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How would you define economic success under President Trump? · The Financial Exchange Show

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  Speaker 2: Mordan. Welcome back to the Financial Exchange. Happy Thanksgiving wake
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  Speaker 2: here as we continue to digest new news about the
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  Speaker 2: incoming Trump administration, which will be frankly the only topic
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  Speaker 2: of discussion for the next couple of months. Here is
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  Speaker 2: conjecture increases about what that will all look like. Yesterday's
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  Speaker 2: news from over the weekend Scott task on AIDS, Yeah,
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  Speaker 2: Stigott Besant being selected as Treasury Secretary. For those that
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  Speaker 2: missed the program yesterday, Wall Street Insider worked for several
• 1:44
  Speaker 2: of the largest hedge funds out there. Protege widely seen
• 1:50
  Speaker 2: as a capable individual with fast knowledge about currency, safe
• 1:54
  Speaker 2: pair of hands. Markets rallied yesterday on that news. Yesterday afternoon,
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  Speaker 2: Donald Trump tweeted no xt I don't know what we
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  Speaker 2: call it anymore, but posted.
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  Speaker 3: Social pay per view social platform.
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  Speaker 2: Posted his intentions of increasing tariff specifically on China, Canada
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  Speaker 2: and Mexico. Mexico. That'll kind of factor its way into
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  Speaker 2: all aspects of the show today. But that is moving
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  Speaker 2: markets a little bit today, especially in currency markets. Uh,
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  Speaker 2: And that is I guess the the market moving news
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  Speaker 2: of the week so far back.
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  Speaker 3: To government by tweet Mike, Uh, we broke out of that,
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  Speaker 3: but we're back in that pattern.
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  Speaker 2: There is a piece this morning from Claudias sam She,
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  Speaker 2: for those who haven't been listening to the program recently,
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  Speaker 2: is the author, I guess of the Psalm rule, which
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  Speaker 2: is a good way to put in author. Yeah, I mean,
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  Speaker 2: there's no such thing as laws in economics. There are physics,
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  Speaker 2: and this is just a you know, view that she
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  Speaker 2: had a a how have you described it a normality
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  Speaker 2: that she saw economics.
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  Speaker 3: Yeah, they would research would call it an empirical regularity,
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  Speaker 3: which means it's something you stumbled on in the data
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  Speaker 3: that appears to hold up, but there's not necessarily a
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  Speaker 3: good fundamental reason for it. There may be usually invented
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  Speaker 3: after the fact. There's no real You don't start with
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  Speaker 3: a theory, You rather see something in the data and
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  Speaker 3: you try to explain it after the fact. To statistical
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  Speaker 3: regularity is another way to put it.
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  Speaker 2: Now, So she authored this Psalm rule, which flashed recession
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  Speaker 2: warning signs earlier this year, and you know, haven't so
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  Speaker 2: far come to me. This will be the first time
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  Speaker 2: in modern US history where her rule didn't work in
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  Speaker 2: terms of recession predictability, and so we will see where
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  Speaker 2: all that goes. But for that reason, among others, she
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  Speaker 2: has some influence out there and has written quite a
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  Speaker 2: bit over the last few years about recession and the markets,
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  Speaker 2: and has a piece today out in Bloomberg about advice
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  Speaker 2: for both Trump and Powell. And pretty clearly the messages
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  Speaker 2: do no harm. So let's start on the Powell side
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  Speaker 2: of that. Where would the be messaging be for Powell
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  Speaker 2: on doing no harm? And what do you think her take?
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  Speaker 3: Is the weight she applied she and I and others.
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  Speaker 3: Obviously this is her area, it's not mine. But I
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  Speaker 3: would say she applies different weights to the two prongs
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  Speaker 3: of the inflation's mandate of the Fed's mandate. Excuse me,
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  Speaker 3: then I would the inflation the FEDS mandate is to
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  Speaker 3: more or less balance growth so as to achieve stable
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  Speaker 3: prices and maximum employment, sometimes called the dual mandate for
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  Speaker 3: that reason. And if you think it's strange, you're right,
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  Speaker 3: because these two things, inflation and unemployment in the short
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  Speaker 3: term anyway, are in perfect tension. The economy heats up,
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  Speaker 3: that generally puts upward pressure on inflation. The FED has
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  Speaker 3: to step in and take away the punch bowl, as
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  Speaker 3: the expression goes, cause a decrease in demand, sometimes a
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  Speaker 3: recession to get inflation under control. This has been the
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  Speaker 3: pattern in every business cycle since the Second World War.
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  Speaker 3: So she's more worried about unemployment at this point than inflation,
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  Speaker 3: so she wants Powell to continue to lead the charge
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  Speaker 3: for interest rate reductions. There are plenty of hard I
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  Speaker 3: just called them hard money, even though that's an antiquated phrase.
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  Speaker 3: Economists who would a monetary economists even who would disagree
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  Speaker 3: with that, who think that there is a danger of
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  Speaker 3: inflation resurging, they would urge cautions. So she's right as
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  Speaker 3: far as it goes, But she has her own biases
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  Speaker 3: and filter that filters into her advices. I guess it should.
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  Speaker 2: To me, this is the This is to me the
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  Speaker 2: single biggest challenge for an incoming Trump administration, if I'm
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  Speaker 2: being quite honest, it's it's fighting the actual fundamental state
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  Speaker 2: of the economy versus Americans view on the economy today
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  Speaker 2: and where it's been over the last couple of years.
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  Speaker 2: Because frankly, a big reason Donald Trump was elected was
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  Speaker 2: a value an evaluation of a bad job done by
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  Speaker 2: Joe Biden. Right, I mean, there are plenty of people
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  Speaker 2: who are going to vote for Donald Trump no matter what,
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  Speaker 2: plenty of people that are going to vote for Comedy,
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  Speaker 2: no matter what lost.
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  Speaker 3: It's still evident you can't spend that.
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  Speaker 2: Right, So there's no I don't think that's much of
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  Speaker 2: a hot take to say that it was a evaluation
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  Speaker 2: of a bad job done by Joe Biden. When you
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  Speaker 2: take a look at the fundamentals of the economy right now,
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  Speaker 2: GDP's growing pretty consistently. Unemployment rose a little bit but
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  Speaker 2: is leveled out, and inflation has been coming down. And
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  Speaker 2: so if you are Donald Trump, you're coming in here
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  Speaker 2: with what he certainly perceives as a mandate and I
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  Speaker 2: think most people would perceive as a mandate. But how
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  Speaker 2: do you go and do all of this and vocalize
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  Speaker 2: and actually implement big change without screwing things up for
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  Speaker 2: the economy? And that's I think the real challenge that
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  Speaker 2: he has here compared to twenty sixteen.
