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Why does it matter that Trump fired the BLS chief? · The Financial Exchange Show

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Speaker 2: Good morning, Happy Tuesday, Welcome back to the Financial Exchange.
1:16
Speaker 2: It is Mike, Mark and Tucker with you on a
1:19
Speaker 2: Tuesday where the S and P five hundred is leading
1:22
Speaker 2: the way down, off twenty eight points a little bit
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Speaker 2: more than four tens percent, but Nasdaq and Dow also
1:28
Speaker 2: in negative territory. That's after a bit of a roller
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Speaker 2: coaster over the last couple of trading sessions. Friday, you
1:34
Speaker 2: had markets off by more than one percent, Yesterday you
1:37
Speaker 2: had them make up all of those losses. And today
1:40
Speaker 2: we've got a lack of big new data and markets
1:45
Speaker 2: taking a bit of a breather here, and you know,
1:47
Speaker 2: they have been bouncing around kind of all over the place.
1:49
Speaker 2: We opened in mixed territory and now pretty firmly in
1:53
Speaker 2: negative territory. Later this week we will continue to hear
1:57
Speaker 2: from a number of large companies regarding their earn. Already
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Speaker 2: this morning we heard from Caterpillar, among others, McDonald's as
2:05
Speaker 2: well as Walt Disney and Uber. Will go tomorrow and
2:07
Speaker 2: we'll have more throughout the course this week. But in
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Speaker 2: terms of big, heavy hitting earnings, a lot of those
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Speaker 2: came last week. The next one to go. I think
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Speaker 2: the only one I can think of that remains out
2:19
Speaker 2: there would be in video, which is another few weeks
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Speaker 2: away here. So but what we will be hearing is
2:26
Speaker 2: from a number of Again, this is why this stuff
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Speaker 2: remains interesting. While these companies like McDonald's, like Uber are
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Speaker 2: not the biggest market movers out there, they're all large employers.
2:39
Speaker 2: They have, you know, thousands of employees across the country.
2:41
Speaker 2: They interact with you and me every day and oftentimes
2:45
Speaker 2: have notable and interesting things to say about the state
2:47
Speaker 2: of the economy, even if they do not end up
2:50
Speaker 2: moving markets a whole lot in one direction or another.
2:54
Speaker 2: Our top story of the hour remains the Friday jobs report.
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Speaker 2: It was kind of the culmination of a week's worth
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Speaker 2: of heavy data. We got four earnings reports from Microsoft, Apple, Meta, Facebooks,
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Speaker 2: Pair and Company, as well as Amazon. Mixed on some
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Speaker 2: of those results. Microsoft and Meta were pretty solid. Amazon
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Speaker 2: and Apple were a little bit weaker, or at least
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Speaker 2: that was the overall interpretation. We got a slew of
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Speaker 2: jobs data, and I guess I'm going to try and
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Speaker 2: summarize first the jobs data before we get into the
3:30
Speaker 2: president's reaction to it, which came Friday afternoon. So we
3:35
Speaker 2: had a Joltz Report, which is the Job Opening's Labor
3:38
Speaker 2: Turnover Survey. We had our weekly jobless claims data, and
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Speaker 2: then we had this Friday Jobs Report and the Friday
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Speaker 2: Jobs Report itself, we were expecting around one hundred thousand
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Speaker 2: jobs to get created. We expected the unemployment rate to
3:51
Speaker 2: bump up to four point two percent from its previous
3:53
Speaker 2: four point one percent. Everything that we got about the
3:57
Speaker 2: month of July from this report was well within the
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Speaker 2: margin of error. When we talk about these because remember
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Speaker 2: what they are, they're surveys. They are not measuring the
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Speaker 2: number of people getting paid. They are not getting the
4:08
Speaker 2: data from the Social Security Administration and reporting that. No,
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Speaker 2: they're going to businesses and they're going to household and
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Speaker 2: they're surveying them and they ask them how many people
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Speaker 2: did you hire, how many people did you fire, where
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Speaker 2: did you move wages, what industry do you employ in
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Speaker 2: et cetera. And so the report that we got for
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Speaker 2: July was fine. At least that was my interpretation. Mark,
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Speaker 2: would you have any different conclusion, You know, a creation
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Speaker 2: number of seventy thousand versus one hundred thousand compared to
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Speaker 2: the estamates it.
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Speaker 3: Was well with the so called confidence interval, which is
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Speaker 3: a function of sample size and how confident you want
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Speaker 3: to be, is plus or minus. I think it's one
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Speaker 3: hundred and thirty, which means if the number were actually zero,
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Speaker 3: the truth if the reported number called a point estimate.
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Speaker 3: If you're interested, and we use the word statistic we
4:51
Speaker 3: use the word estimate. Those aren't just synonyms for number
4:53
Speaker 3: to a statistician, those numbers, which I am not. But
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Speaker 3: in economics you get a little bit of that obviously,
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Speaker 3: and the people can alculating these are economics people, not
5:02
Speaker 3: statisticians necessarily. I think there might be a couple of
5:05
Speaker 3: people with PhDs in math and math statistics. But anyway,
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Speaker 3: you learn to take it with a grain of salt.
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Speaker 3: You should really be reading the so called confidence interval
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Speaker 3: and not hyper focused on the point estimate. And that's
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Speaker 3: not our fault. Because the media reports seventy three thousand
5:20
Speaker 3: something to that effect, right, new jobs created, We think,
5:22
Speaker 3: oh god, that is such a precise number. And sometimes
5:25
Speaker 3: sometimes economists with a sense of humor even give you
5:27
Speaker 3: a decimal place. The unemployment rate is four point two percent,
5:31
Speaker 3: that it holds under very specific now they don't revise that,
5:35
Speaker 3: so that may not be the best example. But inflation
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Speaker 3: coming in at point zero three two.
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Speaker 2: One, it's bloony. It's a survey.
