Latest / The Financial Exchange Show / Energy Shortages Spread, AI Spending Surges, and Layoff Fears Rise

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Energy Shortages Spread, AI Spending Surges, and Layoff Fears Rise · The Financial Exchange Show

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Speaker 2: Good morning, welcome on back to the Financial Exchange. We've
1:14
Speaker 2: got markets in a holding pattern here as we open
1:16
Speaker 2: up the eleven o'clock hour. The Dow is just about
1:20
Speaker 2: flat for the day, off nine points, the SMP up seven,
1:23
Speaker 2: and the NASDAC up twenty six after a pretty big
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Speaker 2: rally that led to SMP closing up over seven thousand,
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Speaker 2: hitting fresh record highs here. So a bit of a
1:34
Speaker 2: holding pattern as I mentioned, and we continue through earning
1:38
Speaker 2: season as we head into next week especially, but we'll
1:42
Speaker 2: have Netflix and others who have reported today oil price
1:47
Speaker 2: is moving slightly up on the day, but well off
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Speaker 2: of their all of their recent highs ninety three bucks
1:53
Speaker 2: a barrel for the May contract on West Texas crude,
1:57
Speaker 2: and the ten year treasury about flat for the day,
2:00
Speaker 2: below four point three percent. When we take a look
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Speaker 2: at gas prices on the national average, we're down about
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Speaker 2: seven cents from the week ago price. We're sitting at
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Speaker 2: four dollars nine cents a gallon on the regular for
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Speaker 2: the national average, and on the thirty year fixed rate
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Speaker 2: mortgage here we are now sitting six point three percent,
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Speaker 2: So Chuck, we're getting back within spitting distance of the
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Speaker 2: pre war mortgage rates. At least we're well above obviously
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Speaker 2: pre war gas prices, but on that thirty year mortgage,
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Speaker 2: we're three tens a percent away from where we were
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Speaker 2: prior to the breakout of conflict. Anything else catching your
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Speaker 2: eyes this early in markets, Chuck, No.
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Speaker 3: I mean, I think it'll be interesting to see where.
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Speaker 3: You know, again, it's going to depend on what happens
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Speaker 3: in the next couple weeks. I know, markets continue to
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Speaker 3: want to look at this as a you know, short
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Speaker 3: term interruption to energy flows another flows through the Middle
3:01
Speaker 3: East that may end up being proven right as of
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Speaker 3: right now, there's still is no meaningful shift that's happening.
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Speaker 3: And so again something like something has to give here.
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Speaker 3: You either need to get Hormuz opening soon or stocks
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Speaker 3: are going to have a hard time kind of maintaining
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Speaker 3: this as we go. That's that's kind of you know,
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Speaker 3: where the rubber meets the road. We did and in
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Speaker 3: terms of like what we're starting to see. Just as
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Speaker 3: an example, so again, the Australian Prime Minister this morning
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Speaker 3: announced that they had secured ten million leaders of diesel,
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Speaker 3: which is basically like one day's supply of diesel for Australia,
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Speaker 3: So like, these are the kinds of announcements they're making
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Speaker 3: in Pakistan. You've now moved to rolling blackouts in order
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Speaker 3: to keep the lights on. KLM, an airline out of Europe.
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Speaker 3: Just now it's one hundred and sixty flight cancelations for
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Speaker 3: the next month. It's only about one percent of their
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Speaker 3: total flight capacity. They basically said, look, these routes are
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Speaker 3: not it wasn't a jet fuel shortage issues, not what
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Speaker 3: they're saying, but they're saying these routes are not profitable
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Speaker 3: at these prices, and so we're not going to run them.
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Speaker 3: So these are the things that are starting to pop up,
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Speaker 3: just again, small little things that are you know, around
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Speaker 3: the edges. And again, ultimately it's not to diminish what
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Speaker 3: you know, Pakistan's going through in terms of rolling blackouts
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Speaker 3: and things like that. But Pakistan going through rolling blackouts
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Speaker 3: is not going to impact the world economy as uncomfortable
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Speaker 3: as it might be for the people who live in Pakistan.