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  Speaker 3: The big question for me is how do we keep
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  Speaker 3: score going forward. There are a lot of people who
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  Speaker 3: think the economic data, the broad averages for GDP, unemployment inflation,
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  Speaker 3: the holy trinity. If I can say that without sounding
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  Speaker 3: defamatory of economics. They think that data is flawed.
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  Speaker 2: So how do I think most people will keep scoring?
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  Speaker 3: Do you want to keep score? Okay, record highs second
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  Speaker 3: year in a row, when it's growing at twenty plus,
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  Speaker 3: better performance under Biden than under Trump, full stop, point
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  Speaker 3: of fact, even including you know, even taking out COVID
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  Speaker 3: and going up to that similar point in their two terms.
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  Speaker 3: So that's not gonna cut it with people. I honestly
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  Speaker 3: want to know how they want to keep score. We
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  Speaker 3: talked to you mentioned inflation, unemployment, and GDP. I just
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  Speaker 3: reiterated it. Remember these three numbers in two or four years.
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  Speaker 3: This is easy, two, three, and four. Two is the
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  Speaker 3: FEDS inflation choice measure year over year. I'm rounding down
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  Speaker 3: just a little bit, but roughly at two right now.
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  Speaker 3: Three is GDP real, that is after inflation year over year.
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  Speaker 3: Four is where the unemployment rate is today, two, three
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  Speaker 3: and four. In two years, if unemployment is higher, or
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  Speaker 3: GDP is lower, or inflation is higher, we're worse off
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  Speaker 3: and in broad statistical sense than we are today. Some
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  Speaker 3: of you might not agree with that. That's fine, but
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  Speaker 3: you have to. You have to decide how you want
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  Speaker 3: to keep score beforehand. So Mike and Chuck, Mike and
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  Speaker 3: I when I'm on, and others know how to tell
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  Speaker 3: you whether or not the economy is good. And it's
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  Speaker 3: a bit of a head scratcher for me. I don't
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  Speaker 3: know how people who are disgruntled want to measure economic progress.
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  Speaker 3: Maybe it's just how they're doing, how they and their
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  Speaker 3: neighbors are feeling. I really don't know.
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  Speaker 2: Well, to be fair, on the inflation side, we haven't
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  Speaker 2: gotten to two so that's what year is close to
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  Speaker 2: pc year over year? Fair enough? So we talked about
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  Speaker 2: the soft landing, right, and to me, that's that's kind
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  Speaker 2: of the end all be all right. I think a
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  Speaker 2: lot of the frustration Americans had about the economy of
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  Speaker 2: the last few years was about inflation. Because clearly there's
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  Speaker 2: a pretty good jobs market, it was a pretty good
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  Speaker 2: stock market. It was a bad inflation. And so to me,
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  Speaker 2: a big success story will be if Donald Trump and
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  Speaker 2: Jerome Powell and all those around them can maintain a
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  Speaker 2: soft landing, right. I mean, you've seen unemployment tick up.
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  Speaker 2: Does a tick up? For me, the soft landing was
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  Speaker 2: maintaining both inflation rates and unemployment under four and a
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  Speaker 2: half percent. If you can do that for four years
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  Speaker 2: of Ti Trup administration, that's quite frankly, almost a miracle.
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  Speaker 2: Like that would be pretty incredible if you could maintain
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  Speaker 2: those two things while still growing the accolomy.
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  Speaker 3: I just want to know where the goalposts are. Yeah,
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  Speaker 3: because we take a lot of heat when we talk
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  Speaker 3: about GDP being strong or unemployment being low. When you
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  Speaker 3: quote the Federal Reserve of Saint Louis so called FRED,
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  Speaker 3: it's an acronym Federal Reserve Economic Database. When you quote
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  Speaker 3: those numbers, people say you're a liberal. Only liberals. We've
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  Speaker 3: had that feedback. Only liberals use FRED. Guys. They're just numbers.
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  Speaker 3: It's like the Celtics score is what it is. You
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  Speaker 3: don't get to make up your own and say they
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  Speaker 3: won when they lost. But I will admit that the
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  Speaker 3: numbers are flawed. They're just averages all. Any average is
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  Speaker 3: not a good representation of the.
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  Speaker 2: If anybody has reams, I'm genuinely asking, like, if people
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  Speaker 2: have specifics that they can text any absolutely, how will
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  Speaker 2: you define financial success or economic success under a trumpet?
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  Speaker 3: It's going to be quantifiable.
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  Speaker 2: We'd love to hear sixty one, seven, three, six, two,
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  Speaker 2: thirteen eighty five is how you can text us.
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  Speaker 3: There are some rules though. It's got to be quantifiable.
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  Speaker 3: It's going to be a check, dude.
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  Speaker 2: It can't be I paid more or less taxes.
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  Speaker 3: That's not terribly It's got to be agreed upon in advance. Yeah,
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  Speaker 3: we want to know how you want to keep score
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  Speaker 3: over the next four years. I just gave you the
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  Speaker 3: status quo, the snapshot two three and four for inflation,
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  Speaker 3: GDP and unemployee.
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  Speaker 2: Is it the stock market? That's fine, it is something else,
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  Speaker 2: you know, it's going to be important questions that. Yeah,
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  Speaker 2: I agree. We need to We need to set some
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  Speaker 2: benchmarks like we did for will we achieve this off landing.
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  Speaker 2: We set those goals back in Q four or q
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  Speaker 2: Q four of twenty three or Q one of twenty four,
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  Speaker 2: and we hit it so far in twenty four. One
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  Speaker 2: of those benchmarks for twenty twenty five and beyond. Let's
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  Speaker 2: take a quick break though. When we come back. Michael
• 10:40
  Speaker 2: Santotli's joining us from CNBC quick update on where markets
• 10:44
  Speaker 2: have moved over the last thirty days and what comes next.
• 10:48
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  Speaker 2: Quick Break Mike Santoli joins us.