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Speaker 3: I wouldn't cut Mike. Let's not use the word. Calling
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Speaker 3: you a bolooney will stoke the sure concerns that this
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Speaker 3: data is just fudged based on whoever is in office.
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Speaker 3: I don't think the great unemployment numbers under Trump one
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Speaker 3: were blooney. I don't think the great unemployment numbers to
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Speaker 3: the extent that we had them under Clinton or pick
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Speaker 3: your president. I don't think any of them were bolooney.
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Speaker 3: These people are career researchers and they are dedicated to
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Speaker 3: getting go ahead.
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Speaker 2: The blooney implies that they're made up.
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Speaker 3: I know you were just being flipp I'm not criticizing.
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Speaker 2: A numbers themselves are purely estimates.
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Speaker 3: They're estimates. That's why you get a confidence interval, and
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Speaker 3: nobody hides the damn confidence interval. It's in the report.
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Speaker 3: You got to go to the footnotes. The media doesn't
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Speaker 3: know how to read these because they don't know what
6:24
Speaker 3: one is. No offense, I mean, you need a background
6:27
Speaker 3: in this stuf. It's not easy that's why you go
6:28
Speaker 3: to school for four years. If you do graduate school,
6:30
Speaker 3: it's additional two. If you get your PhD, it's an
6:32
Speaker 3: additional five to seven, depending on how long you can
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Speaker 3: milk that. So take it with a grain of salt.
6:37
Speaker 3: But it's not entirely made up. Suggestions to the contrary
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Speaker 3: are not helpful.
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Speaker 2: So it was not the July jobs report that President
6:43
Speaker 2: Trump found issue with. What he found issue with was
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Speaker 2: the revisions to the May and June jobs reports, because
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Speaker 2: those two combined showed an economy that in the spring
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Speaker 2: looked a lot different than what we previously understood from
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Speaker 2: those same jobs reports. Effectively, we went from one hundred
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Speaker 2: plus thousand jobs created per month in those two months
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Speaker 2: to down to about twenty five thousand jobs created. That
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Speaker 2: would indicate something that is a fair bit weaker than
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Speaker 2: was previously understood. But I would also say lined up
7:14
Speaker 2: fairly concisely with some other data points that we were seeing.
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Speaker 2: For instance, in May and June, we saw an uptick
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Speaker 2: in the number of jobless claims people filing for unemployment,
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Speaker 2: and it didn't show up in these other surveys. But
7:27
Speaker 2: then we got these revisions, and you say, oh, okay,
7:30
Speaker 2: that actually lines up fairly well. It also contributed to
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Speaker 2: now the Federal Reserve, or at least those who make
7:37
Speaker 2: bets on what the Federal Reserve is going to do,
7:39
Speaker 2: thinking that, hey, a rate cut is more likely. In
7:42
Speaker 2: all this time period, nothing about those revisions, to me,
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Speaker 2: by the way, indicated that we are currently in a recession.
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Speaker 2: I think anybody saying that and looking at those revisions
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Speaker 2: and saying, look out, the president has navigated us into
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Speaker 2: recession now because the Bureau of Labor City six reported
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Speaker 2: twenty five thousand jobs created, I think that's an overstate.
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Speaker 3: I will say that slow downs and payroll growth do
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Speaker 3: tend to precede recession. So we went from a couple
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Speaker 3: of hundred thousand jobs two years ago on average to
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Speaker 3: one hundred and change a little less than that last
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Speaker 3: year on average, and this year. I don't even know
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Speaker 3: what the six month average is forgive me, but if
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Speaker 3: it's eighty thousand, I'd be surprised. Sure, so the economy
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Speaker 3: could be slowing. The pattern is consistent with that, yep,
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Speaker 3: But the unemployment rate is still low, and GDP growth
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Speaker 3: was strong, and the stock market is roaring, right. I
8:27
Speaker 3: just cherry picked a few indicators. Yeah, they're pretty representative.
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Speaker 2: And look, there are other indications, like during the Biden
8:32
Speaker 2: administration that also indicator recession. We talked a lot about
8:35
Speaker 2: the SAM rule.
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Speaker 3: We effectively at a recession in twenty twenty two. GD
8:39
Speaker 3: contracted payroll growth contracted, six month inflation adjusted spending was negative.
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Speaker 3: It wasn't necessarily his fault, just like any slow down
8:46
Speaker 3: now sure isn't necessarily the Trump administrations not, even though
8:49
Speaker 3: you might blame tariffs, and there is an adjustment to
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Speaker 3: tariffs that's to be expected.
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Speaker 1: Good.
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Speaker 2: So what the president did was accused the chief of
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Speaker 2: the BLS of effect of fudging the numbers last year.
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Speaker 2: I don't know that he made accusations of doing so
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Speaker 2: this year, but said that during the presidential run between
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Speaker 2: he and Kamala Harris, they were fudging the numbers to
9:10
Speaker 2: make the economy look better. I have to say that
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Speaker 2: I'll remain open and if he's going to go down
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Speaker 2: that route and has evidence to present that that is
9:19
Speaker 2: the case, which I am very skeptical of, then we
9:22
Speaker 2: should hear about it and that person should be prosecuted.
9:26
Speaker 2: Why I think it is incredibly unlikely is because the
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Speaker 2: person who he fired does not do everything. At the
9:33
Speaker 2: Bureau of Labor Statistics, there are over two thousand employees
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Speaker 2: there who are in charge of gathering the data, compiling it,
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Speaker 2: putting together the statistics. And I just tend to think
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Speaker 2: that it is very difficult to have a conspiracy within
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Speaker 2: the BLS where they are making up of datason.
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Speaker 3: Let's not even go He doesn't think they were really fudged.
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Speaker 2: He was just that's what he said, So I need
9:57
Speaker 2: to take it.
9:58
Speaker 3: President went to Wharton, he knows better. He did it
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Speaker 3: for theatrical and political purposes.
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Speaker 1: It was.
