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Why retailers have no room for error this holiday season? · The Financial Exchange Show

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  This is the Financial Exchange with Chuck Zada and Mike Armstrong.
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  Speaker 2: Kicking off the second hour with the Financial Exchange here
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  on a Job's Friday. Big big numbers up for jobs
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  created two hundred and fifty four thousand for the month
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  of September, the unemployment rate falling from four point two
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  to four point one. It was a hair away from
• 1:31
  falling to four percent flat. It's Chuck, Mike and Tucker
• 1:36
  with you and the market response to this. The Dow
• 1:39
  is up one hundred and thirteen points about a quarter
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  percent as a piece, up twenty four points right now
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  about half a percent, and the Nasdaq up one hundred
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  and thirty nine about three quarters of a percent. But
• 1:48
  trading has been volatile. These indices were all about a
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  half percent higher at the open. They fell to the
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  point where the Dow was negative and the S and
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  P was flat on the day about I don't know,
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  oh ten thirty this morning, and subsequently a little bit
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  of a rally back, so some intra day volatility as
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  traders try to digest.
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  Speaker 3: This not a typical by the way, I mean, when
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  you when you have a big burnoff like this, two
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  big stories burning off. In fact, now I think about it,
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  you've got the job story continuing the show the decline
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  in unemployment, robust hiring along with the end of that
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  strike at the ports. Pretty common for markets to bounce
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  around like this.
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  Speaker 2: And part of the reason for this, you've got the
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  ten year treasury selling off in anticipation of higher growth
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  than the Fed not needing to cut as much ten
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  years up to three point nine to six percent, up
• 2:35
  point one point one percent. So you've got that move happening.
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  Oil continuing to rise, but not by too much today
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  only up fifty two cents of barrel to seventy four
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  to twenty three triple A national average for gas prices,
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  though continuing to slide. Remember oil prices do not necessarily
• 2:50
  reflect gasoline prices, especially immediately, and so we've got the
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  triple A national average for gas prices down another eight
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  tenths of a cent to three eighteen and two tenths nationally,
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  and so those prices continuing to fall at the moment,
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  and we've got goal today up forty cents. Now it's
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  not much movement there to twenty six, seventy nine and
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  sixty cents, Mike, any other key points regarding the jobs
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  report that you want to touch on.
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  Speaker 3: I guess I'm trying to relate it back to the
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  average person who might not care day to day moves
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  on the stock market. I mean to me, one of
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  the things that this reads is less likely for job
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  loss recession. This report, would you know, indicate a reversal
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  of the recent trend we've seen in unemployment and hiring slowdowns.
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  It also means more likely higher rates come the spring
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  housing market, right, if there is a probability of a
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  five three quarters thirty year mortgage coming in by the spring,
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  that was you know, wiped away a little bit with
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  this job's report, and so those things, again, trying to
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  relate to the average person who might be thinking about
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  this stuff. Yeah, a little bit less likely that we're
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  heading towards an imminent recession. Also a little bit less
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  likely that you're gonna get a great deal on a
• 4:02
  mortgage anytime in the near future.
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  Speaker 2: Yeah, this is We've already seen a little bit of
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  upward pressure this week on mortgage rates. Yesterday, the thirty
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  or fixed rate closed at six point twenty six percent.
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  That's according to Mortgage News Daily, this is probably gonna
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  get us back into this six three and a six
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  three five to six four range by the end of
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  day today. So again, this is kind of this give
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  and take where hey, we get good economic data, mortgage
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  rates move up and that potentially slows the economy a
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  little bit. So we'll we'll see where this all goes. Again,
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  it's it's one jobs report, so you don't take too
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  much from it. But quite honestly, and again it's I
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  probably give out, you know, maybe three or four of
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  these along the way. You know, historically, I don't think
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  you can give this one anything other than an A.
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  Speaker 3: Now, this job report is, it's as good as you
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  could reasonably expect any jobs report to be.