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  Speaker 2: Just to provide some contacts. Before the break, we are
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  Speaker 2: talking about how can we actually measure the economic or
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  Speaker 2: financial success of a Trump? What are you gonna keep score?
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  Speaker 2: Our ideas that we came up with were stock market
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  Speaker 2: uh GDP, unemployment inflation numbers. I think those are reasonable starts.
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  Speaker 2: We also ask people to text in with their own thoughts.
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  Speaker 2: Uh what what did you? What did we receive in
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  Speaker 2: terms of We're lots of suggestions.
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  Speaker 3: Thank you? Uh so from the six to SOZHO three
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  Speaker 3: area code self identified long term listeners, So thank you
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  Speaker 3: for that. Uh inflation, he talks about different components of inflation.
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  Speaker 3: But that's that's a good answer. It's objective, it's specified
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  Speaker 3: it I'm just spelling out good benchmark criteria. We all
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  Speaker 3: agree on it. It's easy to see, it's specified in advance, and.
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  Speaker 2: You can measure independent components. Yeah, I know that's what
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  Speaker 2: shouldn't like. Yeah, you could say, like, okay, I'm specifically
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  Speaker 2: concerned about oil prices and so that is an easy
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  Speaker 2: measure of component of inflation. Yeah.
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  Speaker 3: This this this particular text area code six O three says,
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  Speaker 3: when I go to buy parts for the machine I
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  Speaker 3: build for business, all the parts are twenty five to
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  Speaker 3: forty percent more expensive. Presumably he means over the past
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  Speaker 3: several years. And yeah, that's totally believable obviously, so great answer.
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  Speaker 3: A couple of other people cite interest rates. They don't
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  Speaker 3: say which in interest rates.
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  Speaker 2: Or we could measure that, So we could measure the
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  Speaker 2: Fed funds, right.
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  Speaker 3: Maybe the Yeah, but that's under that, that's that's that's
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  Speaker 3: a policy variable.
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  Speaker 2: We could measure the tenure treasury, I think would be
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  Speaker 2: more useful. Right, we can't get marketing interest.
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  Speaker 3: Rates good or bad?
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  Speaker 1: Right?
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  Speaker 3: What if they're due to high demand for loanable funds
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  Speaker 3: because the economy's roar and they went up under Reagan.
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  Speaker 3: Real interest rates went up under Ronald Reagan, not down
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  Speaker 3: because the economy was cranking. But nevertheless, we could break
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  Speaker 3: out the inflation component of interest rates. So it's a
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  Speaker 3: good it's a good answer.
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  Speaker 2: It's an answer, but you have to contextualize it. Do
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  Speaker 2: you want higher or lower interest rates? Because lower interest
• 13:43
  Speaker 2: rates could mean we're in a deep recession, in which
• 13:45
  Speaker 2: case everybody agrees that the economy selves, So it's important
• 13:49
  Speaker 2: to contextualize. We had one on regular ulations.
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  Speaker 3: This is an interesting answer to.
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  Speaker 2: Like you know, I'll say this. I just came back
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  Speaker 2: from a financial services conference out in California and three
• 14:01
  Speaker 2: days there a lot of different speakers. One of the
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  Speaker 2: key pieces was, hey, will the incoming Trump administration regulate
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  Speaker 2: the financial services industry less? So this is a big
• 14:09
  Speaker 2: one out there, a lot of business owners out there
• 14:11
  Speaker 2: looking for less regulation of what they do on an
• 14:14
  Speaker 2: everyday basis. How do you measure it?
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  Speaker 1: Though?
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  Speaker 3: You could look at the Code of Federal the CFR
• 14:20
  Speaker 3: Code of Federal Regulations, as I believe what that acronym
• 14:23
  Speaker 3: stands for, number of pages in the Federal No, not
• 14:26
  Speaker 3: the CFR, that's legal. Excuse me. The Federal Register contains
• 14:30
  Speaker 3: all federal regulations a few years ago when I last
• 14:33
  Speaker 3: looked glanced at it for some reasons, like eighty thousand.
• 14:36
  Speaker 3: You could look at a number of pages in the
• 14:37
  Speaker 3: Federal Register that's quantifiable, a specified in advance. It's another
• 14:41
  Speaker 3: good benchmark, now, Mike, One quibble I have with some
• 14:44
  Speaker 3: of these metrics is that they don't really capture the
• 14:46
  Speaker 3: broad state of the economy. They like unemployment and GDP
• 14:51
  Speaker 3: do I would prefer something a little broader.
• 14:53
  Speaker 2: I would too, But I'll share my perspective that I'm
• 14:56
  Speaker 2: not sure people care about the broader one speaking, the
• 15:00
  Speaker 2: economy was in pretty good shape over the course of
• 15:04
  Speaker 2: the last six months, would you agree on that.
• 15:06
  Speaker 3: Excellent shape relative to potential?
• 15:09
  Speaker 2: Yes, didn't in a artistical sense, people didn't think so,
• 15:13
  Speaker 2: So like, I think, you know, we should contextualize it.
• 15:17
  Speaker 2: And yeah, if we only measure the state of the
• 15:19
  Speaker 2: economy on whether or not there's more or less regulation,
• 15:21
  Speaker 2: then that's not a terribly useful measure, but it might
• 15:24
  Speaker 2: be what people care about. And so it is important
• 15:28
  Speaker 2: to come up with a number of these different ones
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  Speaker 2: to try and measure, because you know, the economy was
• 15:34
  Speaker 2: broadly pretty good, but people cared about inflation. Specifically, they
• 15:37
  Speaker 2: cared about five year over year inflation, not so much
• 15:40
  Speaker 2: year over year inflation. And so defining all of this
• 15:43
  Speaker 2: and identifying what's important to people and how to measure
• 15:46
  Speaker 2: it all is definitively important and and uh, you know,
• 15:52
  Speaker 2: tough to get to.
• 15:52
  Speaker 3: And this is this is a good discussion to have
• 15:56
  Speaker 3: because economists are in the middle of a sort of
• 15:58
  Speaker 3: heated debate on what matters and why. The usual trinity
• 16:03
  Speaker 3: of economic statistics, the gold standard for measuring economic health
• 16:07
  Speaker 3: and thus individual welfare GDP, unemployment inflation. They failed us
• 16:13
  Speaker 3: in a sense over the past few years. They may
• 16:16
  Speaker 3: have missed. They may have missed they may have led
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  Speaker 3: the FED to over or underestimate the amount of weight
• 16:22
  Speaker 3: they should put on either unemployment or inflation as well.
