Latest / The Financial Exchange Show / Are big tech stocks losing their mojo?

Transcript

Are big tech stocks losing their mojo? · The Financial Exchange Show

0:00
Speaker 1: The Financial Exchange is produced by Money Matters Radio and
0:02
is hosted by employees of the Armstrong Advisory Group, a
0:05
registered investment advisor. All opinions expressed are solely those of
0:08
the hosts. Do not reflect the opinions of Armstrong Advisory
0:11
or anyone else. Investments can lose money. This program does
0:14
not offer any specific financial or investment advice. Please consult
0:17
your own financial, tax, and estate planning advisors before making
0:20
any investment decisions. Armstrong Advisory and the advertisers heard on
0:23
this program do not endorse each other or their services.
0:25
Armstrong and Money Matters Radio do not compensate each other
0:28
for referrals and are not affiliated. This is The Financial
0:34
Exchange with Chuck Zada and Mike Armstrong, your exclusive look
0:39
at business and financial news affecting your day, your city,
0:42
your world. Stay informed and up to date about economic
0:46
and market trends plus breaking business news every day. The
0:50
Financial Exchange is a proud partner of the Disabled American
0:53
Veterans Department of Massachusetts. Help us support our great American
0:57
heroes by visiting DAV five k dot com and making
1:00
a donation today. The DAV five K Boston is presented
1:04
by Veterans Development Corporation. This is the Financial Exchange with
1:08
Chuck Zada and Mike Armstrong.
1:18
Speaker 2: Chuck, Mike and Tucker with you today on the Financial Exchange,
1:23
kicking off one of the busiest weeks that we have
1:27
in financial markets this year. Let's go through everything that
1:31
we're going to be getting this week, or at least
1:33
everything of note leg I don't think anyone cares that,
1:38
you know, Tomorrow, at eight fifty five we get Redbook
1:43
weekly retail sales data.
1:46
Speaker 3: Just no one cares.
1:48
Speaker 4: I didn't even know that we had weekly retail sales data.
1:51
Speaker 2: Oh yeah, red Book does a weekly publication on like
1:55
year over year change from what we were saying week. Yeah,
1:58
it doesn't mean anything. It's just one metric. But that's
2:01
why no one cares about It's not that no one cares,
2:04
it's just it doesn't usually tell you anything so meaningful stuff.
2:07
Here's what we're gonna be getting tomorrow. We get the
2:09
SMP Case Shiller Home Price Index. We also get the
2:12
FAHFA Home Price Index. Those are both coming out at
2:15
nine am Eastern time. Of course, what other time zone
2:19
you know? Could you possibly.
2:20
Speaker 3: Style insulting our people in Portland they're not up at
2:24
nine am Eastern. A lot of them aren't.
2:27
Speaker 2: Like six AM's kind of early to get up. Like,
2:30
let's call us be to spade. Okay, you want to
2:32
get up at six am in Portland. Fine, you're up
2:36
at like four thirty. I don't know what you're talking
2:37
about here.
2:37
Speaker 1: I know.
2:38
Speaker 2: Ten am you get the Jolts Report coming out, so
2:41
that's gonna tell us about what's going on with the
2:43
labor market in terms of job openings and things like that.
2:47
Wednesday you get the first reading of Q three GDP.
2:52
If we take a look at the Atlanta Feds GDP
2:55
now now cast, the last number that we have from
2:59
Friday was a three point three percent, so you know,
3:02
plus or minus you can say generally half a percent
3:04
at this point in the cycle, So somewhere between two
3:06
eight and three eight is probably where that number ends
3:09
up in most cases. Like that's kind of your ninety
3:12
percent confidence interval that you have there. Also on Wednesday,
3:16
we're gonna be getting uh, the Treasury refunding announcements. So
3:20
basically what the you know setup is as far as
3:23
the overall you know, amount of bills and bonds and
3:27
stuff that they're gonna be issuing for the upcoming quarter,
3:29
so that stuff's gonna be coming out. Then Thursday you
3:33
get PCE price Index. You also are gonna be getting
3:36
personal income and spending, the Employment cost Index, and Weekly
3:40
Jobless Claims, and then Friday you get the jobs report
3:44
and ism manufacturing.
3:46
Speaker 3: Top three for me, not in any particular order.
3:48
Speaker 4: Jobs report, JOLTS GDP, Yeah, top three, probably not jobs
3:54
jolts GDP. Now, I don't think I would go in
3:58
that direction to see. I don't think be surprised by
4:01
anything in PCE. I don't think I'm gonna be surprised
4:03
by anything in weekly Jobless Claims case shller home price
4:07
index is interesting, but again there's not been any home sales,
4:09
so I don't really find that terribly intriguing. I don't
4:12
know that we're gonna actually learn anything from this job's report,
4:18
so I hear what you're saying because of the hurricanes,
4:20
I think we might not learn anything. Where I'm interested
4:22
would be if we see a surprise upside, then that
4:25
does tell you something.
4:27
Speaker 2: Yeah, yeah, I think that looking at the data here,
4:30
jolts is the big one that I want to see.
