Latest / The Financial Exchange Show / More signs of trouble under the hood?

Transcript

More signs of trouble under the hood? · The Financial Exchange Show

0:00
Speaker 1: The Financial Exchange is produced by Money Matters Radio and
0:02
Speaker 1: is hosted by employees of the Armstrong Advisory Group, a
0:05
Speaker 1: registered investment advisor. All opinions expressed are solely those of
0:08
Speaker 1: the hosts. Do not reflect the opinions of Armstrong Advisory
0:11
Speaker 1: or anyone else. Investments can lose money. This program does
0:14
Speaker 1: not offer any specific financial or investment advice. Please consult
0:17
Speaker 1: your own financial, tax, and estate planning advisors before making
0:20
Speaker 1: any investment decisions. Armstrong Advisory and the advertisers heard on
0:23
Speaker 1: this program do not endorse each other or their services.
0:25
Speaker 1: Armstrong and Money Matters Radio do not compensate each other
0:28
Speaker 1: for referrals and are not affiliated. This is the Financial
0:34
Speaker 1: Exchange with Chuck Zada and Mike Armstrong, Your exclusive look
0:38
Speaker 1: at business and financial news affecting your day, your city,
0:42
Speaker 1: your world. Stay informed and up to date about economic
0:46
Speaker 1: and market trends plus breaking business news every day. The
0:50
Speaker 1: Financial Exchange is a proud partner of the Disabled American
0:53
Speaker 1: Veterans Department of Massachusetts. Help us support our great American
0:57
Speaker 1: heroes by visiting dav five K Boston and making a
1:01
Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
1:06
Speaker 1: and Mike Armstrong.
1:09
Speaker 2: Chuck, Mike and Tucker with you today wrapping up the week,
1:12
Speaker 2: and something we haven't seen in quite a while, which
1:15
Speaker 2: is a real sell off happening in equity markets today
1:20
Speaker 2: where you look across the board and it's a lot
1:23
Speaker 2: of red that dows off about one and three quarters percent,
1:26
Speaker 2: about seven hundred points. SMP is down about one point
1:29
Speaker 2: eight percent, one hundred and fifteen points. NASDAK is off
1:32
Speaker 2: about two point three percent, four hundred and ninety two points.
1:36
Speaker 2: Russell two thousands down three percent. So you've got a
1:40
Speaker 2: real sell off happening here, and it follows two days.
1:43
Speaker 3: Of selloffs as well as the third day of market selloff. Now,
1:46
Speaker 3: obviously the last two were pretty minor.
1:48
Speaker 4: I was attempting to get there. Sorry, but I appreciate
1:51
Speaker 4: I wanted to get in. I appreciate you taking us there.
1:54
Speaker 2: Uh, this is really the first instance of this that
1:57
Speaker 2: we've seen. You could say it to you know, mid
2:00
Speaker 2: to late May, we kind of saw a little something
2:02
Speaker 2: heading into Labor Day, but it wasn't like this. It
2:06
Speaker 2: didn't have this tenor to it, especially given that the
2:09
Speaker 2: last few days last week and a half, under the hood,
2:13
Speaker 2: you've seen some kind of troubling signs in a few
2:15
Speaker 2: different areas that have now kind of you know, bubbled
2:18
Speaker 2: up into the parts of the market that have been
2:20
Speaker 2: carrying it forward. So it's not to say like this
2:23
Speaker 2: is going to be a reducts of April. I don't
2:25
Speaker 2: think we're heading back to you know, the vix at fifty.
2:28
Speaker 2: I don't think we're heading for you know, a twenty
2:30
Speaker 2: percent drop in the span of three weeks. But I
2:34
Speaker 2: do think this is the first real sense that I
2:36
Speaker 2: get that there might be some selling pressure out there,
2:39
Speaker 2: just in the short term. And look, this is part
2:41
Speaker 2: of doing business in markets, and it's it's something that
2:43
Speaker 2: happens from time to time and ultimately we'll see where
2:46
Speaker 2: it goes. Like, who knows what happens over the next
2:48
Speaker 2: few days. We could be sitting here Onnesday being like, gee,
2:50
Speaker 2: that was fun. We're right back to where we were before.
2:52
Speaker 3: But yeah, and I mean we've talked about this being
2:56
Speaker 3: the busiest week of the year, and so there's a
2:58
Speaker 3: few different factors that seem to be moving markets this
3:02
Speaker 3: first day of August. You know, speaking of markets, you've
3:05
Speaker 3: also got yields moving dramatically. The ten year yield moving
3:08
Speaker 3: down more than ten bases points down to four point
3:11
Speaker 3: two three six percent this morning.
3:13
Speaker 2: Yeah, so in terms of the proximate cause of you
3:17
Speaker 2: know what we're seeing in markets, Look, we've got a
3:19
Speaker 2: lot to get through. When I when I when I
3:21
Speaker 2: came on today, Tucker was like, hey, we could do
3:23
Speaker 2: a four hour show today, and like it, It's true,
3:25
Speaker 2: there's there's a ton. So if you hear me talking quickly,
3:28
Speaker 2: it's just because I have a lot that I want
3:29
Speaker 2: to get through, and it's like there's a lot of
3:32
Speaker 2: meat here. But approximate cause of this is so you
3:37
Speaker 2: look at kind of how things progressed last night. And
3:40
Speaker 2: I always do this because I'm a loser. Is I'm always,
3:43
Speaker 2: you know, from eight to ten just kind of watching
3:45
Speaker 2: how futures are trading. And then quite honestly, I usually
3:48
Speaker 2: wake up and have to go to the bathroom somewhere
3:50
Speaker 2: around four am, and so I check how futures are
3:52
Speaker 2: trading then, and then I finally wake up for good
3:54
Speaker 2: around five and I'm like, okay, like how are they
3:57
Speaker 2: It's it's just like when you're in this, you're in this.
3:59
Speaker 2: And so what's interesting to me is I went to
4:02
Speaker 2: bed and futures were off modestly after the Trump tariff announcement,
4:07
Speaker 2: where in case you didn't see, and in case we
4:09
Speaker 2: haven't covered it yet, but new set of tariffs on
4:12
Speaker 2: about sixty countries looks very similar to the April second
4:16
Speaker 2: Deliberation day tariffs. You know, some differences, obviously, some lower.
