Latest / The Financial Exchange Show / Stocks haven't traded at these levels since September. Why?

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Stocks haven't traded at these levels since September. Why? · The Financial Exchange Show

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Speaker 1: Zada and Mike Armstrong.
1:10
Speaker 2: Kicking off another week. Here, it's Chuck, Mike and Chucker
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Speaker 2: with you. I hope you all had a great weekend.
1:17
Speaker 2: It was a beautiful weather over the weekend.
1:19
Speaker 3: I was outside running in shorts and a T shirt
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Speaker 3: yesterday because it was seventy degrees and I was getting
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Speaker 3: a little sweaty just thinking about all the economic data
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Speaker 3: that we had to get through this week.
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Speaker 2: It wasn't the weather that was doing it. It was
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Speaker 2: the data.
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Speaker 3: Because we got some big ones here this week. We
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Speaker 3: got retail sales that came out this morning at eight thirty.
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Speaker 3: We'll discuss those today.
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Speaker 2: Obviously.
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Speaker 3: We also tomorrow have building permits and housing starts. Remember
1:42
Speaker 3: in order to start a house need a permit, so
1:44
Speaker 3: those are always fun to look at. Wednesday one of
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Speaker 3: the sneakiest FED meetings I've seen in recent history. Have
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Speaker 3: you heard anyone talking about the FED meeting this week? No,
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Speaker 3: There's been a few other things to talk about. There's
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Speaker 3: been no one talking about the FED meeting. Jay Pal's
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Speaker 3: going to go up and be like, Hey, where's everybody
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Speaker 3: pay attention to me? You people, So we got the
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Speaker 3: Fed on Wednesday. They're also going to be putting out
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Speaker 3: as part of that meeting. It is one of the
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Speaker 3: releases of the Summary of Economic Projections. We get those
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Speaker 3: on a quarterly basis from the Fed, and so that's
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Speaker 3: something that we have to look forward to about, Hey,
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Speaker 3: how do they think growth and inflation and interest rates
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Speaker 3: may change now that they're getting some more clarity about
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Speaker 3: the policies of the Trump administration. On Thursday we get
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Speaker 3: weekly jobless claims and existing home sales or used homes
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Speaker 3: as I prefer to call them. And then on Friday,
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Speaker 3: John Williams from the Fed.
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Speaker 2: Speaks important stuff. You're only not to do it once.
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Speaker 3: I can do it as many times as I want.
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Speaker 3: But Tucker will tell me when it's a problem. When
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Speaker 3: he turns my mic off. It's fine, that's fair. So
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Speaker 3: let's talk a little bit about these retail sales data
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Speaker 3: points that we got this morning before we go any further.
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Speaker 3: Came in at point two percent month over month, which
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Speaker 3: is about a.
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Speaker 2: Third of headline expectations.
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Speaker 3: Expectations were for point six excluding autos came in at
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Speaker 3: point three compared to point four. So you say, okay,
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Speaker 3: strip out those volatile auto sales YEA, and more in
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Speaker 3: line X autos and X gas. Remember gas obviously obviously
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Speaker 3: it goes into cars.
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Speaker 2: But you strip that out at your opinion.
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Speaker 3: Don't worry about it stripping out gas as well. Came
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Speaker 3: in at point five versus point four percent expected, and
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Speaker 3: they also put in place this thing called the Retail
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Speaker 3: Sales Control Group, which basically controls for like a lot
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Speaker 3: of volatile stuff that isn't necessarily representative, and that came
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Speaker 3: in stronger than expected at one percent versus point two.
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Speaker 3: So overall that the headline retail sales number not good.
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Speaker 3: But this is kind of the opposite of the jobs report,
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Speaker 3: where I said, hey, the job support headline numbers are good,
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Speaker 3: but underneath there's a couple things you're nervous about. This
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Speaker 3: was more it's not good, and there's still some things
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Speaker 3: that you need to pay attention to. But overall, I
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Speaker 3: think this retail sales report is fine.
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Speaker 4: Actually, it was coming off of a pretty substantial drop
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Speaker 4: in January, which I think most were willing to blame
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Speaker 4: on wildfires and freezing cold weather. February did not have
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Speaker 4: a lot of those same things going on, and that'd
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Speaker 4: be the only other thing that catches my eyes when
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Speaker 4: we talk about a point two. It's a point two
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Speaker 4: growth on the previous month, and the previous month was
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Speaker 4: pretty weak.
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Speaker 3: And here here's the one thing that you can point
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Speaker 3: to if you're like, okay, maybe there is a problem here.
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Speaker 3: The previous month was also revised down further. Yeah, it
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Speaker 3: came in a point nine percent negative point nine percent originally,
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Speaker 3: the revised print is negative one point two. So you
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Speaker 3: look at and you're like, okay, maybe there is something
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Speaker 3: that's you know, a little bit dodgy there. Because the
4:42
Speaker 3: other thing you have to remember all of the market
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Speaker 3: uncertainty and tariff hullabaloo if you will, that that effectively
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Speaker 3: started at the beginning of March. I mean, you go
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Speaker 3: back to the end of February and the market had
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Speaker 3: fallen about three percent at that time. I'm looking at
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Speaker 3: the February twenty eighth closed It was just fifty nine
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Speaker 3: fifty four. The high was like sixty one forty seven,
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Speaker 3: so it was like three and a half percent down
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Speaker 3: and you eventually saw a ten percent dip. And remember
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Speaker 3: those new Canada and Mexico tariffs went into place the
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Speaker 3: start of March, right, So I think there is an
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Speaker 3: open question because of how quickly things are evolving with
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Speaker 3: you know, trade policy and how people may be reacting
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Speaker 3: to it. I think there's an open question as to hey,
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Speaker 3: this date is a month old, is already out of date?