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Speaker 3: It was a mistake. But if it results in more
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Speaker 3: transparency about the errors in these and there is transparency,
10:11
Speaker 3: it's not only anybody's hiding it. I'll just go back
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Speaker 3: to my original point and say, these are statistics, which
10:15
Speaker 3: by definition means we don't know the true number. It's
10:17
Speaker 3: like taking any average. You know, there's why dispersion around it.
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Speaker 3: We pay there's a there's a teachable it's a teachable
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Speaker 3: moment here. Again, I think that the political response was
10:26
Speaker 3: probably a mistake because now it undermines confidence in any
10:29
Speaker 3: federal data. Well, maybe they're just fudging it. I wish
10:32
Speaker 3: the President hadn't done that. There is a teachable element
10:35
Speaker 3: to this, though, and it is don't take these statistics
10:38
Speaker 3: as gospel or as scientific fact. They aren't.
10:41
Speaker 2: Here's how this feels. Here's how this reads to me
10:44
Speaker 2: and reminds me of In August of twenty twenty three, uh,
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Speaker 2: the Some Department of the Chinese Communist Party released an
10:53
Speaker 2: employment report that indicated twenty five percent youth unemployment. Imediately,
11:00
Speaker 2: the Chinese Communist Party came out and said, we are
11:02
Speaker 2: no longer reporting data on youth unemployment. And when you
11:05
Speaker 2: have a moment like this, and you know, everybody looked
11:08
Speaker 2: at that and said, okay, yeah, par for the course.
11:10
Speaker 2: Here goes China just fudging the numbers again and hiding
11:12
Speaker 2: data we know.
11:14
Speaker 3: We know they do, because we have reams of alternative
11:17
Speaker 3: data that contradict them already.
11:19
Speaker 2: And the problem that for China in that regard is
11:21
Speaker 2: nobody would trust their currency to conduct trade in No
11:24
Speaker 2: one conducts, no one trusts their data about their economy,
11:27
Speaker 2: and it hampers investment in that country. It's been okay
11:30
Speaker 2: for China, they have found other ways to develop as
11:33
Speaker 2: a society, but certainly nobody is going to trust that
11:36
Speaker 2: government as a useful independent source of data. We didn't
11:42
Speaker 2: do that here in the United States. I'm not saying
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Speaker 2: that President Trump's firing of the BLS is akin to
11:46
Speaker 2: what the Chinese did back in August of twenty twenty three,
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Speaker 2: but it is the type of reaction that you see
11:52
Speaker 2: from It's not the type of reaction usually see from
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Speaker 2: the United States. We are very much have built a
11:59
Speaker 2: reputation on producing reliable, independent data from agencies like this,
12:04
Speaker 2: and serious people who study it don't think that there's
12:08
Speaker 2: any chance of manipulation by the chick.
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Speaker 3: Can we pick up on this?
12:11
Speaker 1: Sure? Is it?
12:12
Speaker 2: Let's take a quick break. When we come back, we're
12:13
Speaker 2: gonna have trivia next on the Financial Exchange.
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13:00
Speaker 4: It's time for trivia here in the Financial Exchange and
13:02
Speaker 4: on this day a year ago, Google lost is an
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Speaker 4: important US anti trust case involving its search engine. With
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Speaker 4: the judge finding quote, Google is a monopolist and it
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Speaker 4: has acted as one to maintain its monopoly. A breakup
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Speaker 4: of the company hasn't happened yet, but it is still
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Speaker 4: on the table. So trivia question today, what is the
13:23
Speaker 4: largest monopoly breakup in US history?
13:26
Speaker 2: Once again?
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Speaker 4: What is the largest monopoly breakup in US history? Be
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Speaker 4: the sixth person today to text us at six one
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Speaker 4: seven three six two thirteen eighty five with the correct answer,
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Speaker 2: Once again.
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Speaker 4: The six correct response to text us to the number
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Speaker 4: six one seven three six two thirteen eighty five will
13:48
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13:53
Speaker 2: I take issue with the question, Okay, the largest could
13:57
Speaker 2: mete a lot of things that we're talking about the
13:58
Speaker 2: fatas CEO. Are we talking about the most employees, biggest
14:02
Speaker 2: market cap? What's our definition? Here of largest breakout. I oh, man,
14:08
Speaker 2: I'll take it up with Ben when he comes back.
14:11
Speaker 3: I didn't write whatever.
14:15
Speaker 2: I don't think it means fat as CEO. But you know,
14:18
Speaker 2: the other ones could be serious contenders. Mark, we were
14:20
Speaker 2: talking about the firing of the head of the Balerau
14:23
Speaker 2: of Labor Statistics. I think we want to bring it
14:27
Speaker 2: home though. Why Why does it matter that the president?
14:31
Speaker 2: The President has removed several Biden and other appointees from
14:36
Speaker 2: their positions since the beginning of this year. We have
14:39
Speaker 2: not made a big deal of many of them. We've
14:41
Speaker 2: barely discussed several of them other than the context of
14:44
Speaker 2: will it be legally allowed? Why are we making a
14:47
Speaker 2: big deal of this one? Why are investment bankers, economists
14:53
Speaker 2: and folks from frankly, both sides of the aisle in
14:56
Speaker 2: that markets and economic circle making a big deal of
15:00
Speaker 2: this one?
15:00
Speaker 3: It calls into question potentially because we don't know what
15:03
Speaker 3: the implications of the change in leadership there will be.
15:06
Speaker 3: It calls into question the reliability of economic data which
15:09
Speaker 3: are used to price assets. If you don't know what
15:12
Speaker 3: the inflation rate is, which BLS I think is struck
15:14
Speaker 3: pointed out yesterday also calculates, and the Jolts survey, by
15:18
Speaker 3: the way, and the weekly unemployment numbers.
15:21
Speaker 2: So your cost of living adjustment on Social Security is
15:25
Speaker 2: determined by what the.