4:21
Speaker 2: The only one that I found that was higher, Mike
4:22
Speaker 2: was Switzerland, which for some reason went from a thirty
4:25
Speaker 2: one percent tariff to thirty nine. I don't know what
4:27
Speaker 2: the Swiss did over the summer, but apparently the answer
4:30
Speaker 2: is not enough. But in any case, these are going
4:34
Speaker 2: to be going into effect next Friday, so a one
4:36
Speaker 2: week delay, same as we saw in the spring. There
4:39
Speaker 2: was a comment from Scott BESSNT yesterday or maybe it
4:42
Speaker 2: was the day before, which was along the lines of hey,
4:45
Speaker 2: if these are in place for a few days or
4:47
Speaker 2: a few weeks, it's not going to be a big deal,
4:49
Speaker 2: which to me is almost a sign like, hey, they're
4:51
Speaker 2: going to capitulate on these. Also, I don't know if
4:54
Speaker 2: you saw that quote.
4:55
Speaker 4: I did not, so that was kind of interesting to me.
4:58
Speaker 2: It's almost like are they pre sell knowing that these
5:01
Speaker 2: aren't gonna be kept in place for very long. I
5:03
Speaker 2: don't know, but I saw that comment from Bessen and
5:05
Speaker 2: I was like, huh, what does that mean?
5:08
Speaker 4: So that was kind of notable.
5:10
Speaker 2: But ultimately I went to bed and futures were off
5:14
Speaker 2: quarter percent or so. By the time it was you know,
5:16
Speaker 2: four am, I'm like, oh, like, futures are down one percent,
5:19
Speaker 2: Like you know, something's happening here. And there are a
5:21
Speaker 2: couple different ways to look at this. The first is, hey,
5:23
Speaker 2: maybe just had to be digested overnight a little bit.
5:26
Speaker 2: The second is, hey, we we saw something interesting yesterday,
5:31
Speaker 2: which was semiconductors getting whacked even worse than the broad market.
5:35
Speaker 2: And if you've watched semiconductors over the last few months,
5:38
Speaker 2: as I have, they've been the leader in the clubhouse
5:42
Speaker 2: where Semi's went the market went, and so Semy's.
5:44
Speaker 4: Getting whacked yesterday.
5:45
Speaker 2: I kind of looked at it and I go, huh,
5:47
Speaker 2: you just got these big CAPEX guides from you know,
5:50
Speaker 2: all of the AI guys, and Semi's are getting you know,
5:54
Speaker 2: bopped on the head like Bunny Fufu's just you know,
5:56
Speaker 2: running around, you know, hitting all the field.
5:58
Speaker 4: Mice, Like what what gives?
6:00
Speaker 2: And so maybe it's just that market leadership starting to
6:02
Speaker 2: roll over on top of that, and we'll get to this.
6:05
Speaker 2: You had an earnings report from Amazon that was good
6:08
Speaker 2: for the quarter, but the guidance was quite honestly pretty bad.
6:13
Speaker 2: And so it's just kind of this convergence of factors
6:16
Speaker 2: and it's kind of taken all week because we talked about, hey,
6:19
Speaker 2: this is one of the busiest weeks with so much
6:22
Speaker 2: important data could really move markets, and through midday yesterday,
6:27
Speaker 2: the S and P had moved a total of two
6:29
Speaker 2: points over the week, and so it was kind of like, Okay,
6:31
Speaker 2: what gibs Like, You've had all this data and the
6:33
Speaker 2: market can't figure out where to go. And then basically
6:36
Speaker 2: since noon yesterday it's been a unidirectional market and that
6:40
Speaker 2: direction has been down.
6:42
Speaker 3: I've got a technical factor to just kind of debate
6:45
Speaker 3: with you here, Chuck, which is I don't think that
6:47
Speaker 3: you looking at futures at eleven pm and then again
6:50
Speaker 3: four am makes you a loser if you were unemployed
6:54
Speaker 3: that night, if you were unemployed and living in your
6:57
Speaker 3: mom's basement and doing that, then I think, yeah, loser
6:59
Speaker 3: status applies.
7:00
Speaker 4: But you know you do have a job.
7:02
Speaker 3: It makes you more of a nerd than a loser,
7:04
Speaker 3: and I think we need to differentiate between those two.
7:06
Speaker 2: I'm a newser Okay, see that's like a double Enton
7:10
Speaker 2: dre Yeah huh. Anyways, so let's actually dig into some
7:17
Speaker 2: of these data points here. And first thing, let's talk
7:20
Speaker 2: about the new set of tariffs, because I have a
7:22
Speaker 2: few different thoughts on this.
7:23
Speaker 4: Okay.
7:24
Speaker 2: The first is, I have no idea if these are
7:26
Speaker 2: going to be in place by the end of September.
7:28
Speaker 2: For two different reasons. The first, they could pivot again
7:32
Speaker 2: and say ninety day pause. Plausible, like completely plausible?
7:37
Speaker 4: Am I wrong? No, very plausible. The second, these could all.
7:41
Speaker 2: Be invalidated by the Federal Court of Appeals Federal Circuit
7:45
Speaker 2: Court of Appeals, and the Trump administration might just say, Okay,
7:48
Speaker 2: we're dropping this and we're we're gonna move on and
7:51
Speaker 2: do it a different way.
7:51
Speaker 3: And by the way, the questions the court case was
7:54
Speaker 3: going on at the Federal Court of Appeals yesterday and
7:56
Speaker 3: the questions from the Dutch panel was they, at least
8:01
Speaker 3: to me, seemed rather suspicious of the president's power to
8:04
Speaker 3: use these terrorists in the way that they have been doing.
8:06
Speaker 4: So.
8:07
Speaker 3: Neither of us are legal experts. So I don't want
8:09
Speaker 3: to speak out of hand here, but they had some
8:11
Speaker 3: very points of questions about why this administration believes that
8:14
Speaker 3: they have these powers under the rules that they are using.
8:17
Speaker 4: So that could be or this could up.
8:21
Speaker 2: It could end up with the Federal Circuit Court of
8:22
Speaker 2: Appeal saying yep, we're gonna, you know, invalidate these but
8:26
Speaker 2: the Trump administration decides nope, We're gonna take this all
8:28
Speaker 2: the way up to the Supreme Court, and maybe the
8:30
Speaker 2: Supreme Court feels the same or differently like this is
8:33
Speaker 2: the legality of these tariffs could be in limbo, probably
8:37
Speaker 2: through the end of the year.
8:38
Speaker 4: Yep.
8:39
Speaker 2: So there's a plausible case where I could sit here
8:42
Speaker 2: and say, hey, none of these tariffs on a country
8:45
Speaker 2: specific basis are in place December thirty. First, there's a
8:50
Speaker 2: case that you could say, hey, we revert back to
8:52
Speaker 2: ten percent by then. There's a case where the ones
8:54
Speaker 2: announced yesterday are in place. There's a case where they
8:57
Speaker 2: are higher ones in place. It still is something where
9:00
Speaker 2: I don't know how one constructively can say I know
9:03
Speaker 2: what the tariff picture is going to be three months
9:06
Speaker 2: from now.
