaker 5: aircraft maker revealed it racked up about four billion dollars
20:46
Speaker 5: in losses and generated less revenue in the fourth quarter
20:49
Speaker 5: than expected. Meanwhile, Noberg nor Disk said its experimental weight
20:53
Speaker 5: loss shot help patients lose over one fifth of their
20:57
Speaker 5: body weight in a trial that stock up by over
21:00
Speaker 5: six percent. Elsewhere, a cloud communications software maker Twilio issued
21:05
Speaker 5: an optimistic forecast for the next few years at its
21:08
Speaker 5: investor event yesterday, sending that stock up by twenty percent
21:13
Speaker 5: so far today. Railroad company CSX saw its revenue fall
21:18
Speaker 5: last quarter, hit by lower fuel, sewercharge and cole revenue
21:22
Speaker 5: that stock down by two percent. Texas Instrument shares down
21:25
Speaker 5: by five percent after the chip makers outlook for this
21:28
Speaker 5: quarter missed expectations. American Express posted a surgeon quarterly revenue,
21:33
Speaker 5: boosted in part by holiday spending. MX shares down by
21:37
Speaker 5: three percent. In Verizon shares up by about one percent
21:40
Speaker 5: after the telecom giant said it expects wireless service revenue
21:44
Speaker 5: to continue rising this year. I'm Tucker Silvan, that's Wall Street.
21:49
Speaker 2: Watch the great news out at Boeing just continuing this week.
21:53
Speaker 2: Boeing will actually be reporting their earnings Tuesday morning, ahead
21:57
Speaker 2: of the bell. But they were so bad, I guess
22:01
Speaker 2: the executives felt the need to get the bad news
22:04
Speaker 2: out early.
22:05
Speaker 4: Here.
22:05
Speaker 2: Boeing had another quarter of fresh charges and losses, highlighting
22:10
Speaker 2: the real problems the new CEO, Kelly Ortberg has as
22:13
Speaker 2: he tries to stabilize this company. Boeing said sales were
22:17
Speaker 2: fifteen point two billion dollars, which was less than the
22:20
Speaker 2: sixteen point seven to six billion expected by Wall Street.
22:24
Speaker 2: Loss per share came in at five dollars and forty
22:26
Speaker 2: six cents loss per share. Again according to generally account
22:30
Speaker 2: generally accepted accounting principles, the problems are also not relegated
22:38
Speaker 2: to the things that we think of the problems with Boeing.
22:41
Speaker 2: You know, obviously the commercial aviation portion of their business
22:45
Speaker 2: has been the concern dumpster fire, but remember they had
22:49
Speaker 2: a big strike that they had to deal with. In
22:50
Speaker 2: the last quarter, they had the failed what was the
22:54
Speaker 2: name of the capsule that they sent to the space station.
22:57
Speaker 2: I don't remember, but you know, we have two astronauts
23:00
Speaker 2: sitting in space right now that can't come home because
23:03
Speaker 2: of a failed Boeing capsule. And I shouldn't say fail.
23:07
Speaker 2: It didn't crash and burn, but there were some concerns
23:09
Speaker 2: about it concerning enough to not bring astronauts home. And
23:14
Speaker 2: then the figures also revealed the precarious state of their
23:16
Speaker 2: defense business. They suffered at one point seven billion dollars
23:19
Speaker 2: in charges tied to programs, including the refueling tanker that
23:24
Speaker 2: they're doing, the long delayed Air Force one. So I
23:29
Speaker 2: don't see any real story of turnarounds now, you know,
23:32
Speaker 2: maybe we'll hear on the earnings report next week that
23:35
Speaker 2: this was one of those throw it all in one
23:38
Speaker 2: quarter and you know, get the dumpster fire out of
23:40
Speaker 2: the way quarters here. And the stock admittedly has been
23:44
Speaker 2: on a bit of an uptick since November when they
23:47
Speaker 2: reached a if that was an all time low or
23:50
Speaker 2: just a a low for the year, but it has
23:53
Speaker 2: been a rough path for Boeing and no indication in
23:57
Speaker 2: this release at least that they are are moving beyond.