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Speaker 3: But these are things that weren't happening two and three
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Speaker 3: weeks ago that now are happening today. And every day
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Speaker 3: that we go on, you're going to see more and
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Speaker 3: more things popping up. The question is going to be
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Speaker 3: when do we get a relief so that this air
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Speaker 3: pocket has you know, that room for improvement on the
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Speaker 3: back end, because if it doesn't come soon, these are
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Speaker 3: going to move from just incremental edge case situations to
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Speaker 3: larger ones. Now that the last ships from the Middle
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Speaker 3: East have made it to Europe and there's no more
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Speaker 3: supply coming until that gets, you know, reopen basically, So
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Speaker 3: this is the expectation for the next month, is you're
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Speaker 3: going to hear worse and worse news coming out from
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Speaker 3: more parts of the world regarding energy supplies. The market
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Speaker 3: is saying, Okay, we can deal with things getting worse
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Speaker 3: for a month, as long as after that month there's
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Speaker 3: a path to things starting to get better. I think
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Speaker 3: if this goes on too much longer without traffic through
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Speaker 3: horror moves, the market's gonna have a more difficult time
5:37
Speaker 3: looking through it. But it's a perfectly logical reaction given
5:41
Speaker 3: the ceasefire that went into effect last week and the
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Speaker 3: hopes that that will lead to progress on actual transits.
5:48
Speaker 3: But eventually you've got to see that progress on transits
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Speaker 3: otherwise this is going to become problematic.
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Speaker 2: Here speaking of shortages. The IEA chief the International Energy
5:56
Speaker 2: Administration tells the Associated Press that Europe would be running
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Speaker 2: out of jet fuel in as few as six weeks
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Speaker 2: from now. That was after a industry group in Europe
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Speaker 2: had been warning about it over the course of the
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Speaker 2: next three weeks. So in any case, speaking to that
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Speaker 2: real shortage of fuel in different parts of the world.
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Speaker 2: Next week, in terms of important earnings to keep an
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Speaker 2: eye on amidst the White Houses call to ramp up
6:21
Speaker 2: defense production. Ge Aerospace will be reporting earnings Tuesday, as
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Speaker 2: will Raytheon and Northrope Grumman. We have United Healthcare going
6:30
Speaker 2: next week as well. Wednesday, after the bell, we'll be
6:33
Speaker 2: hearing from Tesla, Lam Research, IBM, Texas Instruments. We'll hear
6:38
Speaker 2: before the bell on g Vernova. Remember g split up
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Speaker 2: into three separate companies three years ago, somewhere in that timeframe.
6:46
Speaker 2: Philip Morris will go as well. And then on Thursday,
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Speaker 2: we'll be hearing from Intel, AMX, Thermo Fisher and a
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Speaker 2: few others. So, you know, really heating up in terms
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Speaker 2: of earnings next week, and then over the next several
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Speaker 2: weeks we'll be hearing from the Giant Tech conglomerates, Chuck,
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Speaker 2: has the era of the mega layoff arrived? What precisely
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Speaker 2: does the Wall Street Journal? What are they even asking
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Speaker 2: with this question? Because we've seen a couple of layoff
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Speaker 2: announcements that have been abrupt and rewarded by shareholders, and
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Speaker 2: yet we're not seeing anything move in terms of unemployment
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Speaker 2: or weekly jobless claims. So is this all overdone?
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Speaker 3: Yeah?
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Speaker 2: Good?
7:26
Speaker 3: Here's the thing. So you get these big layoff announcements
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Speaker 3: that have been made, where Block formerly known as Square,
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Speaker 3: said hey, we're going to lay off forty percent of
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Speaker 3: our workforce, and Oracles laying off thousands of people. In
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Speaker 3: Amazon said that they're going to cut thirty thousand people.
7:43
Speaker 3: There's rumors of Meta coming forward with some big layoffs soon.
7:48
Speaker 3: And I get that these headline numbers are flashy, but
7:51
Speaker 3: the thing that you have to remember is that in
7:54
Speaker 3: any given month, when you look at the data from
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Speaker 3: the Job Openings and Labor Eternal Survey, the Jolts report
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Speaker 3: that we cover on a monthly basis, if you go
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Speaker 3: in and take a look at the actual underlying data
8:08
Speaker 3: in there and say, okay, like what is you know,
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Speaker 3: what are we seeing in terms of you know, layoffs
8:15
Speaker 3: on a monthly basis, depending on the month you're talking
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Speaker 3: like anywhere from like one point seven to two million
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Speaker 3: layoffs in any given month, Okay, And so ultimately these
8:27
Speaker 3: big announcements like, yes, they might move things on the margins.