4:32
I'd put that number one because you'd say, well, Chuck,
4:35
if the job's data doesn't matter, then why do you
4:37
care about Jolts. Jolts is on a two month lag,
4:39
so it's actually from the month before the recording period.
4:42
It was before the hurricanes hit. So that's why I'm
4:45
more interested in that on this one. So I'd put
4:48
that kind of my number one two jobless claims again,
4:51
always like to see what's going on there. And then
4:54
I do think GDP I'd put number three again it's backwards,
4:58
looking like strongly backwards.
5:00
Speaker 4: Looking at me, did we I said jolts GDP, I said,
5:06
no particular order, Jolts GDP jobs.
5:08
Speaker 3: Oh yeah, two out of three. That's fine.
5:09
Speaker 2: Then then if the economic data wasn't enough, We've got
5:14
a whole bunch of earnings continuing this week. Remember at
5:18
this point, when we look at what has come out
5:21
so far, we're through thirty seven percent of S and
5:23
P five hundred companies. This according to fact Sets Earnings Insight,
5:27
and so far SMP earnings growth is three point six percent.
5:30
Speaker 3: But it really hasn't encapsulated.
5:33
Speaker 2: You know, the companies that have been growing most rapidly
5:35
and that have the largest waiting in the index so
5:38
you're tech companies. And so when you look at who's
5:40
on tap this week again, just looking at companies with
5:44
market cap over one hundred and fifty billion dollars Tuesday,
5:48
a little company by the name of Alphabet. They used
5:51
to be called Google back in the day when names
5:53
were names and companies were companies. Visa Advanced Micro Devices, McDonald's, Pfizer, Striker,
5:59
those are all on Tuesday. On Wednesday, if that's not
6:03
enough for you, Microsoft, Meta, Eli, Lilly Abvy, Caterpillar, Amjen
6:10
Booking dot Com. I mean, like again, just kind of
6:13
some big names out there again. And then hey, if
6:16
that wasn't enough, on Halloween, and that's right, the spookiest
6:20
earnings we've ever had. We've got Apple, Amazon, MasterCard, MERK, Comcast, Uber, Conico, Phillips.
6:31
Speaker 4: I mean yeah, woff, woff. What a week gonna be besy?
6:38
What a week gonna be besy?
6:40
Speaker 3: Which is nice because.
6:43
Speaker 4: Not everyone wants to just talk about the outcome of
6:46
the election and every poll that's well, are there any
6:49
more polls to even be released?
6:51
Speaker 2: Most honestly so, most polling outfits have finished and done
6:54
their you know, final polls at this point, which again
6:58
like at this point, just vote like enough, like enough
7:02
with the analysis, enough with.
7:03
Speaker 4: Well what is this meal? We'll see in a week. Yeah,
7:07
eight days, nine eight.
7:08
Speaker 2: Days, well, nine days, nine days is when we'll actually
7:11
be able to talk about it. Yep, you know we
7:13
vote in eight days. We talked about it in nine
7:15
and we'll see. I mean, look again, I'm hoping that
7:19
we won't be talking about you know who. I'm hoping
7:22
that we actually have a winner on Tuesday night.
7:25
Speaker 3: Again.
7:25
Speaker 2: I just don't want to be, you know, dragging this
7:27
out for you know, a week and all that. So
7:30
we'll see exactly what happens and we'll cover it. We'll
7:33
let you know, you know where things are going. Let's see,
7:37
we've talked a little bit about what is coming this week.
7:41
I do want to touch on this piece from the
7:42
Wall Street Journal. It's titled at a pivotal moment, US
7:46
economic data will be a mess, and the answer is, yeah,
7:49
it's going to because of these hurricanes. And look if
7:53
if you look at the data that we've gotten, in
7:56
particular the jobs report, because this was the area that
7:59
we have been seeing the real economic.
8:01
Speaker 3: Weakness, you know, over July and August.
8:05
Speaker 2: That was the place where you said, hey, there's a
8:07
there's a real problem here, and either that data needs
8:11
to turn and get better or the other economic data
8:14
likely needs to turn and get worse because you just
8:16
don't have that big of a divergence for that long.
8:19
What we saw in you know, the the August and
8:21
September data was that you had improvement in the jobs data.
8:27
I mean September in particular had two hundred and fifty
8:29
four thousand jobs created according to the Job Support obviously
8:33
subject to revisions, but in those two months you saw
8:37
the unemployment rate drop from four point three to four
8:41
point two and then finally to four point one percent.
8:44
Speaker 3: So it looked like you had this.
8:47
Speaker 2: Kind of immaculate drop in the unemployment rate, which rarely happens.
8:52
You know, you typically what you end up seeing when
8:55
unemployment starts going up or down, it doesn't usually stop
9:01
until you run into like some key policy change or
9:04
something that forces it in the other direction.
9:07
Speaker 4: So examples here would be well, most recent example would
9:11
be March of twenty twenty, when unemployment shot up very
9:14
rapidly until yeah, the government stepped in basically said everybody's
9:17
got a job, but also not a real case. Oh,
9:19
eight would be a you know, more realistic example where
9:22
unemployment continued going up I think right until the passing
9:26
of tarp Uh and.