15:26
Speaker 3: More importantly for invent maybe not more importantly forgive me,
15:29
Speaker 3: because that may be the most important thing, the most
15:33
Speaker 3: important statistic to a lot of listeners. But if you
15:36
Speaker 3: buy treasure inflation protected securities, they're indexed using CPI, which
15:39
Speaker 3: BLS calculates. Look, it would take a lot to fudge
15:42
Speaker 3: those numbers, and I don't think the President wants the
15:45
Speaker 3: numbers fudged. I think he was gently. Look, he's acting
15:47
Speaker 3: like a CEO. Sure, if your CFO comes out and
15:50
Speaker 3: undermines you by revising past whatever profits, you might be
15:59
Speaker 3: irate enough to take action just for so. He's behaving
16:01
Speaker 3: like a private sector dictator, and I think he would
16:05
Speaker 3: like that term. I don't mean dictator critically, I mean
16:07
Speaker 3: someone who can with a snap of her fingers. Yeah,
16:10
Speaker 3: a CEO can do that. I think he's acting like
16:12
Speaker 3: a CEO. Maybe had had more time. He did it
16:15
Speaker 3: like two and a half hours after their report game out.
16:18
Speaker 3: I'm laughing because you know he was poed and he said,
16:20
Speaker 3: would you this woman can't get that. I don't mean
16:23
Speaker 3: that's chauvinistic, but you know what I mean. This person
16:25
Speaker 3: can't even get the numbers right. Look at the size
16:27
Speaker 3: of these revisions. If somebody had just taken him out
16:30
Speaker 3: for a walk and said, look, mister President, these revisions
16:32
Speaker 3: are actually pretty typical. Here's why responses come in late.
16:36
Speaker 3: There's a perfectly rational reason for this. It's within the
16:39
Speaker 3: error estimates, which you're published in the footnotes. You know,
16:43
Speaker 3: take the escalate.
16:44
Speaker 2: Yeah, I think there are some reasonable reasons to be critical,
16:47
Speaker 2: Like the response rates on these surveys.
16:50
Speaker 3: Have plum that's appalling lately, so you're gonna get bigger
16:53
Speaker 3: revisions that And that's a real criticism of this bureau
16:58
Speaker 3: Labor statistics would be you need to find ways to
17:01
Speaker 3: get these.
17:01
Speaker 2: Well, you don't think they are. I'm sure they are,
17:04
Speaker 2: But that's my point is there is reason to be
17:08
Speaker 2: critical of the revisions. The reason that I'm critical of
17:11
Speaker 2: the visions is they wouldn't have happened if the response
17:13
Speaker 2: rate was higher, So figure out how to improve that.
17:16
Speaker 2: But in the absence of that, where this is where
17:20
Speaker 2: we are, and I'm with you, I don't think it
17:22
Speaker 2: does anything immediately. The question is if you start to
17:27
Speaker 2: lose the confidence in the long term reliability of US
17:30
Speaker 2: government published statistics, which this doesn't do, it weakens the
17:38
Speaker 2: reputation of the United States as the best place to invest.
17:43
Speaker 3: You can't make reliable estimates of the future value of
17:46
Speaker 3: security without estimates of without pricing in things like inflation
17:50
Speaker 3: and the state of the economy. We don't know what
17:53
Speaker 3: the result of this is going to be. It is
17:54
Speaker 3: a little bit shocking. I was shaken by it. I've
17:56
Speaker 3: never seen a president remove somebody because they thought that
17:59
Speaker 3: the data that came out two and a half hours
18:01
Speaker 3: before was unfavorable. So I was shocked by it. I'm
18:03
Speaker 3: not trying to minimize it, but I've had a few
18:05
Speaker 3: days to think about it. I saw the market's reaction yesterday.
18:08
Speaker 3: Clearly the market is in a well, let's wait and
18:10
Speaker 3: see what this means for the reliability the integrity of
18:14
Speaker 3: US economic data. Maybe you'll appoint someone who's respected universally,
18:19
Speaker 3: and maybe they'll implement some useful changes. The thing is,
18:23
Speaker 3: I don't have an idea because it's not my sub field.
18:25
Speaker 3: I don't have an idea what those changes are.
18:28
Speaker 2: Uh. New York Times ass minimum wage in LA could
18:30
Speaker 2: rise to thirty dollars an hour just enough for too much?
18:35
Speaker 2: I guess we'll have to wait to find out, But
18:37
Speaker 2: mighty think what happen would be too much? Well, they
18:40
Speaker 2: did minimum wage of twenty five bucks an hour for
18:43
Speaker 2: fast food and.
18:44
Speaker 3: You didn't have massive unemployment interestingly right.
18:46
Speaker 2: No, but you did have fewer people working in fast food.
18:50
Speaker 2: Pretty substantial.
18:51
Speaker 3: You would expect that though labor gets more expensive, you
18:53
Speaker 3: substitute capital.
18:54
Speaker 2: For ascisely, what would happen? And so should you raise
18:56
Speaker 2: the minimum wage in California's thirty bucks an hour, I,
18:59
Speaker 2: as a c would hire fewer people, relocate more people
19:03
Speaker 2: outside of California, and automate more would be my god.
19:06
Speaker 3: It's interesting. There is a point beyond which people are
19:08
Speaker 3: going to start to substitute away from labor. It just
19:10
Speaker 3: depends on the local market.
19:12
Speaker 2: Yep. So good luck with Los Angeles minimum wage at
19:16
Speaker 2: thirty dollars if they do to choose to go forward
19:18
Speaker 2: with that. Let's take a quick break here on the
19:21
Speaker 2: financial exchange when we come up. When we come back,
19:24
Speaker 2: full market recap with Wall Street Watches.
19:26
Speaker 1: Next, bringing the latest financial news straight to your radio
19:44
Speaker 1: every day it's the Financial Exchange on the Financial Exchange
19:48
Speaker 1: Radio Network. Time now for Wall Street. Watch a complete
19:53
Speaker 1: look at what's moving market so far today right here
19:57
Speaker 1: on the Financial Exchange Radio Network.