9:06
Speaker 4: I would agree.
9:07
Speaker 3: What I do think is that investors generally didn't expect
9:11
Speaker 3: August first to come with these announcements because I was
9:14
Speaker 3: listening to you know, Ernie Tdesky runs the economics i think,
9:17
Speaker 3: the entire economics department of Yale, who's been doing all
9:20
Speaker 3: of the analysis on these terraffs, and he was doing
9:23
Speaker 3: an interview this morning and he said, look, the tariffs
9:26
Speaker 3: that were announced today, because there were many things like
9:28
Speaker 3: Mexico where it delayed the implementation for ninety days, because
9:32
Speaker 3: there were certain countries like Thailand where the tariff rate
9:34
Speaker 3: actually went down, the average effect of tariff rate compared
9:38
Speaker 3: to where we thought it would be forty eight hours
9:40
Speaker 3: ago has not changed. What's changed is seemingly investor's perception
9:46
Speaker 3: of the seriousness of these tariffs if they stay in place.
9:50
Speaker 4: Here.
9:50
Speaker 3: You know, the budget lab at Yale, for those who
9:53
Speaker 3: are unfamiliar, has been doing all of the kind of
9:56
Speaker 3: front and center research on the effect of tariffs where
10:00
Speaker 3: they bring us when we quote things like the highest
10:01
Speaker 3: tariff rates since the nineteen thirties. They're the ones who
10:04
Speaker 3: have done these calculations. But they didn't change meaningfully from
10:09
Speaker 3: forty eight hours ago. With all of these announcements that
10:11
Speaker 3: were made. What seemingly changed to me was the investor
10:16
Speaker 3: sentiment on the seriousness of these tariffs, which I don't know,
10:20
Speaker 3: maybe maybe not recent history would tell us this ain't
10:24
Speaker 3: going to be where we.
10:25
Speaker 4: Land right, like we.
10:28
Speaker 2: I'm sorry, but it kind of feels like groundhog Day here.
10:32
Speaker 4: Yeah.
10:32
Speaker 3: How many times do we have to get Charlie Brown
10:35
Speaker 3: at that football?
10:36
Speaker 2: We did this one four months ago almost to the day,
10:39
Speaker 2: by the way. Yeah, And so part of me looks
10:41
Speaker 2: at this is like, okay, like if you're actually betting
10:45
Speaker 2: on this, don't you kind of bet that this doesn't
10:49
Speaker 2: end up happening at least in this fashion. Like maybe
10:51
Speaker 2: instead of the rates announced here again, I'm just charting
10:55
Speaker 2: out like pausible pats. Hey, maybe you know a week
10:59
Speaker 2: and a half, two week from now, it's you know what,
11:01
Speaker 2: We're not going to do this. Instead, the Blanke at
11:03
Speaker 2: ten percent is going to be twelve and a half,
11:05
Speaker 2: is it?
11:06
Speaker 3: Couldn't you see that? Or the Banke at ten is
11:07
Speaker 3: going to be fifteen? Yeah, you could very much see that.
11:10
Speaker 3: And I think it's more likely to go on a
11:12
Speaker 3: country by country basis. We've seen what happens when certain
11:17
Speaker 3: countries are able to leverage their own pressure, like China
11:22
Speaker 3: and their rare earth magnets, and there were some big
11:24
Speaker 3: changes that were announced that will directly affect China as
11:28
Speaker 3: part of the August first announcements here. So yeah, it
11:31
Speaker 3: is really tough to know where this goes. And I
11:33
Speaker 3: even wonder, like I had prepared a bunch of stats
11:37
Speaker 3: on what this all means should these tariffs stay in place,
11:39
Speaker 3: But quite honestly, I'm just not sure how worth it
11:42
Speaker 3: is reporting given how much other information we have to
11:45
Speaker 3: get to.
11:45
Speaker 4: We've been down that road before.
11:47
Speaker 2: So the big thing these new teriff's potentially going into
11:50
Speaker 2: place in a week. The only thing that I'll say,
11:54
Speaker 2: we're just now starting to see the first waves showing
11:57
Speaker 2: up in the customs data. May I'm sorry, June was
12:01
Speaker 2: the first month where we saw the average effective terifrate
12:07
Speaker 2: come in. Let me just get this right. I just
12:09
Speaker 2: want to make sure that I phrase this right here. Okay,
12:12
Speaker 2: here we go. Yeah, so when you look at the
12:16
Speaker 2: imports and exports data, the big thing that we saw
12:19
Speaker 2: was the month of June was the first month where
12:23
Speaker 2: the effective tariff rate paid was north of ten percent.
12:27
Speaker 2: And remember when a company imports something, it takes thirty
12:30
Speaker 2: to sixty days from importation to its showing up on
12:33
Speaker 2: store shelves. And so you're just now starting to see,
12:37
Speaker 2: you know, the potential impacts there the concern that I
12:39
Speaker 2: have about higher tariff rates. Hey, you're just starting to
12:42
Speaker 2: see the impact of the first wave. Now you're raising
12:44
Speaker 2: them again. How do companies deal with that? They've been
12:48
Speaker 2: able maybe to absorb the first wave decently enough, even
12:51
Speaker 2: though earnings reports this week and last will tell you
12:54
Speaker 2: it's been dodgy for a bunch. How do these new
12:57
Speaker 2: higher rates affect them. We're gonna have to see how
13:00
Speaker 2: this plays out if these stay in effect. So anything
13:03
Speaker 2: else we want to talk about on tariffs.
13:06
Speaker 3: I do have one brief thing that I want to
13:07
Speaker 3: talk about on who's paying the tariffs according to that
13:10
Speaker 3: Yale budget lab.
13:11
Speaker 4: Let's take a quick break.
13:12
Speaker 3: We'll come back with that, and then I know we
13:14
Speaker 3: got to get onto the jobs report and everything else
13:16
Speaker 3: that came out this week, So quick break, we'll be
13:18
Speaker 3: right back with that next.
13:20
Speaker 1: The Financial Exchange streams live on YouTube. Subscribe to our
13:24
Speaker 1: page and stay up to date on breaking business news.
13:27
Speaker 4: All morning.
13:27
Speaker 1: Long Face is the Financial Exchange Radio network.
13:35
Speaker 2: Mike we got two more things actually to talk about
13:37
Speaker 2: on tariffs. You had one discussing who pays the tariffs?
