Latest / The Financial Exchange Show / Americans’ dream of homeownership has become a luxury

Transcript

Americans’ dream of homeownership has become a luxury · The Financial Exchange Show

0:00
Speaker 1: The Financial Exchange is produced by Money Matters Radio and
0:03
Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
0:05
Speaker 1: registered investment advisor. All opinions expressed are solely those of
0:08
Speaker 1: the hosts, do not reflect the opinions of Armstrong Advisory
0:11
Speaker 1: or anyone else. Investments can lose money. This program does
0:14
Speaker 1: not offer any specific financial or investment advice. Please consult
0:17
Speaker 1: your own financial, tax, and estate planning advisors before making
0:20
Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
0:23
Speaker 1: this program do not endorse each other or their services.
0:26
Speaker 1: Armstrong and Money Matters Radio do not compensate each other
0:28
Speaker 1: for referrals and are not affiliated. This is the Financial
0:34
Speaker 1: Exchange with Mike Armstrong and Paul Lane, your exclusive look
0:39
Speaker 1: at business and financial news affecting your day, your city,
0:43
Speaker 1: your world. Stay informed and up to date about economic
0:46
Speaker 1: and market trends plus breaking business news every day. The
0:50
Speaker 1: Financial Exchange is a proud partner of the Disabled American
0:54
Speaker 1: Veterans Department of Massachusetts. Help us support our great American
0:58
Speaker 1: heroes by visiting DAV five Boston and making a donation today.
1:03
Speaker 1: This is the Financial Exchange with Mike Armstrong and Paul Lane.
1:11
Speaker 2: Good morning, Welcome back to the Financial Exchange. It's a
1:15
Speaker 2: Tuesday here where markets are trying to stage to comeback.
1:18
Speaker 2: We opened up a negative territory. We've got all three
1:20
Speaker 2: major industries up, but not by a whole lot. Of
1:23
Speaker 2: Dow currently leading the way up a quarter of a percent.
1:25
Speaker 2: We'll have a full recap for you later. We're also
1:28
Speaker 2: going to be joined by don't have my schedule in
1:31
Speaker 2: front of me Alex Alex Gaily from Bank Rate in
1:35
Speaker 2: the next segment, talking to us about the American housing
1:38
Speaker 2: market and folks getting priced out of it. We had
1:42
Speaker 2: a jobs released this morning at ten am. The Job
1:46
Speaker 2: Openings Labor Turnover Survey, brought to you by the US
1:48
Speaker 2: Bureau of Labor Statistics, found that the number of job
1:52
Speaker 2: openings sat pretty steady at seven point seven million, a
1:56
Speaker 2: very slight increase, whereas the number of hires and little
2:00
Speaker 2: separations did not change a whole lot at five point
2:02
Speaker 2: one million. Within the separations, the quits rate and layoffs
2:07
Speaker 2: and discharges were a little changed as well, at two
2:09
Speaker 2: point nine million and one point nine million, respectively. We
2:13
Speaker 2: also had a late afternoon announcement on in Nvidia and
2:17
Speaker 2: their ability to sell chips to China. These are not
2:20
Speaker 2: the Blackwell, latest and greatest chips. These are the H
2:22
Speaker 2: two hundreds. Apparently the Trump administration reaching a deal with China.
2:28
Speaker 2: We debated how significant this is, and I guess the
2:32
Speaker 2: culmination of that debate would be looking at Invidious stock
2:35
Speaker 2: price today, which is not moving really at all. Did
2:40
Speaker 2: get a little bump though yesterday afternoon around this announcement.
2:43
Speaker 2: It looks like but this was under yeah starting is
2:49
Speaker 2: that aftermarket trading it got a little bit of a
2:51
Speaker 2: bump and then came right back down. So the investors
2:55
Speaker 2: seeming it is up about two percent of the last
2:57
Speaker 2: five days. But you know yesterday you got a bump
3:00
Speaker 2: late afternoon right at the close, and then you know,
3:03
Speaker 2: reopened about where it was during regular trading. So I
3:07
Speaker 2: think investors taking the message here that there might be
3:11
Speaker 2: a path for some new semiconductors to be sold to China.
3:14
Speaker 2: But it is a long winding path with a lot
3:16
Speaker 2: of potential roadblocks. And we're still not talking about the
3:19
Speaker 2: most profitable chips that Nvidia has to sell. Home depot
3:24
Speaker 2: stock falling ahead of their investor day that they have
3:27
Speaker 2: and this is going to be one of many stories
3:30
Speaker 2: that I think we'll be covering over the course, frankly,
3:33
Speaker 2: not just of the next few months, but of the
3:35
Speaker 2: next few years that speak to the housing market generally,
3:39
Speaker 2: affordability specifically, and any company that is involved in the
3:46
Speaker 2: rehab of or new construction of homes, because there's just
3:52
Speaker 2: not a great solution to what we're dealing with in
3:55
Speaker 2: the housing market. But let's start off with the with
3:57
Speaker 2: the conjecture about Home Depots Investor Day and what we're
4:00
Speaker 2: likely to hear there.
4:01
Speaker 3: Yeah, some recent updates from Home Depot that they're offering
4:05
Speaker 3: cautious guidance for next year, basically stating that they don't
4:09
Speaker 3: anticipate the housing market to rebound in the short term.
4:12
Speaker 3: And you have that in dovetailing with some home builders
4:16
Speaker 3: that we'll talk about a little bit too, that I
4:17
Speaker 3: also have been getting beaten up pretty significantly from the
4:20
Speaker 3: stock side of things, just sort of echoing the sentiments
4:23
Speaker 3: that we've talked about in the program, where it's just been,
4:26
Speaker 3: like you said, Mike, it's been a very dismal housing
4:29
Speaker 3: market and none of the potential catalysts that had been
4:33
Speaker 3: rumored have really come home to roost, whether it be
4:36
Speaker 3: lower interest rates. There hasn't been a real significant change
4:39
Speaker 3: there on the thirty year fixed mortgage side of things.
