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Can Trump actually fix the housing affordability crisis? · The Financial Exchange Show

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  Speaker 2: Good morning, Paul, Good morning, Mike.
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  Speaker 3: Welcome back to the Financial Exchange. It's a Friday here
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  Speaker 3: and markets are in a bit of a cool off
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  Speaker 3: mode as we close in on midday trading here. All
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  Speaker 3: three major usndc's slightly to the negative, Dow the worst
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  Speaker 3: off about a fifth of a percent at the moment
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  Speaker 3: after what's been a pretty solid two weeks for equity markets.
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  Speaker 3: So nothing to write home about here in equity markets.
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  Speaker 3: Next week we have a big kickoff in earning season. Wednesday.
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  Speaker 3: We will have earnings from Microsoft, Tesla, and Meta all
• 1:45
  Speaker 3: reporting Wednesday after the bell. Thursday, we have Apple addition
• 1:48
  Speaker 3: of Visa and MasterCard. So big week gearing up next week.
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  Speaker 3: In terms of economic data. Coming out next week, you'll
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  Speaker 3: have some data on the state of the housing market,
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  Speaker 3: in particular, which I'll find interesting. New home sales comes
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  Speaker 3: out Monday at ten am. You'll have the S and P.
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  Speaker 3: Case Shiller Home Price Index. That's an index that looks
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  Speaker 3: at average home prices across twenty cities. That's expected at
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  Speaker 3: nine am on Tuesday. Consumer confidence comes out Tuesday as well.
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  Speaker 3: We'll get some information on retail inventories and wholesale inventories
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  Speaker 3: on Wednesday. GDP reading comes out Thursday, along with initial
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  Speaker 3: jobless claims and pending home sales, and then we have
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  Speaker 3: one more inflation reading that the Fed likes to take
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  Speaker 3: a look at, the PCE Price Index, coming out on Friday.
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  Speaker 3: So potential for quite a bit of movement next week,
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  Speaker 3: both in terms of headline economic data, but the economic data.
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  Speaker 3: Quite frankly, guess what home prices are still going to
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  Speaker 3: be expensive? Inflation You've already been able to kind of
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  Speaker 3: parse together based on the previous inflation reports that we got.
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  Speaker 3: The big news is going to be earnings. It's going
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  Speaker 3: to be the driver of markets. So far, earnings pretty
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  Speaker 3: darned good. As of a few days ago, you had
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  Speaker 3: eighty percent of companies who had reported thus far beating expectations.
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  Speaker 3: But we're only like ten to fifteen percent of the
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  Speaker 3: way in here, So a lot more to come on
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  Speaker 3: the earnings front. Given that we're going to have a
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  Speaker 3: lot of data next week about the housing market, we
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  Speaker 3: should jump right in there and continue our coverage of
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  Speaker 3: different Trump administration priorities. And another one that has been
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  Speaker 3: brought up and mentioned over the course of the last
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  Speaker 3: week has been the Trump administration and their approach to
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  Speaker 3: restoring purchasing power for American families and specifically housing is
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  Speaker 3: a big piece there. Housing in general and shelter costs
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  Speaker 3: in general makeup about a third of overall inflation, and
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  Speaker 3: if you haven't heard, houses are really expensive. I think
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  Speaker 3: that's the main message we can all take away about
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  Speaker 3: the housing market today.
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  Speaker 2: My question would be perhaps to some of our listeners
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  Speaker 2: out there who are maybe in the building field or
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  Speaker 2: construction is one of the things that's mentioned here in
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  Speaker 2: terms of lowering housing costs. We all agree that you
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  Speaker 2: need to adjust the supply set of things. More homes
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  Speaker 2: need to be built, were really underbuilt over the last
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  Speaker 2: fifteen or twenty years as part of the building process,
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  Speaker 2: which I'm not intimately familiar with. They mentioned in this piece.
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  Speaker 3: All know how to change the light bulbs, so building
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  Speaker 3: houses in pretty far anyway.
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  Speaker 2: Barely put together in my kid's dollhouse. But they mentioned
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  Speaker 2: this idea of lowering regulatory costs associated with the process. Obviously,
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  Speaker 2: there's a lot of costs where go into materials and
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  Speaker 2: other things like that, and you have to deal with
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  Speaker 2: zoning and permitting restrictions locally. My question to people out
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  Speaker 2: there in Texas at six one seven three, six two
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  Speaker 2: one three eight five. Is is regulatory costs something that
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  Speaker 2: would disincentivize you as a builder to not get out
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  Speaker 2: there and build, or is it something that is a
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  Speaker 2: massive hurdle to overcome? Or are the other factors out
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  Speaker 2: there that I mentioned this idea of zoning, permitting, material costs,
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  Speaker 2: those things seem like they would be much more of
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  Speaker 2: a drag on the idea of doing this. Like if
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  Speaker 2: you were to have lower regulatory costs, would that incentivize
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  Speaker 2: you to build more? My assessment would be likely no.
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  Speaker 2: But there's not much you can do from a fe
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  Speaker 2: government perspective to address this issue.
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  Speaker 3: Yeah, zoning I would consider to be a regulatory burden,
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  Speaker 3: but that's not a federal government, it's local. In terms
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  Speaker 3: of homes for sale out there, I know I keep
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  Speaker 3: track of this quite frequently, but as of December of
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  Speaker 3: last year, according to Saint Louis Federal Reserve, there were
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  Speaker 3: eight hundred, seventy eight hundred and seventy two thousand if
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  Speaker 3: I'm rounding active listings in the United States. That's good
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  Speaker 3: news compared to the year before and the year before that.