13:41
Speaker 3: Yeah, so I guess a few things. One, there's been
13:44
Speaker 3: questions by us like who is going to end up
13:47
Speaker 3: paying this tariff because it will start showing up somewhere.
13:50
Speaker 3: It could be paid by foreign manufacturers of goods that
13:53
Speaker 3: come into the United States, right the idea of Walmart
13:56
Speaker 3: driving a higher bargain with their Chinese suppliers to say, hey,
13:59
Speaker 3: we need melp here. It could be paid by companies
14:02
Speaker 3: who absorb the cost increase of tariffs without passing it
14:06
Speaker 3: on to consumers. And finally, it could be borne by
14:09
Speaker 3: consumers or more likely a combination of all of these.
14:13
Speaker 3: What the Yell Budget Lab is finding so far with
14:17
Speaker 3: tariffs that are substantially lower than what we are now
14:20
Speaker 3: expecting with the August first, or at least what we're
14:24
Speaker 3: now being told, I don't know if we're fully expecting
14:26
Speaker 3: eighteen percent effective tariffs. What the Yell Budget Lab has
14:29
Speaker 3: found is, look, the foreign suppliers of goods do not
14:31
Speaker 3: seem to be absorbing this. You see this because we
14:34
Speaker 3: measure import prices and so if you are seeing foreign
14:38
Speaker 3: suppliers of goods on the average take it, you know,
14:40
Speaker 3: take some of this cost, then you would see import
14:43
Speaker 3: prices falling. We're not seeing that, so likely not being
14:46
Speaker 3: born by those foreign suppliers of goods. What the Budget
14:49
Speaker 3: Lab found so far on the tariffs that are being
14:52
Speaker 3: paid is that there's been about a seventy percent pass
14:55
Speaker 3: through to consumers, and generally they expect that to climb.
15:00
Speaker 3: You know, a lot of the tariff, for instance, by
15:03
Speaker 3: Ford has been absorbed so far, but they've kind of
15:06
Speaker 3: hinted that they won't be able to do that forever,
15:08
Speaker 3: and so that's kind of the baseline case here is
15:10
Speaker 3: right now these terifts that are in effect, about seventy
15:13
Speaker 3: percent is being passed along to consumers, thirty percent being
15:16
Speaker 3: eaten by US companies. As time goes on, most expect
15:20
Speaker 3: that to climb. If it were one hundred percent passed through,
15:23
Speaker 3: then you'd be looking at an average increase per household
15:27
Speaker 3: of about twenty four hundred dollars per household. That would
15:30
Speaker 3: take obviously a few years to actually get there, though.
15:33
Speaker 4: So the other piece.
15:34
Speaker 2: I take the other piece that I wanted to mention
15:37
Speaker 2: as part of this tariff announcement there's a blanket forty
15:43
Speaker 2: percent transshipment rule that goes into effect as well. And
15:48
Speaker 2: this is not just you know, transhipments from China, this
15:51
Speaker 2: is from anywhere. So it's it's it's basically, hey, if
15:57
Speaker 2: you try to avoid these tariffs or reduce them by
16:02
Speaker 2: shipping to a third country, first, we're still going to
16:07
Speaker 2: hit you with that forty percent.
16:08
Speaker 4: Now you know, how do you enforce that? And everything?
16:10
Speaker 4: Like viable question.
16:11
Speaker 2: But from what I've heard, Customs and Border Patrol has
16:14
Speaker 2: been pretty aggressive in looking at shipments and trying to
16:21
Speaker 2: you know, actually get appropriate values for the stuff that's
16:25
Speaker 2: shipped and you know, appropriate locations of production.
16:29
Speaker 4: So this is another piece that is in there. And
16:33
Speaker 4: again the piece that you.
16:34
Speaker 2: Find interesting when when you talk about transhipments, ultimately there's
16:37
Speaker 2: one country that matters China. It rhymes with yes, it's
16:41
Speaker 2: it's China.
16:42
Speaker 3: Yeah, sorry, you're getting there, but yeah, when it comes
16:46
Speaker 3: to this stuff. Just to explain how this transhipping works, right,
16:49
Speaker 3: the idea is very simple. China manufactures something, they send
16:53
Speaker 3: it to Vietnam who puts in one screw for example.
16:56
Speaker 3: They don't substantially change the product, but it gets shipped
17:00
Speaker 3: to Vietnam, they label as made at Vietnam and it
17:03
Speaker 3: skips whatever the high tariff burden would be in China.
17:07
Speaker 3: This is what's trying to address this, and it does
17:10
Speaker 3: require some judgment, right, It's a question of was the
17:14
Speaker 3: product substantially changed in Vietnam or whatever country it gets
17:18
Speaker 3: shipped to, and that's a bit of a judgment call.
17:20
Speaker 4: But to your.
17:20
Speaker 3: Point, the customs has been pretty aggressive in trying to
17:26
Speaker 3: enforce this. Almost certainly it's a shot of the bow
17:31
Speaker 3: at China and that gets discussed in these ongoing negotiations
17:36
Speaker 3: that are apparently happening over the next two weeks.
17:38
Speaker 2: And two things. One, we love to toot our own
17:41
Speaker 2: horn on the financial exchange. We're very humble about the tooting,
17:44
Speaker 2: but we love to.
17:45
Speaker 4: Do it and say so, well, try not to be
17:47
Speaker 4: humble on to it in my own hon.
17:49
Speaker 2: No, No, we're humble in that, like we don't take
17:52
Speaker 2: any great pride in tuting.
17:53
Speaker 4: Yes we do. We love to. When the Vietnam.
17:56
Speaker 2: Deal was announced, by the way, Vietnam still has not confirmed,
18:00
Speaker 2: we said one of the parts of that was a
18:02
Speaker 2: twenty percent tariff on Vietnamese imports with a forty tariffon transhipments,
18:07
Speaker 2: and we said look out for that to become a
18:09
Speaker 2: bigger part of US trade policy going forward. Welcome to
18:14
Speaker 2: August first, it's here. So we got that one right.
18:17
Speaker 2: So I like to say that we're wrong a lot too,
18:21
Speaker 2: but we don't bring that back up quite as much.
18:23
Speaker 4: I try to. I do too.
18:24
Speaker 2: Like again, we got to keep the scoreboard, like sometimes
18:27
Speaker 2: we've gotta be like, yep, we screwed up on this one,
18:29
Speaker 2: Like it's it's important to actually try to keep score
18:32
Speaker 2: and say when you're right and when you're wrong. You
18:34
Speaker 2: can't just say stuff and let it go, you know.