4:42
Speaker 3: And also you just haven't seen a significant uptick in
4:46
Speaker 3: transaction volume. And you've seen more listings out there, but
4:49
Speaker 3: just not the appetite for them. And Home Depot's forecasts
4:52
Speaker 3: kind of reflecting that sort of change, where they're seeing
4:56
Speaker 3: that their sales growth is going to be slow and
4:58
Speaker 3: compared to where it was in twenty four.
5:01
Speaker 2: So shares of Home Depot down about ten percent this year.
5:05
Speaker 2: It's tough for me to imagine what is going to
5:07
Speaker 2: turn this one around. You need higher volume of home transactions.
5:10
Speaker 2: We're not seemingly getting it. The one glimmer of hope
5:14
Speaker 2: that I think I can point to would be that
5:17
Speaker 2: there is going to be some cash moving into the
5:21
Speaker 2: overall financial system in twenty twenty six. We've got a
5:24
Speaker 2: few different things, mainly to do with the Trump tax
5:26
Speaker 2: cuts that will be coming into play in the March
5:30
Speaker 2: April timeframe, right in time for the spring housing season.
5:34
Speaker 2: You have the bigger tax cut for seniors. You have
5:38
Speaker 2: the reduction of the salt stuff for folks in high
5:42
Speaker 2: income tax states, and so a few of those things
5:45
Speaker 2: are likely to result in bigger income tax refunds, some
5:48
Speaker 2: of the biggest ones we've seen in years. I'm just
5:51
Speaker 2: not sure how much home Depot ends up benefiting from
5:55
Speaker 2: that compared to a company like Walmart or TJX or
5:58
Speaker 2: some of these other companies that are lower ticket items
6:01
Speaker 2: that might help you feel good without having to spend
6:03
Speaker 2: ten thousand dollars on a bathroom rehab.
6:05
Speaker 3: This is probably a long shot probability, but potentially if
6:08
Speaker 3: you were to see more rate cuts heading into twenty
6:11
Speaker 3: twenty six, and I'm talking about a significant amount of them,
6:14
Speaker 3: then maybe that brings down the barring costs on the
6:16
Speaker 3: whole equi line of credit side of things and makes
6:19
Speaker 3: it so that borring against existing equity in the house
6:23
Speaker 3: is close to that, you know, four to five percent.
6:25
Speaker 2: A little bit more tenable.
6:26
Speaker 3: Yeah, I suppose that I'm grasping its stars.
6:29
Speaker 2: Yeah, yeah, I mean, one thing that would be a
6:31
Speaker 2: lot of rate cuts. One thing that we don't have
6:33
Speaker 2: any evidence of is the rate cuts that the Fed's
6:35
Speaker 2: been doing affecting longer term interest rates and therefore buying mortgages.
6:40
Speaker 2: The current average for a thirty year fixed rate mortgage,
6:43
Speaker 2: according to Mortgage News daily sitting at six point three
6:46
Speaker 2: six percent, and if we take a look here at
6:50
Speaker 2: over the course of the last year or so, hold
6:53
Speaker 2: on just a moment. Sorry, now we're gonna start playing
6:59
Speaker 2: me off.
6:59
Speaker 3: We had had prediction going into this year as to
7:03
Speaker 3: what mortgage range would be. I believe it's me and
7:07
Speaker 3: Chuck on there was Mike did Mike? Did you hop
7:10
Speaker 3: in this too? Were you we predicted the range? I
7:13
Speaker 3: think I had the high of seven and change. Ben's
7:16
Speaker 3: got it here.
7:16
Speaker 2: I don't know, but in either case, at the end
7:19
Speaker 2: of August was last year, which is right before the
7:23
Speaker 2: FED started cutting rates. End of August, last day of August,
7:26
Speaker 2: the average thirty year fixed rate mortgage was six point
7:28
Speaker 2: four to one percent. Since that point in time, the
7:31
Speaker 2: FED has cut rates by a total of one and
7:34
Speaker 2: a quarter percent. Three cuts last year or was it
7:37
Speaker 2: four cuts last year?
7:39
Speaker 3: I think just three?
7:40
Speaker 2: No, it's double plus two, right, so full percentage point
7:44
Speaker 2: last year plus another half percent this year. You've now
7:47
Speaker 2: gone from six point four to one percent on the
7:49
Speaker 2: thirty year fixed rate mortgage to six point three six
7:51
Speaker 2: percent in spite of a big series of rate cuts.
7:55
Speaker 3: On the shorter end, which obviously just for listeners out
7:57
Speaker 3: there doesn't impact the longer end. What were the range
8:00
Speaker 3: that we had been Paul had.
8:01
Speaker 4: A low of five point eight five and high seven
8:03
Speaker 4: to one, Chuck had five point two to seven point eight,
8:07
Speaker 4: and Mike's I can't read the writing here had a low.
8:10
Speaker 3: Of six point five.
8:12
Speaker 2: Well, I'm screwed.
8:13
Speaker 3: I think I nailed that. What did the load did
8:16
Speaker 3: it get?
8:16
Speaker 2: I mean you gave a range of one and a
8:18
Speaker 2: half percentage points Paul, Yeah, you totally nailed it. Congratulations,
8:21
Speaker 2: this is right. Let's take a quick break when we
8:25
Speaker 2: come back. Alex Gaily from Bankraage joining us. The article
8:29
Speaker 2: today priced out of seventy five percent of the market.
8:32
Speaker 2: American's dream of home ownership has become a luxury. Alex
8:37
Speaker 2: joins us. Next on the Financial Exchange.
8:40
Speaker 1: This is your home for the most comprehensive coverage of
8:42
Speaker 1: the economy and the trends on Wall Street. This is
8:45
Speaker 1: the Financial Exchange Radio Network. The Financial Exchange is now
8:50
Speaker 1: available every day from eleven to noon non Serious XM's
8:53
Speaker 1: Business Radio Channel one thirty two. Stay informed about the
8:56
Speaker 1: latest from Wall Street, fiscal policy, and breaking business news
9:00
Speaker 1: every day. The Financial Exchange is live on Serious XM's
9:04
Speaker 1: business radio Channel one two. This is the Financial Exchange
9:08
Speaker 1: Radio Network.