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  Speaker 2: I mean there's always something where you're like, well, we
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  lost seven thousand manufacturing jobs, okay. I mean, if that's
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  going to be the thing where you're like, no, it
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  has to be like an A minus or B plus,
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  then you're then it's impossible to get an ay.
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  Speaker 3: Yeah, you're not being honest then, So it's a great
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  job support it is.
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  Speaker 2: Let's talk a little bit about the retail sector. There's
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  a piece in Bloomberg Opinion today. It's titled retailers have
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  no room for error this holiday and it's uh specifically
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  looking at, you know, the upcoming holiday shopping season and saying, hey,
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  how much are you know, there's a ton of a
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  ton of different surveys that are done prior to the
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  shopping season on how much are people are going to
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  be spending because retailers want to get their inventories right,
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  and so when you look at this, it's you know,
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  kind of a question of, hey, what are we going
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  to be seeing from people? And there are some causes
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  for some reasons for concern heading into the busiest retail
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  season of the year.
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  Speaker 3: Yeah, estimates for shopping and spending increases this year are
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  coming around a three percent increase compared to twenty twenty three.
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  That's not too variable, but it's you know, below the
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  average increase over the last decade of about a five
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  percent increase. Most of that growth is going to be
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  coming from online shopping, not in store, but it is
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  still expected to grow in both segments. And so I mean,
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  who knows where this is going to land. But yeah,
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  if expectations are for a less significant increase in overall spending,
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  then each retailer is going to be fighting for those
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  scraps and looking to execute in any possible way that
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  they can. I think the good news is we're clearly,
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  in my view at least, back to a normal holiday
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  shopping season as opposed to still the COVID era of
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  weird shopping trends, unwillingness to go in person. We're back
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  to the maybe a new normal, but the normal.
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  Speaker 2: Yeah Busting. Consulting Group did a survey of five hundred
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  US consumers about, Hey, what are you expecting for the
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  or what's important to you for the upcoming holiday shopping season?
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  And no surprise that the number one thing fifty two
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  percent of respondents, So, price and promotion is going to
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  be a key driving factor. Thirty six percent said convenience
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  thirty three percent, products often in stock thirty two percent,
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  timely deliveries thirty percent, product quality twenty four percent. A
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  seamless omni channel experience. How important is that to you? Michael?
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  Speaker 3: Omni channel very very big.
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  Speaker 2: Where Where do where does one subscribe to the omni channel?
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  Speaker 3: I mean, this is a silly little word here, but
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  I do think that this is a of growing importance.
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  Right If I'm going to feel comfortable buying something I
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  want to know that I have multiple ways to return it.
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  I want to hopefully go out and you know, maybe
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  touch it and see it in person before I actually
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  make the purchase. And some companies are executing on this
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  better than others, and so you know, being able to
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  provide a swift return if it needs to be returned,
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  being able to you know, have it in stock. If
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  it's you know, something that I see online or get
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  promoted to online, will I be able to go quickly
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  check it out at the local retail store. That's that's
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  of increasing importance to shoppers of all sorts.
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  Speaker 2: Also interesting data this also from Boston Consulting Group and MasterCard.
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  They ask people, look when when does most of your
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  shopping actually take place? And MasterCard in their case, they
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  actually looked at, you know, their own shopping trends from
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  the last couple of years. Twenty nine percent of US
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  holiday sales last year came between October first and October
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  thirty first. Twenty two percent were November first to the
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  day before Thanksgiving. Only seven percent were Thanksgiving to Cyber Monday.
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  So for all the importance and all the talk that
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  we give to you know, Black Friday and Cyber Monday
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  seven percent of overall sales there, Cyber Monday to Christmas
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  Eve thirty six percent of sales, and Christmas to December
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  thirty first apparently six percent of holiday shopping concluded after Christmas.
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  Last year, I can tell you that my Amazon toy
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  catalog already came in the mail.
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  Speaker 3: I think last week.