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  Speaker 4: Yep, all right, well, let's do a little bit of
• 16:27
  Speaker 4: trivia here on the Financial Exchange. In two days, we'll
• 16:32
  Speaker 4: celebrate Thanksgiving. As we all know, a holiday that started
• 16:36
  Speaker 4: in sixteen twenty one, Thanksgiving was celebrated for over two
• 16:40
  Speaker 4: hundred years before it became an official holiday. Trivia question today,
• 16:46
  Speaker 4: which president proclaimed Thanksgiving to be a national holiday?
• 16:50
  Speaker 2: Once again?
• 16:50
  Speaker 4: Which president proclaimed Thanksgiving to be a national holiday?
• 16:56
  Speaker 2: Be the eighth.
• 16:56
  Speaker 4: Person today to text us at six one seven to
• 17:00
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• 17:02
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• 17:05
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• 17:08
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• 17:12
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• 17:15
  Speaker 2: So, just to revisit a story from a few minutes ago, uh,
• 17:19
  Speaker 2: we talked about twelve point four billion dollars in seating
• 17:22
  Speaker 2: fees between twenty eighteen and twenty thirteen. The piece that
• 17:25
  Speaker 2: I missed about this is apparently the A Senate panel
• 17:29
  Speaker 2: has called airline executives to testify in front of them
• 17:33
  Speaker 2: about these fees next week. What are we doing, genuinely?
• 17:38
  Speaker 3: What we it's theater?
• 17:39
  Speaker 2: Do we feel that there is not enough disclosure when
• 17:44
  Speaker 2: you select a seat on an airplane and pay an
• 17:47
  Speaker 2: extra fee to sit there?
• 17:48
  Speaker 3: It's one of those feel good if that's not quite
• 17:50
  Speaker 3: the right phrase, but you know what I mean.
• 17:52
  Speaker 2: It's do we feel that there's not enough competition? If
• 17:55
  Speaker 2: I want to fly from Boston to New York City,
• 17:58
  Speaker 2: can I go and select a seat without a seat fee?
• 18:02
  Speaker 2: Can I go select a different airline if I've had
• 18:05
  Speaker 2: a bad experience with Delta and I instead want to
• 18:07
  Speaker 2: fly on Jet Blue? What are we doing here?
• 18:09
  Speaker 3: If Congress outlawed them, which they might have the authority
• 18:11
  Speaker 3: to do, it is interstate commerce, they would just push
• 18:14
  Speaker 3: up prices elsewhere. Of course, their margins they required margins
• 18:17
  Speaker 3: are what they are. Presumably I don't this is not
• 18:19
  Speaker 3: my area, but I think that's a safe thing.
• 18:21
  Speaker 2: And furthermore, do we feel that you know airlines are
• 18:24
  Speaker 2: profiting too much? Correct? Me if I'm wrong. Did we
• 18:26
  Speaker 2: just have one of the biggest airlines in the country
• 18:29
  Speaker 2: file bankruptcy because they couldn't merge with another airline because
• 18:32
  Speaker 2: they were worried about competition. This is absolutely preposterous way
• 18:37
  Speaker 2: to be spending our But.
• 18:38
  Speaker 3: You asked why. This is just optics and theater and
• 18:40
  Speaker 3: an opportunity for brandstanding, right, It's.
• 18:43
  Speaker 2: An opportunity to have a clip in front of your
• 18:47
  Speaker 2: future view browbeating, some browbeating or chop executive overcharging us
• 18:53
  Speaker 2: poor plebs high fees again, Like, what are we getting
• 18:57
  Speaker 2: upset about here? You chose to shoop to pay a
• 19:00
  Speaker 2: fee to select your seat. If you don't like paying
• 19:03
  Speaker 2: the feet like a seat, don't pay the fee, just
• 19:05
  Speaker 2: like the seat and sit in the middle and deal
• 19:09
  Speaker 2: with it. I I yeah, I mean this is the
• 19:11
  Speaker 2: stuff that people can have said about, like what does
• 19:13
  Speaker 2: the government have to do with regulating whether or not
• 19:18
  Speaker 2: and how much airlines charge for selecting your seat on
• 19:21
  Speaker 2: an airplane. Let's take a quick break. When we come back,
• 19:25
  Speaker 2: Mike Sentoli's going to be joining us from CNBC talk
• 19:27
  Speaker 2: about market reaction to a Trump incoming presidency. That's next
• 19:31
  Speaker 2: here on the financial Exchange.
• 19:41
  Speaker 5: Bringing the latest financial news straight to your radio every day.
• 19:45
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• 19:51
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• 20:09
  Speaker 2: Joining us now is CNBC's Michael stand Totally for a
• 20:12
  Speaker 2: quick conversation about state of the economy and markets. Mike,
• 20:15
  Speaker 2: thanks for coming on, appreciate.
• 20:16
  Speaker 6: It, glad to do it. Thank you.
• 20:18
  Speaker 2: So as we enter into the end of the year here,
• 20:22
  Speaker 2: we've got the S and P five hundred sitting at
• 20:25
  Speaker 2: or New yor all time highs to out hit all
• 20:26
  Speaker 2: time highs yesterday. Forward pe on the SMP, you know,
• 20:30
  Speaker 2: low twenties. Other than discussion of the incoming Trump administration,
• 20:35
  Speaker 2: what do you think is going to be the major
• 20:37
  Speaker 2: theme as we head into year end here and any
• 20:39
  Speaker 2: data points that you are particularly focused on.
• 20:42
  Speaker 6: Yeah, I mean I think the theme is increased or
• 20:45
  Speaker 6: at least entrenched confidence in you know, the soft landing hypothesis.
• 20:50
  Speaker 6: It's not even very soft at this point. And then
• 20:53
  Speaker 6: how much whatever anybody expects about the policy mix to
• 20:57
  Speaker 6: come allows you to kind of give the to be
• 21:00
  Speaker 6: a longer leash if it starts to look like it's wobbling.