9:16
Speaker 2: Joining us now is Alex Gaily from bank Rate talking
9:19
Speaker 2: to us about their latest piece on home affordability in
9:23
Speaker 2: the United States. Alex, thank thanks so much for joining us,
9:25
Speaker 2: appreciate it.
9:26
Speaker 5: Thanks for having me here today.
9:28
Speaker 2: So we have folks on from bank Rate on a
9:31
Speaker 2: fairly regular basis, and oftentimes it's about surveys that are
9:34
Speaker 2: done of the American consumer asking them about affordability and
9:37
Speaker 2: prices and spending plans and credit cards. This is a
9:40
Speaker 2: little bit different. You guys analyzed dozens of metro markets
9:45
Speaker 2: to try and figure out, you know, for the average family,
9:49
Speaker 2: how affordable is housing Specifically, what was your methodology here
9:54
Speaker 2: to determine affordability for these households.
9:58
Speaker 5: So we analyze primarily real dot com and Redfinn data
10:02
Speaker 5: to figure out what share of homes are affordable to
10:05
Speaker 5: the typical household and the thirty four largest US metros.
10:08
Speaker 5: And we defined affordability by looking at the thirty percent
10:13
Speaker 5: rule and that your housing costs typically should stay under
10:16
Speaker 5: that threshold. At least that's been the historical definition and
10:20
Speaker 5: widely popular measure for the real estate industry. So what
10:25
Speaker 5: we really found is that nationally, seventy five percent of
10:29
Speaker 5: homes are unaffordable to the typical household And then when
10:32
Speaker 5: you zoom in more locally, only about a dozen of
10:35
Speaker 5: the largest US metros have more than thirty percent of
10:39
Speaker 5: listings that are affordable to the typical households in those areas.
10:42
Speaker 5: So what this tells us is that really it validates
10:48
Speaker 5: the frustration that many home aspiring homeowners have felt over
10:52
Speaker 5: the last few years, which is that they want to
10:54
Speaker 5: become homeowners, but they're increasingly feeling priced out. And it
10:58
Speaker 5: shows us that homeownership has, in many ways in America's
11:01
Speaker 5: largest city, become a luxury instead of this common middle
11:06
Speaker 5: class milestone that historically it has been.
11:08
Speaker 2: So you mentioned thirty four large metro areas. I don't
11:12
Speaker 2: need you to list them all, but where did you
11:14
Speaker 2: find the worst problems of affordability? And some areas that
11:18
Speaker 2: are I'm sure they're not what most people would define
11:21
Speaker 2: as affordable, But where did you find the most affordability
11:23
Speaker 2: across the country?
11:24
Speaker 5: I guess so in terms of the trends we saw regionally,
11:28
Speaker 5: the coastal markets are largely the least affordable for typical
11:33
Speaker 5: households in those areas, so we saw rich was no
11:36
Speaker 5: surprise New York, Boston, Miami on the East coast, and
11:40
Speaker 5: then on the west coast, La San Diego, Seattle, San Francisco.
11:44
Speaker 5: These markets are where essentially the typical household is completely
11:48
Speaker 5: price style of those markets, So you have to be
11:51
Speaker 5: earning significantly more than that, you know, talking one hundred
11:56
Speaker 5: and fifty thousand plus in a lot of these metro
11:58
Speaker 5: areas to even think about getting your foot in the door.
12:02
Speaker 5: And then when you go more inland, that's where we
12:04
Speaker 5: see that there is still a path to homeownership. So
12:07
Speaker 5: places like Saint Louis, Detroit, Pittsburgh, Birmingham, a lot of
12:11
Speaker 5: metros in the South along the Russ Bell and even
12:14
Speaker 5: in the Midwest. Although Midwest does offer affordability, it has
12:18
Speaker 5: been lagging in terms of new construction, so it's a
12:21
Speaker 5: little bit more bottleneck than the Midwest, but it does
12:25
Speaker 5: have that affordability, which is what is attractive to a
12:28
Speaker 5: lot of Americans right now who want to become homeowners.
12:30
Speaker 2: It seems to me that this affordability problem is well
12:35
Speaker 2: obviously causing friction, obviously getting a lot of attention, but
12:37
Speaker 2: I think also is resulting in you know, voters going
12:41
Speaker 2: to the ballot voting based on these types of things
12:45
Speaker 2: we've seen. Well, you know, housing affordability being a big
12:50
Speaker 2: affordability generally being a big item that was debated during
12:53
Speaker 2: the New York City mayoral election. Here in Massachusetts, there's
12:56
Speaker 2: a ballot initiative going forward to propose rent control again
13:01
Speaker 2: in Massachusetts. What do most economists view as the underlying
13:06
Speaker 2: root cause and does anybody have what seems to be
13:09
Speaker 2: a achievable solution to housing affordability today?
13:14
Speaker 5: The real fix to achieving more affordability in the housing
13:18
Speaker 5: market is simply building more homes. But the problem with
13:22
Speaker 5: that is that it takes time, and we haven't been
13:24
Speaker 5: building homes at the rates we should have been since
13:26
Speaker 5: the Great Recession. As of the latest data I've seen,
13:29
Speaker 5: we're about at a four point seven million housing shortage
13:33
Speaker 5: across the country, so we have a lot of catching
13:35
Speaker 5: up to do to meet demand. And really the root
13:39
Speaker 5: problem is the lack of supply, specifically affordable housing across
13:45
Speaker 5: the country, but particularly on those coastal markets. But you know,
13:49
Speaker 5: we spend a lot of time talking about how much
13:51
Speaker 5: prices have grown for homes over the last five years,
13:54
Speaker 5: they're up about fifty percent, wages have only been up
13:57
Speaker 5: about twenty percent during that time period, and then you
14:00
Speaker 5: also have these higher mortgage rates that are keeping a
14:03
Speaker 5: lot of buyers on the sideline. So I think overall,
14:06
Speaker 5: looking ahead, the forecast i've seen have been more optimistic
14:10
Speaker 5: and that affordability will slowly get better, but we do
14:14
Speaker 5: have a long road ahead. It's not going to be
14:15
Speaker 5: a quick fix.