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  Speaker 2: Oh yeah, we've.
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  Speaker 4: Gone through that puppy uh like six times already.
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  Speaker 3: Really really tried to just put in the recycling bin
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  before it could be found, but that did not work
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  in case.
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  Speaker 4: The kids look forward to that.
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  Speaker 3: I do just love just you know, the company that
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  puts Sears out of business is doing catalogs, is adopting
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  the business model.
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  Speaker 2: Anything anything look good there?
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  Speaker 3: This year, I have not personally looked through it. It
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  was just stolen from my hands by my children who
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  ran away with it.
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  Speaker 2: So pro talker. Did you get to look at it?
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  Speaker 4: Oh yeah, yeah. We sit down and look through it,
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  and you know, we talk about all the things that
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  I can't afford.
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  Speaker 2: He's buying.
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  Speaker 3: He's buying an ADU for his backyard. Is this a
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  toy catalog or is it a toy cat Is it
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  everything cattag I think it's mainly a toy catalog.
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  Speaker 2: Yeah, it's too bad that they don't have like the
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  ADUs and they're like seis used to have the home
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  kits that you could buy, not the Apple Home Kit.
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  But hey, here's it. Here's all this. We'll deliver you
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  all this stuff you need to build your own.
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  Speaker 3: Here's a nineteen sixties craftsman.
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  Speaker 2: You know, it's just it's it's wonderful.
• 9:56
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  Speaker 2: Mike, there's a great piece of New York Times today.
• 12:11
  It's talking about the wave of startups that emerged in
• 12:16
  twenty twenty through twenty twenty two, and talking about the
• 12:21
  fact that, you know, whether because of the pandemic or
• 12:23
  just because of other factors, during that time, you had
• 12:26
  this wave of startups that you know, kind of emerged then.
• 12:30
  And according to data from the Census Bureau, businesses formed
• 12:34
  in twenty twenty through twenty twenty two have created seven
• 12:37
  point four million jobs by the end of twenty twenty two.
• 12:41
  And so we may be ushering in kind of a
• 12:45
  new era of entrepreneurship after you know, ten fifteen years
• 12:49
  where that had kind of fallen on the back burner
• 12:51
  based on most metrics.
• 12:52
  Speaker 3: Yeah, I think there were Look, there were just a
• 12:55
  ton of businesses that failed across the spectrum after the
• 12:59
  Great recept and because of a unique set of circumstances
• 13:04
  in COVID, it allowed for this new creation and that
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  seven point four million. I'd be interested to find out,
• 13:10
  but it should be fairly easy for the Census Bureau.
• 13:13
  I don't think that's a survey. I guess would be
• 13:15
  my point here. If you are the Census Bureau, you
• 13:18
  know which EI ends employer identification numbers were created back
• 13:23
  in that time period, and you can actually go and
• 13:25
  track this to the to the level, and you know
• 13:30
  this is Look, this is important because traditionally and historically
• 13:36
  throughout the United States, this is where you get your innovation.
• 13:39
  This is where you get your tremendous growth. Is new
• 13:42
  ideas from small businesses that take risks. You know, General
• 13:46
  Electric or Microsoft is not going to be willing to
• 13:49
  take the same risk that you know some guy working
• 13:51
  out of his garage in Boston is going to be.
• 13:54
  And this this should be a compelling and exciting piece
• 13:58
  of information, and you know, looking back on it, we
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  should really study what about this period of time compelled
• 14:06
  this type of innovation and creation.
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  Speaker 2: I think let's let's dig in on that a little bit,
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  because I think it's a really good question, is to like,
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  why do people you know, pursue, you know, the idea
• 14:19
  of starting their their own business and and and why
• 14:22
  do they do it at a certain time, Because at
• 14:26
  any point in time, anyone could drop out of you know,
• 14:29
  whatever job they're doing, or hey, if you're not working, say,
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  you know what, I'm going to start this business today.