• 21:02
  Speaker 6: So I do think that's been one of the bigger
• 21:06
  Speaker 6: factors in the last few weeks. It's just essentially everybody's saying, oh,
• 21:09
  Speaker 6: maybe we got a little bit of an extra boost
• 21:11
  Speaker 6: in terms of how long this cycle might last. The
• 21:14
  Speaker 6: broadening out of corporate earnings growth is also a big theme.
• 21:19
  Speaker 6: It's been promised for a few quarters, it's sort of
• 21:21
  Speaker 6: happening now. I think in general, people are rolling forward
• 21:24
  Speaker 6: the idea that we get double the journey's growth next year,
• 21:26
  Speaker 6: in which case you can kind of at least somewhat
• 21:30
  Speaker 6: justify or rationalize where the S and P five hundred
• 21:34
  Speaker 6: is trading. I do think we risk as we get
• 21:37
  Speaker 6: toward the end of the year, everybody getting a little
• 21:40
  Speaker 6: bit too certain about how things are lining up in
• 21:43
  Speaker 6: a positive way for next year. You're starting to see
• 21:46
  Speaker 6: strategists raised their forecast for where the S and P
• 21:48
  Speaker 6: can go. I'm starting to see hedge fund positioning get
• 21:52
  Speaker 6: a little bit aggressive, and then just a lot of
• 21:54
  Speaker 6: retail trader speculation stuff in the last couple of weeks
• 21:58
  Speaker 6: that's maybe not today's business. But it's something to keep
• 22:01
  Speaker 6: an eye on.
• 22:02
  Speaker 2: I mean, clearly, it's easy to see where the optimism
• 22:05
  Speaker 2: is right. Deregulation, lower taxes, more growth. That optimism story
• 22:10
  Speaker 2: has definitely played out since the election. You speak to
• 22:12
  Speaker 2: a lot of portfolio managers, a lot of CEOs. I'm
• 22:15
  Speaker 2: sure what sort of concerns are people talking about. Are
• 22:19
  Speaker 2: they talking about concerns about inflation, about valuations just being
• 22:22
  Speaker 2: too high? What do you hear on the street.
• 22:25
  Speaker 6: I think the main concerns are that the policy sequencing
• 22:30
  Speaker 6: will cause more friction than benefit. Arguably, if you get
• 22:35
  Speaker 6: the high focus initially on tariffs, it's not so much.
• 22:40
  Speaker 6: I think that it feeds broad inflation as measured. It's
• 22:44
  Speaker 6: just it's an extra bit of disruption to parts of
• 22:49
  Speaker 6: the economy, and so I think that's part of the concern.
• 22:52
  Speaker 6: And then the other piece of it is and related
• 22:55
  Speaker 6: to it, is where yields go. I mean, we've had
• 22:57
  Speaker 6: a nice little real time test of whether the housing
• 23:00
  Speaker 6: market can handle seven percent thirty year fixed mortgages. It
• 23:03
  Speaker 6: seems like it can't handle it that well based on
• 23:05
  Speaker 6: the data. So I think that those are two areas.
• 23:07
  Speaker 6: Just the residual rate sensitivity of parts of the economy,
• 23:11
  Speaker 6: and then if you're going to have some kind of
• 23:13
  Speaker 6: you know, stand in the gears of global trade, those
• 23:17
  Speaker 6: seem to be where people are reserving, you know, their
• 23:20
  Speaker 6: concerns along with I do think the idea that you know,
• 23:24
  Speaker 6: valuations are at least in terms of you know, the
• 23:27
  Speaker 6: megacap parts of the market seem like they're pretty full.
• 23:30
  Speaker 6: My personal thing I would keep an eye on is
• 23:33
  Speaker 6: we've had this really constructive rotation in terms of first
• 23:37
  Speaker 6: half of this year, it was magnificent seven megacat growth
• 23:40
  Speaker 6: docs just carrying the day. We've they've really taken a
• 23:43
  Speaker 6: back seat in the last few months, and it's been
• 23:45
  Speaker 6: picked up the slack cast by almost everything else, by banks, bicycles,
• 23:49
  Speaker 6: by industrials. Now it's probably not always going to be
• 23:52
  Speaker 6: quite so neat and tidy as these things go on
• 23:55
  Speaker 6: from here.
• 23:56
  Speaker 2: Yeah, I mean since the beginning of the month, consumer
• 23:58
  Speaker 2: discretionary up double digits, financials up, you know, nearly ten
• 24:02
  Speaker 2: percent since November first, whereas yeah, tech and other areas
• 24:05
  Speaker 2: in the market are still up, but more muted. You
• 24:08
  Speaker 2: spoke of yields a little bit. Obviously, Donald Trump, Drum
• 24:10
  Speaker 2: Powell have a bit of a history, to put it lightly,
• 24:13
  Speaker 2: do you suppose that friction plays out in the public,
• 24:17
  Speaker 2: you know, where does the FED go here? In my view,
• 24:19
  Speaker 2: at least they've had some messaging inconsistency problems, I think
• 24:24
  Speaker 2: when interpreting data about the economy and where they lead
• 24:27
  Speaker 2: interest rates. How do you think that dynamic plays out
• 24:30
  Speaker 2: under a Trump presidency?
• 24:31
  Speaker 6: Yeah, I mean, I think it's it's probably safest to
• 24:34
  Speaker 6: assume that there is the potential for conflict, but only
• 24:40
  Speaker 6: coming at the moment that Powell either does something that
• 24:45
  Speaker 6: seems like it's it's not sufficiently supportive of growth, or
• 24:50
  Speaker 6: there's something to blame them for, right something specific to
• 24:54
  Speaker 6: sort of blame the FED for botching something. And what's
• 24:57
  Speaker 6: interesting right now is I think, you know, the market
• 24:59
  Speaker 6: is kind of fifty to fifty on whether we get
• 25:01
  Speaker 6: a quarter point rate cut in December. And that's just
• 25:04
  Speaker 6: because the data have come in as they have. I mean,
• 25:06
  Speaker 6: tomorrow we're gonna get PCE. Inflation's kind of gone sideways.
• 25:09
  Speaker 6: Growth has been surprising to the upside for the most part.