14:16
Speaker 2: I know this wasn't something that you guys specifically studied,
14:19
Speaker 2: but if we're heading for a spring housing market where
14:23
Speaker 2: buyers don't seem to have the money to be able
14:25
Speaker 2: to buy homes and sellers seem to be fixated on
14:27
Speaker 2: a price that was really available to them two or
14:30
Speaker 2: three years ago, it doesn't seem to spell a good
14:34
Speaker 2: news housing market a high volume of transaction housing market
14:37
Speaker 2: come twenty twenty six, at least in my view, any
14:40
Speaker 2: take on what realtors are saying about the upcoming housing
14:44
Speaker 2: market in twenty twenty six, I think.
14:46
Speaker 5: This year could largely be categorized as stagnant. There has
14:50
Speaker 5: been a stalemate between you know, there's really been a
14:53
Speaker 5: standoff between buyers and sellers this year, and I think
14:56
Speaker 5: we could continue to see some of that going into
14:59
Speaker 5: twenty twenty six. The thing is that is really keeping
15:03
Speaker 5: I think what a lot of housing economists deem is
15:05
Speaker 5: optimistic is that it looks like interest rates are headed
15:09
Speaker 5: towards dropping more and so that you know, inherently affects
15:15
Speaker 5: mortgage rates in a couple different ways. And so housing
15:18
Speaker 5: economists think that even if we just see a subtle
15:20
Speaker 5: drop in mortgage rates, that that will create more demand
15:24
Speaker 5: on the buyer side to get into the housing market.
15:27
Speaker 5: And we also may see slower price growth as well
15:31
Speaker 5: as well as the We have actually seen more supply
15:35
Speaker 5: in the last few months, and so if we continue
15:38
Speaker 5: to see a growth and supply, and of course this
15:41
Speaker 5: varies from market to market, but generally if we start
15:43
Speaker 5: to see more supply, then that's kind of why a
15:46
Speaker 5: lot of housing economists are more optimistic going into twenty
15:49
Speaker 5: twenty six than pessimistic.
15:51
Speaker 2: Alex Gaily is a data reporter and analyst at bank
15:54
Speaker 2: Rade Joints. They talk about the affordability crisis in the
15:57
Speaker 2: housing market and Alex, thanks so much for joint us.
16:00
Speaker 2: Appreciate it. We'll talk to again soon.
16:01
Speaker 5: Thanks for having me.
16:03
Speaker 4: The Financial Exchange streams every day live on YouTube. Subscribe
16:07
Speaker 4: to our page and follow market activity all morning long,
16:10
Speaker 4: only here on the Financial Exchange Radio Network. And it
16:13
Speaker 4: is time now for trivia here on the Financial Exchange.
16:17
Speaker 4: Today's trivia question is on this day in two thousand
16:21
Speaker 4: and five, Paramount purchased DreamWorks Studio for one point six
16:25
Speaker 4: billion dollars. DreamWorks was founded in nineteen ninety four by
16:29
Speaker 4: Katzenberger Geffen and the most powerful director in Hollywood, at
16:34
Speaker 4: least at that time. So today's question is which famed
16:37
Speaker 4: film director founded dream Works Studio? Which famed film director
16:42
Speaker 4: founded dream Works Studio? Be the third person to text
16:46
Speaker 4: us at six one seven three six two one three
16:49
Speaker 4: eight five with the correct answer, and you'll win a
16:51
Speaker 4: Financial Exchange Show t shirt. The third correct response will
16:54
Speaker 4: be our winner, and make sure you add along the
16:57
Speaker 4: keyword trivia to your answer t r IVA. That's trivia.
17:03
Speaker 4: To see the complete contest rules, visit Financial Exchange Show
17:06
Speaker 4: dot com.
17:08
Speaker 2: Just sticking with housing for a little bit here. I
17:11
Speaker 2: had never heard of them, Maybe you had, Paul? Ever
17:13
Speaker 2: heard of a New Jersey based homebuilder Hovnanian entreprene Enterprises.
17:16
Speaker 3: I thought I knew the group. Lennar and told Brothers
17:20
Speaker 3: it was not familiar with this one.
17:21
Speaker 2: Now there was I In any case, the company posted
17:23
Speaker 2: a loss of fifty one cents per share in the
17:25
Speaker 2: fourth quarter. Okay, a company lost money a year prior.
17:28
Speaker 2: They made twelve dollars eighty cents per share twelve seventy nine.
17:32
Speaker 2: It's a pretty big shift in profitability over a course
17:36
Speaker 2: of one year. Their shares fell twenty three percent last week.
17:40
Speaker 2: It spilled over to other homebuilders as well. Dr Horton
17:43
Speaker 2: Lenar Pulti Group told Brothers, all slipping pretty substantially in
17:49
Speaker 2: concern for this this home builder here, And I keep
17:52
Speaker 2: going back to this. I do not see a path
17:58
Speaker 2: to fixing the home affordability situation in this country for
18:03
Speaker 2: a number of years. It just is not because of
18:06
Speaker 2: what she was talking about, what Alex was talking about here.
18:09
Speaker 2: Even if you get a bunch of constituents all on
18:14
Speaker 2: board with the idea of developing more housing, which we've
18:17
Speaker 2: seen here in Massachusetts, they are not. They are not
18:22
Speaker 2: on board but saying yeah, you can go ahead and
18:24
Speaker 2: develop dense housing in this area because we want more
18:27
Speaker 2: affordable homes. And I understand why. But even if they did,
18:31
Speaker 2: it would take two or three years to get some
18:33
Speaker 2: of that stuff online and really start to see prices reflected.
18:37
Speaker 2: And in the meantime, I think the real danger that
18:40
Speaker 2: people are not picking up on here is maybe you know,
18:45
Speaker 2: some people would say I'm miscategorizing, but I think the
18:47
Speaker 2: danger here is the longer home affordability becomes unattainable, I
18:52
Speaker 2: think the more outlandish solutions to fix the problem are
18:56
Speaker 2: going to come to the forefront. I'm talking about things
18:58
Speaker 2: like rent control, talking about things like taxing the rich
19:01
Speaker 2: to build housing. I'm talking about all of these different things,
19:05
Speaker 2: fifty year mortgages, it spans the spans the gap. But
19:10
Speaker 2: everyone is going to be focusing on this. And I
19:12
Speaker 2: think the affordability situation specifically around housing is why we're
19:16
Speaker 2: seeing things like Zoron Mumdani being elected in New York City.