8:32
Speaker 3: The concern that you have is the one that I've
8:34
Speaker 3: voiced previously, which is I'm a big believer that most
8:38
Speaker 3: CEOs are corporate lemmings. They don't really do anything with
8:42
Speaker 3: like they don't want to step out of line, They
8:43
Speaker 3: don't want to do anything too risky, because most CEOs
8:46
Speaker 3: are pretty risk averse actually, like they CEOs don't like
8:50
Speaker 3: taking big risks. They like to know that what they're
8:53
Speaker 3: doing is going to be successful before doing it. And
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Speaker 3: so I do think that if you see more and
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Speaker 3: more companies that are being rewarded for larger layoffs, I
9:05
Speaker 3: do think a lot of CEOs sit back and say, hmm,
9:09
Speaker 3: these companies laid off x percentage of people and their
9:11
Speaker 3: stock went up by why, Hey, maybe we should look
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Speaker 3: into doing that. And maybe at some point it does
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Speaker 3: cause like a tipping point problem as far as you know,
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Speaker 3: too many layoffs in one fell swoop. But the layoffs
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Speaker 3: that have been announced again you look at initial job
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Speaker 3: as claims, there's nothing doing there, continuing jobless claims, nothing
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Speaker 3: doing there. Layoff rates through the jolts, nothing happening, separations,
9:37
Speaker 3: nothing happening. You go through job openings, they're not, you know, declining,
9:42
Speaker 3: They're basically where they've been for the last six seven months.
9:45
Speaker 3: You talk about overall hiring rates, they haven't really changed
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Speaker 3: in a year. So I'm very much sure of the
9:51
Speaker 3: opinion that, yeah, like these things are making news, but
9:55
Speaker 3: they're not actually making any structural changes to the US economy,
9:59
Speaker 3: and that that's what would get me concerned, is if
10:01
Speaker 3: you started seeing something like that popping up, but you're
10:04
Speaker 3: just not right now quite honestly, and hiring remains sluggish
10:09
Speaker 3: by most metrics. Maybe there's some green shoots here and there,
10:13
Speaker 3: but ultimately it's not something where I see the labor
10:17
Speaker 3: market falling apart right now. It's really found its footing
10:20
Speaker 3: to not deteriorate further in the last three months.
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Speaker 2: Yeah, I think there's that open question of, hey, will
10:27
Speaker 2: future companies be able to reduce headcount legitimately because of AI,
10:32
Speaker 2: or even if they can't, can they reduce headcount claim
10:35
Speaker 2: because of AI? And see their stock price rewarded, and
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Speaker 2: if that begins to become a phenomenon that I'm with you, you
10:41
Speaker 2: could see more CEOs pushing in that direction. But to
10:44
Speaker 2: this point, nothing that I think you can point to
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Speaker 2: that is concerning for the state of the overall labor market.
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Speaker 3: I have one other thing that I want to add
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Speaker 3: on that just an anecdote from some of that I
10:57
Speaker 3: talked to whose company is using lots of A because
11:01
Speaker 3: this this is the piece that is going to end
11:04
Speaker 3: up mattering. So initially they set their AI budget at
11:10
Speaker 3: five percent of their headcount, saying, Okay, if we're spending
11:15
Speaker 3: just as an example, one hundred grand a month on headcount,
11:18
Speaker 3: we're willing to spend five grand a month on AI. Okay.
11:22
Speaker 3: Now at the point three months in where they're spending
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Speaker 3: around fifteen percent of headcount budget on AI with no
11:29
Speaker 3: reduction in headcount, yet he thinks that they are going
11:34
Speaker 3: to end up getting to a point where by the
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Speaker 3: end of this year they're spending almost as much on
11:39
Speaker 3: AI as they are on headcount. And like to which
11:44
Speaker 3: you say, okay, like what does this actually mean? Because
11:47
Speaker 3: if they can't actually reduce headcount or can't reduce expenses
11:52
Speaker 3: through the use of AI, and instead it's just another expense.