• 14:36
  Why why did we see this this surge in twenty
• 14:39
  twenty through twenty twenty two. And there are a couple
• 14:41
  different reasons that that I come to. The first is
• 14:44
  could have been necessity. Hey, I was working in an
• 14:47
  industry that was disrupted, like you know, the restaurant industry
• 14:51
  or you know wherever, and I wasn't sure where my
• 14:53
  paycheck was going to come from, and so I had
• 14:56
  to do something, and I decided to start a business
• 14:58
  because what did I have to lose.
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  Speaker 3: I think there was some of that. I think there is, frankly,
• 15:02
  some boredom. You got some out of boredom.
• 15:05
  Speaker 2: You got some people who, hey, they saw all this
• 15:08
  disruption and maybe it just you know, kind of knocked
• 15:11
  them upside the head metaphorically and said hey, like things
• 15:14
  can change in a hurry. I should do that thing
• 15:16
  that I've always wanted to do, you know, and go
• 15:19
  start this business that I've had this idea for part
• 15:22
  of it. We can also look at it and you
• 15:25
  had a whole bunch of money that was slashing around.
• 15:27
  Speaker 3: Then yeah, that's a key thing here too, and one
• 15:30
  of those scenarios that will be more difficult to create.
• 15:33
  Everyone and their mother wanted to become an angel investor
• 15:35
  in twenty twenty.
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  Speaker 2: So it's it's hard to untangle all of this and
• 15:41
  find anything that is like the one reason people did.
• 15:45
  But I think ultimately I'm a big believer in one
• 15:48
  of the key things that I believe about any business
• 15:52
  or any person or whatever it might be. Stressed forces
• 15:57
  change and forces you know, adaption and adaptation, not adaptation,
• 16:02
  but whatever. You know, it's it's a Friday, and it
• 16:06
  forces you to kind of get outside of your comfort
• 16:08
  zone and look for better or for worse. If there's
• 16:11
  one thing that we all experienced a lot of in
• 16:13
  like twenty twenty through twenty twenty.
• 16:15
  Speaker 3: Two, getting way outside that comfort zone.
• 16:17
  Speaker 2: It was stressed. We're all a little like you know,
• 16:20
  it was not an easy time to get through, and
• 16:24
  so I think part of it, you know, I attribute
• 16:27
  just to that overall, you know, mindset of hey, look,
• 16:30
  we're all a little bit stressed out and trying to overcome that,
• 16:33
  and stress forces you know, ingenuity and new ideas to
• 16:38
  come to the forefront. So I've got a little confirmation
• 16:41
  bias when when I look at these because that's something
• 16:43
  that I've believed for a while. And so I kind
• 16:45
  of come back to that in terms of, hey, why
• 16:48
  did people pursue new things? And I generally think it's
• 16:50
  because they had to because of stress, but it can
• 16:53
  be all these different factors that play in.
• 16:55
  Speaker 3: And I would also say that the counterpoint can also
• 16:57
  be true, because there's a hell of a lot of
• 16:59
  stress from two thousand and eight through twenty twelve, and
• 17:04
  instead it led to a pretty depressed level of innovation
• 17:07
  and creation and other things going on there. You know
• 17:10
  that you think about the long term problems we're experiencing
• 17:13
  now because of that, because of a lack of home building,
• 17:15
  and so, you know, it does come to a culmination
• 17:19
  of circumstances. I'm not sure you would have gotten the
• 17:21
  same results had there not been all that cash slashing
• 17:24
  around the economy for a few years, bringing.
• 17:33
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  Speaker 2: We've had the biggest weekly gain in oil prices in
• 17:59
  a year following the escalation of the conflict in the
• 18:05
  Middle East with Iran earlier this week, sending about one
• 18:08
  hundred and eighty missiles towards Israel, some of which struck
• 18:13
  their targets. And the challenge here and why I think
• 18:19
  that energy markets may still be complacent is that, Mike.
• 18:25
  For the last I'm trying to think how long now.