19:20
Speaker 2: Why you know about initiative mess just for rent control
19:23
Speaker 2: is making it to the forefront again. Quick break, We've
19:26
Speaker 2: got to We'll be right back, But Wall Street Watches next, bringing.
19:40
Speaker 1: The latest financial news straight to your radio. Every day.
19:44
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:50
Speaker 1: Time Now for Wall Street Watch a complete look at
19:54
Speaker 1: what's moving markets. So far today right here on the
19:57
Speaker 1: Financial Exchange Radio network.
20:01
Speaker 4: Not a lot change going on as investors wait tomorrow's
20:04
Speaker 4: FED decision. However, things have turned positive here. The Dow
20:07
Speaker 4: Jones is up one hundred and fifty points, or three
20:09
Speaker 4: tenths of a percent. S and P five hundreds up
20:12
Speaker 4: over sixteen points, or over two tenths of a percent.
20:17
Speaker 4: The Nasdaq is up just under two tenths of a
20:20
Speaker 4: percent right now. President Donald Trump said the US will
20:23
Speaker 4: allow VIDIA to ship its H two hundred AI chips
20:26
Speaker 4: to China and elsewhere. The US will get a twenty
20:29
Speaker 4: five percent cut for the sales, which are only allowed
20:32
Speaker 4: for approved customers. Vidia is currently up over three tenths
20:36
Speaker 4: of excuse me, down over three tenths of a percent.
20:39
Speaker 4: CVS is up over three percent after the company provided
20:43
Speaker 4: twenty twenty six profit guidance that came above Wall Street
20:46
Speaker 4: estimates and this year's projected earnings, marking a sign of
20:50
Speaker 4: steady progress in its turnaround plan. Home Depot shares are
20:54
Speaker 4: up just under two tenths of a percent after the
20:55
Speaker 4: home improvement giant issued weaker than expected earnings growth guidance
20:59
Speaker 4: for twenty twenty s And AutoZone shares are down over
21:04
Speaker 4: six and a half percent after the automated parts retailer
21:07
Speaker 4: reported worse than expected results for its first fiscal quarter.
21:11
Speaker 4: AutoZone posted earnings of thirty one dollars and four cents
21:14
Speaker 4: per share on revenue of four point six three billion.
21:17
Speaker 4: Analyst polled expected a profit of thirty two dollars and
21:20
Speaker 4: fifty one cents per share on revenue of four point
21:23
Speaker 4: six four billion dollars. And finally, drone maker aero Vironment
21:27
Speaker 4: is up two and a half percent after it was
21:29
Speaker 4: awarded an eight hundred and seventy four million dollar contract
21:33
Speaker 4: for the Army for unmanned aerial systems and counter UAS systems.
21:39
Speaker 4: I am Ben Kitchen and that was Wall Street watching.
21:41
Speaker 4: To pay off the trivia question from earlier, a question
21:44
Speaker 4: was which famed film director founded Dreamwork Studio. Your answer
21:50
Speaker 4: Steven Spielberg. He founded Dreamwork Studio in nineteen ninety four.
21:55
Speaker 4: Today's winner is Ben in South Yarmouth. He will be
21:57
Speaker 4: taking home a Financial Exchange Show T shirt trivia every
22:00
Speaker 4: day here on the Financial Exchange See complete contest rules
22:03
Speaker 4: at Financial Exchange Show dot com.
22:05
Speaker 3: And do you live in South Yarmouth?
22:07
Speaker 2: No, going a little bit off script here for a moment.
22:15
Speaker 2: I was meeting with somebody the other day and married couple,
22:18
Speaker 2: few year age difference, not significant, I think it's a
22:21
Speaker 2: three year age difference, and husband hit sixty five, had
22:24
Speaker 2: some health stuff going on, retired and wife was still working.
22:28
Speaker 2: And then frankly got sick of her husband being retired
22:31
Speaker 2: and she not being able to and she retired too,
22:35
Speaker 2: and so not quite sixty five, and it led to
22:38
Speaker 2: some unique challenges. Largely the biggest one where the heck,
22:42
Speaker 2: am I going to get my health insurance? Because it
22:44
Speaker 2: gets pretty expensive. Fortunately for them, for the last few
22:48
Speaker 2: years it hasn't been a big issue because of the
22:52
Speaker 2: Affordable Care Act and the additional subsidies that have been
22:54
Speaker 2: going on since COVID. But now they're heading towards twenty
22:57
Speaker 2: twenty six and they're looking at a pretty big increase
23:01
Speaker 2: in premiums for a period of time here, and so
23:04
Speaker 2: we're talking about positioning assets and things like that. But
23:08
Speaker 2: when I think about most of the conversations I have
23:12
Speaker 2: with married couples, it when it comes to financial playing,
23:15
Speaker 2: it's all coming down to one thing, which is, given
23:20
Speaker 2: that we're a married couple, there's a good chance we're
23:21
Speaker 2: going to live a pretty long time, and how do
23:24
Speaker 2: we protect each other, whether it's through insurance, whether it's
23:28
Speaker 2: through investment planning, and how much more complexity is added
23:32
Speaker 2: to the overall situation, and you know, it really runs
23:35
Speaker 2: the game. But I'm also working with a couple in
23:38
Speaker 2: their thirties and we were trying to plan out, like
23:39
Speaker 2: what's the right amount of life insurance to have. You know,
23:43
Speaker 2: they have one kid, but they're like, we're planning on
23:45
Speaker 2: having more and we're healthy now, So what do we
23:48
Speaker 2: do about these types of things. I'm trying to think
23:50
Speaker 2: of the additional complexities. There are a few items that
23:54
Speaker 2: I don't consider to be red flags, Like that's not
23:56
Speaker 2: what I'm describing. But there's a few categories you can
23:59
Speaker 2: fall into where you say, okay, it's really time to
24:02
Speaker 2: engage a professional. One of them is that situation where
24:06
Speaker 2: if you're trying to retire before sixty five, before you
24:10
Speaker 2: get anywhere close to sixty five, there's a lot of
24:13
Speaker 2: planning to be done, whether it comes from you know,
24:16
Speaker 2: when you're gonna take Social Security, how you're going to
24:18
Speaker 2: get health insurance, Like if your goal is to retire
24:20
Speaker 2: before sixty five, start planning at fifty five, right, Start
24:24
Speaker 2: playing at forty five if you can, But at the
24:26
Speaker 2: very ly start playing at fifty five because there's going
24:28
Speaker 2: to be a lot to do. The other one that
24:32
Speaker 2: again not a red flag, but requires more planning. If
24:35
Speaker 2: you're an unmarried couple, it's immensely more complicated. Sure, sure, right,
24:40
Speaker 2: Like how many clients do you work with where it's
24:42
Speaker 2: second marriage, kids from both sides. They're talking about getting married.