24:01
Speaker 3: No, the worst is not behind them. You made the
24:03
Speaker 3: key points. We all know the issues that they're dealing
24:05
Speaker 3: with on the silvil aviation side of things. Those have
24:07
Speaker 3: been well documented on the news, but it was surprising
24:11
Speaker 3: to see just how dismal their defense contract business is
24:14
Speaker 3: doing on that end of things. That loss in that
24:17
Speaker 3: area is concerning. It's really hard to make the argument
24:21
Speaker 3: other than you really believing that Kelly Orper can come
24:24
Speaker 3: in and turn around this company. There's just a lot
24:26
Speaker 3: of negatives out here when you look at this business,
24:29
Speaker 3: and it's gonna take more than a quarter to turn
24:31
Speaker 3: this around. I mean, this is supply chains that need
24:34
Speaker 3: to be reconstructed. There is a financial discipline that needs
24:39
Speaker 3: to occur. And to that point, Kelly Oorper has stashed
24:42
Speaker 3: away twenty four billion in cash they now sit That
24:45
Speaker 3: was at the most recent quarter, but they now sit
24:47
Speaker 3: with a little over twenty six billion cash, basically recognizing
24:50
Speaker 3: that they're going to need a lot of cash to
24:52
Speaker 3: burn to try and turn this thing around. Because to
24:55
Speaker 3: your point where you led this, the sales aren't backing,
24:58
Speaker 3: you know what they're anticipating, so they really need to
25:01
Speaker 3: bunker down and try and turn this thing around. The
25:03
Speaker 3: stock had lost thirty three percent last year and to
25:06
Speaker 3: your point, had reached one of its historic lows back
25:09
Speaker 3: in November.
25:10
Speaker 2: There hasn't been much in the way of activist investor
25:12
Speaker 2: activity and to this point, and my read on that
25:15
Speaker 2: is just I don't think anybody knows how to fix
25:17
Speaker 2: this company yet, and so you have not had activists
25:21
Speaker 2: coming in and saying do this, do that. But it
25:23
Speaker 2: does bring up a big question to me, which is
25:26
Speaker 2: does this company eventually take the GE approach, you know, like, hey,
25:30
Speaker 2: we've just been a disaster for so long.
25:31
Speaker 4: We've gotten into too many areas and what GE.
25:34
Speaker 2: Has done over the last decade has been sell off
25:37
Speaker 2: massive businesses and split up. It is not the same
25:41
Speaker 2: company that it was pre Great Financial Crisis, and it's
25:43
Speaker 2: a real question as to whether or not Boeing will
25:45
Speaker 2: ever be the same company it was pre twenty twenty
25:48
Speaker 2: and the disaster, sorry, pre twenty eighteen. When was the
25:52
Speaker 2: no that was twenty twenty twenty, nineteen, twenty twenty, I
25:55
Speaker 2: don't know when the first planes that went down, But
25:59
Speaker 2: real question as to whether they will ever be that
26:01
Speaker 2: company again or if you potentially have a you know,
26:05
Speaker 2: Boeing Commercial Aviation and a Boeing defense. I'm not sure.
26:08
Speaker 3: There's definitely an argument to be made that they need
26:11
Speaker 3: to narrow their focus.
26:12
Speaker 2: Speaking of the airline industry, as much trouble as Boeing
26:17
Speaker 2: seems to be struggling, with United, Delta and other major
26:21
Speaker 2: global airlines having a heck of a moment right now.
26:26
Speaker 2: United Airlines for the year bumped up one hundred and
26:29
Speaker 2: fifty four percent in twenty twenty four. Delta not quite
26:34
Speaker 2: as much, but rose seventy seven percent over the same
26:36
Speaker 2: period of time. According to the Wall Street Journal those
26:39
Speaker 2: reliability rankings that they put out there every year. In
26:42
Speaker 2: terms of US airlines, Delta once again took the number
26:45
Speaker 2: one spot, followed by Southwest, which again surprising given some
26:48
Speaker 2: of the troubles they've had, Alaska Airlines, Allegiance, United Jet,
26:52
Speaker 2: Blue American taking that seventh spot, and then Spirit in
26:56
Speaker 2: Frontier rounding out the last two places there in terms
27:00
Speaker 2: of reliability at least, but in spite of United, kind
27:04
Speaker 2: of middle of the pack in terms of reliability.
27:07
Speaker 4: Huge profit year for them.
27:08
Speaker 3: I love this piece, Mike. I thought it did a
27:10
Speaker 3: really great job. One of the theories that Buffett has
27:14
Speaker 3: trumpeted for many years is this idea that investing in
27:17
Speaker 3: airlines is just a bottomless pit, that you just can't
27:19
Speaker 3: make any money doing it. And what they did here
27:21
Speaker 3: in the Wall Street Journal is they said, back in
27:25
Speaker 3: nineteen seventy eight, the Airline Deregulation Act was passed, and
27:28
Speaker 3: since then, over the forty six years, if you had
27:30
Speaker 3: put one thousand bucks into some of the major airline carriers,
27:33
Speaker 3: you would have three thousand, three hundred and forty two
27:36
Speaker 3: dollars a day, but only seven hundred eleven dollars after
27:39
Speaker 3: you account for the impacts of inflation. You put that
27:42
Speaker 3: same one thousand bucks into the S and P five hundred,
27:45
Speaker 3: you'd have one hundred and ninety thousand bucks over that
27:47
Speaker 3: forty six year period.