9:29
Speaker 2: Was it after Oh yeah, I mean unemployment if you
9:31
look at the labor market in you know, two thousand
9:34
and seven through twenty ten, the unemployment rate, I'm pulling
9:39
it up right now just to get the exact time
9:40
where it where it peaked.
9:42
Speaker 3: But the yeah, the unemployment rate did not peak until
9:47
here we go.
9:49
Speaker 2: The you didn't see a peak of the unemployment rate
9:51
until March of twenty ten.
9:54
Speaker 4: That's not what I'm saying. I'm saying a peak in
9:57
October of nine ten.
9:59
Speaker 3: No, nope, it's it's not there. I'm looking at it's
10:05
right here.
10:07
Speaker 4: Saint Louis fed unemployment rate peak October of nine.
10:15
Speaker 3: I'm looking at it right here. Okay, it's great to
10:18
just I'm woking you six.
10:22
Speaker 4: Yeah. Yeah.
10:24
Speaker 2: Even there, it wasn't like the fail like. It wasn't
10:26
like companies are like, oh we need to stop firing now.
10:28
Speaker 4: It doesn't change the point, which is you rarely see
10:31
unemployment climb a little bit and then shrink without some
10:35
big event occurring. And in the case of nine, it
10:38
was the Great Recession really playing out and Congress starting
10:43
to act on that giant unemployment rate, banks failing, et cetera.
10:46
Speaker 3: And so, yeah, it wasn't abnormal. O nine wasn't when No, that,
10:50
oh nine wasn't when TARP was passed? Was a wait?
10:53
Speaker 1: Was that?
10:54
Speaker 3: Yeah? Okay, That's why I was.
10:55
Speaker 2: I'm like, I'm like, I know it was after so sorry,
10:59
I was just can fused about when it actually passed. Yeah,
11:01
TARP was October of eight when it passed. So I
11:05
think that ultimately, you don't usually just see, hey, we're
11:09
going along and unemployment's going up and then it just
11:12
starts going down. It has some momentum to it, usually
11:15
either going down or going up, likewise, like heading into
11:20
the Great Financial Crisis. Unemployment before that peaked in late
11:24
oh three, somewhere right around six percent, and it slid
11:29
down steadily until you got to you know, May June
11:33
of seven when it was four point four percent.
11:37
Speaker 3: Why did it.
11:37
Speaker 2: Start moving back up? Well, because all of the economic
11:40
activity generated by housing stopped.
11:45
Speaker 4: So we are at a pivot pivotal pivotal why do
11:49
I want to say, pivotable pivotal moment with the election upcoming,
11:54
But I honestly do wonder what data could really come
11:58
out here to sway someone's vote or get them to
12:02
the polls that otherwise wouldn't be coming.
12:06
Speaker 3: I have a tough tomic perspective.
12:07
Speaker 4: Yeah, Like you know, I suppose if you got an
12:10
absolute bomb of a job's report, then that could bring
12:14
the I don't think it would sway anyone to vote
12:17
for Trump over Harris, but I think it would be
12:19
bad for Harris if you got an absolute bomb of
12:21
an unemployment report or a bomb of an inflation report.
12:27
Speaker 3: But this matters near the direction. That's kind of where
12:30
I am is.
12:30
Speaker 4: I don't know that there's much at this stage, and
12:33
I know we're calling it pivotal because the election is
12:36
a week away. I just don't know that there's much
12:38
of anything that gets somebody off their couch that wasn't
12:40
already planning.
12:41
Speaker 2: I think the reason that the economic data would be
12:44
called pivotal here is not necessarily the election, but much more,
12:48
Hey is the improvement that we've seen in the labor
12:51
market for the last couple of months.
12:52
Speaker 1: Real.
12:52
Speaker 3: Yeah, And we're just not going to be able to
12:54
tell for.
12:54
Speaker 2: A couple months now because of how disruptive these hurricanes
12:58
have been to the southeast part of the United State. Ye,
13:01
it's we're not going to know until January. Unfortunately, take
13:05
a quick break. When we come back, we'll talk big
13:07
tech right after this.
13:09
Speaker 1: Business and financial news affecting the markets and your wallet.
13:12
We've got it all straight from Wall Street right here
13:15
on the Financial Exchange Radio Network. Miss any of the show,
13:20
catch up at your convenience by visiting Financial Exchange show
13:23
dot com and clicking the on demand icon, where you'll
13:26
find all of our interviews and full shows. This is
13:29
your home for the latest business and financial news in
13:32
New England and around the country. This is the Financial
13:35
Exchange Radio Network.
13:39
Speaker 5: The Ultimate Boston Sports Auction to benefit the Disabled American
13:44
Veterans Department of Massachusetts is coming soon. Your chance to
13:47
see the world champion Celtics, the Bruins, the Red Sox
13:50
and the Patriots, plus autographed merch from Pedro Martinez, christavs Porzingis,
13:55
Brandon Carlow and much more. One massive auction for incredible
13:59
experiences and all benefit the Disabled American Veterans Department of Massachusetts.