20:00
Speaker 4: It's a slightly pulling back after yesterday's strong rally as
20:03
Speaker 4: investors react to a new batch of second quarter earnings
20:07
Speaker 4: posted this morning. At the moment, the Dow is off
20:10
Speaker 4: nearly three tenths of one percent or one hundred and
20:14
Speaker 4: eighteen points, SMP five hundreds down four tenths of one
20:18
Speaker 4: percent or twenty seven points, and the NASZAC is down
20:21
Speaker 4: about half a percent or one hundred and two points.
20:23
Speaker 4: Of Rusted two thousand is dipping by only a tenth
20:27
Speaker 4: of a percent. Ten yere treasure reeled is flat at
20:30
Speaker 4: four point one nine to four percent. In crude oil
20:34
Speaker 4: down about one and a half percent, lower training its
20:37
Speaker 4: sixty five dollars in thirty three cents. A barrel Ai
20:41
Speaker 4: software company Pallenteer, seeing its stock surge nearly seven percent
20:46
Speaker 4: after it reported revenue above one billion dollars for the
20:49
Speaker 4: first time in its history, well above street expectations. Pallenteer
20:53
Speaker 4: reported fifty three percent growth in earnings from US government
20:56
Speaker 4: contracts for the previous quarter. Management also ras its annual
21:01
Speaker 4: revenue outlook. Meanwhile, shares in telehealth company Hymns and Hers
21:04
Speaker 4: falling six percent now after its quarterly revenue missed expectations.
21:09
Speaker 4: The company had a challenging breakup with Novo Nordisk back
21:12
Speaker 4: in June related to the platform sales of copycat weight
21:16
Speaker 4: loss drugs. Elsewhere, Pfizer reported better than expected quarterly results
21:20
Speaker 4: and lifted its annual profit guidance. The drugmaker said its
21:24
Speaker 4: guidance absorbs the impact of the currently imposed teriffs from China,
21:28
Speaker 4: Canada and Mexico, as well as potential price chart changes
21:32
Speaker 4: this year. Pfizer up by four percent. Caterpillar posted mixed
21:36
Speaker 4: quarterly results and said it expects incremental teriffs to knock
21:39
Speaker 4: one point three to one point five billion dollars off
21:42
Speaker 4: its bottom line for the year. Shares are pulling back modestly.
21:47
Speaker 4: YOUM Brand excuse me, YOUM Brands is dropping about four
21:51
Speaker 4: percent after the restaurant company reported quarterly earnings in revenue
21:55
Speaker 4: that missed analysts expectations. As Pizza Hut and KFC reported
22:00
Speaker 4: US same store sales declines and after Today's Clothes we'll
22:04
Speaker 4: see earnings from AMD tomorrow morning ahead of the open, Novo, Nordisk, McDonald's, Disney,
22:10
Speaker 4: Uber and Shopify will all report their earnings. I'm Tucker
22:14
Speaker 4: Silva and that is Wall Street Watch. And in the
22:16
Speaker 4: previous segment, we asked you the trivia question, what is
22:19
Speaker 4: the largest monopoly breakup in US history? That would be
22:24
Speaker 4: AT and T. Frank from Manchester, New Hampshire is our
22:28
Speaker 4: winner today taking on the Financial Exchange showed T shirt.
22:31
Speaker 4: Congrats to Frank and we played trivia every day here
22:34
Speaker 4: in the Financial Exchange. See complete contest rules at Financial
22:37
Speaker 4: Exchange Show dot com.
22:39
Speaker 2: Young Brands is a terrible parent company name. The only
22:43
Speaker 2: thing that indicates the work in the food sector. You
22:45
Speaker 2: know what he used to be, PEPSI something I don't know.
22:48
Speaker 3: Try Coon.
22:49
Speaker 2: Try Coon was the owner of KFC, Pizza, Hutt and
22:51
Speaker 2: Taco Bell.
22:52
Speaker 3: Those three companies.
22:54
Speaker 2: Yeah, that's worse. Okay, try Con is worse than Young Brands,
22:57
Speaker 2: but they're both bad. Give me some indication of what
22:59
Speaker 2: you do, all right, I.
23:01
Speaker 4: Just call it Kintaco Bell like everybody does.
23:03
Speaker 2: Yeah, yeah, okay, I didn't. I didn't think of that.
23:06
Speaker 2: That's a that's a great that's a great one because
23:07
Speaker 2: Pizza Hut is not relevant anymore in that brand. It's
23:10
Speaker 2: it's not KFC and Taco Bell. So can Taco bell
23:13
Speaker 2: I like it?
23:14
Speaker 3: Or heart disease?
23:16
Speaker 2: Yeah, yeah, that's a little bit on the nose, but.
23:19
Speaker 3: Yeah, SUREFC is top five for me. But there is a.
23:25
Speaker 2: Peace in barons today. It's actually an interview with a
23:27
Speaker 2: financial advisor, Jonathan Schenkman, and he shares some strategies that
23:31
Speaker 2: he uses when people clients specifically panic, and I'll tell
23:38
Speaker 2: you you know, none of this was groundbreaking for anyone
23:42
Speaker 2: that works in this industry, but I do think it's
23:44
Speaker 2: kind of educational to understand how financial advisors guide people
23:47
Speaker 2: through because it is a big part of the job
23:50
Speaker 2: in educating people on what is normal and abnormal in
23:55
Speaker 2: markets and what to expect and then navigating when things
23:58
Speaker 2: get hairy through that difficult period of time. And so
24:02
Speaker 2: he has I think it's five different tips that he
24:05
Speaker 2: uses with clients when they say, sell everything and put
24:08
Speaker 2: it in cash because I'm terrified, and that can happen
24:11
Speaker 2: in many different times. Anyone that has worked in this
24:13
Speaker 2: business has dealt with it before. But five strategies that
24:16
Speaker 2: I think would be useful whether you're an advisor or
24:19
Speaker 2: just someone managing your own money, would be one pause
24:24
Speaker 2: dollar cost averaging. So dollar cost averaging would be when
24:27
Speaker 2: you're putting new money in that way, you're not selling,
24:30
Speaker 2: you know, you're not sticking with your plan of continuing
24:34
Speaker 2: to invest new money. And that's the whole point of
24:36
Speaker 2: dollar cost averaging is buying more shares when markets are down.