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Speaker 4: Maybe, but I would go back to something here checks
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Speaker 4: What we're talking about is retail sales. And the one
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Speaker 4: thing that's pretty consistent about the retail consumer is they
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Speaker 4: don't usually draw back on spending until they can't spend anymore. Right,
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Speaker 4: you go back and look at spending tracks in like
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Speaker 4: oh eight, when did they stop spending? Well, they stopped
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Speaker 4: spending once the credit card got maxed out because they
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Speaker 4: lost their job. And I'm not trying to make light
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Speaker 4: of that. That was a really sad, difficult time. But
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Speaker 4: it's not as though the consumer is a great lead
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Speaker 4: in to be able being able to predict recession. They
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Speaker 4: usually stop spending, like I said, yeah, once they literally
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Speaker 4: can't anymore. And so I don't want to read too
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Speaker 4: much into what you know could be coming because of
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Speaker 4: tariff uncertainty. My guess will be average consumer keeps on
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Speaker 4: spending like they are usually until they can't anymore. The
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Speaker 4: one caveat which we've brought up a few times now
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Speaker 4: is that when you talk about retail spending, you do
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Speaker 4: have to focus on the top ten percent income earner
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Speaker 4: because that's where half of the spending is actually coming from.
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Speaker 4: And you know, is there some wealth effect going on
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Speaker 4: there when you talk about markets, you know, coming down
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Speaker 4: a little bit, real estate prices getting hit a little bit.
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Speaker 2: Maybe there's some reverse.
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Speaker 4: Wealth effect that could play in earlier than usual when
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Speaker 4: we talk about the health.
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Speaker 2: Of the consumer. So what did well?
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Speaker 3: What did badly for the month? So auto sales down
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Speaker 3: point four percent for the month. We mentioned I think
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Speaker 3: we're in December that auto sales rose two point eight
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Speaker 3: percent for the month, and we were like, guys, that's
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Speaker 3: that's just not something that is sustainable. And so you've
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Speaker 3: seen a predictable retrenchment there no surprise. Electronics and appliance
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Speaker 3: stores down point three percent for the month. They're down
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Speaker 3: five point three percent for the year though, So this
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Speaker 3: is kind of a twelve month trend that we've been
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Speaker 3: seeing there.
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Speaker 2: It's not anything new.
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Speaker 3: It's not new behavior that people are spending less on
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Speaker 3: electronics right now. Gas station, we talked about people spent
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Speaker 3: less on gas. Don't know how, don't know why, I
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Speaker 3: don't know, maybe just all the bad weather we had
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Speaker 3: in February, a lot of storms and stuff like that.
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Speaker 3: People just not traveling as much. Everyone was sick. I
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Speaker 3: don't know, like whatever, Clothing stores down point six percent
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Speaker 3: for the month, Okay, like kind of something, but I
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Speaker 3: don't know that it means anything. Sporting goods down point
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Speaker 3: four percent. They've been falling for the last year. No
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Speaker 3: change there. Here's the one that is notable to me.
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Speaker 2: Actually there's there's.
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Speaker 3: Yeah, this is the one that's notable to me. Food
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Speaker 3: services and drinking places down one and a half percent
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Speaker 3: for the month.
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Speaker 2: Now.
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Speaker 3: A couple different possible causes on this. I mentioned A
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Speaker 3: the weather was horrible in much of the country in February.
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Speaker 3: Think about all the snow we got here in the Northeast.
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Speaker 3: Wasn't just the Northeast. Those storms typically come across the country,
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Speaker 3: and so you had bad weather everywhere. That can absolutely
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Speaker 3: impact restaurant sales. Also, everyone was sick. I don't know
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Speaker 3: about you, but I generally prefer to not go out
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Speaker 3: in public when I'm sick. A. I don't keep up
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Speaker 3: the fresh faced, you know, bushytailed appearance that I'm known for.
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Speaker 3: And B I generally prefer to not get everyone else sick.
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Speaker 3: I would say it's more the latter than the former.
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Speaker 4: But yeah, with you on the gas prices side, just
8:43
Speaker 4: to return there, remember too that oil prices and I
8:46
Speaker 4: know this isn't directly related to gas prices, but yeah,
8:49
Speaker 4: oil prices. January fifteenth, we're sitting at eighty bucks a barrel.
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Speaker 4: By February fifteenth we are down to seventy bucks a barrel,
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Speaker 4: So a lot of this. Again, it's not price adjusted
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Speaker 4: gas sales, no, just gas phenomenal, and so I'm guessing
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Speaker 4: cheaper gas was a good portion of the decline in
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Speaker 4: gas sales.
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Speaker 2: But here's the other thing.
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Speaker 3: On food services and drinking places, it can be bad
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Speaker 3: weather in people getting sick. It also could be one
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Speaker 3: of those early signs of hey, are we pulling back
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Speaker 3: and getting more cautious, because last time I checked, it's
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Speaker 3: more expensive to buy food that someone else makes for
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Speaker 3: you as opposed to making your own food.
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Speaker 4: And that would fall in line with some other things
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Speaker 4: that we've been hearing from executives at the likes of
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Speaker 4: Delta and other more I guess luxury experience type things. Right,
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Speaker 4: If we talk about dining out at fancy restaurants, or
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Speaker 4: flying on Delta airlines. You know, some of that's necessity travel,
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Speaker 4: but most of it is a choice.
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Speaker 3: Yeah, let's take a quick break here. When we come back,
9:43
Speaker 3: let's talk a little bit about the stock market. I
9:46
Speaker 3: know we were just going through some economic data, but hey,
9:48
Speaker 3: let's talk about where the market actually is right now
9:51
Speaker 3: when we return.