• 18:29
  I mean, basically, for the last twenty years, any escalation
• 18:33
  in the Middle East has been relatively minimal and confined
• 18:37
  to you know, small geographic areas. It never became a
• 18:41
  broader regional conflict. And even the stuff that's horrible that's
• 18:45
  been going on, I mean, like the civil war in
• 18:47
  Yemen has been confined within Yemen's borders and largely has
• 18:51
  been horrible for the many people, but it has neighbors.
• 18:56
  It hasn't caused any larger problems in terms of disrupting
• 19:00
  trade or energy production and things along those lines. And
• 19:04
  so here here's where I find this one to potentially
• 19:09
  be different is again, like you you just kind of
• 19:12
  game out the responses from each side and say, okay,
• 19:15
  what you know, what what's at stake here and how
• 19:18
  does this work. Iran decided earlier this week, hey, we
• 19:22
  have to respond. And this is the second time, by
• 19:25
  the way, this year that they have launched missiles towards
• 19:28
  Israel directly. The first time they gave like a day
• 19:33
  and a half notice. They pretty much said where they down.
• 19:37
  They pretty much said, we're gonna shoot this at this
• 19:40
  and so Israel and the United States shot quite literally,
• 19:44
  I think it was like ninety nine point five percent
• 19:47
  of the missiles down and the other ones just didn't
• 19:49
  even hit anything. It was just it was all noise.
• 19:52
  This one fewer missiles that they shot, but they actually
• 19:57
  aimed them at you know, Israeli military targets, and they
• 20:01
  hit quite a few of them. They didn't cause a
• 20:03
  ton of damage necessarily, but there was stuff that got
• 20:06
  through and actually hit Israeli targets. And so if you
• 20:12
  are Israel, you look at this and you say, okay,
• 20:16
  our concern is sure. This might have been like, you know,
• 20:20
  your best effort where you said, okay, this is what
• 20:22
  we're gonna do, but there was nothing that was nuclear
• 20:25
  that was sent towards us. Right if in the future
• 20:30
  one of those ballistic missiles is armed with a nuclear
• 20:34
  warhead and it's the one that gets through, that is
• 20:37
  an existential threat to the Israeli state and as such,
• 20:44
  we have to be able to prevent that from happening.
• 20:47
  Now that we know what Tehran's you know, real capabilities
• 20:50
  are in conflict, and so we have to do something
• 20:55
  significant in order to prevent that from becoming a problem,
• 20:59
  in which case Trani is gonna you know, Iran is
• 21:01
  going to come back and say, okay, we need to
• 21:03
  do X. There are a few off ramps at this point,
• 21:06
  is what concerns me.
• 21:07
  Speaker 3: Yeah, and you know what happens if Iran decides that
• 21:11
  they can't successfully strike into Israel, do they go after
• 21:14
  a different neighbor who is tacitly supporting You know, this
• 21:19
  could yeah, it could hypothetically go in a lot of
• 21:23
  different places. Is the oil market complacent. Are they underpricing
• 21:27
  the risk? Yes, they are my answers, I don't know,
• 21:32
  but it feels like it more than it does at
• 21:34
  other times. But you did see a nine percent rally
• 21:36
  in oil prices.
• 21:38
  Speaker 2: I don't know.
• 21:39
  Speaker 3: I don't know. It's impossible to appropriately price this stuff
• 21:43
  until you see the net result.
• 21:46
  Speaker 2: What I mean is they're not pricing in the fact
• 21:49
  that it could get worse at this point. It's basically, hey,
• 21:53
  we think we've you know, priced this to where it
• 21:56
  is today. It might be fairly price for where things
• 21:59
  stay today, but not for where it could go. And
• 22:02
  that I think is is because of complacency, because every
• 22:07
  potential escalation in the last twenty years, the temperature has
• 22:10
  gotten turned down pretty quickly, right, and this is potentially
• 22:16
  different like it's It's a very different set of circumstances
• 22:21
  that we find each other in right now. And I
• 22:26
  just don't feel that this is being appropriately priced as
• 22:30
  a tail risk in markets. I hope I am wrong. Sure,
• 22:35
  I would absolutely love to be wrong on this, because
• 22:42
  it has the potential to get very ugly here. But
• 22:46
  we'll see, you know, it's it's a very minute to minute,
• 22:51
  day to day situation at the moment there.