24:39
Speaker 2: But I'm with him. I would rather see somebody pause
24:41
Speaker 2: that when times get tough, then sell all their stocks
24:44
Speaker 2: and go to cash. Stop reinvesting dividends and income payments.
24:48
Speaker 2: So many people will reinvest all the dividends they get paid,
24:52
Speaker 2: and so you could pause that and have that paid
24:54
Speaker 2: to cash instead. If all that fails, rebalancing to a
24:58
Speaker 2: more conservative allocation. So that would be the Okay, I'm
25:01
Speaker 2: not going all to cash, but I'm going some to cash.
25:04
Speaker 4: Uh.
25:04
Speaker 2: If that doesn't work, then divest proportionately. If you own
25:08
Speaker 2: a combination of stocks, bonds, and commodities, then sell all
25:11
Speaker 2: of them equally. And then I think the best advice
25:14
Speaker 2: that he has on all of this is just sleep
25:16
Speaker 2: on it, give it a day. Think about this before
25:18
Speaker 2: you make a potentially life changing decision with your investment allocation.
25:22
Speaker 3: Can we go back to the first point. Yeah, that
25:24
Speaker 3: seems very wrong headed to me, isn't the whole point
25:27
Speaker 3: of my equities?
25:28
Speaker 2: Yes?
25:29
Speaker 3: And I know you said this, would you lead with that?
25:32
Speaker 2: If no, I would go in the opposite direction. Actually, yeah,
25:37
Speaker 2: first thing, sleep on it. But if well, well, but
25:41
Speaker 2: let's think about that. If somebody tells you you're you're
25:46
Speaker 2: managing their money or or you're managing somebody your your
25:48
Speaker 2: own money, and you're saying I want you to sell
25:51
Speaker 2: everything and put it in cash, yes, I would rather
25:53
Speaker 2: see you pause the dollar cost averaging than do that.
25:56
Speaker 2: If it's between those two, I'm taking that. Yeah.
26:00
Speaker 3: But if they didn't know they could do the former
26:01
Speaker 3: and they said, good idea, let's do both. Just yeah,
26:05
Speaker 3: I mean you already said it perfectly. The whole point
26:07
Speaker 3: of buying equities on a program consistently over decades is
26:11
Speaker 3: to take advantage of soe those downturns.
26:13
Speaker 2: Yeah, that's the entire point of it. You don't want
26:15
Speaker 2: to be dollar cost averaging into a market when when things.
26:18
Speaker 3: Seems really wrongheaded to me to lead with that anyway.
26:21
Speaker 2: Here would be my overall takeaway of why a financial
26:25
Speaker 2: advisor or investment advisor should exist in the first place.
26:28
Speaker 2: It shouldn't be to come to the rescue when things
26:31
Speaker 2: are falling apart and you're demanding that everything get changed.
26:34
Speaker 2: It should be assessing that up front. It should be
26:37
Speaker 2: knowing you as an individual so well that they appropriately
26:41
Speaker 2: ahead of time address what is going to be a
26:44
Speaker 2: concern when the markets do fall apart because of I mean,
26:48
Speaker 2: who the heck knows. Nobody saw COVID coming, but you know, like,
26:52
Speaker 2: oh yeah, the person that I really didn't want got elected,
26:54
Speaker 2: so I'm selling my stocks. The job of a financial advisor,
26:58
Speaker 2: in my view, yes, should be to coach that person
27:00
Speaker 2: when things are going wrong, but more importantly, to assess
27:04
Speaker 2: all of this upfront with you and understand what you
27:08
Speaker 2: are going to be willing to tolerate when it does
27:10
Speaker 2: all fall apart, because anybody who's been doing this long
27:14
Speaker 2: enough knows it's going to fall apart at some point,
27:16
Speaker 2: and make that assessment upfront. If you have ever been
27:19
Speaker 2: tempted by this, and by tempted by this, I mean
27:22
Speaker 2: when the exact wrong thing happens at the wrong time
27:24
Speaker 2: and you feel like you're losing everything, the temptation button
27:28
Speaker 2: to hit the sell button and go and execute that.
27:31
Speaker 2: If you've ever felt like nobody has put that initial
27:35
Speaker 2: work upfront to understand what your tolerance and expectations are,
27:40
Speaker 2: please give the folks at are I'm Strong Advisory Group
27:42
Speaker 2: a call. Yes, there are moments where people have that
27:45
Speaker 2: panic button and it is definitely the job of a
27:47
Speaker 2: financial advisor to assess that. But more importantly it's to
27:50
Speaker 2: work with you upfront before you start investing in a
27:54
Speaker 2: you know who knows portfolio of God knows what what
27:58
Speaker 2: you're going to be comfortable doing down on the road
28:00
Speaker 2: when it does fall apart. If you have questions like that,
28:03
Speaker 2: please give the folks at Armstrong a call. The numbers
28:05
Speaker 2: eight hundred three nine three for zero zero one again
28:09
Speaker 2: Armstrong Advisor Group Free consultation eight hundred three nine three
28:13
Speaker 2: for zero zero one.
28:15
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
28:17
Speaker 1: registered investment advisor. Nothing in the ad or in any
28:20
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
28:23
Speaker 1: your own financial, tax, and estate planning advisors before making
28:26
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
28:29
Speaker 1: advisory services.