27:48
Speaker 2: That was just been a detrimental area to invest in. Yeah,
27:53
Speaker 2: And which is, you know, on the surface, surprising because
27:56
Speaker 2: more people fly today, it's become a much bigger piece
27:59
Speaker 2: of every day life compared to the nineteen sixties and seventies.
28:02
Speaker 2: And yet there does not seem to be that benefit
28:06
Speaker 2: from scale that you would expect from a business that
28:09
Speaker 2: has dramatically grown over the course of five decades.
28:12
Speaker 3: No, And it's because to the point, and people may
28:14
Speaker 3: argue with this because some fares do seem expensive today,
28:17
Speaker 3: but if you look back to nineteen seventy eight, they're
28:21
Speaker 3: fifty percent cheaper if you account for inflation the fares
28:23
Speaker 3: that we pay today. And some of that's obvious, right.
28:25
Speaker 3: You just innovate more. There is more scale, there's more
28:28
Speaker 3: planes out there, but it's it's an area where from
28:31
Speaker 3: an investing standpoint, has always been fascinating to fall because
28:35
Speaker 3: it's just it's very cyclical in nature. It's so capital intensive,
28:39
Speaker 3: and there's been some some stars out there. Southwest Airlines
28:42
Speaker 3: is one that has really done well over its history,
28:46
Speaker 3: but all of these have run into Chapter eleven bankruptcies
28:49
Speaker 3: over you know, the last decade plus.
28:50
Speaker 4: Have either of you ever flown a Legiant No.
28:53
Speaker 2: I was surprised by them taking the number four spot
28:55
Speaker 2: in terms of the Wall Street Journal's reliability ranking. They
28:58
Speaker 2: are a discount air line. I've flown them twice, I
29:02
Speaker 2: think mainly because they were one of the few carriers
29:04
Speaker 2: doing NonStop Boston to Indiana. We did take off on time,
29:09
Speaker 2: but it is a spirit type experience and if you're
29:11
Speaker 2: flying out there. My word of advice would be, do
29:14
Speaker 2: not check luggage with them, not because they lost anything,
29:16
Speaker 2: but I remember showing up to the airport with plenty
29:19
Speaker 2: of time and then experiencing the single longest bag check
29:24
Speaker 2: experience that I've ever dealt with in my life. Yeah,
29:27
Speaker 2: and just it was one of those funny experiences where
29:30
Speaker 2: they're constantly like, all right, if you're on the Boston flight,
29:32
Speaker 2: cut the line, get to the front.
29:33
Speaker 4: We need to get you on that. We need to
29:35
Speaker 4: get you on that plane.
29:35
Speaker 2: Immediately, give us your bags, and you would just deal
29:38
Speaker 2: with this over and over and over again, where you
29:40
Speaker 2: were getting towards the front of the line, and then
29:41
Speaker 2: oh no, we got to get all these bags on
29:43
Speaker 2: the plane because otherwise you're going to miss your plane.
29:45
Speaker 2: Quick break. But when we come back, I want to
29:48
Speaker 2: talk about the job market in New England. What are
29:52
Speaker 2: we really facing here? Can you still describe it as
29:55
Speaker 2: one of the hottest job markets in the country as
29:57
Speaker 2: you have been, you know, during previous times of economic
30:01
Speaker 2: down term?
30:02
Speaker 4: Quick break? That's next on the Financial Exchange.
30:05
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30:14
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30:45
Speaker 2: Paul, we talk a lot about the state and national
30:48
Speaker 2: employment market, but not as much focus on the regional
30:51
Speaker 2: and so I want to quote some data here. We
30:54
Speaker 2: get the week the monthly jobs report, but the state
30:57
Speaker 2: by state data comes out a little bit later. So
30:59
Speaker 2: the latest that I have is November of twenty twenty
31:01
Speaker 2: four in front of me, and it paints a pretty
31:05
Speaker 2: good picture of most of.
31:06
Speaker 4: New England and Vermont.