• 22:54
  Speaker 3: Yeah, I get the complacency argument. I also do get
• 22:58
  the argument on the side of traders say, we've seen
• 23:04
  echoes of this over the last two decades and this
• 23:07
  is where it's landed, and so I do get the
• 23:09
  complacency I guess would be my point.
• 23:12
  Speaker 2: Uh, let's turn to something that's a little bit more chill. Yeah.
• 23:19
  McDonald's gonna be rolling out there Chicken Big Mac to
• 23:24
  US restaurants on October tenth. Mike, why are they not
• 23:27
  calling this the chick mac.
• 23:32
  Speaker 3: Because they're not good at naming things. I guess was
• 23:36
  their last hit, the McNugget the McRib again in a
• 23:41
  little while it has, But like Chicken Big Mac, the
• 23:46
  chicken doesn't roll off the tongue. The chick mac Chicken
• 23:50
  Chicken big four syllables instead of two.
• 23:53
  Speaker 2: The chick mac. It's like the chick The chick mac
• 23:57
  really hits, I think, But.
• 23:58
  Speaker 4: Yeah, October ten, this has not been created before, by
• 24:01
  the way, especially like five years ago when the whole
• 24:04
  chicken sandwich craze went through the roof, you.
• 24:07
  Speaker 2: Kind of figured that someone would have done it by accident,
• 24:11
  you know, like, right, there's probably someone who ordered this
• 24:15
  and was like, Hey, can you give me a big mac,
• 24:17
  but give me two of the fried chickens instead of
• 24:19
  the burger and and some you know. McDonald's order taker
• 24:24
  was like, I gotta call corporate because this is it.
• 24:28
  Speaker 3: I don't think so. No, I don't think this is it.
• 24:32
  I'm not going here instead of chick fil A. If I've
• 24:34
  got the options, the chicken mac isn't going to make
• 24:38
  me do it?
• 24:38
  Speaker 2: Oh what, Michael? Michael. Now, we can talk a lot
• 24:41
  of things, but we can't talk that way about McDonald's.
• 24:46
  As someone who consumes large quantities of McNuggets on a
• 24:52
  more regular basis than i'd like to admit, I think
• 24:56
  we have to give McDonald's a little bit of credit
• 24:58
  for be what it is, which is again, really good
• 25:03
  fast food. Quite honestly, that's nice.
• 25:05
  Speaker 3: What did you learn in kindergarten today, Chuck?
• 25:09
  Speaker 2: So? I have a buddy of mine who, as much
• 25:13
  as you know, he went to smart Smart dude went
• 25:16
  to Harvard Business School, which is why I kind of
• 25:18
  dislike him but also crudgingly admit that he's kind of smart. Yeah,
• 25:22
  he views McDonald's actually as the pinnacle of food because
• 25:25
  he says that it is the most consistent that you
• 25:28
  will get from restaurant to restaurant given the scale that
• 25:31
  they have, which I appreciate that point of view. But yes,
• 25:36
  So McDonald's rolling out the Chick Mac on October tenth.
• 25:40
  So that's exciting.
• 25:41
  Speaker 3: And we're still not sponsored by McDonald's. I don't believe.
• 25:47
  Speaker 2: Look, there's a lot of competition. I mean, I am
• 25:51
  a fast food connoisseur. I mean you mentioned Chick fil A.
• 25:55
  Also one of my favorites, Taco Bell. Wendy's has a
• 25:57
  special place in my heart.