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  Speaker 3: In December of twenty three is only seven hundred and
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  Speaker 3: fourteen thousand homes for sale, so you're seeing an improvement.
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  Speaker 3: The problem, of course, is that in December of twenty
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  Speaker 3: nineteen you had one point zero three homes one point
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  Speaker 3: zero three million homes for sale, right, so across the
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  Speaker 3: nation we are still pretty far away from the housing
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  Speaker 3: market that we were seeing in years prior. And to
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  Speaker 3: your point, Paul, at the federal level, are there things
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  Speaker 3: you could do to improve housing affordability? I'm trying to
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  Speaker 3: go through the list here. I suppose you could take
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  Speaker 3: the method of tax benefits. Could you incentivize home building
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  Speaker 3: by providing a big tax credit for home builders to
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  Speaker 3: build certain types of homes or homes in general, Like, Okay,
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  Speaker 3: you're going to have a tax credit if you build
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  Speaker 3: homes that are one hundred and twenty percent of the
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  Speaker 3: median housing price in that area, or some sort of
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  Speaker 3: complex tax code there. Yeah, you could. My problem is
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  Speaker 3: when you go about doing that, you start injecting taxpayer
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  Speaker 3: money into an area. Well, sometimes you get a bubble,
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  Speaker 3: and we saw that a few different times, but the
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  Speaker 3: biggest example would be the bubbles associated with the oweight
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  Speaker 3: housing crisis. And you could recreate something like that. If
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  Speaker 3: you incentivize a whole bunch of building by giving a
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  Speaker 3: bunch of tax credits, then watch out because you might
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  Speaker 3: end up overbuilding and blowing up the second Again to me,
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  Speaker 3: if you are, you know, the Trump administration looking at
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  Speaker 3: all of this the areas that you want to focus on,
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  Speaker 3: as you know, again, I'm reading based on the people
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  Speaker 3: that he has surrounded himself with, who generally speaking, are
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  Speaker 3: free market conservatives who want less regulation. That seems to
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  Speaker 3: be the area and the only regulation, as far as
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  Speaker 3: I can tell, that would genuinely help housing affordability does
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  Speaker 3: have to do with zoning. Like maybe somebody texted us
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  Speaker 3: in and said, otherwise, that know the you know, the
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  Speaker 3: the regulations that have to do with fire safety standards
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  Speaker 3: are so burdensome that it's so expensive now to build
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  Speaker 3: a home. But I don't get that sense when talking
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  Speaker 3: to people. It's, hey, I can't build a three story
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  Speaker 3: building in downtown need A Massachusetts because the zoning loose
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  Speaker 3: laws won't let me do it. So instead I'm building
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  Speaker 3: one two and a half million dollar home with six
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  Speaker 3: thousand square feet and five bedrooms because that's what makes
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  Speaker 3: me money, and so that I just don't know that
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  Speaker 3: as Trump administration is going to be willing to have
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  Speaker 3: that fight.
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  Speaker 2: No, it's so hard. You can make certain changes or
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  Speaker 2: propose certain changes, but because everything is so local and fragmented,
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  Speaker 2: And think about what we've been dealing with locally here
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  Speaker 2: with the NBTA Act, this idea, all these towns out there,
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  Speaker 2: it's Nimbi. You're fighting nimi constantly, not in my backyard.
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  Speaker 2: It's really an uphill battle. And I just don't know
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  Speaker 2: at the federal level if you can do enough from
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  Speaker 2: a legislative perspective to try and seep in some changes
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  Speaker 2: into the local municipality.
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  Speaker 3: The other piece that we've talked about housing related, right,
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  Speaker 3: you know, you can talk about deregulation, you can talk
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  Speaker 3: about other factors here, but a you know, lumber costs
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  Speaker 3: coming imported from Canada, that could be a significant increase
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  Speaker 3: should you face tariffs. And then two would be the
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  Speaker 3: immigration story, right, I mean, you know a significant portion
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  Speaker 3: of the construction industry is performed by either illegal immigrants
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  Speaker 3: or by legal immigrants who are related to illegal immigants
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  Speaker 3: living in the United States. We've talked about I think
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  Speaker 3: I saw statistics that up to fifty percent of the
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  Speaker 3: construction industry either is not in the United States legally
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  Speaker 3: themselves or has a living relative who is in the
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  Speaker 3: United States illegally. And should you have a big change
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  Speaker 3: in migration policy or a large increase in deportations, it
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  Speaker 3: calls into question what the labor supply would look like
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  Speaker 3: on that construction side, which has already been somewhat short
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  Speaker 3: on labor. So we will see. I'm again, look, I'm
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  Speaker 3: all in favor of any solutions you can come up
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  Speaker 3: with to increase the supply of housing. What I thought
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  Speaker 3: were really dumb policies that we have heard mentioned, not
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  Speaker 3: necessarily by the Trump administration. I'm just pointing at, you know,
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  Speaker 3: politicians across the board. I don't want to see, you know,
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  Speaker 3: the requirements for down payments come way to down. I
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  Speaker 3: don't want to see more incentives for first time home buyers,
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  Speaker 3: and I don't really want to see tax credits for
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  Speaker 3: builders either. It's when you inject a whole bunch of
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  Speaker 3: policies in there to manipulate the market, you tend to
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  Speaker 3: get distortions and its potentially bubbles.