9:53
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11:00
Speaker 3: So there's a headline in the Wall Street Journal it
11:02
Speaker 3: says stocks haven't traded at these levels since September, and
11:05
Speaker 3: I was trying to figure out if they were saying
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Speaker 3: that that was something meaningful or not, given that September,
11:10
Speaker 3: based on the math that I've done, was six months ago.
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Speaker 2: So look, those of you.
11:16
Speaker 3: Who are regular listeners to the show, you know my
11:19
Speaker 3: favorite saying is that you know, volatility in markets, it
11:21
Speaker 3: is a feature, it's not a bug. You typically see
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Speaker 3: a ten percent crack up in markets every I don't know,
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Speaker 3: twelve to eighteen months like that. I think that the
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Speaker 3: data that I was looking at today, there's been thirty
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Speaker 3: four of these since nineteen fifty, so it's every couple
11:36
Speaker 3: of years you have a ten percent correction. There are
11:39
Speaker 3: some periods where you go far longer I mean if
11:42
Speaker 3: you look at you know, effectively, like what the longest
11:47
Speaker 3: periods are between you know, stock market corrections, and like
11:50
Speaker 3: how they've you know gone, you do end up with
11:52
Speaker 3: some periods where you go an awful long time without
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Speaker 3: seeing a correction. One of the biggest ones was actually
12:01
Speaker 3: leading up to uh, the I'm sorry, after the no
12:07
Speaker 3: sorry one more you got it. Leading up to the
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Speaker 3: Great Financial Crisis, you had at like a five year
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Speaker 3: period from three to seven, sixteen hundred and seventy three
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Speaker 3: days where you didn't have a ten percent correction. You
12:17
Speaker 3: saw another one from twenty eleven to twenty fifteen, and
12:21
Speaker 3: so like you can have periods of like three or
12:23
Speaker 3: four years where you don't have a correction. You also
12:26
Speaker 3: can have some times where, look, there's one in you know,
12:29
Speaker 3: nineteen eighty where there's only ninety eight days between ten
12:32
Speaker 3: percent corrections. One in nineteen ninety one hundred and sixty
12:35
Speaker 3: seven days, the tech bubble featured multiple ten percent corrections
12:39
Speaker 3: in pretty rapid succession. There were ones in ninety eight,
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Speaker 3: ninety nine, two thousand, and two thousand and two. So
12:46
Speaker 3: like you can see these things, you know, there's no
12:49
Speaker 3: rhyme or reason to them in terms of when they develop.
12:52
Speaker 3: But I guess the big thing that you need to
12:56
Speaker 3: try to figure out in these and not that you
12:59
Speaker 3: need to, but that people try to figure out in
13:01
Speaker 3: these is again kind of the big question in any
13:04
Speaker 3: investing is this temporary or permanent? The shift that I'm seeing,
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Speaker 3: and I think more than that, is this because of,
13:11
Speaker 3: you know, a fundamental regime change. When we say regime change,
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Speaker 3: we're not meaning not political regime, not political regime, but
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Speaker 3: investment game from think about if you're thinking like, regime
13:22
Speaker 3: change in markets AI in twenty twenty three was a
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Speaker 3: regime change from what had been going on in twenty
13:29
Speaker 3: twenty two when markets were puking all over themselves. It
13:32
Speaker 3: was a fundamental shift in regime change, likewise inflation in
13:36
Speaker 3: twenty two regime change investment wise from what we had
13:39
Speaker 3: seen previously. So that's what markets are trying to sniff
13:42
Speaker 3: out now, is hey, is it something where this is
13:46
Speaker 3: something that's just temporary and we're gonna bounce and go
13:48
Speaker 3: on our merry way. And if not, how do things
13:53
Speaker 3: need to rotate? Because where is the growth going to
13:55
Speaker 3: be going forward? And there's no way to know definitively
13:59
Speaker 3: the answer those questions until after the fact. You can't
14:02
Speaker 3: just be like, well, it's definitely this, I mean it,
14:05
Speaker 3: maybe it may not be. You'd never really know until
14:09
Speaker 3: later on the idea of you know, technology regime change.
14:13
Speaker 3: Everyone in their grandmother bought into the AI bubble, now bubble,
14:17
Speaker 3: we can call it a bubble right to the AI trend.
14:19
Speaker 2: The trend. I can't say it's the bubble because as
14:22
Speaker 2: it really popped in.
14:22
Speaker 3: Yeah, everyone in their grandmother bought into the AI trend.
14:26
Speaker 3: Did anyone buy into the three D printing trend? No, Like,
14:29
Speaker 3: it never became a thing, even though it got talked
14:31
Speaker 3: about relentlessly for you know, six months or so, it
14:34
Speaker 3: never became a thing.
14:36
Speaker 2: So we've talked about, you know, we entered correction. What
14:38
Speaker 2: was it?
14:39
Speaker 4: Thursday of last week was when markets first closed in
14:41
Speaker 4: crustion territory often more when they have right Friday, they
14:44
Speaker 4: bounced right back up.
14:45
Speaker 2: You're to date.
14:46
Speaker 4: If we take a look at those numbers through Friday,
14:48
Speaker 4: just to give a sense for you know, where this
14:50
Speaker 4: all is now. S and P now off close to
14:53
Speaker 4: four percent as of Friday, Dow Jones Industrial average only
14:57
Speaker 4: off about.
14:58
Speaker 2: Two percent, saying year to date not from peak.
15:00
Speaker 4: Sorry, yes, year to date, not from peak, because we
15:03
Speaker 4: did go up through February and then been coming down
15:05
Speaker 4: off of that peak. The NASDAC off about eight percent
15:09
Speaker 4: year to date. You know, if you want to take
15:11
Speaker 4: a look at Russell one thousand, that's off more like
15:14
Speaker 4: four percent. And by the way, none of those indices
15:16
Speaker 4: are now down. When you look at the last twelve months.