18:36
Speaker 2: Forever I had another point I was going to make,
18:40
Speaker 2: and it got lost somewhere in that shuffle.
18:43
Speaker 4: Well that's okay. Oh nope, that's not it. Nope. I
18:46
Speaker 4: thought I had it, and then that wasn't it. Okay,
18:49
Speaker 4: I can't get there.
18:50
Speaker 2: I don't know what it is, but that forty percent
18:52
Speaker 2: transhipment is, you know, kind of a big blanket thing.
18:55
Speaker 4: Now, Oh, here's the other point on it.
18:57
Speaker 2: Yes, Mike, do you think that it's a coincidence that
19:01
Speaker 2: that announcement is happening right as the US and China
19:04
Speaker 2: are in the midst of discussions about this August twelfth deadline.
19:09
Speaker 3: No, obviously not. It's something that you can take away
19:11
Speaker 3: as a negotiating point if you choose.
19:14
Speaker 4: So you're resetting the goalpost again. Correct.
19:17
Speaker 2: It feels like the US trying to, you know, say, okay,
19:19
Speaker 2: like this is something so we don't necessarily have to
19:21
Speaker 2: give something somewhere else.
19:23
Speaker 4: I like that. Let's take a quick break.
19:25
Speaker 2: When we come back, we got Wall Street Watch and
19:27
Speaker 2: then we're talking jobs.
19:33
Speaker 5: Like us on Facebook and follow us on Twitter at
19:36
Speaker 5: TFFE show. Breaking business news is always first right here
19:40
Speaker 5: on the Financial Exchange Radio Network. Time now for Wall
19:45
Speaker 5: Street Watch a complete look and what's moving market so
19:48
Speaker 5: far today right here on the Financial Exchange Radio Network.
19:52
Speaker 6: Markets selling off this morning after President Trump modified tariffs
19:56
Speaker 6: in several countries ranging from ten to forty one percent
19:59
Speaker 6: late last night that will begin on August seventh. Furthermore,
20:03
Speaker 6: Wall Street I was also sifting through the July jobs report,
20:07
Speaker 6: where seventy three thousand jobs were added last month, softer
20:10
Speaker 6: the estimates of one.
20:11
Speaker 1: Hundred and four thousand.
20:13
Speaker 6: The weaker than expected jobs data is sending treasury yields
20:16
Speaker 6: lower as traders reassessed the chances of a FED rate
20:19
Speaker 6: cut in the fall. At the moment, the Dow is
20:22
Speaker 6: down by one point one percent, or five hundred and
20:25
Speaker 6: four points lower, s and P five hundred down one
20:29
Speaker 6: point two percent or eighty points lower, and the tech
20:32
Speaker 6: heavy NAZAC selling off by over one and a half
20:35
Speaker 6: percent or three hundred and thirty four points. Russell two
20:38
Speaker 6: thousand is now down two point three percent or fifty
20:41
Speaker 6: one points lower. Ten year treasure reeled down ten basis
20:45
Speaker 6: points at four point two five to one percent, and
20:48
Speaker 6: crude oil down nearly two percent lower, trading right around
20:51
Speaker 6: sixty eight dollars a barrel. And what would normally be
20:54
Speaker 6: the top story of the day, Amazon and Apple reported
20:57
Speaker 6: earnings after the bill yesterday, Amazon down by six percent
21:01
Speaker 6: after the e commerce and tech giant offered a disappointing
21:04
Speaker 6: forecast where its cloud business wasn't growing as fast as
21:08
Speaker 6: its competitors. Amazon did, however, see a sharp increase in
21:12
Speaker 6: sales and profit for the previous quarter. As for Apple,
21:15
Speaker 6: the iPhone maker handily beat street expectations for the second quarter,
21:20
Speaker 6: driven by consumers rushing to buy devices before potential price
21:24
Speaker 6: increases from tariffs. Overall sales were up about ten percent
21:28
Speaker 6: higher on the year, Apple shares retreating by about one percent. Elsewhere,
21:33
Speaker 6: cryptocurrency exchange operator coinbase missed revenue expectations amid a slump
21:39
Speaker 6: in crypto trading activity, sending shares down by fourteen percent,
21:44
Speaker 6: and social media platform Reddit seeing its stock surge by
21:48
Speaker 6: seventeen percent after it beat second quarter expectations and offered
21:53
Speaker 6: a stronger than forecasted third third quarter guidance. I'm Tucker Silvan,
21:58
Speaker 6: that is Wall Street.
21:58
Speaker 4: Watch, Mike.
22:00
Speaker 2: So, we got a jobs report this morning at eight
22:04
Speaker 2: thirty am, and here are the highlights of it, or
22:09
Speaker 2: in some cases, the low lights of it. Wasn't great,
22:12
Speaker 2: seventy three thousand jobs created for the month compared to
22:14
Speaker 2: expectations of one hundred and ten. Quite honestly, it's within
22:18
Speaker 2: the margin of era. I don't really view that as
22:20
Speaker 2: being anything awful, like it's it's fine.
22:23
Speaker 4: That wasn't the problem.
22:24
Speaker 3: When I first saw this released at eight thirty, I said, okay, fine.
22:29
Speaker 2: Now the last two months. I'm gonna quote here just
22:32
Speaker 2: because I like their quotes. The change in total non
22:35
Speaker 2: farm payroll employment for May was revised down by one
22:37
Speaker 2: hundred and twenty five thousand from one hundred and forty
22:39
Speaker 2: four thousand nineteen thousand, and the change for June was
22:42
Speaker 2: revised down by one hundred and thirty three thousand, from
22:44
Speaker 2: one hundred and forty seven thousand to fourteen thousand. With
22:47
Speaker 2: these revisions, employment in May and June is a combined
22:50
Speaker 2: two hundred and fifty eight thousand lower than previously reported.
22:52
Speaker 2: So what this does mean is that for the last
22:55
Speaker 2: three months now you've averaged thirty five thousand jobs created
23:00
Speaker 2: for the month.
23:01
Speaker 3: We previously, as of last month, thought that that number
23:04
Speaker 3: was what somewhere in the hundreds.
23:06
Speaker 4: Yes, and this is not good.
23:08
Speaker 2: We don't know exactly where in any particular point in
23:11
Speaker 2: time you need to be in order to break even.
23:13
Speaker 2: Historically the last couple of years, it's been around one
23:15
Speaker 2: hundred and twenty five tw one hundred.
23:17
Speaker 4: And fifty thousand. Explain, to break even, basically how.