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  Speaker 2: Quick feedback from some of the Texters regarding my question
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  Speaker 2: that I posed around building around the area. So one
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  Speaker 2: texter said that zoning is, you know, a big hurdle
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  Speaker 2: to overcome. Building codes in Massachusetts are too onerous on
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  Speaker 2: rehabbing a house or a multifamily that makes things challenging.
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  Speaker 2: Another text came in and said everything else the government
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  Speaker 2: has little control over. So it's not the regulatory piece
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  Speaker 2: that was alluded to in this piece that they could
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  Speaker 2: perhaps bring down. Another one saying that code compliance and
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  Speaker 2: MAAB are major drivers of cost and construction. The other
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  Speaker 2: is labor. So those are just some of the feedback
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  Speaker 2: here that we're hearing.
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  Speaker 3: So I wouldn't say we were wildly inaccurate with our assessment.
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  Speaker 3: At least we might have missed some of the code requirements,
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  Speaker 3: But you know, labor being the big driver rings true
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  Speaker 3: and does call in a question, Hey, what does this
• 11:05
  Speaker 3: look like from a deportation and immigration standpoint? Quick break,
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• 15:02
  Speaker 3: with the IRS as to whether or not you're eligible
• 15:04
  Speaker 3: to use direct file. Paul egg prices through the roof.
• 15:09
  Speaker 3: I was at Trader Joe's, I want to say, about
• 15:11
  Speaker 3: a month ago, and UH, similar experience to what's described
• 15:15
  Speaker 3: in the New York Times piece. Here is this New
• 15:17
  Speaker 3: York Times Sure, yes, uh. There's a crowd kind of
• 15:22
  Speaker 3: gathered around the the egg area and it was completely empty.
• 15:26
  Speaker 3: There's a sign there saying, really, you know.
• 15:28
  Speaker 2: My wife had the same thing in the last week.
• 15:30
  Speaker 3: Did you. Yes, just a completely empty section with no eggs.
• 15:34
  Speaker 3: And they outlined that a Walmart store in Ozark, Missouri,
• 15:37
  Speaker 3: experience Montana, Ozark, Montana, Sorry, experience the exact same thing
• 15:42
  Speaker 3: here where you head over to the egg section, and
• 15:46
  Speaker 3: it's not that prices are eight bucks a dozen, it's
• 15:49
  Speaker 3: that they are completely out of eggs.
• 15:53
  Speaker 2: Montana. You were right the first time, Surrey. Yeah, Missouri.
• 15:56
  Speaker 3: Yeah, were sorry about what what's the abbreviation te well
• 16:00
  Speaker 3: m O no, so you m O is Missouri, So
• 16:04
  Speaker 3: you're right, you were it's mt Yeah, Okay, got it.
• 16:09
  Speaker 3: There's a comedian that I follow who has a hilarious
• 16:11
  Speaker 3: bit about the naming of the states. Should check it out.
• 16:13
  Speaker 3: But in any case, which comedian Gary Gllman, There you go.
• 16:19
  Speaker 3: In any case, this egg problem is not due to
• 16:24
  Speaker 3: some weird economics thing. It is because we have bird
• 16:28
  Speaker 3: flu spreading across the country and have had to kill
• 16:31
  Speaker 3: millions of birds in order to deal with it.
• 16:34
  Speaker 2: Pet's heads are quite literally falling of.
• 16:36
  Speaker 3: The average price for a dozen eggs today is over
• 16:39
  Speaker 3: four dollars per dozen. That's up considerably from this time last.
• 16:44
  Speaker 2: Year, higher from a year ago.
• 16:46
  Speaker 3: Yeah, and again, you know, we talk a lot about
• 16:49
  Speaker 3: presidential politics and inflation being a key thing here, and
• 16:54
  Speaker 3: you know, different people promising to bring down inflation and
• 16:57
  Speaker 3: grocery prices. This is completely out of the control of
• 16:59
  Speaker 3: any executive branch in terms of how to deal with
• 17:02
  Speaker 3: this sort of thing.
• 17:03
  Speaker 2: Yeah, and it also furthers the point on this idea
• 17:06
  Speaker 2: that sometimes people will talk about if all healse holds
• 17:09
  Speaker 2: equal for inflation in terms of the basket of goods,
• 17:12
  Speaker 2: then we'll see inflation come down. You know, if gas
• 17:14
  Speaker 2: prices go up and all other prices hold equal, that
• 17:17
  Speaker 2: will increase inflation. On the Seatpip Baker, you just can't
• 17:20
  Speaker 2: do that. You can't have this conversation and say, if
• 17:22
  Speaker 2: all us equal when there's a basket of goods that
• 17:25
  Speaker 2: you're consistently tracking, because there's always going to be something
• 17:28
  Speaker 2: like this that's a particular one off. This is something
• 17:31
  Speaker 2: that there absolutely needs to be a lot of study
• 17:34
  Speaker 2: and assessment as to what's going on, because the impacts
• 17:36
  Speaker 2: are really significant. You've got ten percent of the nation's
• 17:40
  Speaker 2: egg laying population impacted by this strain of the bird.
• 17:44
  Speaker 3: Flu, and it's been egg legging population.
• 17:47
  Speaker 2: There's a lot of stuff in here. Even the feedback
• 17:50
  Speaker 2: from the Walmart Ozark, Missouri location where this woman's quota
• 17:55
  Speaker 2: saying all the normal egg size cards were practical gone.