11:54
Speaker 2: You need more revenue, you need more sales.
11:56
Speaker 3: There's far more limited room to do that. Like the
11:59
Speaker 3: whole premise of AI is I can spend a little
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Speaker 3: more and make my team more productive, or a lot
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Speaker 3: more and get rid of a lot of my team.
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Speaker 3: There's not really a great path to Hey, we're gonna
12:11
Speaker 3: have another line item on our expense, you know ledger
12:15
Speaker 3: that is looking anywhere close to what we spend on
12:20
Speaker 3: employee salaries, like employee compensation. So we'll have to see
12:24
Speaker 3: how this works out. Because again it's it's clear that
12:28
Speaker 3: companies that are starting to dive into using AI in
12:31
Speaker 3: big ways are finding that they just want to spend
12:33
Speaker 3: more and more because they are seeing positive effects. But
12:36
Speaker 3: the problem is they're not seeing big enough effects where
12:39
Speaker 3: they can lay people off. I know that's not a
12:41
Speaker 3: problem for the employees, but there's only so much money
12:45
Speaker 3: to go around, and eventually something has to give, either
12:48
Speaker 3: the AI budget or the employee budget.
12:52
Speaker 2: We shall see. Let's take a quick break when we return,
12:55
Speaker 2: playing a little bit of trivia here, next on the
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Speaker 2: financial Exchange, and then a showdown coming for the FED
13:01
Speaker 2: share Kevin worsh heading towards Senate confirmation hearing. That's next
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13:44
Speaker 4: All right, sim for trivia here on the Financial Exchange.
13:47
Speaker 2: On this day.
13:48
Speaker 4: Back in two thousand and three, the Treaty of Ascension
13:51
Speaker 4: was signed in Athens, Greece. The treaty allowed for the
13:55
Speaker 4: admittance of ten new countries to the European Union. So
14:01
Speaker 4: our trivia question how many countries are currently in the EU?
14:06
Speaker 4: Once again? How many countries are currently in the EU?
14:11
Speaker 4: Be the second person to text us at six one, seven, three, six,
14:15
Speaker 4: two thirteen eighty five with the correct answer along with
14:18
Speaker 4: keyword trivia, and you'll win a Financial Exchange Show t
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Speaker 4: shirt once again. The second correct response to text us
14:25
Speaker 4: to the number six one seven, three, six two thirteen
14:28
Speaker 4: eighty five with the correct answer along with keyword trivia,
14:31
Speaker 4: We'll win that T shirt. See complete contest rules at
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Speaker 4: Financial Exchange Show dot com.
14:36
Speaker 2: All right, Chuck, it's FED talk time. Because J. Powell's
14:39
Speaker 2: term is up in four weeks. We have got an
14:43
Speaker 2: ongoing investigation from the Justice Department into J. Powell and
14:48
Speaker 2: his alleged misuse of what is the allegation really just
14:53
Speaker 2: mismanagement of funds regarding the building construction. We also have
15:00
Speaker 2: a Senate confirmation hearing that's finally been scheduled for incoming
15:04
Speaker 2: Trump pick for FED Chair, Kevin Warsh And then finally,
15:08
Speaker 2: on on top of all of that, you've get you've
15:11
Speaker 2: got Republican Senator Tom Tillis saying that he intends to
15:14
Speaker 2: block the vote for Kevin worsh for fedchair so long
15:18
Speaker 2: as the investigation into J. Powell continues. So with this
15:23
Speaker 2: sort of thing, I tend to think it still gets resolved.
15:26
Speaker 2: But what are the deadlines we're heading towards here? And
15:30
Speaker 2: I mean the big question is what would happen if
15:32
Speaker 2: Kevin worsh can't get through nomination and Jay Powell is
15:35
Speaker 2: still sitting there.
15:37
Speaker 3: Yeah, there's no one really knows for sure because we've
15:41
Speaker 3: never had this situation before.
15:44
Speaker 2: There's no specific there's no real rule sitting down for
15:47
Speaker 2: what happens if you don't get a new FED chair
15:49
Speaker 2: confirmed and the existing ones still sitting there but his
15:52
Speaker 2: terms up right.