• 25:12
  Speaker 6: What I do find probably helpful in this equation is
• 25:15
  Speaker 6: that FED officials, if they're looking at one piece of
• 25:18
  Speaker 6: macroeconomic data as a beacon. It's employment and private sector
• 25:22
  Speaker 6: employment has been kind of one of the softer pieces
• 25:25
  Speaker 6: of economic data coming in in the last few months,
• 25:29
  Speaker 6: in which case they're going to be keying off of
• 25:31
  Speaker 6: the thing that might make them more dubbish than otherwise.
• 25:34
  Speaker 6: So for now, I think it's one of those things,
• 25:36
  Speaker 6: you know, it's sort of percolating but not boiling over
• 25:39
  Speaker 6: because there's nothing specific to tag him with. I mean,
• 25:42
  Speaker 6: the market obviously celebrated the pick of Scott Bessett yesterday
• 25:45
  Speaker 6: for Treasury Secretary. I think he's generally considered more of
• 25:49
  Speaker 6: a moderating force than an amplifying one on the tariff
• 25:52
  Speaker 6: and the fiscal side, but obviously we'll have to see.
• 25:56
  Speaker 2: Michael Santolli is commentator for CNBC, joining us today talk
• 26:00
  Speaker 2: about markets and the still playing out Trump trade today.
• 26:04
  Speaker 2: Thanks Mike, appreciate it. You got to thank you, folks.
• 26:07
  Speaker 2: We are closing in on the end of the month here,
• 26:10
  Speaker 2: frankly the end of the year, and it's gonna be
• 26:12
  Speaker 2: the last few days to get your hands on the
• 26:14
  Speaker 2: November Guide from the Armstrong Advisory Group. This month, we
• 26:17
  Speaker 2: want to give people an actual physical checklist that might
• 26:21
  Speaker 2: be easy to accomplish here. I know there's a lot
• 26:23
  Speaker 2: that goes on between now and the end of the
• 26:25
  Speaker 2: year for family holidays and all sorts of planning. But
• 26:30
  Speaker 2: if you are concerned about your personal financial scenario and
• 26:33
  Speaker 2: you're trying to set goals for between now and year end,
• 26:36
  Speaker 2: or just do a general financial checkup, we've got the
• 26:40
  Speaker 2: guide for you. It's our top year end planning Tips.
• 26:43
  Speaker 2: In here, we'll cover some things that really, if you're
• 26:46
  Speaker 2: going to do them, must get done by year end.
• 26:49
  Speaker 2: Roth conversions, tax loss harvesting, to name a few of those.
• 26:53
  Speaker 2: You don't have the option to wait until January first
• 26:55
  Speaker 2: on some of these items. Others I just find to
• 26:58
  Speaker 2: be great year end and to do items right. Checking
• 27:02
  Speaker 2: on your beneficiaries, are they actually set up in the
• 27:05
  Speaker 2: way that I want to making sure that I have
• 27:08
  Speaker 2: a budget that is actually accurate and relevant in today's
• 27:13
  Speaker 2: higher cost environment. If you're looking for that type of
• 27:17
  Speaker 2: checklist that you can set out to accomplish prior to
• 27:19
  Speaker 2: year end, we've only got a few days left in
• 27:21
  Speaker 2: the month to get your copy of our brand new
• 27:24
  Speaker 2: guide on top year end planning Tips. You can get
• 27:27
  Speaker 2: a copy by calling our office at eight hundred three
• 27:30
  Speaker 2: nine three four zero zero one. Maybe you have questions
• 27:33
  Speaker 2: about your own personal situation. Grab a copy of our guide.
• 27:37
  Speaker 2: Talk to our folks here at Armstrong. The number again
• 27:40
  Speaker 2: eight hundred three nine three four zero zero one.
• 27:43
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 27:46
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 27:48
  Speaker 1: Armstrong Guide a specific financial, legal, or tax advice. Consult
• 27:52
  Speaker 1: your own financial tax into state planning advisors before making
• 27:54
  Speaker 1: any investment decisions. Armstrong may contact you to offer investment
• 27:57
  Speaker 1: advisory services, all right.
• 27:59
  Speaker 4: In the last segment, he asked the trivia question which
• 28:01
  Speaker 4: president proclaimed Thanksgiving to be a national holiday. That'll be
• 28:05
  Speaker 4: Abraham Lincoln. That was back in eighteen sixty three. He
• 28:09
  Speaker 4: intended to promote a sense of unity and gratitude among Americans.
• 28:13
  Speaker 4: Pete from Moyster Masses are winner today taking all my
• 28:17
  Speaker 4: Financial Exchange Show t shirt. Congrats to Pete, and we
• 28:20
  Speaker 4: played trivia every day here on the Financial Exchange. See
• 28:24
  Speaker 4: complete contest rules at Financial Exchange Show dot com.
• 28:27
  Speaker 2: Markets are slightly improving here as we head to the
• 28:30
  Speaker 2: noon hour. The Dow still off, but only by one
• 28:32
  Speaker 2: hundred and fifty seven points now a third of a percent,
• 28:35
  Speaker 2: SMP sticking up over six thousand points up a third
• 28:38
  Speaker 2: of a percent today, Nasdak nineteen thousand, up half a
• 28:42
  Speaker 2: percent today. Those smaller size names from the Russell two
• 28:45
  Speaker 2: thousand selling off a bit off half a percent right now,
• 28:49
  Speaker 2: price of oil shooting up to sixty nine dollars forty
• 28:51
  Speaker 2: cents a barrel, up two thirds of a percent at
• 28:54
  Speaker 2: the moment, and the yield and the ten year treasury
• 28:56
  Speaker 2: moving up as slightly as well, to four point three
• 29:00
  Speaker 2: one percent. Let's take a quick break when we come back,
• 29:03
  Speaker 2: a little bit of stack Roulette on the Financial Exchange.
• 29:06
  Speaker 1: Miss any of the show, catch up at your convenience
• 29:09
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• 29:12
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• 29:15
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• 29:18
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• 29:21
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• 29:27
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• 29:33
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• 29:36
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• 29:43
  Speaker 2: Mark if sorry, I'm gonna go ahead and kick things
• 29:45
  Speaker 2: off here for stack Roulette, if you don't mind, I'm
• 29:48
  Speaker 2: gonna kick it off by displaying a little bit of
• 29:50
  Speaker 2: empathy for teenagers, which I know I am not supposed
• 29:53
  Speaker 2: to do. I'm a millennial. I'm supposed to hate the
• 29:56
  Speaker 2: generation that comes after me and be really mean to them.