28:30
Speaker 2: Well it happened again, I got a call from somebody
28:33
Speaker 2: I know last week that they came home and their
28:37
Speaker 2: spouse was on the computer and on the phone with
28:41
Speaker 2: a Microsoft tech support person who, by the time they
28:45
Speaker 2: got home and checked on this situation, had already given
28:47
Speaker 2: out social Security number data, birth home address, and was
28:51
Speaker 2: on the verge of giving out bank account to details
28:54
Speaker 2: and investment account to details to a person who unsurprisingly
28:57
Speaker 2: was not a Microsoft tech support person, and they had
29:00
Speaker 2: hacked their computer given them a number two dial saying
29:04
Speaker 2: that they were tech support and there were a number
29:06
Speaker 2: of viruses detected on their you know PC, and that
29:10
Speaker 2: the thing was compromised. Fortunately, it doesn't look like they
29:14
Speaker 2: got access to funds or anything like that. But according
29:16
Speaker 2: to the Pew Research Center, seventy three percent of adults
29:20
Speaker 2: have experienced some kind of online scam or attack. Now,
29:24
Speaker 2: the most common one is one that I think most
29:27
Speaker 2: of us have dealt with. They say only forty eight
29:29
Speaker 2: percent of people have dealt with this. But it's online
29:32
Speaker 2: hackers gaining access to a credit or debit card information
29:35
Speaker 2: and making fraudulent chars. I don't know if it was
29:38
Speaker 2: online hackers for me, but has anyone not had a
29:40
Speaker 2: fraudulent charge on their credit card before. To me, that's
29:43
Speaker 2: like everyone debit someone debit. You ever have a fake
29:48
Speaker 2: charge on your credit card? I mean, yeah, that seems
29:51
Speaker 2: like everybody to me. But other areas of you know, fraud.
29:57
Speaker 2: Thirty six percent of respondents had bought an item online
30:00
Speaker 2: that turned out was counterfeit or never arrived and they
30:02
Speaker 2: couldn't get a refund. Twenty nine percent of people had
30:06
Speaker 2: personal online account that was taken over access without permission.
30:11
Speaker 2: Twenty four percent said a scam email, text, messenger call
30:14
Speaker 2: led them to give away personal information, ten percent said
30:17
Speaker 2: ransomware blocked use of their computer until they paid money,
30:20
Speaker 2: and seven percent gave money online to a fake investment opportunity.
30:26
Speaker 2: Any of those numbers are far too high. Any of
30:29
Speaker 2: them are far far too high. Unfortunately, this is nothing new.
30:37
Speaker 2: I'm also you know, while I'm tempted to say, hey,
30:40
Speaker 2: family members of older Americans, you need to help them out.
30:44
Speaker 2: And that was the case that I dealt with recently,
30:46
Speaker 2: is the older person who was starting to deal with
30:50
Speaker 2: the cases of dementia and you know, that type of
30:53
Speaker 2: thing was going on. Unfortunately, according to this research, that's
30:59
Speaker 2: not the ex In fact, three quarters of adults under thirty,
31:03
Speaker 2: as well as those thirty to forty nine, fifty to
31:07
Speaker 2: sixty four, all of them reporting three quarters or more
31:10
Speaker 2: of them reporting having fallen for this type of scam
31:13
Speaker 2: or attack on them. And so yes, I think the
31:18
Speaker 2: most vulnerable are the ones that we need to focus
31:19
Speaker 2: on here because they're also the most likely to fall
31:21
Speaker 2: for the worst parts of these attacks and give out
31:24
Speaker 2: the really, really bad information. But yeah, I mean, you've
31:28
Speaker 2: got thirty year olds, You've got twenty year olds falling
31:30
Speaker 2: for these things. I think it's different types of scams
31:32
Speaker 2: that they fall for, but they are falling for them.
31:35
Speaker 2: And I don't know what advice to give other than
31:40
Speaker 2: to be hyper vigilant and aware of these. And if
31:42
Speaker 2: you're not familiar with the type of scams that I've
31:45
Speaker 2: described in any of these, then look them up and
31:47
Speaker 2: understand them, because they happen every single day to very
31:53
Speaker 2: smart people. That's my approach to all of this is
31:57
Speaker 2: just assume that I am dumb enough to fall for
31:59
Speaker 2: one of these, because anybody is apparently dumb enough to
32:01
Speaker 2: fall for these. They can be very far.
32:04
Speaker 3: A link in an email, go into your account the
32:06
Speaker 3: way you would if you were initiated or maybe that
32:09
Speaker 3: is call the institution as if you were initiating the contact.
32:13
Speaker 3: Yeah right, it's just as a rule, don't click a link.
32:15
Speaker 2: Yeah, there's just so many. If it says.
32:17
Speaker 3: Fidelity or Schwab or whatever, don't don't.
32:20
Speaker 2: And folks that are listening now that are working for
32:22
Speaker 2: an employer, they know this, right because there is such
32:24
Speaker 2: a trained on it.
32:26
Speaker 1: Right.
32:26
Speaker 3: You spend a lot of money as an employer training us,
32:28
Speaker 3: and we're still screw up.
32:29
Speaker 2: But you know, think about that person that's been out
32:31
Speaker 2: of the workforce for a decade, forget about it, even
32:34
Speaker 2: if they're even if they're only sixty six years old,
32:37
Speaker 2: they're retired. Really, it doesn't matter.
32:39
Speaker 3: It's it's it's a turkey shit.
32:40
Speaker 2: It changes so rapidly that I might believe.
32:45
Speaker 3: We are trained, Mike, and we fall for it. Here
32:48
Speaker 3: it worked. Now I think the phishing challenge, so called
32:51
Speaker 3: fishing show, they're getting increasingly unfair. Like now, even reporting
32:55
Speaker 3: one can you could fall for it by opening it up.