31:08
Speaker 2: The unemployment rate is the second lowest in the country,
31:11
Speaker 2: sitting at two point four percent, closely followed by New
31:13
Speaker 2: Hampshire at two point five. When you take a look
31:16
Speaker 2: at other larger states Connecticut sitting at three percent unemployment Massachusetts,
31:22
Speaker 2: you gotta come down quite a bit further. Here they
31:25
Speaker 2: take the thirty first rank, but still below the national
31:28
Speaker 2: average at four percent. Rhode Island was the only one
31:31
Speaker 2: that I could look at definitively here and say, okay,
31:33
Speaker 2: that's a little bit worse than average four point six
31:35
Speaker 2: percent forty first rank in terms of state by state
31:39
Speaker 2: here in terms of the unemployment rate. Obviously, the unemployment
31:43
Speaker 2: rate isn't the only factor to consider when looking at
31:46
Speaker 2: the state of the labor market, and I am hearing
31:48
Speaker 2: pretty consistently, especially from new college graduates, that it is
31:52
Speaker 2: a tremendously competitive market right now. Well not for new labor,
31:58
Speaker 2: but for jobs. They are having a tougher time finding them.
32:02
Speaker 2: Those who are unemployed are staying on unemployment longer, and
32:05
Speaker 2: it's not exactly the job market that they were kind
32:08
Speaker 2: of led to believe from maybe people that were graduating
32:12
Speaker 2: in just a few years ago, in twenty twenty one
32:14
Speaker 2: and twenty twenty two.
32:15
Speaker 3: It's interesting, it does seem like New England is a
32:17
Speaker 3: bit of a microcosm of what's going on nationally in
32:20
Speaker 3: terms of the job market, where unemployment rates are still
32:23
Speaker 3: very low historically, and as you alluded to, a lot
32:26
Speaker 3: of the New England states look very well positioned from
32:29
Speaker 3: an unemployment rate perspective. But to your point, this idea
32:32
Speaker 3: of job openings and new jobs being posted. Those have
32:36
Speaker 3: declined wherever you look around. New England, Massachusetts saw a
32:40
Speaker 3: drop of thirty three thousand openings, Main twelve thousand, New
32:44
Speaker 3: Hampshire seven thousand, and Rhode Island five and Vermont three.
32:48
Speaker 3: All of them have less jobs available than they did
32:51
Speaker 3: a year ago. Now, part of this is the fact
32:53
Speaker 3: that twenty twenty two sorry extremely robust. Twenty one and
32:56
Speaker 3: twenty two were extremely robust labor market that was hard
33:00
Speaker 3: to replicate. But if you do look forward, it does
33:02
Speaker 3: seem like many employers Mike are really focused on retaining
33:05
Speaker 3: the talent that they have, but not really adding on
33:08
Speaker 3: more employees, sort of standing pat from an employment perspective.
33:12
Speaker 2: In terms of financial planning work that you do, Paul,
33:15
Speaker 2: and that I do here, I feel like there's a
33:18
Speaker 2: real lack of resources and education on workplace benefits in particular.
33:24
Speaker 2: There's a few reasons for that, but the big one
33:26
Speaker 2: is that for financial advisors, a lot of the incentive
33:30
Speaker 2: for making money is aligned with managing assets, and if
33:33
Speaker 2: you're a younger worker in the workplace, it's kind of
33:36
Speaker 2: tough to do that, and so there's a ton of
33:40
Speaker 2: advice out there for things like social security and retirement planning,
33:44
Speaker 2: not a ton out there for what I do about
33:46
Speaker 2: things like stock options or what's better a traditional or
33:49
Speaker 2: WROTH for one K? How much life insurance do I
33:51
Speaker 2: need at earlier stages of life and planning? And so
33:56
Speaker 2: I want to put that out there is Hey, I
33:58
Speaker 2: know that there's a lack of resources on this. Certainly,
34:00
Speaker 2: if you want to go digging and search on the internet,
34:03
Speaker 2: you can find it. But when you go out there
34:06
Speaker 2: to try and find professional advice on these subjects, I
34:08
Speaker 2: recognize that it can be few and far between. If
34:11
Speaker 2: you're facing questions such as, hey, my company's offering stock
34:15
Speaker 2: options and I just don't understand exactly how they might
34:18
Speaker 2: benefit me for the future, or you know, should I
34:22
Speaker 2: be contributing to traditional versus ROTH for one K? And
34:25
Speaker 2: how much should be going in? How much life insurance
34:27
Speaker 2: do I need at the stage of my life? When
34:30
Speaker 2: or should I be considering long term care insurance? These
34:33
Speaker 2: are complicated questions that are truly unique to each individual,
34:38
Speaker 2: and also don't have a ton of education resources on
34:43
Speaker 2: how to find the answer to them. If you're facing
34:46
Speaker 2: these types of questions, maybe you've got a kid or
34:48
Speaker 2: a niece or nephew that's in the labor market trying
34:51
Speaker 2: to sort these things out and is trying to learn
34:53
Speaker 2: more and just get educated on the subject. We'd love
34:56
Speaker 2: to talk to you here at the Armstrong Advisory Group.