• 29:59
  Speaker 2: But I want everybody to go into a state of
• 30:01
  Speaker 2: mind for me. Go ahead and imagine the dumbest three
• 30:06
  Speaker 2: things that you said or did as a teenager for
• 30:08
  Speaker 2: a moment. Just lock them in your mind. I know
• 30:11
  Speaker 2: it takes a minute, but we've all got them right. Like,
• 30:13
  Speaker 2: nobody came out of their teenage years with nothing to
• 30:17
  Speaker 2: regret or be embarrassed about. Now, imagine that all of
• 30:21
  Speaker 2: them were on video or social media, because that is
• 30:25
  Speaker 2: the life of a teenager today is like, pretty good
• 30:27
  Speaker 2: chance you say something stupid or do something dumb, somebody's
• 30:31
  Speaker 2: gonna record it with a phone and post it on
• 30:33
  Speaker 2: the internet within seconds. And that sucks. That must be
• 30:37
  Speaker 2: so difficult as a teenager. So I'm gonna display a
• 30:40
  Speaker 2: little bit of empathy there because I think just about
• 30:42
  Speaker 2: every single person listening right now has something that they
• 30:46
  Speaker 2: did or said when they were a teenager that they regret.
• 30:48
  Speaker 3: I remember, Mike, I thought Greenspan was right on in
• 30:52
  Speaker 3: ninety one keeping rates where he was and boy.
• 30:54
  Speaker 2: That marks a little bit different than the rest.
• 30:56
  Speaker 3: Of Cheapish Boy. But what a fool.
• 31:00
  Speaker 2: The piece today is from CNBC on a viral teenager
• 31:04
  Speaker 2: texts that highlight just how little some kids know about money,
• 31:09
  Speaker 2: Questions like do I need to tip the eye doctor?
• 31:13
  Speaker 2: Is the ATM going to be opened later? And these
• 31:15
  Speaker 2: are very funny questions, but I gotta say, like, the
• 31:19
  Speaker 2: first time I got a bank account, did I have
• 31:21
  Speaker 2: any idea how an ATM worked and whether or not
• 31:23
  Speaker 2: it was open twenty four hours?
• 31:24
  Speaker 1: No?
• 31:25
  Speaker 2: I wasn't out allowed outside my house twenty four hours
• 31:27
  Speaker 2: a day, so I didn't know if the ATM would
• 31:29
  Speaker 2: be open past ten pm. I don't think that's a
• 31:31
  Speaker 2: fundamentally stupid question. Likewise, do I tip the eye doctor
• 31:35
  Speaker 2: or not? Quite honestly, with this craze of tipping these days,
• 31:38
  Speaker 2: maybe that's not as dumb a question as otherwise thought.
• 31:42
  Speaker 2: It depends the other ones that I think actually are
• 31:46
  Speaker 2: pervasive of multiple generations and not just gen z and
• 31:50
  Speaker 2: teenagers these days, is what is generational worth wealth? Do
• 31:54
  Speaker 2: I have a trust fund, what's my net worth? Like?
• 31:57
  Speaker 2: These are questions that frankly I see the baby boomers,
• 32:01
  Speaker 2: millennials and gen xers asking because they have a general
• 32:07
  Speaker 2: misunderstanding and misinterpretation of their parents' wealth. And like I've
• 32:12
  Speaker 2: seen these questions from gen xers like, hey, I'm expecting
• 32:14
  Speaker 2: to inherit hundreds of thousands of dollars from my parents. Oh,
• 32:18
  Speaker 2: they put a reverse mortgage on their house. And they're like,
• 32:21
  Speaker 2: these are not dumb questions. And so for any teenagers
• 32:25
  Speaker 2: listening out there, get them out. These aren't dumb questions.
• 32:28
  Speaker 2: That's one of the benefits of the internet is you
• 32:30
  Speaker 2: can anonymously ask questions that you might be too embarrassed
• 32:34
  Speaker 2: to ask about in general, And so there aren't dumb
• 32:38
  Speaker 2: questions about your personal finances. And I feel a little
• 32:41
  Speaker 2: bit of pity for these teenagers who, like I said,
• 32:43
  Speaker 2: imagine living in a world where your dumbest drunk moment
• 32:47
  Speaker 2: at a high school party when you're drinking illegally is
• 32:51
  Speaker 2: permanently plastered all over the internet. That would be a
• 32:53
  Speaker 2: rough life to live in. One other thing that I'll
• 32:56
  Speaker 2: express some optimism about these days, there are twenty six
• 32:59
  Speaker 2: states in the tree that require you to take a
• 33:02
  Speaker 2: financial literacy course in order to graduate high school. Massachusetts
• 33:05
  Speaker 2: happens to not be one of them, but New Hampshire,
• 33:08
  Speaker 2: Rhode Island, Connecticut, twenty six states out there are requiring
• 33:11
  Speaker 2: financial literacy as a piece for high school graduation. I
• 33:14
  Speaker 2: think that's a positive step in the right direction.
• 33:17
  Speaker 3: I wonder how uniform the curriculum is.
• 33:19
  Speaker 2: Probably not terribly, but I'm sure it covers some basic
• 33:22
  Speaker 2: things that are really important, like compounding credit cards, budgeting
• 33:27
  Speaker 2: like that. That should be pretty universal on a financial
• 33:29
  Speaker 2: literacy course. I would imagine, what do you have texts?
• 33:31
  Speaker 4: I'm sorry, texture from the fiaway said, I am seventy.
• 33:33
  Speaker 4: I still regret saying some saying things as of yesterday
• 33:37
  Speaker 4: right now.
• 33:38
  Speaker 2: Imagine all of them being posted online with your name
• 33:41
  Speaker 2: and picture attached to them. Yeah, I hear you. Regrets
• 33:44
  Speaker 2: regrets a piece of all of our lives. And yeah,
• 33:49
  Speaker 2: I don't know. I think we pretend that it doesn't
• 33:52
  Speaker 2: exist too much. What do you have for us?
• 33:53
  Speaker 3: Mark? Wall Street Journal has a piece on Target's troubles.
• 33:57
  Speaker 3: Target slide from cheap shit to a dull, sure chic
• 34:02
  Speaker 3: hick h you've already pronounced the eyes. Oh, I always
• 34:07
  Speaker 3: said shick. I never used that word. Oh that's so
• 34:10
  Speaker 3: embarrassing that one said something else. Did you hit the
• 34:16
  Speaker 3: dumb button?