32:57
Speaker 3: So my our strategy now many of it here at work,
33:00
Speaker 3: I'm informing you on the air, is just to ignore
33:03
Speaker 3: these emails completely. Don't report them, don't open an email,
33:06
Speaker 3: go into somebody's office if you got an email from
33:09
Speaker 3: them that is not in the usual format or has
33:12
Speaker 3: an unusual request in and talk about it face to face.
33:14
Speaker 3: And the same is true of your relationship with a
33:17
Speaker 3: bank or other institution.
33:19
Speaker 2: Let's take a quick break here on the Financial Exchange.
33:21
Speaker 2: When we come back, Stack Roulette.
33:24
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34:32
Speaker 2: It is time now for some stack roulette, Mark, what
34:35
Speaker 2: do you have for ye?
34:36
Speaker 3: Tesla's struggles in Europe in particular, continue, Mike, and I
34:39
Speaker 3: hope I'm not repeating a story that was reported earlier,
34:42
Speaker 3: because this comes from the Financial Times and it's several
34:46
Speaker 3: hours stale. But anyway, I'm too far into it. Sales
34:50
Speaker 3: of Teslas, which are all obviously electric, plummeting sixty percent
34:54
Speaker 3: according to the Financial Times in the UK, which I
34:57
Speaker 3: assume is you know, England, Scotland and all those other
35:00
Speaker 3: m hm former countries that England is subjugated and brutalized
35:05
Speaker 3: over the centuries.
35:07
Speaker 2: Has that relevant to electric vehicle cars?
35:09
Speaker 3: It isn't, Mike. I just felt the need to add
35:10
Speaker 3: some color to the story for those in our audience
35:13
Speaker 3: who might appreciate it.
35:15
Speaker 2: You know, it seems like the appropriate thing for the
35:17
Speaker 2: board to do here. Then give give you.
35:22
Speaker 3: Nine square With plummeting sales somewhat tarnished, perhaps slowly recovering reputation,
35:29
Speaker 3: or maybe not I don't have a good read on that. Idrish,
35:32
Speaker 3: what was your reaction to that award?
35:33
Speaker 2: Uh is in need for better government?
35:36
Speaker 3: Is it scream and need for better governance? Governance?
35:38
Speaker 1: Excuse me?
35:39
Speaker 2: I think it was probably a necessary uh, a necessary
35:45
Speaker 2: evil in their view, which is, yeah, sales are not
35:48
Speaker 2: going terribly well. But imagine how badly sales would be
35:51
Speaker 2: going if we had all the current headwinds and Elon
35:54
Speaker 2: must decided not to work here anymore. That that would
35:58
Speaker 2: be my guess as to why they were twenty nine
36:00
Speaker 2: billion dollars in grants at the same time that the
36:02
Speaker 2: stock is down nineteen percent a year of to date's
36:07
Speaker 2: He's just.
36:07
Speaker 3: The indispensable man. They don't have a choice, I mean
36:09
Speaker 3: without him.
36:10
Speaker 2: When you think Tesla, you think Elon Moscow. Yeah. I
36:13
Speaker 2: don't think there's any single company. I'm racking my brain.
36:17
Speaker 2: Is there any single company you can think of where
36:18
Speaker 2: the CEO is so inextribly tied.
36:20
Speaker 3: To Armstrong Advisory Group?
36:22
Speaker 2: Yeah? Now you can replace me with Meta Armstrong. There's
36:25
Speaker 2: a ton of us.
36:25
Speaker 3: That's a good Meta.
36:28
Speaker 1: Uh.
36:28
Speaker 3: You know one yesterday I never met before.
36:30
Speaker 2: Yes, I work with you.
36:31
Speaker 3: Got thank you?
36:32
Speaker 2: The zuck I suppose you.
36:34
Speaker 3: Think, sure, okay, Zuck is jeez.
36:40
Speaker 2: All right, I'm not. Yes, When I think of Facebook
36:45
Speaker 2: and Meta, I do think of Mark Zuckerberg, But I
36:48
Speaker 2: think the shareholders would be more tolerant of a change
36:51
Speaker 2: of CEO there than they would be a Tesla disagree.
36:54
Speaker 3: Okay, okay, yeah, no, it is that that that's a
36:58
Speaker 3: great question. Bill Gates was not as closely as he
37:01
Speaker 3: was associated with Office. We knew that he wasn't the
37:04
Speaker 3: sole architect, even though he was a coder and a
37:07
Speaker 3: visionary in many ways.
37:08
Speaker 2: In I mean Jobs and Apple, I think was yeah,
37:11
Speaker 2: but we knew he was.
37:11
Speaker 3: He was a sales guy now and he wasn't. He
37:14
Speaker 3: wasn't a tech, he wasn't indispensable. Well, I shouldn't say that. Yeah,
37:18
Speaker 3: it's hard to These things are not easily defined.
37:20
Speaker 2: I can't. I will say that I can't think of
37:22
Speaker 2: any current there were concerns. I can't think of any
37:24
Speaker 2: currently that are more strategically important to the company than
37:28
Speaker 2: Elon Musk seems to be to Tesla. I agree, Mark Tucker.
37:32
Speaker 2: The only one that I think is even close is
37:33
Speaker 2: the Zuck with Facebook and and Meta in particular. But yeah,
37:40
Speaker 2: to me, it doesn't rise there, Jamie Diamond at JP Morgan. No,
37:44
Speaker 2: there's nobody else in my view that quite rises to
37:47
Speaker 2: that level. That's all the time that we have for
37:50
Speaker 2: today's edition. To the financial exchange markets remaining in negative territory,
37:55
Speaker 2: although diversifying out a little bit here the NASDAC now
37:58
Speaker 2: off six tenths of a place point one hundred and
38:01
Speaker 2: twenty eight points, S and P down half a percent,
38:04
Speaker 2: and the Dow Jones Industrial Average AWFU one hundred and
38:06
Speaker 2: seven points, or one quarter of one percent. We'll be
38:09
Speaker 2: back out of tomorrow, folks, have a great rest of
38:11
Speaker 2: your day.