23:20
Speaker 2: Many jobs do you need to add in order for
23:22
Speaker 2: the unemployment rate to not go up, and so you've
23:25
Speaker 2: been around one hundred and twenty five thousand, one hundred
23:27
Speaker 2: and fifty thousand needed for it to not go up.
23:29
Speaker 2: But demographics have continued to shift in the US, so
23:32
Speaker 2: you have more boomers retiring and fewer gen z ers
23:35
Speaker 2: coming in in order.
23:37
Speaker 4: To replace them.
23:39
Speaker 2: But the other piece, remember this year, you've got this
23:42
Speaker 2: uptick in deportations that's happening, and that's impacting the labor
23:47
Speaker 2: force as well. So the estimates that I've seen as
23:50
Speaker 2: far as how many jobs you need to produce each
23:52
Speaker 2: month in order for unemployment to not go up now
23:55
Speaker 2: is closer to like fifty to ninety thousand a month,
23:59
Speaker 2: but no one's I'm quite sure exactly where it is.
24:01
Speaker 2: But either way, thirty five thousand jobs ated a month
24:04
Speaker 2: over the last three months is on the low end.
24:07
Speaker 4: It starts to look a little bit dodgy there, Chuck.
24:10
Speaker 3: We usually say that anyone data point doesn't you know,
24:13
Speaker 3: it doesn't make a trend, doesn't really matter. This one
24:15
Speaker 3: data point to may matter is quite a bit.
24:17
Speaker 2: It matters because it changes the trend for the last
24:19
Speaker 2: three months, right, If it's really not one data point,
24:21
Speaker 2: it's three that we're looking at here.
24:24
Speaker 3: Yeah, and when you have such a significant revision, which,
24:27
Speaker 3: by the way, when you're having big revisions like this,
24:30
Speaker 3: especially to the downside, it's usually not indicative of a
24:33
Speaker 3: healthy economy. Remember what these estimates are, These are estimates
24:37
Speaker 3: that they get from surveying businesses. And what this means
24:41
Speaker 3: is that the businesses that took a while to respond
24:45
Speaker 3: ended up either not hiring very many people or firing
24:49
Speaker 3: some people. Which, again, if you're not meeting the deadlines
24:54
Speaker 3: for responding to this survey, maybe your business is under pressure.
24:59
Speaker 3: It's just not terribly good sign of this state of
25:03
Speaker 3: demand for labor. The big piece that the Federal Reserve
25:07
Speaker 3: is focused on right now, though, or at least it
25:09
Speaker 3: seems to me that they're focused on quite a bit,
25:12
Speaker 3: is the supply of labor. And to your point, that
25:17
Speaker 3: is really tricky right now, and I'm really really confusing.
25:20
Speaker 2: And here's the whole ballgame, quite honestly, in terms of
25:23
Speaker 2: like why the Fed is in a pickle right now.
25:26
Speaker 2: Is so the last three months, non farm payrolls have
25:31
Speaker 2: increased by thirty five thousand a month, which is decreasing
25:35
Speaker 2: from where it was. It's the this is the slowest
25:38
Speaker 2: three month stretch of payroll gains that we have seen
25:41
Speaker 2: since late twenty ten. So, like, just to put this
25:44
Speaker 2: in perspective, I'm not including the pandemic because of obvious reasons.
25:49
Speaker 2: On the other hand, the year over year wage growth
25:54
Speaker 2: for hourly earnings from the same report, it's coming into
25:58
Speaker 2: three point nine percent, which is an uptick from the
26:00
Speaker 2: last couple months.
26:02
Speaker 3: And so this is the tremend for labor. But the
26:05
Speaker 3: labor that you do have is getting paid a lot more,
26:08
Speaker 3: not a lot more.
26:08
Speaker 4: Like it's three point nine percent is not a small number,
26:11
Speaker 4: but no, but.
26:12
Speaker 2: Like you look at like twenty eighteen and twenty nineteen
26:14
Speaker 2: and we were running like three and a quarter. So
26:16
Speaker 2: it's like, I'm not gonna look at this and be like,
26:18
Speaker 2: you know, hey, red alert, like big, big problem. But
26:21
Speaker 2: like you look at how you get to a stagflationary place.
26:24
Speaker 2: It's with slowing job growth but increasing labor cost and
26:29
Speaker 2: like that's that's not a great place to be. And
26:32
Speaker 2: this is why the FED is in a pickle. Now,
26:34
Speaker 2: the counter to this, in terms of the FED being
26:37
Speaker 2: in a pickle, we've we've talked an awful lot about
26:40
Speaker 2: Chris Waller, who is actively running to be the next
26:43
Speaker 2: FED chair YEP, And I've said, look, Waller's basically been
26:47
Speaker 2: right about this economy for a while now, and he's
26:50
Speaker 2: pretty vindicated because he's been saying for the last few months,
26:54
Speaker 2: guys like there's there's some weakness in the labor market.
26:56
Speaker 2: You gotta pay attention to this. You got to get
26:58
Speaker 2: ahead of it because if you're too late, there's gonna
27:00
Speaker 2: be a problem.
27:01
Speaker 4: And I think he kind of indicated on there.
27:04
Speaker 2: But the other piece that I think is interesting just
27:06
Speaker 2: to think through, Well, there's a few Okay, there's so
27:10
Speaker 2: much meat here, there's just a lot. Doesn't this really
27:14
Speaker 2: indicate if if the revisions down are for the months
27:18
Speaker 2: of May and June, it's indicating, Hey, companies after the
27:23
Speaker 2: tariffs were announced kind of paused hiring on a net
27:27
Speaker 2: basis during that time. Is that right, Like that's a
27:30
Speaker 2: fair way to look at it.
27:31
Speaker 3: Yeah, whether it's directly because the tariffs are not, after
27:34
Speaker 3: the tariffs they slowed down hiring, that is pretty definitive
27:37
Speaker 3: for you.
27:37
Speaker 2: If if I'm trying to build a story around this,
27:39
Speaker 2: which is all any of us ever do, because none
27:40
Speaker 2: of us know for sure, a plausible explanation is hey,
27:44
Speaker 2: in May and June, companies slowed hiring because they were
27:47
Speaker 2: trying to sort through their business plans on tariffs.
27:49
Speaker 4: Sure got it.
27:50
Speaker 2: This also matches up with what we saw with continuing
27:54
Speaker 2: claims for unemployment during that time where it was starting
27:56
Speaker 2: to get concerning there and initial claims were moving up.