• 34:17
  Speaker 2: Good?
• 34:18
  Speaker 3: So they can hear us now, but they couldn't hear
• 34:19
  Speaker 3: what I just said? Is that how that works? Just
• 34:21
  Speaker 3: keep going?
• 34:22
  Speaker 2: Mark mispronounced the word chic because.
• 34:24
  Speaker 3: What if I bastard? That's fine, okay, Uh, I didn't
• 34:29
  Speaker 3: know how deep crack targets trouble. I didn't use vulgarity
• 34:34
  Speaker 3: or say anything appropriate. I mispronounced. I mispronounced a word
• 34:38
  Speaker 3: that I don't say a lot anyway, Thanks, thanks Duck.
• 34:41
  Speaker 3: Shopping at Target, one shopper says used to be a
• 34:43
  Speaker 3: favorite activity. They're lamenting locked up goods. They're lamenting goods
• 34:46
  Speaker 3: out of stock. Have have. I've run into a little
• 34:49
  Speaker 3: bit of that. I still use them quite there. Might
• 34:51
  Speaker 3: go to main Target convenience. Yeah, get But people who
• 34:57
  Speaker 3: are we gonna let this go? Tucker? Or is this
• 34:59
  Speaker 3: going to continue right on through?
• 35:00
  Speaker 2: Can't stop laughing, Just gotta keep going. So I did
• 35:05
  Speaker 2: not shop at Target all that much. My wife definitely does,
• 35:08
  Speaker 2: and I don't feel like she has stopped doing so. Furthermore,
• 35:11
  Speaker 2: like I I get it that if you are Megan
• 35:15
  Speaker 2: Halligan forty eight, of San Jose, the frustration of going
• 35:20
  Speaker 2: into a Target store beside themselves and it's annoying. I
• 35:24
  Speaker 2: was at a Target in San fran and literally everything
• 35:29
  Speaker 2: from the tile and all that I wanted to get
• 35:31
  Speaker 2: because I had a bit of a headache was behind
• 35:32
  Speaker 2: a locked case and it took me like ten minutes
• 35:34
  Speaker 2: to find somebody to unlock the door. And that is
• 35:36
  Speaker 2: a bad experience. I also have no idea what targets
• 35:38
  Speaker 2: supposed to do about it, Like they're getting ripped off left,
• 35:41
  Speaker 2: right and center by customers just stealing things over and so, yeah.
• 35:46
  Speaker 3: They're having an identity It seems to me they're.
• 35:47
  Speaker 2: They're I think that they are having an identity crisis,
• 35:52
  Speaker 2: and I think it is because they cannot compete on
• 35:54
  Speaker 2: grocery in the same way that Walmart has been able
• 35:56
  Speaker 2: to and so therefore they've just lost a bunch of
• 35:59
  Speaker 2: eyeballs that previously people were willing to shop there and
• 36:02
  Speaker 2: buy a bunch of stuff from Target, and they were
• 36:04
  Speaker 2: kind of seen as like a trendier version of Walmart's
• 36:07
  Speaker 2: own stuff, and I think they've lost some of that,
• 36:10
  Speaker 2: and it's showing in their sales, their comp sales year
• 36:12
  Speaker 2: over year. Compstore sales were up like half a percent
• 36:15
  Speaker 2: in their most recent earnings, whereas Walmart's up like five
• 36:18
  Speaker 2: six percent in comp store sales. So they've got a
• 36:20
  Speaker 2: real problem. They're working on a turnaround, and I don't know,
• 36:24
  Speaker 2: I don't know what's going to really do the turnaround here.
• 36:29
  Speaker 3: Yeah, some of this stuff doesn't seem remedable, remediable, remediable. Uh,
• 36:33
  Speaker 3: and it doesn't seem unique to Target, and yet they're
• 36:36
  Speaker 3: at the they're at the center of this sort of
• 36:38
  Speaker 3: perfect storm or intersection of bad trends.
• 36:42
  Speaker 2: Yeah, maybe this is always the case, but it seems
• 36:44
  Speaker 2: to me in retail in general right now especially, you
• 36:49
  Speaker 2: have to have one of two things. You have to
• 36:51
  Speaker 2: have a truly unique shopping experience, which I think the
• 36:55
  Speaker 2: likes of TJX with home goods Home Sense, you know,
• 36:58
  Speaker 2: is a unique treasure hunt type shopping experience where you
• 37:03
  Speaker 2: don't really know what you're gonna get when you walk
• 37:04
  Speaker 2: into one of those doors, whereas Target, I can look
• 37:07
  Speaker 2: at your entire inventory online and know what to expect,
• 37:11
  Speaker 2: or you need to be able to do that, meaning
• 37:14
  Speaker 2: have an organized, knowable and understandable shopping experience where you
• 37:19
  Speaker 2: are the cheapest option out there or most convenient. Amazon's
• 37:22
  Speaker 2: not the cheapest on everything, but I can browse it
• 37:25
  Speaker 2: from my phone and get it shipped to my home
• 37:27
  Speaker 2: in you know, like six hours, six minutes in some cases.
• 37:30
  Speaker 2: So Amazon's got that covered. But Target, You're basically a
• 37:35
  Speaker 2: more expensive Walmart these days. And the number of items
• 37:39
  Speaker 2: that I can get at Target that I can't find
• 37:42
  Speaker 2: at Walmart, it's been rapidly shrinking over the last few years.
• 37:46
  Speaker 2: And so I think that that's that's a real significant.
• 37:49
  Speaker 3: Problem for experienced documentary.
• 37:51
  Speaker 2: Yeah, yeah, so it is. It is a challenge for them.
• 37:54
  Speaker 2: Markets remain open in a mixed territory, but like I said,
• 37:58
  Speaker 2: improving as time goes on. Down now of only a
• 38:00
  Speaker 2: quarter of a percent. S and P up a third,
• 38:03
  Speaker 2: Nasdaq up a half a percent. As we close out
• 38:05
  Speaker 2: the show today, we've got one more coming at you
• 38:08
  Speaker 2: tomorrow prior to the Thanksgiving holiday. Have a great rest
• 38:10
  Speaker 2: of your day, everybody. We'll talk to you then.