24:46
Speaker 2: They're worried about the consequences. You know, what if my
24:50
Speaker 2: new spouse goes into a nursing home. What if what
24:55
Speaker 2: if I die and we're not married? In my retirement
24:58
Speaker 2: account has to be turned into an inherited or something
25:01
Speaker 2: along those lines, income.
25:02
Speaker 3: Loss from pension, social Security, those types of things are
25:06
Speaker 3: definitely at the forefront and the planning piece. I couldn't
25:11
Speaker 3: agree with you more. Oftentimes we're meeting with people who
25:14
Speaker 3: are on the prespice of retirement, and if they fall
25:18
Speaker 3: short on their planning, then they almost are turning to
25:22
Speaker 3: us to saying, all right, I'm ready to go. But
25:24
Speaker 3: if we had met three or four years prior, we
25:26
Speaker 3: could have put in a plan to place, particularly on
25:28
Speaker 3: the savings front, to be very aggressive because usually in
25:31
Speaker 3: those later years of your career, you're making the most
25:33
Speaker 3: money that you have, and that is likely the best
25:37
Speaker 3: time that you have to save more. The kids are
25:39
Speaker 3: likely out of the house or off the payroll and
25:41
Speaker 3: cause tuitions, So that sixty to sixty five range you
25:44
Speaker 3: mentioned can be a real significant time to increase your savings.
25:47
Speaker 3: So better to do that knowing at fifty five or
25:50
Speaker 3: sixty I'm about to turn it up and save a
25:52
Speaker 3: lot during this period of time than just come in
25:54
Speaker 3: at sixty five and say, hey, I'm ready to go.
25:56
Speaker 2: We have a brand new guide from the Armstrong Advisor
25:59
Speaker 2: Group for the month of December. It's called Retirement Planning
26:02
Speaker 2: for Spouses, and there's no way to capture everything that
26:06
Speaker 2: goes into this for a married couple, but this guy
26:09
Speaker 2: attempts to identify which areas you should be focusing on
26:12
Speaker 2: if you're heading forwards retirement as a married couple, and
26:16
Speaker 2: how to assess things like when's the appropriate thing to
26:18
Speaker 2: take SOCCE security, how much insurance do I need to have?
26:21
Speaker 2: What types of insurance do I need to have as
26:23
Speaker 2: I'm heading to that later stage. If you would like
26:25
Speaker 2: your free copy, you can call eight hundred three nine
26:29
Speaker 2: three for zero zero one. You can also request your
26:32
Speaker 2: free copy of Retirement Planning for Spouses by going to
26:35
Speaker 2: Armstrong Advisory dot com, but that number, once again is
26:38
Speaker 2: eight hundred three nine three for zero zero one.
26:43
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
26:45
Speaker 1: registered investment advisor. Nothing in the ad or in any
26:48
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
26:51
Speaker 1: your own financial tax into state planning advisors before making
26:54
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
26:57
Speaker 1: advisory services.
27:00
Speaker 2: Four one k's are minting a generation of moderate millionaires.
27:03
Speaker 2: That's what UBS is calling them. Any well, ubf ubs
27:06
Speaker 2: UBF UBF has dubbed them the moderate millionaires, with assets
27:13
Speaker 2: ranging from a million to five million dollars. And their
27:16
Speaker 2: point about this term moderate millionaires, which I'm not sure
27:20
Speaker 2: I like, but the term millionaire generally to me at least,
27:24
Speaker 2: does bring images of Scrooge McDuck with his top hat
27:28
Speaker 2: and diving into his piles of gold. And their point
27:30
Speaker 2: is that given how the retirement systems have shifted in
27:33
Speaker 2: the US, given how investments have performed over the last
27:37
Speaker 2: few years, that you have this new group of people
27:40
Speaker 2: who are generally pretty close to retirement but generally think
27:44
Speaker 2: of themselves as firmly middle class, and are suddenly sitting
27:49
Speaker 2: on more than a million dollars of retirement savings but
27:51
Speaker 2: not really spending that money like previous generations of millionaires did.
27:57
Speaker 3: Well, it's the inflation piece, you know, that's a huge
28:00
Speaker 3: part of it. That a million dollars today isn't what
28:03
Speaker 3: it was ten twenty years ago. And I had a
28:07
Speaker 3: couple a social gathering or two, I've had somebody ask
28:11
Speaker 3: me off cuff, you know, hey, how much would someone
28:14
Speaker 3: around this area need to retire? And this kind of
28:16
Speaker 3: spins back to some of the stuff we do on
28:18
Speaker 3: a day to day basis. But the answer, it's so hard, Mike,
28:21
Speaker 3: to give that answer to somebody because someone who's pushing,
28:24
Speaker 3: you know, g wagons and properties everywhere, the number is
28:28
Speaker 3: a lot different than somebody who's you know, cruising a
28:30
Speaker 3: little bit more affordability. But I would agree, in Massachusetts
28:34
Speaker 3: or some of these Northeast states, a million dollars it
28:39
Speaker 3: doesn't get you as far as it used to, for sure.