14:03
The auction begins next Monday, November fourth, at eleven am.
14:08
That's next Monday, November fourth, at eleven am. Keep it
14:11
here on the Financial Exchange and help support our great
14:14
American heroes.
14:15
Speaker 3: Peace Today.
14:16
Speaker 2: In the Bloomberg, big tech stocks lose some of their
14:20
aura as earnings growth slow. And basically what it's talking
14:23
about is that your five biggest companies in the S
14:26
and P five hundred, Apple and Video, Microsoft, Alphabet, and Amazon,
14:30
they are projected to see earnings growth of nineteen percent
14:33
in their third quarter results, which is nothing to sneeze at.
14:38
I mean, that is cooking, like let's let's let's you know,
14:42
talk about it. But here's the thing is that when
14:45
you look at how their earnings growth is moving right now.
14:50
Last year, at this time, their earnings were growing at
14:54
a thirty five percent annualized clip, and by next year
14:58
you're expected to see that narrow into kind of the
15:01
mid teens.
15:02
Speaker 3: So earnings growth is slowing. Does this matter to stocks?
15:08
Speaker 2: The answer, in my opinion is yes in the long run,
15:12
not so much in the short term necessarily because look,
15:16
we've seen companies that have had slowing earnings growth that
15:20
still are able to maintain impressive valuations, high valuations in
15:24
many cases despite that slowing earnings growth. Well, no further
15:29
than last week. Tesla just as an example, it's not
15:32
a company that is seeing any kind of you know,
15:35
huge enormous earnings growth at this point, and yet still
15:38
carries one of the steepest valuations in the market. And
15:42
that is just a reflection of hey, earnings growth. While
15:46
it might be gravity for stocks in the long run,
15:49
can be overpowered by investor sentiment in the short term.
15:52
Speaker 4: Yeah, I was gonna say, you know, this may be
15:53
something to come, but you know, to say that it's
15:56
here that shifting sentiment, that shift in you know, losing
16:02
some of their or I don't see it yet. I mean,
16:04
the information technology sector for the S and P five
16:06
hundred has had the best return month to date of
16:10
any S and P five hundred sector, the best return
16:12
year to date and the best actually, let me double
16:15
check utilities here for a moment. Ex Autilities more higher, No, Yeah,
16:21
for according to SMP Dow Jones industries so far year
16:24
to date now, information technology sector up thirty three and
16:27
a half percent, Utilities now up to twenty six point
16:30
eight over the last twelve months, fifty six percent on
16:33
the technology sector the only one that compares there would
16:35
be financials up forty five percent over twelve months. But
16:40
I guess that's where I land is any time period
16:43
that I look at month to date, year to date,
16:45
one year, trailing tech is the dominator of all sectors,
16:50
and so that aura may shift. I don't deny that.
16:53
And the sales growth that they are likely to per
16:58
dict project whatever. So whatever their sales growth is likely
17:03
to be is not likely to be as strong as
17:06
it was for the last twelve months. But I don't
17:08
see any facts and evidence that it's shifting people's viewpoints
17:11
on the sector.
17:12
Speaker 3: No, I don't think so.
17:14
Speaker 2: And look, it's something where ultimately we're gonna know whether there's.
17:21
Speaker 3: More to this AI story in the next couple of years.
17:25
Speaker 2: It's gonna take a little bit of time to play out,
17:28
but it's gonna be binary.
17:30
Speaker 3: It's gonna be either.
17:31
Speaker 2: Look, companies can continue to expand their capex at this
17:35
rate for you know, an incredible amount of time because
17:38
there's a bunch of profit to be made from it,
17:41
or there's not, And if there's not, there's a big
17:44
reckoning coming for a lot of these tech companies. But
17:47
let's also be open to the possibility. And I'm not
17:51
saying it is. I'm not saying it isn't. I'm just saying,
17:53
let's be open to the possibility that maybe this artificial
17:58
intelligence transformation is bigger than any of us can conceptualize,
18:03
because there is a possibility that that is the case.
18:07
Speaker 3: Yeah, I and I will. I will admit that that's
18:10
the case.
18:11
Speaker 4: Where I remain highly skeptical and I just don't know
18:15
is that the same companies that dominate tech today will
18:18
be the ones that dominate AI a decade from now.
18:21
I think it's entirely possible. But that was distinctly not
18:25
the case of the Internet. The Internet, for all of
18:29
it's you know, for all of its growth stories and
18:31
everything else, was a massive contributor to US technology and
18:36
growth in that space. It just happened to be not
18:39
the companies that were dominating in nineteen ninety nine.
18:42
Speaker 2: The piece that if you want a key difference there,
18:45
the piece that's different is launching an Internet based business
18:48
back in the nineties required very little capital, Like you
18:52
registered a domain name and hey, i'm you know whatever,
18:57
I am dot com. Today, if you want to build
19:00
out anything AI related, boy, you.
19:03
Speaker 3: Need a boatloader capital.