15:20
Speaker 4: Overseas stocks have been doing fair bit better. The MSCI
15:23
Speaker 4: eaf E FE Index eaf E excludes the United States
15:27
Speaker 4: and Canada and generally looks at all other developed markets,
15:29
Speaker 4: up nearly nine and a half percent so far this year,
15:32
Speaker 4: and the MSCI Emerging Markets Index up about four and
15:35
Speaker 4: a half percent so far.
15:37
Speaker 2: And so.
15:38
Speaker 4: We've talked about how tariffs by and large, well, I
15:43
Speaker 4: think the common phrase is there are no real winners
15:46
Speaker 4: in a trade war, but there are some losers. And
15:49
Speaker 4: generally speaking, you know, most foreign countries economies might get
15:52
Speaker 4: hit harder than the United States in the face of tariffs. However,
15:57
Speaker 4: thus far their stock markets are far out performing the
16:00
Speaker 4: United States stock market at this time, and so there's
16:04
Speaker 4: likely a number of different factors there, but I think
16:07
Speaker 4: one of them is that if you take a look at,
16:09
Speaker 4: for instance, you know, trade of goods from Canada coming
16:13
Speaker 4: into the United States. Who's doing a lot of that importing?
16:17
Speaker 4: It's American firms doing business in Canada. It's not sure
16:21
Speaker 4: for example, some giant Canadian firm that's manufacturing the cars
16:25
Speaker 4: up there. No, it's General Motors, Forward Stilantis that are
16:29
Speaker 4: setting up factories in Canada and bring that stuff over.
16:32
Speaker 4: And so if you're worried about trade tariff, you're going
16:35
Speaker 4: and selling American stocks doing business in Canada.
16:37
Speaker 3: Right If you ask, like, hey, name me like the
16:40
Speaker 3: great auto manufacturers of Canada, there are none right right now?
16:47
Speaker 3: You know again, it's like General Motors Canada, Ford Canada,
16:51
Speaker 3: Fiat Chrysler Canada. Like that's that's what you have. I know,
16:57
Speaker 3: I'm sure there are standalone Canadian auto companies that have
17:00
Speaker 3: existed historically. But I wonder when the last like Canadian
17:04
Speaker 3: well Canadian owned automaker went out of business or merged
17:09
Speaker 3: somewhere else.
17:09
Speaker 4: Yeah, I mean to be curious, I'm sure it's been
17:11
Speaker 4: quite some time, because all I can think of is,
17:13
Speaker 4: I'm certain there are car parts manufacturers that are oharly
17:17
Speaker 4: just not not actual car makers.
17:19
Speaker 3: Yeah, I wonder if anyone has, uh, like Canadian automakers
17:23
Speaker 3: that they've known historically, please text us at six point
17:25
Speaker 3: seven three six two thirteen eighty five, just because quite honestly,
17:29
Speaker 3: it predates me.
17:30
Speaker 2: I'm sure this.
17:31
Speaker 4: Seems like a point that Ben's going to pick up
17:34
Speaker 4: on trivia at some stage. Name that Canadian car company.
17:38
Speaker 4: Oh that would be good.
17:39
Speaker 2: Yeah, yeah, that'd be good. Tucker. You finding anything Magna International?
17:43
Speaker 4: Come on, you're blowing it. What what do they do?
17:47
Speaker 2: I don't know.
17:49
Speaker 5: A global mobility tech company, a major supplier of automotive
17:53
Speaker 5: components and systems, so parts.
17:55
Speaker 3: Yeah, anyways, so you got stocks that. Again, we're still
17:58
Speaker 3: trying to sort out where this all goes. I still
18:02
Speaker 3: think in terms of like the economic data, we need
18:05
Speaker 3: to see how a few months of data go before
18:07
Speaker 3: we can proclaim, hey, this is an overreaction or this
18:12
Speaker 3: is you know, for real.
18:13
Speaker 4: Also say you've mentioned this, Chuck, but this has not
18:17
Speaker 4: been a COVID style market selloff, right, And important to
18:22
Speaker 4: kind of keep that in mind because no panic here.
18:24
Speaker 2: It's it's been volatile.
18:26
Speaker 4: There's been ups and downs, but yeah, we have not
18:28
Speaker 4: had one of those five percent down days there has
18:31
Speaker 4: not been that panic sell off, and in part I
18:33
Speaker 4: think you know, in my mind, part of the reason
18:35
Speaker 4: for that is investors are kind of torn what to
18:38
Speaker 4: do here because fundamentally the US economy is pretty darn strong.
18:43
Speaker 4: GDP is looking pretty good, unemployment's looking fairly decent. No
18:46
Speaker 4: GDP's like for this, it's going down to see how
18:50
Speaker 4: it looks this quarter. These things were all at a
18:52
Speaker 4: pretty reasonable starting point ahead of time, and I think
18:55
Speaker 4: the acknowledgment I'm part of investors is, ah, do I
18:59
Speaker 4: sell everything knowing that the president could effectively turn this
19:03
Speaker 4: ship with the stroke of a pen for now. That
19:06
Speaker 4: might not be the case six months from now, but
19:08
Speaker 4: at the moment that seems to be the compelling case
19:11
Speaker 4: is that a stroke of a pen very much changed
19:13
Speaker 4: the direction of both the economy and the stock market.
19:15
Speaker 4: And that's a tough part too, a tough thing to
19:18
Speaker 4: invest based on.
19:19
Speaker 3: Let's take a quick break here. When we come back,
19:21
Speaker 3: I mentioned we do have a FED meeting this week.
19:23
Speaker 3: We'll talk a little bit about expectations heading into that meeting.