28:42
Speaker 2: By the way, that inflation piece is important because Scrooge
28:45
Speaker 2: McDuck first made his appearance in December of nineteen forty seven,
28:49
Speaker 2: so it's not exactly a new reference. I did not
28:52
Speaker 2: think Scrooge McDuck went back that far. But I do.
28:55
Speaker 4: Remember this everyone because that is going to be our
28:57
Speaker 4: trivia question.
28:58
Speaker 2: Huge and McDuck nineteen forty seven according to AI, So yeah,
29:04
Speaker 2: having a million bucks in your four oh one k,
29:06
Speaker 2: you're right, is not quite quite what it used to be.
29:10
Speaker 2: But nonetheless there's you know, whether it's Fidelity or Vanguard,
29:14
Speaker 2: they're all reporting more and more of their four oh
29:16
Speaker 2: one k participants are at that threshold or higher.
29:19
Speaker 3: Now the market's gone up.
29:20
Speaker 2: Quick break when we come back. Stack Roulette is next.
29:26
Speaker 1: Here The Financial Exchange every day from eleven to noon
29:29
Speaker 1: non Serious XM's Business Radio Channel one thirty two. Keep
29:33
Speaker 1: it here for the latest business and financial news and
29:35
Speaker 1: the trends on Wall Street. The Financial Exchange is now
29:38
Speaker 1: life on Serious XM's Business Radio channel one thirty two.
29:43
Speaker 1: He's the Financial Exchange Radio Network. Find daily interviews and
29:48
Speaker 1: full shows of the Financial Exchange on how are YouTube page.
29:51
Speaker 1: Get cut up on anything and everything you might have missed.
29:54
Speaker 1: This is the Financial Exchange Radio Network.
29:59
Speaker 4: This levee of the financial exchange is brought to you
30:02
Speaker 4: by the US Virgin Islands Department of Tourism. There's still
30:05
Speaker 4: time to book your holiday vacation at Saint Croix, Saint Thomas,
30:08
Speaker 4: or Saint John enjoy one or all three. If you
30:12
Speaker 4: act fast, you could be on Saint Croix to experience
30:15
Speaker 4: their Crucians Christmas Festival, taking place this December through early January.
30:21
Speaker 4: Discover the magic of this long standing tradition with incredible food,
30:24
Speaker 4: music and entertainment. Or just go to soak up the sun,
30:27
Speaker 4: stroll along white sand beaches and feel the rhythm of
30:29
Speaker 4: the heartbeat of the Islands. The us v I is
30:32
Speaker 4: America's Caribbean paradise. Plan your winter escape now at us
30:36
Speaker 4: v I dot com. That's visit us v I dot com.
30:53
Speaker 2: Boston Road Today. Deciding that this is the worst Christmas
30:58
Speaker 2: song for US, I have to say it's probably up there.
31:02
Speaker 2: It is a pretty terrible song. Paul McCartney, I don't
31:06
Speaker 2: know why you went about this, but I'm not sure
31:08
Speaker 2: it's the worst. I do like the description of this song. First,
31:13
Speaker 2: they describe Grandma got run over by a reindeer as
31:15
Speaker 2: the audio equivalent of drinking kurdled eggnog that's been leasd
31:19
Speaker 2: with moonshine distilled in Jeff fox Worthy's bathtub. I don't
31:23
Speaker 2: know which AI wrote that, but that, yeah, that's a
31:25
Speaker 2: pretty good insult. I do like that. Uh, personally, Wham's
31:31
Speaker 2: Last Christmas way worse than either of those two songs. Yes,
31:36
Speaker 2: I'm just gonna throw that out there as worse than
31:38
Speaker 2: all of them. Do you guys have any contenders? By
31:40
Speaker 2: the way, you can text the show if you have
31:42
Speaker 2: a contender for worst ever Christmas song six one, seven
31:45
Speaker 2: three six two thirteen eighty five. I feel like this
31:48
Speaker 2: time of year, we do all hear them in the
31:50
Speaker 2: stores and just like something turns in my head a
31:53
Speaker 2: little bit when I hear one of them that really
31:55
Speaker 2: gets me upset. And uh, but yeah, I'm hearing it
31:59
Speaker 2: constantly across all the stores, and those are two of
32:02
Speaker 2: them that just I can't stand. In fact, we were
32:05
Speaker 2: listening to Grandma got run over by a reindeer, and
32:09
Speaker 2: my nine year old, who never listens to lyrics, like
32:11
Speaker 2: listen to the lyrics and she's like, oh, oh god,
32:14
Speaker 2: did they say that she? I think she like drank
32:17
Speaker 2: something or too much or something, and then you know
32:20
Speaker 2: Grandpa founder dead and that's you know why they believe
32:23
Speaker 2: in Santa Claus. Now, I that is a pretty rough
32:26
Speaker 2: one for a nine year old. That's a miracle. Anybody
32:31
Speaker 2: else have any contenders for worse Christmas?
32:33
Speaker 3: I would have gone simply having a wonderful Christmas Time
32:35
Speaker 3: Every year. I have the sam recurring thought in my
32:37
Speaker 3: head when these songs kew up again, I'm like, this
32:39
Speaker 3: is the best musical business model decision ever to have
32:44
Speaker 3: if you can successfully make it into the rotation of
32:47
Speaker 3: them like and Sync did one and my wife still
32:50
Speaker 3: plays it to this day, the n Sync like Christmas
32:52
Speaker 3: songs that they've done, and other artists have done this too.
32:55
Speaker 3: Michael Buble has done a Christmas album, but like, if
32:57
Speaker 3: you can get to be one of those big players,
33:00
Speaker 3: none other than Murah Carrey is the absolute queen of
33:03
Speaker 3: this and has made it a annual spiel of hers
33:06
Speaker 3: to just try and take over the Christmas time airways.
33:09
Speaker 3: She does have probably the best one out there.
33:11
Speaker 2: Yeah I've got it, saying Michael Bubla. There's a famous
33:16
Speaker 2: image of give of him walking out of a cave
33:19
Speaker 2: and you know, did someone say Christmas and he was
33:21
Speaker 2: interviewed and somebody asked him about this, and he was like, guys,
33:24
Speaker 2: we gotta stop. I have thirty friends that send that
33:27
Speaker 2: same exact picture to me every single year the day
33:30
Speaker 2: after Thanksgiving. So yeah, yeah, pretty good gig if you can,
33:34
Speaker 2: you know, get one of the.