19:05
Speaker 2: You know, the Internet was kind of this great leveler
19:07
where hey, everyone could compete. I don't know how many
19:12
people can compete in the AI space that with with
19:15
where they're going on their spend and and and maybe
19:19
I'm wrong on that, but if everyone's spending that much money,
19:26
these are not dumb people. They might be a little
19:30
you know, different, but they're not They're not dumb. Yeah,
19:32
quick break here Wall Street watches Next.
19:41
Speaker 1: Like us on Facebook and follow us on Twitter at
19:44
TFE show. Breaking business news is always first right here
19:48
on the Financial Exchange Radio Network. Time now for Wall Street.
19:54
Watch a complete look at what's moving markets so far
19:56
today right here on the Financial Exchange Radio Network.
20:00
Speaker 5: The markets is starting off the week in positive territories.
20:03
Wall Street braces for a pivotal week ahead where we'll
20:06
see a core PCE index reading the first estimate of
20:10
third quarter GDP and a JAWS report on Friday. Oh
20:13
and we have a third quarter earning season where we'll
20:16
hear quarterly results from tech giants like Alphabet, Microsoft, Meta, Amazon,
20:21
and Apple.
20:22
Speaker 1: So not much going on this week.
20:25
Speaker 5: Right now, the Dow is up by three quarters of
20:27
a percent, or three hundred and sixteen points. SMP five
20:30
hundred is up by half a percent, or twenty eight points,
20:33
and the Nasdaq is up by two thirds of a percent.
20:35
Russell two thousand is up over one and a half percent.
20:38
Ten year treasure Reeled is up by two basis points
20:41
at four point two five percent. In crude oil pulling
20:45
back by over five percent today training sixty seven dollars
20:49
in seventy nine cents a barrel. Boeing shares down by
20:52
one and a half percent after the planemaker this morning
20:55
announced a stock offering that could raise about nineteen billion
20:59
dollars targeted at improving the company's finances, which have been
21:03
impacted by the six week strike in several production and
21:06
safety issues. Meanwhile, an update on McDonald's equal ee outbreak,
21:10
where the fast food giants said its quarter pounder burger
21:13
would return this week to about nine hundred restaurants. These
21:17
locations will, however, serve the burgers without slivered onions, which
21:21
are believed to be the source.
21:23
Speaker 3: Of the outbreak.
21:24
Speaker 5: McDonald's stock fell more than seven and a half percent
21:27
last week on the news, its worst weekly performance since
21:30
twenty twenty. That stock today, however, up by two percent. Elsewhere,
21:36
Delta Airlines on Friday sued CrowdStrike, alleging breach of contracting
21:40
negligence following the July outage that led to seven thousand
21:44
flight cancelations. Delta up by three percent, while CrowdStrike is
21:48
up by one percent. Spotify shares up by one percent
21:51
after Wells Fargo named the music and podcast streaming company
21:55
to a top stock pick, where the analyst said he
21:57
was bullsh on its rising margin, strong product, makes an
22:00
evolving record, label relationships. And after today's closing bell, we'll
22:04
see third quarter earnings from Ford and Waste Management. I'm
22:09
Tucker Silvan.
22:10
Speaker 1: That's Wall Street Watch, Mike.
22:11
Speaker 2: We got a piece here from the New York Times,
22:16
I believe, and it's titled for investors, what if this
22:21
time is different? And it's not talking about, you know, hey,
22:25
stocks are overvalued. It's not talking about, oh, is this
22:28
another tech bubble? It's saying, hey, what if there is
22:33
some kind of global or US disruption that hasn't occurred
22:39
in the last you know, one hundred years or so
22:41
one hundred and fifty years, But that ultimately is something
22:44
that makes the returns on stocks and bonds very bad?
22:48
Speaker 4: And can I give you my conclusion on that? Yeah,
22:51
here's Yeah, if it is different this time, then the
22:57
last thing you care about is your return on stocks
22:59
and bonds.
23:00
Speaker 2: And this is kind of the like, Okay, let's say
23:04
that you knew an asteroid was coming and was going
23:06
to destroy all life on earth. You don't say, well, gee,
23:10
where should I put my portfolio? Because your portfolio doesn't matter.
23:15
It's not like, well, what's the investment strategy for this?
23:17
Who cares you're gonna be dead?
23:19
Speaker 4: Yeah, this is not talking about, Hey, maybe politics minor
23:25
lead you know, in some minor degree shifts, what the
23:28
projected return is on your portfolio over the next four
23:32
years during the next presidential cycle. What they're talking about
23:35
in this article is what if politics in this country
23:39
is so broken that it leads to catastrophe. What if
23:44
it's so broken that it leads to civil war or
23:48
leads to world war, or leads to a change in
23:53
our entire societal makeup, Like stop thinking about your investment
23:59
philosoph then.
24:00
Speaker 3: Like you should be voting if that's the case.
24:02
Speaker 4: But it does not matter what's going on with the
24:06
markets in those cases, other than to say, in that
24:08
type of disaster, there's almost no asset class that ends
24:12
up doing terribly. Well no, I mean not that we
24:15
have a ton of examples of this, but yeah, if
24:18
you go and study countries where civil war has broken out.