19:41
Speaker 1: Like us on Facebook and follow us on Twitter at
19:44
Speaker 1: TFE show. Breaking business news is always first right here
19:48
Speaker 1: on the Financial Exchange Radio Network. Time now for Wall Street.
19:53
Speaker 1: Watch a complete look at what's moving markets so far
19:56
Speaker 1: today right here on the Financial Exchange Radio.
20:00
Speaker 5: Markets is starting off the new week in mixed territory
20:03
Speaker 5: as Wall Street reacts to disappointing February retail sales data,
20:07
Speaker 5: where sales climbed zero point two percent last month, softer
20:10
Speaker 5: than forecasts of zero points six percent. Investors are also
20:14
Speaker 5: ready for a FED meeting and comments from FED Chairman
20:16
Speaker 5: Jerome Powell on Wednesday afternoon. Right now, the Dow is
20:20
Speaker 5: up by about a half a percent, or one hundred
20:22
Speaker 5: and ninety points, SMP five hundred up a quarter percent
20:26
Speaker 5: or fifteen points, and the Nasdaq is pulling back by
20:30
Speaker 5: twenty eight points or two tenths of a percent. Russell
20:33
Speaker 5: two thousand up nearly half a percent or eight points,
20:36
Speaker 5: Tenure Treasure reeled down by two basis points at four
20:39
Speaker 5: point two eight percent, and crude oil up nearly one
20:43
Speaker 5: percent higher, trading at sixty seven dollars in seventy eight
20:46
Speaker 5: cents a barrel. Some acquisition news to report this morning
20:49
Speaker 5: after Pepsi announced it will buy prebiotics soda brand Poppy
20:54
Speaker 5: for more than one point six billion dollars. This deal
20:58
Speaker 5: is still pending regulatory approval. Pepsi shares are up by
21:02
Speaker 5: about two percent on the news. Meanwhile, after its recent
21:05
Speaker 5: pullback of more than twelve percent over the past month,
21:07
Speaker 5: and Video shares down another one and a half percent today.
21:11
Speaker 5: The chip maker and AI Giant will hold its annual
21:14
Speaker 5: GtC Developers Conference this week, otherwise known as AI Woodstock.
21:19
Speaker 5: According to CNBC, Klarna will be the exclusive provider of
21:23
Speaker 5: buy now, pay later loans for Walmart, taking a coveted
21:27
Speaker 5: partnership away from rival affirm A. Firm shares are down
21:31
Speaker 5: over thirteen percent. Elsewhere, shares in Norwegian Cruise line up
21:36
Speaker 5: three percent after JP Morgan upgraded the cruise operator stock
21:39
Speaker 5: to overweight from neutral, citing that its management has indicated
21:43
Speaker 5: no change in booking curves and cancelation rates or cracks
21:48
Speaker 5: and on board spend levels. MafA Nathanson upgraded Netflix to
21:52
Speaker 5: buy from neutral, saying the streaming giantkim monetize more than
21:56
Speaker 5: previously expected in turn growing profit. Netflix shares are up
22:00
Speaker 5: about three and a half percent and taking a look
22:02
Speaker 5: at some noteworthy earnings for this week, FedEx, Micron Technology,
22:08
Speaker 5: and Nike will all report on Thursday, followed by Carnival
22:12
Speaker 5: on Friday on Tucker Silvan that's Wall Street Watch.
22:16
Speaker 3: An uncertain economic moment poses a big test for the FED.
22:20
Speaker 3: I actually don't think it's that big of a test
22:22
Speaker 3: for the FED because the data to this point has
22:25
Speaker 3: not really shown any significant deviation from you know, the
22:29
Speaker 3: prior trend of you know, Q late Q three through
22:33
Speaker 3: early Q through Q four and as such, Like, what
22:37
Speaker 3: do you think you're gonna get from the FED this week?
22:39
Speaker 2: They're not gonna do anything.
22:41
Speaker 4: Yeah, you're not gonna get much of anything at the
22:44
Speaker 4: at the FED meeting, nor are you gonna get much
22:45
Speaker 4: in the way of commentary. I think where I land
22:49
Speaker 4: on a story like this is the big test for
22:54
Speaker 4: the FED may be soon to come. And sure, Here's
22:58
Speaker 4: here's what I mean by this is if unemployment actually
23:02
Speaker 4: starts upticking, that's tricky because you are then facing you know,
23:10
Speaker 4: probably the most important thing that you're responsible for, which
23:13
Speaker 4: is the state of the labor market and making sure
23:15
Speaker 4: that that remains in balance and not you know, affecting
23:18
Speaker 4: long term consumer health. But if it's being caused by
23:23
Speaker 4: tariff policy, there is a huge tail risk, especially with
23:28
Speaker 4: when combined with tax cuts of a resurgence in inflation,
23:31
Speaker 4: and so the thing you don't want to see from
23:34
Speaker 4: the FED is volatility and policy either, right, like, Oh,
23:37
Speaker 4: we're lowering interest rates because of higher unemployment, but if
23:41
Speaker 4: things change, we're gonna have to shoot those interest rates
23:44
Speaker 4: back up in the other direction. That is precisely what
23:47
Speaker 4: we dealt with in the nineteen seventies that led to,
23:50
Speaker 4: you know, one of the worst.
23:51
Speaker 2: Decades in economic history.
23:52
Speaker 3: The other piece on that is, I know that obviously
23:55
Speaker 3: in the United States we focus predominantly on what's going on,
23:58
Speaker 3: you know, with with the domestic accompt Like it's it's
24:00
Speaker 3: hard enough to figure out what's going on with the
24:02
Speaker 3: US economy most of the time without having to be like, hey,
24:06
Speaker 3: what's happening in the UK? I mean, does anyone listening
24:11
Speaker 3: actually know what the UK either inflation rate or unemployment
24:15
Speaker 3: rate is?