• 17:58
  Speaker 2: I heard some of the elderly people being really upset,
• 18:00
  Speaker 2: and even I sat and left of that, Like, you
• 18:02
  Speaker 2: don't say elderly people upset at something not going their way. Really,
• 18:06
  Speaker 2: that doesn't seem like them.
• 18:08
  Speaker 3: So the other piece that is probably playing out here, though,
• 18:11
  Speaker 3: is the what I'm gonna call it the toilet paper effect.
• 18:14
  Speaker 3: If you go to a grocery store and there's a
• 18:16
  Speaker 3: sign that says, here's how much the eggs cost limit
• 18:19
  Speaker 3: two dozen per customer. Even if I was only about
• 18:23
  Speaker 3: to buy six eggs, I'm going in there and I'm
• 18:25
  Speaker 3: buying twenty four when.
• 18:26
  Speaker 2: I hand Sanitizer's a good recent corollary to twenty twenty
• 18:30
  Speaker 2: oh that was the same period of time. I guess
• 18:32
  Speaker 2: the toilet paper, all of that stuff.
• 18:34
  Speaker 3: All of that stuff where you think that there's going
• 18:36
  Speaker 3: to be some sort of the egg one at least
• 18:39
  Speaker 3: there's some common sense behind it. Like the toilet paper
• 18:42
  Speaker 3: one was always crazy, but the egg one here, like
• 18:46
  Speaker 3: they is a genuine shortage. This is not grocery stores
• 18:50
  Speaker 3: out there price gouging. This is just a pure market
• 18:54
  Speaker 3: reaction to the fact that there are millions fewer living birds.
• 18:58
  Speaker 2: There, and it's going to take time to stabilize too.
• 19:00
  Speaker 2: It's not something that's going to be resolved immediately.
• 19:03
  Speaker 3: Can like duck eggs fill the place here? I genuinely
• 19:08
  Speaker 3: don't know much about egg laying it. Yeah, yeah, let's
• 19:11
  Speaker 3: just all switch to quail eggs and those are probably
• 19:14
  Speaker 3: a lot cheaper. Let's take a quick break here on
• 19:19
  Speaker 3: the Financial Exchange. When we come back, return to office
• 19:22
  Speaker 3: policies creeping up across many different industries. How are employers
• 19:26
  Speaker 3: saying they're going to respond to them. We'll also have
• 19:28
  Speaker 3: the trivia winner for you next here on the Financial.
• 19:30
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• 20:07
  Speaker 4: Which legendary film director directed the famous Apple McIntosh super
• 20:12
  Speaker 4: Bowl ad There'll Be Ridley Scott. The nineteen eighty four
• 20:15
  Speaker 4: Apple McIntosh commercial directed by Scott would become one of
• 20:19
  Speaker 4: the most famous Super Bowl commercials of all time. Entertainment
• 20:23
  Speaker 4: Weekly ranked it the second most famous ad, behind only
• 20:26
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• 20:30
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• 20:34
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• 20:37
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• 20:41
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• 20:43
  Speaker 3: Return to office policies creeping up across multiple different areas,
• 20:47
  Speaker 3: the most recent being the federal government, and I feel
• 20:51
  Speaker 3: like this is the most honest return to office assessment
• 20:55
  Speaker 3: that I've heard of so far. Quote, requiring federal employee
• 21:00
  Speaker 3: to come to the office five days a week would
• 21:02
  Speaker 3: result in a wave of voluntary terminations that we welcome.
• 21:05
  Speaker 3: That's from Elon Musk and Vivic Ramaswame, who Trump tapped
• 21:09
  Speaker 3: to lead the DOGE, the Department of Government Efficiency. They
• 21:11
  Speaker 3: wrote that back in November. So you know, who knows
• 21:14
  Speaker 3: exactly how that's playing out now, But this looks to
• 21:19
  Speaker 3: me to be the message that employers seemed to be sending,
• 21:23
  Speaker 3: and I was pretty surprised, and I'm not sure I
• 21:26
  Speaker 3: believe this survey that was done. But according to a
• 21:29
  Speaker 3: Pew Research Center poll, about half of workers say that
• 21:32
  Speaker 3: they would rather quit than return to the office full time.
• 21:37
  Speaker 3: And my answer that would be, well, you're likely to
• 21:39
  Speaker 3: be given the opportunity here, so good luck with that
• 21:42
  Speaker 3: opinion on it.
• 21:43
  Speaker 2: I thought that was a bit higher than what should
• 21:47
  Speaker 2: actually be the case if you're faced with that type
• 21:49
  Speaker 2: of decision to potentially lose your livelihood overcome into the office.
• 21:53
  Speaker 2: I'm not sure if I'm willing to get behind half
• 21:55
  Speaker 2: of people just saying I'm out, you know, particularly like
• 21:58
  Speaker 2: we've talked about with the labor market before, Mike, there's
• 22:00
  Speaker 2: not a tremendous amount of hiring out there. The quits rate,
• 22:03
  Speaker 2: which tracks this exact same statistic as how many people
• 22:06
  Speaker 2: are moving around from position to position, is much lower
• 22:10
  Speaker 2: than it was in twenty two when it reached its
• 22:12
  Speaker 2: peak level. But this piece does a good job of
• 22:14
  Speaker 2: covering all angles of it. There's absolutely been companies out
• 22:17
  Speaker 2: there that have been using this as a cudgel to
• 22:19
  Speaker 2: get people who want to quit or are not down
• 22:23
  Speaker 2: with working at the companymore to leave by forcing them
• 22:26
  Speaker 2: to come back into office. Amazon's dumb It JP Morgan
• 22:29
  Speaker 2: has done a similar initiative, and now the federal government
• 22:31
  Speaker 2: with its workers as well. It's really been something that
• 22:34
  Speaker 2: has been used to bring down headcaut without having to
• 22:37
  Speaker 2: actually take the action to layoff imploys.