24:21
Speaker 2: If you look at Pompeii after the volcano, yeh, the
24:26
value of homes there was low.
24:29
Speaker 4: If you look at Germany, right, Germany post World post
24:33
War two?
24:34
Speaker 3: Again great, not but not what you cared about.
24:38
Speaker 2: Like, if you're honestly thinking about, like, oh, gee, where
24:41
do I put my money in the event that, like
24:43
something really bad happens politically, the answerest like what, it
24:46
doesn't matter. Yeah, So everyone likes to think that they're
24:50
going to be freaking mad Max during the apocalypse, and
24:53
honestly we're basically all going to be cowering in the
24:56
corner like a little dog, just like make it stop.
25:00
Speaker 4: The election obviously has consequences. The election will matter in
25:07
some way, shape or form to the stock market, but
25:10
you don't know in what way that will happen, and
25:14
stop worrying about it.
25:16
Speaker 3: Stop worrying about it. Right.
25:17
Speaker 2: It's one of those things where it just it's not
25:21
something that you can fundamentally do anything on. If worst
25:25
case scenarios happen, and if they do, like it's just
25:29
not something that you can do anything about as far
25:32
as your investments.
25:33
Speaker 4: Yeah, I'm not saying don't worry about the election. I'm saying,
25:36
don't worry about the stock market's reaction to the election.
25:41
That's done.
25:41
Speaker 3: I don't know. I maintain that we'll just need to
25:43
do that done.
25:46
Speaker 4: Yeah, So, dumb story of the day, I suppose is
25:50
where Well, the point that was.
25:51
Speaker 3: In here was was basically the same thing.
25:54
Speaker 2: Like the point was, Hey, I'm investing for the long term,
25:56
so if something like crazy unexpected happens, there's nothing else
26:00
I can do, right, And I know people don't like
26:03
to hear that because they're like, well, you're not preparing then, okay,
26:07
if the asteroid is coming, you're just gonna reach your
26:09
hands up and catch it.
26:11
Speaker 3: Like, how are you gonna prepare for it?
26:14
Speaker 2: Well, you gotta, you gotta have preparate Okay, prepare your
26:17
investment portfolio for the asteroid.
26:21
Speaker 3: Like what what are you gonna do?
26:23
Speaker 2: Yeah, Well it's the same. They know that asteroids can't
26:27
go more than twelve miles down. So I'm gonna dig
26:29
a hole that's twenty miles deep and put all my
26:32
golden animals down there and my name is you know,
26:37
like I don't care, Like, if you want to do
26:41
that stuff, do that, but just realize that there are
26:44
cost to doing that stuff too.
26:46
Speaker 4: It's the same type of catastrophe planning that I hear
26:49
about when people tell me that the dollar is no
26:52
longer going to be the default currency of trade.
26:54
Speaker 3: Oh can we do that? One?
26:56
Speaker 4: Explain to me what your investment thesis is?
26:58
Speaker 2: Then yes, if here's the thing, if if as long
27:02
as we're just going through all these because I don't
27:04
know man, Like it's I've been getting all these questions
27:07
the last like everyone has lost their freaking mind.
27:10
Speaker 3: Well that's not new.
27:11
Speaker 4: That's every every few months before the election. I know
27:14
exactly what happened.
27:15
Speaker 3: Like, I'm not saying it's excusable, it's just I'm not
27:18
saying it's new either.
27:19
Speaker 2: I'm just saying everyone has lost their minds. I got
27:21
questions last week, well what if after the election everyone
27:25
has to use like the Chinese currency that you want?
27:28
Speaker 3: And I'm like, in what world is that happening? In
27:34
what world? Like my goodness, it's every freaking four years,
27:39
we gotta go through this.
27:41
Speaker 4: And I'm like, oh, let's let's let's even step aside
27:43
from the craziness of that person's no, let's let's dig
27:47
into it.
27:47
Speaker 2: Let's like, the best way to fight crazy is with crazy. Okay,
27:52
let's go deeper into this, all right. Let's say that
27:56
you believe that the Chinese you want is going to
27:58
be the dominant currency for the future, for Americans, to.
28:03
Speaker 3: The world, for the world.
28:05
Speaker 2: Okay, you're gonna take all your dollars and put them
28:07
in you want. Now, raise your hand if you're not driving,
28:12
raise your hand if you would do that, Because if not,
28:16
then what are you actually worrying about other than just
28:18
making yourself all nervous about nothing? If you're not actually
28:22
going to commit to like, hey, I think that yu
28:24
want is going to be the dominant form of payments,
28:26
and that's why I only own you wan.
28:28
Speaker 4: Which by the way, would be the logical thing to
28:30
do if you were convinced that all forms were occurrent.
28:32
You want, it's going to appreciate in that case, in
28:35
which case you want to own you on.
28:36
Speaker 3: But if you're not doing that, and you're just making
28:39
yourself really nervous for no reason, then then what are
28:43
you really doing?