24:15
Speaker 2: Because I'll be one hundred percent honest, I don't know.
24:18
Speaker 3: I don't, right, But here's what I do pay attention
24:21
Speaker 3: to when it comes to international stuff. The last few
24:23
Speaker 3: weeks has now seen a flurry of announcements of foreign
24:30
Speaker 3: countries that are ramping up pretty aggressive fiscal policy. Germany
24:37
Speaker 3: a couple of weeks ago said hey, here's our you know,
24:39
Speaker 3: five hundred billion euro plan for infrastructure and defense spending
24:43
Speaker 3: over the next decade.
24:45
Speaker 2: China over the weekend.
24:46
Speaker 3: Now, granted, like with a Chinese stimulus announcement, who knows,
24:50
Speaker 3: they're not worth the paper that they're printed on. But
24:53
Speaker 3: you still have to pay attention because sometimes like you
24:55
Speaker 3: actually get some follow through and it's something that's actually meaningful.
24:58
Speaker 3: And they announced a huge consumer facing stimulus over the weekend.
25:02
Speaker 3: And so when you're starting to see these things popping up,
25:05
Speaker 3: you think about this in the context of, Okay, China
25:08
Speaker 3: is saying they're gonna spend more, Germany is saying they're
25:10
Speaker 3: gonna spend more. Follow On from Germany is probably France,
25:13
Speaker 3: Italy and you know Spain are going to say they're
25:16
Speaker 3: going to spend more. Like you end up with kind
25:17
Speaker 3: of this whole, you know, this whole you know, follow
25:21
Speaker 3: on effect that you get as well. And so part
25:25
Speaker 3: of the challenge that you end up with when it
25:26
Speaker 3: comes to US interest rates is, hey, if the US is,
25:31
Speaker 3: you know, trying to figure out a way to be
25:33
Speaker 3: more fiscally responsible at the same time that the rest
25:36
Speaker 3: of the world is moving in the other direction. Even
25:38
Speaker 3: if the US economy is slowing and the FED decides
25:41
Speaker 3: to cut, it might not move long term interest rates
25:44
Speaker 3: very much because of the upward pressure that that fiscal
25:48
Speaker 3: impulse from everywhere else puts on, especially when coupled with
25:52
Speaker 3: the tariff side of things. So you might end up
25:54
Speaker 3: with this weird situation. And again, this is not this
25:57
Speaker 3: is not a certainty like that. There are a million
25:59
Speaker 3: permeations out there. But what if the FED six months
26:03
Speaker 3: from now or three months from now, whenever it is,
26:04
Speaker 3: decides hey, we need to aggressively cut right into ramping
26:08
Speaker 3: up fiscal stimulus from overseas and tariff supplied, you know,
26:12
Speaker 3: to imported goods, you might not get any movement in
26:15
Speaker 3: long term bonds. And if that's the case, is the
26:18
Speaker 3: Fed is the fat neates intervened on the longer rand
26:21
Speaker 3: of the curve?
26:21
Speaker 4: Right?
26:21
Speaker 3: It kind of gets back to the age old question.
26:25
Speaker 3: If interest rates aren't moving, is the FED actually intervening?
26:31
Speaker 3: These are again just things that you wonder about, and
26:34
Speaker 3: ultimately we're not gonna know until we see how this
26:37
Speaker 3: plays out and the other pieces. Again, Look, you could
26:40
Speaker 3: end up three months from now, I big believe you'll
26:43
Speaker 3: know what's going on with the US economy by fourth
26:45
Speaker 3: of July. Anyone who's like, oh, like we need to
26:47
Speaker 3: figure out if it's like recession or not right now, like, no,
26:49
Speaker 3: you're you're not gonna be able to by fourth of July.
26:53
Speaker 3: You will know where things are going because you have
26:55
Speaker 3: a multi month trend, you know, in place one way
26:58
Speaker 3: or another, and so you know it very well could
27:01
Speaker 3: be the case that we get to, you know, fourth
27:03
Speaker 3: of July and it's like, hey, the economic data stabilized
27:06
Speaker 3: after a week February and you know, kind of shaky
27:09
Speaker 3: March and everything looks fine now, Like that's absolutely possible.
27:14
Speaker 3: We see plenty of little wiggles in the economy that
27:16
Speaker 3: never develop into anything. Let's see how things evolve, see
27:20
Speaker 3: where things go from a trade policy perspective, and will
27:24
Speaker 3: know a lot more as we get towards the middle
27:27
Speaker 3: of the year, because right now we don't know anything.
27:31
Speaker 3: And anyone who's like, well, this is you know, gonna
27:33
Speaker 3: be the biggest recession, no idea.
27:36
Speaker 4: Yeah, we're talking about tariff rates that haven't been seen
27:39
Speaker 4: since the nineteen forties. Anybody telling that, you're telling you
27:41
Speaker 4: that they know how that's going to play out in
27:43
Speaker 4: the economy is full of it anything.
27:46
Speaker 2: There's no one.
27:46
Speaker 3: Alive who was an adult the last time this happened.
27:50
Speaker 3: I had to look it up.
27:50
Speaker 4: Warren Buffett started his investing career in the early nineteen fifties,
27:54
Speaker 4: so even he missed out on.
27:55
Speaker 3: It, right, I retracted my statement. There's someone alive, they're
27:59
Speaker 3: probablyrobably one hundred and twelve years old, and like they're
28:04
Speaker 3: not going to be able to tell you specifically what
28:05
Speaker 3: the economy did through that time period, because it's just
28:09
Speaker 3: like this is where we are today, is just in
28:14
Speaker 3: pretty uncharted territory, and we're just gonna have to see
28:17
Speaker 3: how this plays out because none of us know for certain.