• 22:40
  Speaker 3: Now the curious thing here too, I mean, at the
• 22:42
  Speaker 3: same time that the US government has been requiring all
• 22:45
  Speaker 3: their employees to come back, they've also been talking about
• 22:48
  Speaker 3: selling off buildings in DC. Donald Trump has been discussing like, hey,
• 22:52
  Speaker 3: we've got these empty office buildings across the district of Columbia.
• 22:55
  Speaker 3: Why don't we sell them off to the highest bidder. Well,
• 22:57
  Speaker 3: if you require all your workers to come back into
• 22:59
  Speaker 3: the then you're not going to down.
• 23:01
  Speaker 2: That's the Amazon issue, right. We covered this earlier this week,
• 23:03
  Speaker 2: that Amazon tells everyone to come back, and probably more
• 23:06
  Speaker 2: people than they came back anticipated came back, and they
• 23:09
  Speaker 2: have no real estate to house these people. The other
• 23:12
  Speaker 2: point that I think is fair to make here is
• 23:14
  Speaker 2: that remote work is not going anywhere necessarily. I'm not
• 23:18
  Speaker 2: going to say that it will be as prevalent as
• 23:19
  Speaker 2: it was, that perhaps will trend down, but I think
• 23:21
  Speaker 2: there's always going to be some place for it in
• 23:23
  Speaker 2: certain industries because it does cut your expenses. If you're
• 23:27
  Speaker 2: looking at some of these firms in Boston, if you
• 23:29
  Speaker 2: need less real estate space, that does help your bottom line.
• 23:32
  Speaker 3: Yeah, I'll be really curious to see how all of
• 23:36
  Speaker 3: these things play out, because on the surface, very obviously,
• 23:41
  Speaker 3: I think companies are trying to get rid of employees
• 23:44
  Speaker 3: and not wanting the pressure and the press of saying
• 23:47
  Speaker 3: it out loud. That's a pretty clear message that we're
• 23:50
  Speaker 3: getting in some areas. But in some places and big
• 23:53
  Speaker 3: financial institutions that I'm familiar with, they're not going that far,
• 23:56
  Speaker 3: and I think they are genuinely worried about the blowback
• 23:58
  Speaker 3: from their employees, or maybe they do see the benefits
• 24:01
  Speaker 3: of real estate reduction. And you know, if you operate
• 24:05
  Speaker 3: an office in downtown Manhattan, then you can get some
• 24:11
  Speaker 3: real juice from saying, hey, we're gonna require that you
• 24:14
  Speaker 3: come in half the time, but not full time. So
• 24:16
  Speaker 3: I'll be interested to see how this plays out, especially
• 24:18
  Speaker 3: if we get to a point that companies are facing
• 24:21
  Speaker 3: some margin pressure and financial pressure. Do we still prioritize
• 24:24
  Speaker 3: that five days a week in the office, or do
• 24:26
  Speaker 3: we get a little bit more on board with that
• 24:29
  Speaker 3: hybrid work that allows us to unload some of this
• 24:32
  Speaker 3: office space.
• 24:33
  Speaker 4: According to Jenworth, the average monthly cost for a private
• 24:35
  Speaker 4: room in New England could double by twenty forty So
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• 25:29
  Speaker 1: The proceeding was paid for, and the views expressed are
• 25:31
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• 25:40
  Speaker 3: Paul staying in the workplace here for a moment. Why
• 25:42
  Speaker 3: should I be suspicious if my employer starts offering me
• 25:46
  Speaker 3: unlimited time off?
• 25:47
  Speaker 2: This is something that initially when I heard of this
• 25:49
  Speaker 2: concept with tech companies and maybe a friend in a startup,
• 25:52
  Speaker 2: I said, Wow, I can't imagine unlimited vacation time. That
• 25:56
  Speaker 2: sounds like a tremendous perk.
• 25:57
  Speaker 3: The first company I ever heard of doing it it
• 25:59
  Speaker 3: was back in twenty twelve, and it was HubSpot, a
• 26:03
  Speaker 3: big Boston based marketing firm, and they said, yeah, unlimited
• 26:06
  Speaker 3: time off. And I had a friend that was working
• 26:08
  Speaker 3: there and he is no longer. But I think, maybe
• 26:12
  Speaker 3: use that to every penny it was worth back at HubSpot.
• 26:15
  Speaker 2: Now it seems like the pendulum has swung on that,
• 26:18
  Speaker 2: or maybe there's strategic reasons behind it. In the first place,
• 26:21
  Speaker 2: where one advantage of the employer has is that they
• 26:24
  Speaker 2: don't need to pay off any vacation when an employee leaves.
• 26:28
  Speaker 2: That's a financial reason to do it, where you don't
• 26:30
  Speaker 2: have to bank away someone's vacation and disperse it out
• 26:33
  Speaker 2: to them if they are to leave the company. The
• 26:36
  Speaker 2: other is just the pressure that employees feel to keep
• 26:40
  Speaker 2: up with other employees and continue to hustle and start
• 26:43
  Speaker 2: to feel somewhat guilty about taking more time than others,
• 26:49
  Speaker 2: or just taking time in general versus having a fixed number.