• 25:59
  Speaker 3: You know, it's the what was the Wendy's the Double
• 26:02
  down where Okay, yeah, yeah, it was the bread was
• 26:08
  chicken innovation, people, innovation of what was in the middle burger?
• 26:15
  I think more chicken.
• 26:18
  Speaker 2: Hang on, I can't remember what they Oh no, it
• 26:21
  was bacon in the middle, bacon and cheese. Okay, okay, yeah,
• 26:25
  it's a bun free sandwich with two chicken FLEs, cheese
• 26:27
  and bacon.
• 26:28
  Speaker 4: Just had a burger in that. Now you're talking three
• 26:32
  different animals sandwich heart attack together.
• 26:38
  Speaker 3: Oh that is not kosher.
• 26:40
  Speaker 2: Let's take a quick break here and when we return,
• 26:44
  we're joined by Paul Lamonica from Baron's Right after this.
• 26:48
  Speaker 1: Business and financial news affecting the markets and your wallet.
• 26:52
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• 26:55
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• 27:02
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• 27:09
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• 27:11
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• 27:17
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• 27:22
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• 27:57
  Speaker 2: We are now joined by Paul Monica from Barons and
• 28:02
  we're talking a little bit about AT and T here, Paul,
• 28:07
  how are you today?
• 28:09
  Speaker 7: Good? Thanks? How you guys?
• 28:10
  Speaker 2: Don't We're doing well? And AT and T has been
• 28:15
  one of the probably worst shepherds of capital over the
• 28:19
  last ten to fifteen years out there in my opinion.
• 28:25
  But they finally have sold off their remaining direct TV steak,
• 28:30
  they'veloaded unloaded WarnerMedia. At this point, what's the outlook for
• 28:35
  the company going forward and how does this you know,
• 28:37
  potentially shore things up for them financially.
• 28:41
  Speaker 7: Yeah, that's a great question, man. I think investors are
• 28:44
  hopeful that doing this deal, getting rid of the remaining
• 28:48
  steak Interact TV to private acuity firm TPG, who will
• 28:52
  then in turn hopefully merge that with Dish, which has
• 28:57
  been a rumored deal for years. What this could do
• 29:01
  for AT and T is it now makes them once
• 29:05
  again a pure play telecom company that's going to focus
• 29:08
  on five G and you know, fiber optic network and
• 29:13
  obviously that is you know what you would think AT
• 29:17
  and T should be doing. It's what Verizon obviously is
• 29:20
  doing as well. The problem is that this is still
• 29:24
  a slow growth business, and I think that AT and T,
• 29:31
  even though it is now once again a pure play,
• 29:34
  you know, they face the challenges from Verizon and T Mobile,
• 29:39
  which is kind of the you know, the red hot
• 29:42
  or magenta hot name if you will, in wireless telecom
• 29:46
  right now. As I wrote in a story for Barons, yes,
• 29:49
  AT and T will have some more financial flexibility to
• 29:52
  spend on capex and maybe even increase its dividend, which
• 29:57
  already has an impressive yield of five percent, which is
• 30:00
  below Verizon's yield of six percent. But if you look
• 30:03
  at T Mobile, you've got to yield just under two percent,
• 30:06
  which is no slouch and higher earnings growth. Granted, the
• 30:09
  valuations much higher, but you know, T Mobile might be
• 30:13
  the best bet in this sector as opposed to the
• 30:17
  sleepy mobel and equally somnolent Verizon.
• 30:22
  Speaker 2: When you look at AT and T, is there anything
• 30:28
  marginally exciting about them?
• 30:32
  Speaker 7: I mean, if you are to buy the argument that
• 30:38
  less is more, I do think it is a more
• 30:41
  exciting potential stock given its valuation. In the fact that
• 30:46
  it has finally gotten out of the media entertainment business,
• 30:50
  which you know, I'm going to be careful to knock
• 30:53
  them too much. As someone who you know, worked for
• 30:56
  WarnerMedia before joining Barons, obviously, I was at CNN and
• 30:59
  saw my fair share of corporate overlords, which at one
• 31:03
  point did include AT and C. I think that, you know,
• 31:08
  Verizon also learned with its Oath deal. Remember it had
• 31:13
  AOL and Yahoo.