28:45
Speaker 2: You know, Oh well, I heard about that there's gonna
28:48
be a bricks currency. What are they gonna call it?
28:51
Speaker 3: Legos? Like, what what are we doing here?
28:56
Speaker 2: Like, Okay, you want to know who's in the bricks
28:59
right now? And let's go through this and talk about Hey,
29:03
do you do you want to trust like the bricks
29:06
countries with your your currency? Russia, Brazil, China, India, South Africa. Uh,
29:13
hang on, I'm going down the list just to get
29:16
more of them. Okay, here we go, Ethiopia, Iran?
29:19
Speaker 3: Did they let North Korean?
29:22
Speaker 2: North Korea didn't even make the cut there, not even there.
29:27
So Like again, if just to put this in perspective,
29:31
a couple of years ago, China and Russia signed a
29:34
massive natural gas deal. Russia was gonna export I forget
29:37
how much, but like they're sending China all the natural gas,
29:42
just all of it. Yep, not really, but they're just
29:44
sending a lot, a lot.
29:45
Speaker 3: Yeah. Do you know what currency they settled that trade in?
29:49
Must be the hon or the ruble. It was the
29:52
euro because neither.
29:53
Speaker 2: Of them trust each other's currency enough to even do
29:55
that trade in one another's currency.
29:57
Speaker 4: Furthermore, well, I think that the the idea of the
30:01
dollar being replaced by a bricks currency is preposterous in
30:04
anyone listening's lifetime, even if it happened and the majority
30:08
of trade was occurring in that tell me what your
30:11
investment philosophy is.
30:12
Speaker 2: Right, What do you actually do when people say, oh,
30:15
like that the dollar is gonna go down in value.
30:17
I don't think there's like a logical thought about what
30:19
that actually means. It's not like you suddenly wake up
30:23
one day and you're like, gee, that, like everything I
30:26
own is worthless.
30:29
Speaker 3: Like no, like we're still paying each other in dollars.
30:32
It's not how it works.
30:35
Speaker 2: So I'm sorry if I got a little excited there,
30:40
but I just said, chuck the the relentless fear mongering
30:45
about how like America is going to imminately collapse.
30:51
Speaker 3: I just I can't do it. It's not like everyone else.
30:54
Speaker 2: It's not like the entire rest of the world is
30:55
like six point seven billion geniuses and we're all just
30:59
a bunch of dummies.
31:02
Speaker 3: I'm not saying that we're better. I'm just saying that
31:04
we're all the same. Like, no one else is just
31:07
like this.
31:07
Speaker 2: Super genius that's like, oh, we can screw the Americans.
31:11
This no like everyone's trying to figure Look at the
31:15
Chinese economy right now. They're literally blowing up buildings because
31:19
they built too many of them.
31:21
Speaker 4: Like trying to incentivize people to have children because for
31:24
decades they locked you up if you had more than one, Right, Like,
31:28
it's crazy.
31:30
Speaker 2: We're not, Like the whole rest of the world is
31:33
not geniuses, and we're dumb. We're all dumb together, right,
31:37
We're all humans, and we make human mistakes, and we're
31:40
all just trying to figure this out. And if there
31:42
was a really perfect way to do all this, we
31:44
already would have gotten there.
31:46
Speaker 5: That's a great T shirt, Mike, We're all dumb together.
31:50
Print those.
31:52
Speaker 3: Can we put the Financial Exchange consolutely?
31:55
Speaker 2: TM coming back will continue to be all dumb together
31:59
when we talk about Boeing launching a nineteen billion dollar
32:02
share sale.
32:04
Speaker 1: Find daily interviews and full shows of the Financial Exchange
32:07
on how are YouTube page. Get cut up on anything
32:10
and everything you might have missed. This is the Financial
32:13
Exchange Radio Network. Text us six one seven three six
32:18
two one three eighty five with your comments and questions
32:21
about today's show. This is the Financial Exchange Radio Network.
32:27
Speaker 5: This segment of the Financial exchange is brought to you
32:29
in part by the US Virgin Islands Department of Tourism,
32:32
the US Virgin Islands of Saint Croix, Saint Thomas, and
32:35
Saint John. Now's the time to start looking at a
32:38
fabulous holiday vacation, and there's no better place than the
32:41
US Virgin Islands. Enjoy perfect weather, world class dining, incredible
32:45
beaches and a vibrant nightlife. No passport is needed, and
32:49
there's no money to exchange. Take your next vacation in
32:51
America's Caribbean paradise the United States Virgin Islands. Go to
32:55
visit USVII dot com to book your trip. That's visit
32:58
USVII dot com.
33:00
Speaker 2: Boeing announced yesterday that they are going to sell ninety
33:04
million shares of common stock and about five billion dollars
33:06
of depository shares.
33:08
Speaker 3: That is, according to.
33:10
Speaker 2: A statement from them, they're gonna raise just under nineteen
33:14
billion dollars based on Friday's closing price of the common stock.
33:18
And this as they contend with a business that's obviously
33:22
struggled for the last several years and an ongoing strike
33:26
amongst their machinists based out of.