• 26:52
  Speaker 2: So it's been interesting to sort of play it the
• 26:53
  Speaker 2: other way when initially all you can think of is
• 26:55
  Speaker 2: the negative impacts that some employee takes four months of vacation,
• 26:59
  Speaker 2: But in reality, it seems like it's had the opposite
• 27:02
  Speaker 2: effected some cultures out there. Company cultures.
• 27:05
  Speaker 3: Yeah, So I mean taking a look at all this
• 27:07
  Speaker 3: at this stage. In twenty twenty four approximately seven percent
• 27:11
  Speaker 3: of US employers offer unlimited time off. That's up a
• 27:14
  Speaker 3: lot back in twenty fourteen that was one percent of companies.
• 27:17
  Speaker 3: So this is a relatively new thing and it's still
• 27:19
  Speaker 3: a very small minority of companies that are doing it.
• 27:23
  Speaker 3: But to speak to that pressure, yeah, I mean, one,
• 27:26
  Speaker 3: if you have unlimited time off from what I hear
• 27:28
  Speaker 3: your manager still needs to approve your vacation, so it's
• 27:30
  Speaker 3: not like you just don't show up to work. And
• 27:32
  Speaker 3: so there's some questions about that. But at most of
• 27:36
  Speaker 3: the places that I've heard about limited time off or
• 27:39
  Speaker 3: unlimited time off, rather everyone there is super nervous about
• 27:43
  Speaker 3: actually using their time off what it results in. And
• 27:46
  Speaker 3: I think I didn't see any stats on this, but
• 27:48
  Speaker 3: I would be really interested to see Compare for me,
• 27:52
  Speaker 3: a company, for instance, that gives you three weeks paid
• 27:56
  Speaker 3: vacation and a company with unlimited paid time off, and
• 28:00
  Speaker 3: you know who takes more? I'd be did they cover it?
• 28:03
  Speaker 2: They do? Actually, it's that the average number about sixteen
• 28:08
  Speaker 2: numbers of days off taken by people who work for
• 28:10
  Speaker 2: companies with unlimited PTO. According to a survey done by Empower,
• 28:14
  Speaker 2: a typical worker with finite vacation takes fourteen days off.
• 28:17
  Speaker 2: So that's contrary to what I would think ye that
• 28:20
  Speaker 2: the limited PTO would be less than that of the finite.
• 28:23
  Speaker 3: Let's take a quick break here. When we come back,
• 28:26
  Speaker 3: Paula Monica is joining us piece that he wrote this week,
• 28:30
  Speaker 3: This healthcare stock might just be RFK Junior proof. We'll
• 28:34
  Speaker 3: be back with Paul.
• 28:35
  Speaker 1: Next, find daily interviews and full shows of the Financial
• 28:39
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• 28:42
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• 28:45
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• 28:50
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• 28:53
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• 28:56
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• 28:59
  Speaker 1: Exchange Network, Ladies and gentlemen the weekend.
• 29:11
  Speaker 3: Joining us now is Paul Lamonica, as he does every Friday,
• 29:14
  Speaker 3: to talk a bit about the healthcare sector. This week, Paul,
• 29:17
  Speaker 3: thanks for joining us, appreciate it.
• 29:19
  Speaker 5: Thanks a lot of how you guys.
• 29:20
  Speaker 3: Doing very well, so, I think for folks that may
• 29:23
  Speaker 3: not be paying close attention to sector bisector as many
• 29:27
  Speaker 3: investors don't. Right, you just take a look at how
• 29:29
  Speaker 3: the markets have been doing, and you know, to kick
• 29:31
  Speaker 3: off the new year, they've been faring pretty well, but
• 29:34
  Speaker 3: the healthcare sector particularly not so much. What have we
• 29:38
  Speaker 3: seen just in terms of equity market performance from that
• 29:41
  Speaker 3: one area of the market.
• 29:44
  Speaker 5: Yeah, I think healthcare stocks there's been a concern since
• 29:48
  Speaker 5: the election, especially because of the nomination of Robert F.
• 29:53
  Speaker 5: Kennedy Junior for Health and Human Services Secretary about what
• 29:57
  Speaker 5: that might mean. You know, is a well known vaccine skeptic,
• 30:03
  Speaker 5: so you know, definitely some worries. But I think that
• 30:07
  Speaker 5: for all of the concerns about what an RK Junior
• 30:11
  Speaker 5: type regime at HHS might do for the Pfizers and
• 30:16
  Speaker 5: Madernas and other big you know, pharma biotech companies in
• 30:20
  Speaker 5: the world, there are pockets of healthcare that should still
• 30:23
  Speaker 5: hold up fine. And you know, one of those companies
• 30:25
  Speaker 5: that I wrote about this week is Thermo Fisher Scientific.
• 30:28
  Speaker 5: You know, a major medical instruments and equipment company that
• 30:33
  Speaker 5: you know isn't going to necessarily get hit by worries
• 30:37
  Speaker 5: about RFK Junior because you know, this is a company
• 30:39
  Speaker 5: that makes beakers and test tubes and microscopes, a lot
• 30:43
  Speaker 5: of equipment that you know, big drug companies are all
• 30:46
  Speaker 5: going to still use and need.
• 30:48
  Speaker 3: So for our listeners here in New England, I mean
• 30:50
  Speaker 3: this is a this is a company that's headquartered I think,
• 30:53
  Speaker 3: you know, less than ten miles away from our studio here.