34:58
Speaker 2: We offer free consultation through out in New England, have
35:01
Speaker 2: a lot of great resources on our website as well.
35:03
Speaker 2: But to talk to one of our people here at
35:05
Speaker 2: Armstrong about your financial future, give us a ring at
35:08
Speaker 2: eight hundred three nine three for zero zero one. That's
35:11
Speaker 2: again the number four the Armstrong Advisory Group Live Human
35:14
Speaker 2: Beings standing by at eight hundred three nine three for
35:17
Speaker 2: zero zero one.
35:18
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
35:21
Speaker 1: registered investment advisor. Nothing in the ad or in any
35:24
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
35:27
Speaker 1: your own financial, tax and estate planning advisors before making
35:29
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
35:33
Speaker 1: advisory services. Uh.
35:35
Speaker 2: Did you know that you could get a used iPhone
35:40
Speaker 2: Paul for the rock bottom price of three thousand dollars?
35:43
Speaker 2: Why are people paying three thousand dollars for iPhones with
35:48
Speaker 2: cracked screens and gross clogged speakers.
35:52
Speaker 4: Do you know why.
35:53
Speaker 3: I don't understand why anyone would go out and do
35:56
Speaker 3: it unless perhaps it has TikTok in it, because phones
36:02
Speaker 3: with TikTok are now being listed for extremely absurd prices
36:08
Speaker 3: in hopes that there's some way for people to get
36:12
Speaker 3: their crack app TikTok through a means of an older phone.
36:18
Speaker 2: So, Tucker, can you confirm have you looked every day
36:20
Speaker 2: that the TikTok app is still back to the Apple apps?
36:23
Speaker 4: Right?
36:23
Speaker 2: I know you did this on like Tuesday, So let's
36:26
Speaker 2: refresh our memory here in terms of whether or not
36:28
Speaker 2: Apple has reallowed this. But to recap, the Trump administration
36:33
Speaker 2: has put into place a seventy five day delay, effectively
36:38
Speaker 2: informing their justice departments that they don't want it to
36:41
Speaker 2: go after any companies, TikTok especially.
36:44
Speaker 4: However, that has.
36:47
Speaker 2: Not been enough for Apple and Google to say we're
36:49
Speaker 2: still willing to let people download the app new in
36:51
Speaker 2: the App Store. So what does that leave. It leaves
36:54
Speaker 2: an app that's still perfectly functional. TikTok's still supporting it
36:56
Speaker 2: as far as I can tell. They might not be
36:58
Speaker 2: able to push updates through it. But if you have
37:01
Speaker 2: TikTok on your phone. You can still access it, you
37:03
Speaker 2: can still go, you know, get that endorphin rush that
37:07
Speaker 2: you get from setting up a camera and doing a
37:11
Speaker 2: silly dance on a public street.
37:12
Speaker 4: For some reason, I don't get it this algorithm.
37:15
Speaker 3: I'm telling you, it's got people.
37:17
Speaker 5: But.
37:19
Speaker 2: For you know, the latest craze and you know, hey,
37:23
Speaker 2: this is the economics.
37:24
Speaker 4: It works applying to mand baby.
37:25
Speaker 2: But a brand new phone might get you, you know,
37:28
Speaker 2: might cost you a thousand bucks before taxes from the
37:30
Speaker 2: Apple Store, but you want one with TikTok loaded up
37:34
Speaker 2: on it, and you're going to be paying out the
37:36
Speaker 2: nose for it because you cannot anymore download that app.
37:40
Speaker 2: I don't know how this works, because generally speaking, I
37:42
Speaker 2: would want to wipe a phone clean before transferring it.
37:45
Speaker 2: So I'm a little bit confused about that piece of it.
37:48
Speaker 2: But nonetheless, these things are selling like hotcakes. We're going
37:52
Speaker 2: to take a quick break here on the financial exchange.
37:55
Speaker 2: Markets are very lightly negative as we kick off trading here.
37:59
Speaker 4: We're about an hour halfy in.
38:00
Speaker 2: The Dow's off one hundred and seven points a quarter
38:02
Speaker 2: of a percent, the S and P's off four less
38:04
Speaker 2: than a tenth of a percent. And the nazac's off
38:06
Speaker 2: twenty one or one tenth of a percent. We'll be
38:09
Speaker 2: right back with a whole lot more here on the
38:11
Speaker 2: Financial Exchange. Stay tuned, folks,