33:29
Speaker 4: The West Coast, so sometimes companies issue new shares when
33:32
their stock price gets bid up to a crazy level.
33:34
I remember with AMC did it when their stock price
33:38
got bid up and they.
33:39
Speaker 3: Also bought a gold mine. Remember that.
33:40
Speaker 4: Yeah, stupid use of the funds, but good idea. Like, hey,
33:43
investors seem willing to pay for your stock no matter
33:45
the price, Let's issue some new shares and raise some cash.
33:49
This very distinctly not the case in the event of Boeing. Here,
33:53
in fact, you know, oftentimes, in fact, what we're talking
33:55
about is stock buybacks. Companies wanted to repurchase their shares
33:58
to to you know, reward shareholders and see the stock
34:03
price rise. In fact, here what's happening is Boeing's entity
34:09
is so desperate for cash that they need to sell
34:11
a bunch of shares in order to not fail. Is
34:15
the general conclusion.
34:16
Speaker 5: Spouses generally serve as the beneficiary to your IRA or
34:19
life insurance policy, but naming your estate the beneficiary has
34:23
quite a few benefits. Cushing and Dolan are experts in
34:26
elder law, and they can help bring help you protect
34:29
your assets from probate and the nursing home. By naming
34:32
your state as a beneficiary, you can avoid the probate process,
34:35
lessen the chance of creating any income tax issues on
34:38
your rmds, and enjoy enhanced the state tax reduction. Call
34:42
Cushing and Dolan right now at eight six six eight
34:44
four eight five six nine nine and ask for their
34:47
brand new guide called Why Name your Estate and IRA Beneficiary?
34:52
Learn about these benefits and others, and provide peace of
34:54
mind for you and your family during your retirement years.
34:57
That number again eight six six eight four eight five
35:01
six nine nine, or we can request the guide from
35:03
their website Legal exchange show dot com.
35:07
Speaker 1: The proceeding was paid for and the views expressed are
35:09
solely those of Cushing and Dolan. Cushing and Dolan and
35:11
or Armstrong Advisory may contact you offering legal or investment services.
35:14
Cushing and Armstrong do not endorse each other and are
35:16
not affiliated.
35:18
Speaker 2: Sticking with Boeing, they are also exploring selling off their
35:21
space business. So if you want an uncrewed Starliner capsule
35:27
on floating around out boy, they might just have one
35:30
for you. This as again they're trying to trim costs
35:33
and things like that. One item of note, I'm trying
35:36
to figure out if this is just phrased badly in
35:40
this piece, or if I read it right the first time, Ortberg,
35:45
the new CEO of Boeing, fired the head of Boeing's
35:47
defense and space business in September. First, I didn't realize
35:50
that the two operated under like the same umbrella. The
35:55
space business is a small part of the unit which
35:57
makes jet fighters and helicopters for the Pentagon, had three
36:00
point one billion dollar loss on eighteen and a half
36:02
billion dollars in revenue in the first nine months of
36:05
twenty twenty four. Is that the space business. That's the
36:09
defense business, right.
36:11
Speaker 4: That's the space and that was my read as well,
36:13
is that the space and defense business alone, which has
36:16
nothing to do with Boeing's other issues. Let me let
36:22
me peel that back. Nothing to do with Boeing's commercial
36:26
airline issues that the FAA has been assessed about. They've
36:28
had other space issues, lost three point one billion dollars,
36:34
Like how do you lose three point one billion dollars
36:37
on government contracts for credit for planes.
36:40
Speaker 3: That they need to buy?
36:44
Speaker 4: So I was looking at this from like the national
36:47
forget about from Boeing's perspective, like, clearly they're raising nineteen
36:51
billion dollars in cash via stock sales. They're gonna be
36:53
willing to fire sale just about anything that's not core
36:55
to their business. And this is a business unit they
36:58
apparently can't make money on with a defense contract, which
37:01
is crazy. Uh, what does this put the Space Force,
37:06
the Pentagon? What sort of position does it put them in?
37:08
Because in one regard, if you're the Space Force, and
37:10
they've the leaders there have spoken public about this, they
37:13
want a lot of different options to be able to
37:15
get stuff to space. Right now, it's pretty much SpaceX,
37:19
and that's not great. By Boeing stepping out or selling
37:24
off this business. I suppose they wouldn't allow it to
37:26
go to SpaceX, but it's not great from that perspective.
37:29
On the other hand, it removes one of the you know,
37:33
the more of the defense stuff and space stuff that
37:35
they sell off removes one of the big pieces here
37:39
that I would use to consider Boeing too big to fail.
37:42
And I do like that from a just you know,
37:45
national security standpoint.
37:47
Speaker 2: What an absolute mess this is from a company that
37:52
the saddest part about this is until ten maybe fifteen
37:57
years ago, you could point to bow be like that
38:01
is one of the most if not the most impressive
38:03
company in the world in terms of what they're actually
38:06
able to accomplish, and now it's just a shell of itself,
38:12
and it's it's really sad what's happened to what was
38:15
once a great American company. Quick break here, Our two
38:19
coming up in a little bit