• 30:55
  Speaker 3: So a lot of folks pretty familiar with Thermo Fisher
• 30:58
  Speaker 3: drive by it on the highway on a day to
• 31:00
  Speaker 3: day basis. What has this company evolved into. I mean,
• 31:03
  Speaker 3: obviously you mentioned a number of their research equipment type stuff,
• 31:05
  Speaker 3: but how have they performed if you look at them
• 31:08
  Speaker 3: over the last decade or so.
• 31:10
  Speaker 6: Yeah, I mean this is a stock that is, you know,
• 31:14
  Speaker 6: a giant within the healthcare medical equipment sector, and the
• 31:19
  Speaker 6: stock has you know, had a pretty solid run about
• 31:23
  Speaker 6: you know, up more than seventy percent over the past
• 31:26
  Speaker 6: you know.
• 31:26
  Speaker 5: Five years. You know, again, it has taken a bit
• 31:30
  Speaker 5: of a hit from its fifty two week high. I
• 31:32
  Speaker 5: think partly because of the concerns about what the environment's
• 31:35
  Speaker 5: going to look like going forward. But uh, you know,
• 31:38
  Speaker 5: there was obviously a boom during COVID times and then
• 31:43
  Speaker 5: a bit of a hangover you know, since then. But
• 31:46
  Speaker 5: you know, this isn't a company that just relies on
• 31:49
  Speaker 5: things like you know, COVID vaccines and big GLP one drugs.
• 31:54
  Speaker 5: I mean companies you know within medical you know medical
• 31:58
  Speaker 5: you know, big pharma and biotecher instantly looking for the
• 32:01
  Speaker 5: next new blockbuster. So Thermoficial Scientific should benefit from being
• 32:05
  Speaker 5: you know, part of that ecosystem.
• 32:07
  Speaker 3: Well, I'm always a bit suspicious when we hear about
• 32:10
  Speaker 3: how a new political administration is going to completely upend
• 32:13
  Speaker 3: in industry. I feel like I've heard that tail too
• 32:15
  Speaker 3: many times to believe it over the long term. You know,
• 32:18
  Speaker 3: the healthcare industry over the last twelve twenty four months
• 32:22
  Speaker 3: has really been dominated by those weight loss drugs, and
• 32:25
  Speaker 3: some of the best performing stocks not only in the
• 32:27
  Speaker 3: healthcare sector but in the entire market have been companies
• 32:30
  Speaker 3: like Lily, like Nova Nordisks who have really driven massive
• 32:34
  Speaker 3: profit gains off these weight loss drugs. Is there any
• 32:36
  Speaker 3: indication that that really might slow down under a Trump administration,
• 32:42
  Speaker 3: I'm not so sure.
• 32:43
  Speaker 5: I mean, you know, you know, Eli, Lilly and Nois
• 32:46
  Speaker 5: as you point out, or done extremely well, and I
• 32:49
  Speaker 5: don't think there's that much skepticism per se about the
• 32:55
  Speaker 5: you know, the efficacy of those drugs and the benefits.
• 33:00
  Speaker 5: Are sure there's as much of an RFK worry about
• 33:04
  Speaker 5: Eli Lilly and Novnortisk, which with both are rallying sharply today,
• 33:08
  Speaker 5: some very strong results from Nova Nordists lifting that stock.
• 33:13
  Speaker 5: So I do agree that some of the worries might
• 33:18
  Speaker 5: be a little misplaced, but you know, investors definitely have
• 33:24
  Speaker 5: legitimate concerns about what an RFK junior environment for healthcare
• 33:29
  Speaker 5: will look like, and I think that's why some large
• 33:32
  Speaker 5: pharma companies and biotechs are selling off. But I think
• 33:35
  Speaker 5: there are opportunities in other companies you know that maybe
• 33:40
  Speaker 5: been over sold. You know, Thermo Fisher being being one
• 33:43
  Speaker 5: medtronics one I've written about in the past couple of
• 33:45
  Speaker 5: months that you know, could you do well. Also, I
• 33:48
  Speaker 5: think medical equipment is still going to be a growth
• 33:52
  Speaker 5: business regardless of what happens at AHHS.
• 33:55
  Speaker 3: Paula Monica from Baron's joining us today to talk about
• 33:57
  Speaker 3: the healthcare sector and Thermo Fisher Special Paul, thanks for Johnnys.
• 34:01
  Speaker 3: Appreciated as always, and we'll talk to you next week.
• 34:03
  Speaker 5: Thanks a Lon have be going.
• 34:04
  Speaker 3: Guys, Other Paul, what do you have for us for
• 34:07
  Speaker 3: stack Roulette Comcasts? Sorry, you're not other Paul, The one
• 34:10
  Speaker 3: and only, not fair Paul.
• 34:11
  Speaker 2: Number one Comcast launches a seventy dollars sports streaming bundle
• 34:17
  Speaker 2: with NFL, NBA, and MLB games. And I was just
• 34:19
  Speaker 2: talking to Tucker about this off air. It just seems
• 34:23
  Speaker 2: like your head spins in terms of the amount of
• 34:25
  Speaker 2: packages and bundles out there. This one would be, like
• 34:29
  Speaker 2: I said, seventy bucks a month. You get access to
• 34:32
  Speaker 2: more than fifty channels like ABC, CBS, Fox, and NBC.