15:53
Speaker 3: We've seen instances before where there's been like reasons why,
15:59
Speaker 3: I forget what it was, which chair had to stay
16:01
Speaker 3: on a little bit longer, But it wasn't like a
16:03
Speaker 3: contentious thing. It was just one of them previously had
16:07
Speaker 3: to stay on. It was a very short period, but
16:12
Speaker 3: they did have to stay on after their term it expired.
16:15
Speaker 3: And so the question here is, look, Powell's basically said
16:20
Speaker 3: back in March that if there is no success or confirmed,
16:25
Speaker 3: he's going to stay on as a temporary chair in
16:29
Speaker 3: that absence. The White House put out a position this
16:33
Speaker 3: week basically saying no, if there's no success or confirmed,
16:39
Speaker 3: then Powell shouldn't continue as chair, and maybe it's someone
16:43
Speaker 3: else who's on the committee that would take up the
16:47
Speaker 3: chairmanship at that point. So I have no idea what's
16:52
Speaker 3: going to happen here. But we are now a month
16:55
Speaker 3: away from that deadline, and Worrish's first hearing is now
16:59
Speaker 3: set or about a week or so from now, and
17:03
Speaker 3: there's no guarantees going to be confirmed by them, So
17:07
Speaker 3: potentially you've got some drama that's gonna come up in
17:10
Speaker 3: a month.
17:11
Speaker 2: Yeah, you kind of had an opening for the Trump
17:13
Speaker 2: administration to walk away from this, right we had the
17:16
Speaker 2: court strike things down, and you know, could have you know,
17:21
Speaker 2: with everything else going on in the world, I don't
17:22
Speaker 2: think anybody would have blinked and I had the Trump
17:25
Speaker 2: administration just kind of pushed this to the side in
17:28
Speaker 2: order to get their guy in. Uh but the President
17:31
Speaker 2: has been pretty public saying, you know, I want these
17:33
Speaker 2: investigations to continue, and uh so it doesn't seem like
17:38
Speaker 2: that's going to happen in the short term. Meanwhile, you know,
17:41
Speaker 2: beyond just the role of chair of the Federal Reserve,
17:45
Speaker 2: J Powell's been playing his cards pretty close to the
17:48
Speaker 2: vest in terms of his intentions. Even if the investigation
17:53
Speaker 2: is done, and even if his term is over, he
17:56
Speaker 2: hasn't is it another two years that he could hypothetically
17:59
Speaker 2: serve on the Federal Reserve, just not as chairperson and
18:03
Speaker 2: he's also said, hey, I'm not willing to step down
18:06
Speaker 2: and let the board go without a chair person. So yeah,
18:11
Speaker 2: he's playing is again. Would it be very surprising to
18:14
Speaker 2: have j. Powell stay on at the Federal Reserve if
18:17
Speaker 2: Kevin Warsh is confirmed and everything else is still going on,
18:21
Speaker 2: It would be. But he's not exactly letting up and
18:26
Speaker 2: giving a clear path here to say yeah, this is
18:28
Speaker 2: what I will do. So yeah, it could be some
18:31
Speaker 2: fireworks coming up. I tend to think that usually with
18:34
Speaker 2: this sort of thing, negotiations happen, it gets resolved, and
18:38
Speaker 2: we move along. But we're getting a lot closer to
18:42
Speaker 2: the turnover than I expected we would.
18:46
Speaker 3: Yeah, I mean it's I'm still not really going to
18:49
Speaker 3: get excited about this until we're right up against the deadline, because,
18:55
Speaker 3: as we've seen in multiple instances, like you get up
18:58
Speaker 3: to those deadlines and you get some movement that happens,
19:02
Speaker 3: we're still a month away. A month is kind of
19:04
Speaker 3: an eternity when it comes to Congress. You know, it's
19:08
Speaker 3: a month is both the eternity and no time at all.
19:11
Speaker 3: And that Congress move was very very slowly until there's
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Speaker 3: a deadline, and then they moved through very quickly, to
19:18
Speaker 3: the point where you're not even entirely sure what happened
19:21
Speaker 3: until it's done.