33:36
Speaker 4: We're missing an obvious one here. I think, hands down
33:38
Speaker 4: the absolute worst of all of them. Christmas wrapping by
33:42
Speaker 4: the waitresses.
33:44
Speaker 2: Oh, actually I put it into my rotation.
33:47
Speaker 3: Oh you like it?
33:48
Speaker 2: I like it? Yeah, Yeah, I'm gonna talk to you
33:51
Speaker 2: from now on. Well, yeah, i'd say, how does it go?
33:55
Speaker 3: But I don't really want to hear either of you
33:56
Speaker 3: guys sing.
33:57
Speaker 2: Yeah you don't anything by Alvin and the Chipmunk's terrible.
34:02
Speaker 2: I start to cringe when I hear that, So I
34:05
Speaker 2: really that one just distresses me a little bit. Yeah. Again,
34:12
Speaker 2: if you have a least favorite Christmas song textas at
34:14
Speaker 2: six one seven or I guess favorite will highlight the favorites.
34:17
Speaker 2: But six one seven, three, six, two, thirteen eighty five,
34:20
Speaker 2: what do you have for us? Or stack with that?
34:21
Speaker 3: Pol from Lamas to Avocado's Meta's shifting AI strategy is
34:27
Speaker 3: causing internal confusion. I couldn't resist doing one more artificial intelligence.
34:32
Speaker 2: Story, especially to pick on Meta at the same.
34:34
Speaker 3: Well, that's kind of where I wanted to go with
34:36
Speaker 3: this is when you look at the players in the
34:40
Speaker 3: artificial intelligence game, which is fascinating me just because there
34:44
Speaker 3: is so much a stake from a monetary and you know,
34:46
Speaker 3: stock market perspective. Meta is often like that person in
34:51
Speaker 3: high school that is maybe knocking out knocking the door
34:55
Speaker 3: of all the cool parties, but not really being let in,
34:58
Speaker 3: uh with open arms. Because it is trying to be clear.
35:03
Speaker 3: MENA has benefited significantly or Facebook from artificial intelligence the
35:07
Speaker 3: reels or the advertisements that you're served up on your Instagram,
35:11
Speaker 3: and Facebook is a benefactor from just machine learning and
35:16
Speaker 3: our official intelligence to putting the right ad in front
35:18
Speaker 3: of you, and that's led to a lot of profitability
35:20
Speaker 3: for them. However, when it comes to the large language
35:22
Speaker 3: model stuff, they are barely mentioned. When it comes to
35:27
Speaker 3: talking the big players at all. Tessa or Eon muss
35:30
Speaker 3: Xai is one, or Groc that's one that's up there,
35:33
Speaker 3: Anthropic and many others out there, but they are just
35:37
Speaker 3: like a drunken sailor in terms of their spending and
35:40
Speaker 3: just going after this problem. It's just like, I'm just
35:42
Speaker 3: gonna throw all this money at this and maybe we'll
35:44
Speaker 3: become a player in this. Avocados is supposed to be
35:49
Speaker 3: their new large language model that's coming out. Lamas was
35:52
Speaker 3: the previous one they're naming conventions for these are also
35:55
Speaker 3: mind boggling. I guess you do remember them by how
35:58
Speaker 3: obscure they are. But they have thrown own billions of
36:01
Speaker 3: dollars at the problem, and I wonder that this fear
36:06
Speaker 3: of missing out for them could cause further issues for
36:10
Speaker 3: the company in just terms of what they're spending. They
36:12
Speaker 3: still have such a profile business model. Instagram is still
36:15
Speaker 3: an absolute giant out there. WhatsApp is a great business too.
36:18
Speaker 3: But it's just funny to see them spin their.
36:20
Speaker 2: Wheels on the naming conventions. I'll just acknowledge that they're
36:23
Speaker 2: not alone in this one. Google's new image generator is
36:26
Speaker 2: called Nano Banana, So like, at least they're in good
36:30
Speaker 2: company with naming their ais stupidly, which I feel like
36:34
Speaker 2: is their way of not making them quite as scary. Sure,
36:40
Speaker 2: you know, like if you're going to get attacked by
36:41
Speaker 2: a future AI and it's called chat GPT five point three,
36:45
Speaker 2: that's kind of scary where if it's nano banana, how
36:51
Speaker 2: much like how that's what I would do too if
36:55
Speaker 2: I was if I was inventing a world ending technology,
36:57
Speaker 2: I would definitely name it something like avocado. But yeah,
37:01
Speaker 2: the question is can Meta throw good money after a
37:06
Speaker 2: good project. After sinking tens of billions if not more,
37:10
Speaker 2: into their metaverse, which still open, produced nothing, And finally
37:17
Speaker 2: they've taken a step back and said, yeah, we're going
37:19
Speaker 2: to divert some of the money from that continued investment
37:22
Speaker 2: into artificial intelligence. But yeah, that's I don't quite see
37:28
Speaker 2: what the path is for Meta, because I don't think
37:30
Speaker 2: anyone really likes using their products. They do because their
37:35
Speaker 2: friends are on there, But I don't know what's going
37:37
Speaker 2: to make me use a large language model from Facebook
37:40
Speaker 2: versus Google's or anybody else's. But maybe they've got something
37:44
Speaker 2: else going on if they if they can sell more
37:46
Speaker 2: ads at a higher profit because of AI than anything
37:49
Speaker 2: that I'm saying is pretty irrelevant. And clearly they are
37:53
Speaker 2: not having any issues with getting lots of posts of
37:55
Speaker 2: AI generated videos on their platform, because that's all that
37:59
Speaker 2: I see.
38:00
Speaker 3: The Facebook post ones are crazy.
38:02
Speaker 2: Yeah, markets are open and remain in positive territory with
38:05
Speaker 2: the Dow leading the way up three ten percent. Will
38:08
Speaker 2: have a FED meeting tomorrow and a full market recap
38:11
Speaker 2: and more. Then, have a great rest of your day, folks,