• 34:36
  Speaker 2: And then they have a group of news stations as
• 34:39
  Speaker 2: well as the typical sports channels like ESPN, FS one
• 34:42
  Speaker 2: Golf Channel, and SEC Network. You know, the more I
• 34:46
  Speaker 2: read through this, I'm starting to convince myself maybe this
• 34:48
  Speaker 2: would get to my overall needs. But I'm always so
• 34:52
  Speaker 2: hesitant to disrupt the apple cart when it comes to
• 34:55
  Speaker 2: the way we have our traditional cable set up at
• 34:58
  Speaker 2: the house. And i know some of you guys are YouTube,
• 35:00
  Speaker 2: Ube or Fubu, but I've always been hesitant to make
• 35:02
  Speaker 2: the plunge.
• 35:03
  Speaker 3: Yeah, I'll be interested to see now that Fubo has
• 35:05
  Speaker 3: done this combination with Disney, or at least announced it.
• 35:08
  Speaker 3: I don't know if it's actually gone through, but you know,
• 35:11
  Speaker 3: what changes there they're combining the platforms with their Hulu
• 35:15
  Speaker 3: Live TV, what changes come in there. Look, in my experience,
• 35:19
  Speaker 3: every single streaming option I have changed to has some drawback. Right,
• 35:23
  Speaker 3: the last one I was on didn't get Nisson at
• 35:26
  Speaker 3: some point, and then the current when I'm on doesn't
• 35:27
  Speaker 3: get TNT, and so I've had experiences in playoff. I
• 35:31
  Speaker 3: don't care about basketball, but hockey where I can't get
• 35:34
  Speaker 3: the game, and I don't think anybody's going to have
• 35:37
  Speaker 3: the perfect solution to any of this unless you're willing
• 35:40
  Speaker 3: to shell out the cost of a full cable package.
• 35:43
  Speaker 2: No you're not. It's interesting Netflix could be added within
• 35:48
  Speaker 2: this seventy dollars package for another fifteen bucks a month,
• 35:51
  Speaker 2: with some of the other popular streamers of Apple TV,
• 35:55
  Speaker 2: plus annex Freney stream Saver, which I have no idea
• 35:58
  Speaker 2: what the heck dre is.
• 36:00
  Speaker 3: That is another one that keeps getting tossed around, and
• 36:03
  Speaker 3: I wonder how compelling that becomes of, Hey, we can't
• 36:07
  Speaker 3: get we can't get Affinity subscribers to really sign up,
• 36:10
  Speaker 3: but if we offer them a discounted Netflix package, maybe
• 36:13
  Speaker 3: maybe they will.
• 36:14
  Speaker 2: Just ride their coattails.
• 36:15
  Speaker 3: Oh man, just you know, lining up with the company
• 36:18
  Speaker 3: that ate your lunch is just kind of hilarious to me.
• 36:21
  Speaker 3: The good times are ahead for US wine drinkers, maybe
• 36:26
  Speaker 3: not so much the producers. In twenty twenty four, Americans
• 36:30
  Speaker 3: bought fewer wines than the year before. That was I
• 36:34
  Speaker 3: think the first time that that has ever been reported
• 36:36
  Speaker 3: that the sales year over year dropped. They're not expected
• 36:40
  Speaker 3: to hit rock bottom until about twenty thirty. But across
• 36:44
  Speaker 3: the board, wine drinkers are growing a bit more skepticism,
• 36:48
  Speaker 3: and I think this comes from a few places. One
• 36:51
  Speaker 3: would be just more competition from everything under the sun
• 36:54
  Speaker 3: in terms of different alcohol But we've talked at length
• 36:56
  Speaker 3: about people going more for non alcoholic bever just as
• 37:00
  Speaker 3: well and taking a look at their drinking habits. This
• 37:03
  Speaker 3: is an industry also that is potentially facing warning labels
• 37:06
  Speaker 3: when it comes to alcohol consumption, although I wonder how
• 37:09
  Speaker 3: that changes again under the Trump administration. In terms of sales,
• 37:14
  Speaker 3: you saw decreases across the board. The least impacted area
• 37:18
  Speaker 3: was wines and grocery and drug stores that were priced
• 37:20
  Speaker 3: between fifteen and twenty five dollars. The only type of
• 37:25
  Speaker 3: wine that increased in sales was prosecco, which was up
• 37:28
  Speaker 3: two point seven percent in the United States. So the
• 37:32
  Speaker 3: big news for me at least is that over the
• 37:35
  Speaker 3: next five years, I expect to be able to get cheaper,
• 37:38
  Speaker 3: better wines sitting in my house, and we as a
• 37:43
  Speaker 3: household are more of a I would say wine is
• 37:46
  Speaker 3: our dominant beverage of choice in our household.
• 37:48
  Speaker 2: Yeah, and our house it doesn't get consumed too much
• 37:51
  Speaker 2: I wish my wife was more of a red wine fan,
• 37:54
  Speaker 2: but I just feel guilty about opening the bottle and
• 37:56
  Speaker 2: then you know.
• 37:57
  Speaker 3: Just letting it go back. Yeah, yeah, happened to me.
• 38:00
  Speaker 3: I don't know what you're talking about.
• 38:01
  Speaker 2: It you're not a quitter.
• 38:04
  Speaker 3: That's all the time we have for today's financial exchange.
• 38:07
  Speaker 3: Markets are mixed, NASDAK and Dow in slightly negative territory,
• 38:10
  Speaker 3: SMP and positive. Will be back added on Monday. Folks,
• 38:14
  Speaker 3: have a great weekend and we'll have a full market
• 38:16
  Speaker 3: coverage and recap for you then