19:22
Speaker 2: True quick break markets have turned to the positive who
19:25
Speaker 2: have a full recap for you next, as well as
19:27
Speaker 2: the trivia winner after.
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20:00
Speaker 4: After the SMP five hundred and NASDAK notched all time
20:04
Speaker 4: highs yesterday, Marcus today are now modestly higher. The Dow
20:09
Speaker 4: is flat, only off by thirty two points, SMP five
20:13
Speaker 4: hundred up over a tenth of a percent or ten
20:15
Speaker 4: points higher, NASDAK up about a quarter percent. We're also
20:18
Speaker 4: two thousand is up nearly two tenths of a percent.
20:21
Speaker 4: Ten year Treasure reeled up one basis point at four
20:24
Speaker 4: point two nine to three percent. In oil jumping over
20:27
Speaker 4: two percent higher, trading at ninety three dollars. Barrel shares
20:32
Speaker 4: in Taiwan Semiconductor down over two percent despite the chip
20:35
Speaker 4: maker reporting better than expected first quarter earnings and revenue.
20:39
Speaker 4: The company also raised its revenue outlook for the year
20:41
Speaker 4: due to strong demand for AI chips. Meanwhile, several media
20:45
Speaker 4: outlets reporting that Spirit Airlines could liquidate as early as
20:49
Speaker 4: this week, as the budget carrier has been attempting to
20:51
Speaker 4: climb out of bankruptcy but has been impacted by rising
20:55
Speaker 4: fuel costs. Elsewhere, Beverage and snack giant Pepsi reported all
21:00
Speaker 4: at first quarter profit and revenue after the company cut
21:03
Speaker 4: prices by as much as fifteen percent on its signature
21:06
Speaker 4: snacks in a bid to lure cost conscious consumers. Pepsi
21:11
Speaker 4: up by two percent after storing more than five hundred
21:14
Speaker 4: eighty two percent yesterday due to its pivot to an
21:18
Speaker 4: AI infrastructure. All birdstock is now retreating twenty nine percent
21:23
Speaker 4: today and after today's closing bell, Netflix will post their
21:28
Speaker 4: first quarter results. I'm Tucker Silvan. That is Wall Street watching.
21:32
Speaker 4: On the previous segment, we asked you the trivia question
21:35
Speaker 4: how many countries are in the European Union. It will
21:38
Speaker 4: be twenty seven. Tom and East Longmeadow Masses our winner today,
21:43
Speaker 4: taking home the Financial Exchange Show t shirt. Congrats to Tom.
21:46
Speaker 4: We play trivia every day here on the Financial Exchange.
21:50
Speaker 4: See complete contest rules at Financial exchange show dot com Chuck.
21:54
Speaker 2: According to Redfinn, large homes, which they define as three
21:59
Speaker 2: plus bedroom owned by empty nest baby boomers, account for
22:04
Speaker 2: about twenty eight percent of the total national supply of
22:08
Speaker 2: those large again three bedroom single family homes. Redfind published
22:13
Speaker 2: that a few weeks ago and found it relevant to
22:15
Speaker 2: this next story of retirees obviously wanting to age inside
22:19
Speaker 2: their homes. And I don't know that this marks a
22:21
Speaker 2: significant difference. I think obviously every family is different. My
22:25
Speaker 2: grandparents retired and sold their home in New York, moved
22:29
Speaker 2: out to Arizona, bought a two bedroom home on a
22:30
Speaker 2: golf course, and that was their retirement dream. But I'm
22:34
Speaker 2: honestly seeing less and less of that these days, and
22:36
Speaker 2: more often than not, we are seeing older Americans choose
22:40
Speaker 2: to stay in their homes for a litany of different
22:44
Speaker 2: reasons that they are more comfortable in those single families.
22:47
Speaker 2: What's been your experience when talking to people about why
22:50
Speaker 2: they're so focused on staying in place at aging in place?