28:21
Speaker 2: We just don't.
28:23
Speaker 3: Meanwhile, you do have this FED meeting that's coming up,
28:25
Speaker 3: and so the only piece that you might start to
28:28
Speaker 3: get some chatter about from the FED is they've been,
28:33
Speaker 3: you know, effectively trying to reduce their balance sheet, and
28:38
Speaker 3: maybe you start to get some chatter about that halting
28:41
Speaker 3: just because you're getting to the point where it appears
28:43
Speaker 3: that most excess reserves are out of the financial system
28:47
Speaker 3: and the FED probably doesn't want to continue reducing that
28:51
Speaker 3: balance sheet in the event that you know, they're not
28:54
Speaker 3: seeing signs of additional excess reserves there. So that's one
28:57
Speaker 3: thing that you could see, which in theory, hey, if
29:00
Speaker 3: you're not rolling, you know, this stuff off your balance sheet. Okay, great,
29:03
Speaker 3: it provides for you know, a little bit more support
29:06
Speaker 3: potentially for you know, bonds and bond prices. But I
29:10
Speaker 3: don't think it was a huge thing that was moving
29:13
Speaker 3: things around at this point, just because it's been pretty
29:15
Speaker 3: consistent for all while.
29:15
Speaker 4: The last few meetings they've been calling the risk between
29:18
Speaker 4: employment and inflation to be relatively equally weighted in their minds.
29:23
Speaker 4: I guess I'd be intrigued to see if they start
29:25
Speaker 4: favoring the unemployment side of that equation more than inflation.
29:29
Speaker 3: It's the interesting way that you could actually frame it
29:33
Speaker 3: if you wanted to be them, Just like with the
29:34
Speaker 3: greater uncertainty overall, is hey, these risks are now in balance,
29:39
Speaker 3: but have likely increased proportionally, right, you know, It's something
29:45
Speaker 3: along those lines. And again, just because a risk is
29:48
Speaker 3: increased doesn't mean that that is going to end up,
29:51
Speaker 3: you know, playing out that way. We just need to
29:54
Speaker 3: see how things go. I feel so much urgency from
29:58
Speaker 3: people to just declare things either good or bad right now,
30:02
Speaker 3: and sometimes you just got to see how it goes.
30:07
Speaker 3: It's the data is going to tell you where things go.
30:10
Speaker 3: You don't have to be first to call recession or
30:14
Speaker 3: growth like you can.
30:16
Speaker 2: Yeah, you only do that.
30:17
Speaker 4: You only need to do that if you're trying to
30:19
Speaker 4: make a career for yourself on CNBC or Bloomberg.
30:22
Speaker 2: I'm not necess or any of those places. I'm not.
30:25
Speaker 3: I got a scam job offer from TikTok today, and
30:28
Speaker 3: I might take that instead of going to c NBC
30:32
Speaker 3: or Bloomberg because I don't think I do very well there.
30:35
Speaker 3: But scam TikTok, well that could be for me, Michael.
30:39
Speaker 3: They say I only have to work half an hour
30:41
Speaker 3: a day.
30:42
Speaker 4: If you get one of these, they just want your
30:43
Speaker 4: social and address and all those details. Please don't if
30:46
Speaker 4: you get a PSA, if you receive a text message
30:50
Speaker 4: from a company saying that you only have to work
30:52
Speaker 4: thirty minutes a day for one thousand dollars a day,
30:55
Speaker 4: don't respond to it.
30:56
Speaker 2: Yeah that they'll call you if they're really interested.
31:00
Speaker 3: Alf you know, they'll send you something on company letterhead,
31:03
Speaker 3: and even then probably don't respond to whatever's in the
31:06
Speaker 3: phone call or letterhead and actually like google hr for
31:09
Speaker 3: the company and reach out that way.
31:11
Speaker 2: Yeah. Yeah, because I'll tell.
31:12
Speaker 3: You I'm getting like four or five of these a
31:14
Speaker 3: week now, not just the job offers, but like the
31:16
Speaker 3: toll scams and stuff.
31:17
Speaker 5: I was gonna say that that toll scam that's been
31:19
Speaker 5: going around for a couple months.
31:21
Speaker 2: Yeah, yeah, a lot of people.
31:23
Speaker 4: Yeah, let's take a break and let's actually make sure
31:25
Speaker 4: that we cover that next on the Financial Exchange.
31:27
Speaker 3: Yeah.
31:29
Speaker 1: If you missed any of today's show, catch up whenever
31:31
Speaker 1: you want on our YouTube page. Find daily show segments
31:34
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31:37
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31:40
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31:44
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31:57
Speaker 1: the latest business and financial news in New England and
32:00
Speaker 1: around the country. Is the Financial Exchange Radio Network.
32:09
Speaker 3: All Right, during the last segment, we were touching on
32:12
Speaker 3: the toll texting scam I've gotten I don't know I
32:16
Speaker 3: feel like I get one of these every week or
32:18
Speaker 3: two where it's you know, hey, you've got unpaid tolls. Please,
32:23
Speaker 3: you know, follow the link below in order to make
32:25
Speaker 3: sure that you pay your balance, and it includes something
32:28
Speaker 3: that looks like, you know, an easy pass link, but
32:30
Speaker 3: if you actually read the address, it's not going there.
32:34
Speaker 3: And a couple of things just went just general scam principles.
32:39
Speaker 3: Number one, no reputable organization is going to demand payment
32:45
Speaker 3: from you via text. They're just not.
32:52
Speaker 2: They're not.
32:54
Speaker 4: I feel as though I have gotten texts from medical
32:59
Speaker 4: type stuff of payment dues and things along those lines. Sure,
33:03
Speaker 4: texting in the medical industry is pretty calmon, but it's.