• 31:14
  Speaker 3: Hi.
• 31:15
  Speaker 7: Content companies maybe are not the best fit for the
• 31:20
  distribution firms. There was this whole notion for a while
• 31:23
  in media and technology team and entertainment that you own
• 31:27
  the pipes, you might as well own all the content
• 31:30
  that you're going to lush down those pipes if you will.
• 31:34
  I'm not so sure that that was the right strategy.
• 31:37
  There's nothing wrong, there's no shame in being a networking company.
• 31:41
  You don't have to be a media firm as well.
• 31:44
  So I think AHT and T being more streamlined now
• 31:47
  investors will appreciate that. The question just is what's the
• 31:51
  growth going to be like? And even at a tennish
• 31:55
  type earnings multiple, is low sluggish growth enough to justify
• 32:00
  that type of stock price or is this back to
• 32:03
  just the classic widow and orphan stock. Hey, five percent
• 32:06
  yield when probably rates are coming down because the FED
• 32:11
  rate cuts. It's not the worst thing in the world.
• 32:14
  Speaker 2: Is there any you know, engine out there for them
• 32:17
  where you know there's Hey, this part of their business
• 32:20
  is growing quickly and there's something you know to it
• 32:23
  or is it just Hey, it's a mature company. Everyone's
• 32:27
  got cell phones, everyone's got you know, cable coming into
• 32:30
  the house at this point, and there's just not much
• 32:32
  else that they can do here.
• 32:34
  Speaker 7: Yeah, I think that is going to be the big challenge.
• 32:37
  It's it's hard to imagine you know, unless you're really
• 32:41
  looking at market share, stealing customers from Verizon, from T Mobile,
• 32:48
  from some of the cable companies that offer broadband you know,
• 32:52
  internet and phone services as well. That's really where the
• 32:56
  growth is going to come from. Because you know, it
• 32:58
  won't be too long probably before we start wondering about
• 33:03
  what's next with technological advances, and will companies have to
• 33:08
  spend even more on new network capacity for even more
• 33:13
  advanced you know, I don't think we're at the level
• 33:16
  of salivating over six G just yet, but we're eventually
• 33:20
  going to get to a point where all of these
• 33:22
  telecoms are going to have to spend more aggressively for
• 33:25
  network improvements for even faster Internet speeds, and that could
• 33:30
  be a challenge as well if you have high capital
• 33:34
  expenditures and very little in the way of revenue and
• 33:37
  earning scrow.
• 33:38
  Speaker 2: Very good, Paul, appreciate you joining us today and have
• 33:41
  a great weekend.
• 33:43
  Speaker 7: Thanks a lot, you two.
• 33:45
  Speaker 2: Mike, you a fan of chicken tenders? Sure, Chuck, piece
• 33:49
  of New York Times. Have chicken tenders conquered America? Do
• 33:52
  you know? They were only invented fifty years ago in Manchester,
• 33:55
  New Hampshire.
• 33:56
  Speaker 3: Allegedly, right like you can't like?
• 33:59
  Speaker 2: Is that the case? No one breded and fried a
• 34:02
  chicken tender until then? I don't know.
• 34:04
  Speaker 3: To close things out, Spirit Airlines off twenty five percent
• 34:07
  ninety percent for the year as they consider bankruptcy.
• 34:10
  Speaker 2: That in the chicken tender will get you a cup
• 34:12
  of coffee.
• 34:13
  Speaker 3: There you go.
• 34:14
  Speaker 2: Stocks for remains slightly positive, that dows up a quarter percent,
• 34:17
  s and P up twenty two points now and Nasdaq
• 34:20
  up one twenty one. Have a great weekend everyone. We'll
• 34:23
  see you on Monday.