28:00
Speaker 2: Think the initial claims thing is a seasonality thing, so
28:02
Speaker 2: not too excited. But in the last couple weeks, initial
28:06
Speaker 2: claims are now running way below last year. Continuing claims
28:10
Speaker 2: have come back into line with expectations for where we
28:13
Speaker 2: thought they would be this year. And so if you
28:17
Speaker 2: want to say, hey, maybe the Fed's justified in not
28:20
Speaker 2: cutting I'm not saying that they are on I'm just saying, like,
28:22
Speaker 2: if you want to build an interesting case, the case
28:25
Speaker 2: you could make is, yeah, the labor markets slowed in
28:28
Speaker 2: May and June, but subsequently is showing some signs now
28:32
Speaker 2: of re acceleration. And so maybe the Feds should wait
28:35
Speaker 2: because the slowing already happened, and now we're onto a
28:38
Speaker 2: new impulse now that companies have sorted through that initial
28:41
Speaker 2: wave of tariffs.
28:42
Speaker 3: That could be the other piece that I'll quote from
28:44
Speaker 3: Jay Powell on Wednesday this week. The main number you
28:47
Speaker 3: have to look at now is the unemployment rate. He
28:50
Speaker 3: already took a step and said, I don't really care
28:53
Speaker 3: about the job creation rate right now as much as
28:55
Speaker 3: I care about that unemployment rate. And he's talking about
28:58
Speaker 3: labor supply and the potential and inflationary impulse there. So yes,
29:02
Speaker 3: is Waller feeling a little bit vindicated this morning?
29:04
Speaker 4: Probably? Does J.
29:06
Speaker 3: Powell think that this report changes his view on where
29:08
Speaker 3: interest rates should be? Probably not. You did not see
29:10
Speaker 3: an uptick in the unemployment rate significantly went from four
29:13
Speaker 3: to one to four two.
29:14
Speaker 4: Not meaningful.
29:15
Speaker 2: No, And this is because ultimately, look, if you have
29:18
Speaker 2: a labor force that isn't growing much, what are the
29:21
Speaker 2: feds two mandates? Maintain price stability and full employment. The
29:26
Speaker 2: Fed's job is not to add one hundred thousand jobs
29:28
Speaker 2: a month, it's to maintain full employment. If you have
29:31
Speaker 2: the labor force growing by five hundred thousand people a
29:34
Speaker 2: month and you have a job's report like this, Fed's
29:38
Speaker 2: gonna cut because unemployment's also going up to four to seven,
29:40
Speaker 2: then yeah, if you have a labor force that's shrinking
29:43
Speaker 2: and you get this kind of jobs reported kind of says, okay,
29:47
Speaker 2: we'll watch, because you know, you never like to see
29:50
Speaker 2: job grow slowing that much. But ultimately, if you're still
29:53
Speaker 2: near full employment, what are you gonna do? One other
29:58
Speaker 2: thing that I find really interesting, do you remember the
30:01
Speaker 2: last couple of months, those ADP reports kept coming out
30:03
Speaker 2: and they were, you know, below what we were seeing
30:06
Speaker 2: from the BLS, and everyone's like, oh, like silly, stupid ADP.
30:10
Speaker 2: What a bunch of idiots, what a bunch of maroons?
30:13
Speaker 2: How could they come up with those numbers.
30:16
Speaker 4: Yeah, it's not that they were right.
30:17
Speaker 2: I'm not like, no one's right or wrong, because these
30:19
Speaker 2: are statistics, like no, no one knows who's right. The
30:23
Speaker 2: interesting thing is it's not even The interesting thing is
30:27
Speaker 2: if you look at the three month average of ADP
30:31
Speaker 2: and both private and total payrolls from this report, all
30:36
Speaker 2: three of those lines are almost identical for the last
30:39
Speaker 2: six months now. So the revisions have brought this in
30:43
Speaker 2: line with ady. Like I'm not saying like, hey, everyone
30:46
Speaker 2: should pay attention to ADP, not that, but very much
30:52
Speaker 2: like kind of interesting how after some revisions these end
30:55
Speaker 2: up coming in pretty close to that ADP report. Just
30:58
Speaker 2: a couple other things that we're seeing that a problematic
31:01
Speaker 2: in a few different ways. Labor force participation continues to
31:04
Speaker 2: decline now down to sixty two point two percent. That's
31:07
Speaker 2: off a cycle high of about sixty two eight not
31:10
Speaker 2: entirely surprising giving demographics the labor force participation likely will
31:14
Speaker 2: continue to employment to population ratio also declining to fifty
31:18
Speaker 2: nine to six cycle high was in the sixty and
31:22
Speaker 2: a half to sixty point seven range. Generally, when you
31:26
Speaker 2: start seeing a drop in the size of the workforce,
31:29
Speaker 2: it means lower GDP growth, So that kind of messes
31:31
Speaker 2: with what we saw in the first part of this year. Finally,
31:36
Speaker 2: the U six the underemployment rate rose again from seven
31:39
Speaker 2: point seven to seven point nine percent. So that's saying, hey,
31:42
Speaker 2: the unemployment rate's for to two. That's the percentage of
31:44
Speaker 2: people saying I don't have a job but want one.
31:47
Speaker 2: Seven point nine percent of people are saying I don't
31:49
Speaker 2: have enough job. I need more job, Chuck need more job.
31:56
Speaker 2: Like that's that's that's what people are saying when the
31:58
Speaker 2: underemployment rate goes up, people need more job. Let's take
32:02
Speaker 2: anything else to do on this.
32:05
Speaker 3: I don't think so it's again coming to ass a
32:08
Speaker 3: mile a minute, but I think.
32:09
Speaker 4: We can move on from jobs. Now.
32:10
Speaker 2: Okay, let's move on from jobs, and let me just
32:14
Speaker 2: make sure I've covered everything I want. I'm just scrolling
32:16
Speaker 2: through different charts just to make sure that I got
32:18
Speaker 2: to everything that I had here. Oh, actually, I've got
32:23
Speaker 2: a couple more jobs things. So let's take a quick
32:25
Speaker 2: break and more jobs after.
32:27
Speaker 1: This business and financial news affecting the markets and your wallet.
32:32
Speaker 1: We've got it all straight from Wall Street right here
32:35
Speaker 1: on the Financial Exchange Radio network.
32:40
Speaker 6: The Financial Exchange is a proud partner of the Disabled
32:42
Speaker 6: American Veterans Department of Massachusetts and now's the perfect time
32:46
Speaker 6: to register for this year's five K at Castle Island
32:49
Speaker 6: by visiting dabfivek dot Boston. The event will saw again,
32:53
Speaker 6: So if you're interested in participating, now's the time to
32:57
Speaker 6: reserve your spot. Come out and helps our great American
33:00
Speaker 6: heroes by joining us for the DAV five K. Visit
33:03
Speaker 6: DAV fivek dot Boston to register or to make a
33:07
Speaker 6: donation today. That's DAV fivek dot Boston.