33:05
Speaker 5: More prompting you to log into a patient hold.
33:07
Speaker 3: It's like go somewhere like yep, never ever click on
33:11
Speaker 3: an unsolicited link in text.
33:13
Speaker 2: Do not.
33:15
Speaker 3: Number two, these toll texting things again, things just to
33:20
Speaker 3: pay attention to. There's never any actual urgency, Like, there's
33:25
Speaker 3: nothing that you need to do.
33:26
Speaker 2: Right now with any of these.
33:28
Speaker 4: You can you drove through a toll booth without money
33:32
Speaker 4: on your transport, they'll mail you, mail you a ticket.
33:35
Speaker 3: They'll mail you something. And look, these things look convincing.
33:39
Speaker 3: So I'm not saying this like, oh, like, how could
33:41
Speaker 3: anyone fall for this?
33:42
Speaker 2: Like, I get it. They look pretty convincing.
33:44
Speaker 4: Oh yeah, my wife showed me the emails she got
33:46
Speaker 4: on this a few months ago, and this was before
33:49
Speaker 4: this was such a big thing, and it did look
33:51
Speaker 4: very convincing. Likewise, in New York City, when they had
33:55
Speaker 4: the new congestion pricing go into place, almost immediately drivers
34:00
Speaker 4: are getting scam text about those specifics congestion pricing tools
34:03
Speaker 4: and again playing on people's fear, what people's fear, and
34:08
Speaker 4: what they're thinking about right away, right, Oh, this is new,
34:10
Speaker 4: Maybe this is how they collect those payments. Take a
34:13
Speaker 4: step back, go to a bit of research, and do
34:16
Speaker 4: not believe anything you get via text message, via email
34:19
Speaker 4: or even via phone call these days.
34:21
Speaker 3: Other general scam things. If anyone ever tells you that
34:23
Speaker 3: you need to pay for something either in gift cards
34:26
Speaker 3: or cash, don't or crypto or crypto Yeah, like the
34:32
Speaker 3: IR red flags, the IRS does not accept gift cards.
34:36
Speaker 3: What if they're from A they do not accept gift cards.
34:39
Speaker 3: A registered CVS, they do not accept gift cards. So
34:43
Speaker 3: just take a second and really think through what's being
34:48
Speaker 3: asked of you. I know it's hard, and I know
34:49
Speaker 3: that smart people fall for this stuff. So don't be embarrassed.
34:52
Speaker 3: If you're someone who's like, oh gee, I did fall,
34:55
Speaker 3: just work on it next time.
34:56
Speaker 2: Like there's trust me.
34:58
Speaker 3: There's gonna be another scam attempt made on you, fortunately,
35:01
Speaker 3: but just take your time, relax, and think through it.
35:05
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36:10
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36:18
Speaker 3: Mike you, Meg, Chris Farley Fan, Yeah, you ever, you know,
36:23
Speaker 3: think about living in a van down.
36:24
Speaker 2: By the river. I've considered it.
36:25
Speaker 3: Yes, you cannot live in a van down by the
36:27
Speaker 3: Charles River. Because there is a parking spot on Beacon
36:30
Speaker 3: Hill that is now listed for seven hundred and fifty
36:32
Speaker 3: thousand dollars. Uh. And so this apparently is in the
36:36
Speaker 3: Brimmer Street garage and so again it's listed for seven
36:41
Speaker 3: hundred and fifty thousand dollars.
36:42
Speaker 2: Right now. Here is the quote from one of the
36:45
Speaker 2: listing agents. Quote.
36:47
Speaker 3: It's a great long term hold. They're not going to
36:49
Speaker 3: be building any more parking on the hill. That's true,
36:53
Speaker 3: probably true, you know, probably true. But I just love
36:56
Speaker 3: the idea of referring to a parking spot as a
36:58
Speaker 3: long term hole. Like, So, how diversified is your portfolio
37:04
Speaker 3: these days, Jim, Well, I've got about a third inequities,
37:07
Speaker 3: a third in bonds, and a third and parking. Oh
37:10
Speaker 3: I didn't realize that that was one of the major
37:12
Speaker 3: ass of classes these days.
37:14
Speaker 4: It actually leads me to an interesting thought about the
37:16
Speaker 4: New England area, which, you know, think about the Great Recession.
37:19
Speaker 4: Massachusetts in particular heavily insulated from that downturn. You think
37:23
Speaker 4: about real estate values, for example, in the greater Boston area,
37:27
Speaker 4: and just how much more they held up than other
37:29
Speaker 4: parts of the country. The Massachusetts unemployment rate peaked at
37:34
Speaker 4: it looks like eight percent, whereas the national unmployment peaked
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Speaker 4: at ten percent. So just a number of ways more insulated.
37:40
Speaker 4: If this time eround, I'm not sure we're going to
37:42
Speaker 4: get an uptick in unemployment this year, but if it
37:45
Speaker 4: does come from government cuts to both employees as well as.
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Speaker 2: Research programs, New England's vulnerable.
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Speaker 4: Yeah, New England is heavily vulnerable to this type of thing,
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Speaker 4: as opposed to the typical Oh, look at Vegas, look
37:58
Speaker 4: at Florida, they're they're having a tough time. I'm like, no, Masters,
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Speaker 4: it's all the universities might not quite insulate us the
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Speaker 4: same way it did last time, So be careful about
38:07
Speaker 4: that three quarters million dollar parking spot.
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Speaker 3: I guess yes, it's hard to know where you might
38:10
Speaker 3: want to incorporate that into your portfolio. According to the
38:14
Speaker 3: listing agent, we're done for the hour, but we got
38:17
Speaker 3: a whole lot more coming up.
38:18
Speaker 2: Stick around