33:12
Speaker 4: My couple other.
33:12
Speaker 2: Things that I want to touch on with the jobs report. Yeah, first,
33:17
Speaker 2: manufacturing sector, something that everyone always loves to focus on.
33:21
Speaker 2: In the last twelve months now, the US manufacturing sector
33:23
Speaker 2: has lost one hundred and thirteen thousand jobs on a
33:26
Speaker 2: net basis.
33:27
Speaker 3: What's the total Do you know what the total employment
33:30
Speaker 3: is in the manufacturing sector?
33:31
Speaker 4: How significant is that? Yes, I do know what that is.
33:35
Speaker 2: Actually it is about twelve point seven million, so it's
33:38
Speaker 2: about a one percent decline sure in the last year
33:41
Speaker 2: a little bit less than that, but like right around
33:42
Speaker 2: that ballpark. This, by the way, has been going on
33:46
Speaker 2: since October of twenty twenty three, So this is not
33:50
Speaker 2: a new phenomenon. It's not related to anything you know
33:52
Speaker 2: on trade or whatever this was. You know, this has
33:55
Speaker 2: been going on for the better part of a year
33:58
Speaker 2: and a half. It's it's not related to you know,
34:00
Speaker 2: anything specific to what's going on in the economy today,
34:03
Speaker 2: but just notable in terms of where manufacturing job growth is.
34:08
Speaker 2: We were seeing some you know, big gains obviously in
34:10
Speaker 2: twenty one and twenty two coming off of the pandemic,
34:13
Speaker 2: and also in President Trump's first term you saw really
34:16
Speaker 2: big manufacturing job gains as well. By July of twenty eighteen,
34:20
Speaker 2: we were adding two hundred and eighty six thousand jobs
34:22
Speaker 2: a year in manufacturing. This time, there's you know, a
34:26
Speaker 2: different set of circumstances, and this is something that we
34:28
Speaker 2: talked about around the election, where it's just a different
34:30
Speaker 2: economy than the first time he was in office. So
34:34
Speaker 2: that's one thing that I wanted to point out another thing,
34:37
Speaker 2: and this is from Parker Ross who works at Arch
34:42
Speaker 2: Capitol Group, and when talking about like that labor force
34:45
Speaker 2: participation rate in why it matters for the unemployment rate,
34:48
Speaker 2: Parker has a great chart that is available on like
34:50
Speaker 2: every social media platform today, and what it shows is that, look,
34:55
Speaker 2: if you held the labor force participation rate stable at
34:59
Speaker 2: where it was in a April, So saying, hey, the
35:01
Speaker 2: labor force participation is not declining like it's just where
35:04
Speaker 2: it was in April, the unemployment rate would be four
35:08
Speaker 2: point nine percent now instead of four to two.
35:12
Speaker 4: Like that's the whole ballgame right there. Yeah, is if.
35:16
Speaker 2: We're wrong about the labor force participation rate and it
35:18
Speaker 2: still is where it is in April, then unemployment's way
35:21
Speaker 2: higher than we think it is right now. Counterpoint to that, Hey,
35:25
Speaker 2: if the labor force participation rate is actually lower than
35:30
Speaker 2: we think it is right now, unapployment might be like
35:32
Speaker 2: three to seven. But I don't hear a ton of
35:35
Speaker 2: people saying ge like it's such a competitive job market,
35:39
Speaker 2: you know, there's no one unemployed. I hear the opposite,
35:43
Speaker 2: So again, just food for thought. I'm not saying the
35:46
Speaker 2: unemployment rate is four to nine, but much more. Hey,
35:49
Speaker 2: the reason why the unemployment rate isn't looking worse is
35:52
Speaker 2: because a higher percentage of people are out of the
35:55
Speaker 2: workforce now than three months ago.
35:58
Speaker 6: Well, believe it or not, the holidays are just around
36:00
Speaker 6: the corner, So now's the time to plan your winter escape.
36:04
Speaker 6: Trade in the cold for sunshine, sea breezes, and island
36:07
Speaker 6: vibes in the US Virgin Islands, America's Caribbean paradise. Whether
36:11
Speaker 6: it's a romantic retreat, a family celebration, or a solo recharge.
36:15
Speaker 6: Before the new year, Sant Croix, Saint Thomas, and Saint
36:18
Speaker 6: John offered the ultimate warm weather getaway. Lounge on sun
36:22
Speaker 6: drenched beaches, explore vibrant culture and celebrate the holiday's island style.
36:27
Speaker 6: No passport, no hassle, just warm weather, clear blue water,
36:31
Speaker 6: and unforgettable memories. This is where the stress melts away
36:36
Speaker 6: and find and you find yourself naturally in rhythm with
36:39
Speaker 6: the heartbeat of the islands. Go to visit USVII dot
36:42
Speaker 6: com and book your trip today. That's visit USVII dot
36:46
Speaker 6: com the US Virgin Islands, America's Caribbean Paradise, Your holiday
36:50
Speaker 6: escape starts here at visit USVII dot com.
36:54
Speaker 4: Mike.
36:55
Speaker 2: Just a couple other stats that I found interesting in
36:57
Speaker 2: the jobs report, More about that labor worst participation. This
37:02
Speaker 2: is the third straight month in a row that the
37:04
Speaker 2: labor force has declined. The last time that happened was
37:08
Speaker 2: twenty eleven, so it's been, yep, a while since we've
37:12
Speaker 2: seen that.
37:13
Speaker 3: Which again, I do think that meshes with what we
37:17
Speaker 3: are seeing from both It does baby boomer and migration
37:22
Speaker 3: perspective here right like there are very few border crossings,
37:26
Speaker 3: there are very few illegal boarding crossings in particular right now,
37:29
Speaker 3: and it does mesh out with Yeah, that labor force
37:33
Speaker 3: would seemingly at least slow down, if not declined.
37:37
Speaker 2: And so it's kind of this thing where think about
37:40
Speaker 2: this from the perspective of a company. I don't need
37:43
Speaker 2: to hire many people, but someone just left and I
37:45
Speaker 2: need to hire them, and I got to pay more
37:48
Speaker 2: for that person because there's not enough labor.
37:51
Speaker 4: Quick break here, we got a lot
37:53
Speaker 2: In our two all those earnings from yesterday, Yeah, we're
37:56
Speaker 2: talking those and a whole lot more