22:54
Speaker 3: So I think one of the reasons is actually a
22:58
Speaker 3: large number of them we don't necessarily want to stay
23:02
Speaker 3: in place, but when they look around at the homes
23:05
Speaker 3: that they would like to buy, generally something that is smaller,
23:11
Speaker 3: you know, fewer stairs and things like that, you know,
23:14
Speaker 3: maybe less maintenance. What they find is the difference in
23:18
Speaker 3: price isn't that significant, or in some cases the price
23:21
Speaker 3: actually might be higher, just because there are so few
23:23
Speaker 3: of those homes available and there's so much demand from
23:26
Speaker 3: baby boomers. And so I think one of the reasons
23:29
Speaker 3: is people look out and they say, hey, like, I
23:32
Speaker 3: think I could sell my home for four hundred and
23:35
Speaker 3: fifty thousand, but to downsize into that you know, other situation,
23:39
Speaker 3: it's gonna cost me four hundred thousand plus. Then I'm
23:42
Speaker 3: gonna have a condo feat you know, tapped on top
23:45
Speaker 3: of that. And so they say, no, it just doesn't
23:48
Speaker 3: make sense for me because of that. And so even
23:51
Speaker 3: for a lot of people who might want to find
23:54
Speaker 3: a different place to move to, it either doesn't exist
23:58
Speaker 3: in their area or the price is not matching up
24:02
Speaker 3: with what they're willing to spend on it.
24:04
Speaker 2: Yeah, and I think that other piece there that you
24:06
Speaker 2: mentioned right, that condo or association fee, the idea for
24:09
Speaker 2: a lot of people going from single family to sharing
24:11
Speaker 2: a wall or you know, sharing some other features of
24:15
Speaker 2: a condo is not appealing for a lot of people,
24:17
Speaker 2: and that supply of you know, two to three bedroom
24:20
Speaker 2: single family homes is almost non existent in parts of
24:25
Speaker 2: New England. But I do feel I do agree with
24:29
Speaker 2: market watching one item here. You know, I oftentimes hear
24:33
Speaker 2: people say, oh, you know, I looked at this condo
24:35
Speaker 2: and we loved it, but the association fees are just
24:38
Speaker 2: so expensive, and I do have to take a step
24:41
Speaker 2: back and remind them, like, listen, guys, I know you're
24:44
Speaker 2: you're in your sixties now, but fast forward fifteen years
24:48
Speaker 2: where you're living in that home. Do you really think
24:51
Speaker 2: you're going to be maintaining your two acre lawn and
24:56
Speaker 2: you know, climbing on a ladder to clean the gutters
24:58
Speaker 2: and replacing all the light bulbs in your home because
25:03
Speaker 2: if you aren't able to do so all of a sudden,
25:07
Speaker 2: that monthly condo fee looks pretty darn attractive compared to
25:11
Speaker 2: the cost of outsourcing all that work.
25:13
Speaker 3: Yeah, yeah, I totally agree.
25:16
Speaker 2: The other pieces that get underappreciated, right, you know, oftentimes
25:19
Speaker 2: we talk about the need to redo a bathroom, or hey,
25:22
Speaker 2: the laundry is down in the basement, and you know,
25:25
Speaker 2: I'm in my eighties now, I feel nervous going up
25:27
Speaker 2: and down the staircase. I need to put in a
25:29
Speaker 2: lift in order to get me upstairs. There can be
25:32
Speaker 2: significant costs to aging in home, just as there are
25:36
Speaker 2: significant cost of potentially moving too, and many, many retirees
25:41
Speaker 2: are facing this, you know, decision point of hey, what
25:45
Speaker 2: makes sense? Maybe I've got a mortgage still on that
25:47
Speaker 2: home and it's locked in at a good three percent
25:50
Speaker 2: or under. Right, that's a huge incentive to stay right
25:53
Speaker 2: where you are if you're attempting to evaluate where it
25:57
Speaker 2: is that you are going to retire, and you know
26:01
Speaker 2: what type of home you're going to own, and what
26:03
Speaker 2: is really a priority for you along with what can
26:07
Speaker 2: you actually afford to do in retirement? These are the
26:10
Speaker 2: types of questions that, believe it or not, financial advisors
26:14
Speaker 2: work with their clients to answer every day. You know,
26:17
Speaker 2: I know everyone tends to focus on, hey, what do
26:19
Speaker 2: I do with my four oh one K? How do
26:21
Speaker 2: I invest more efficiently? But these types of questions are
26:25
Speaker 2: so impactful to folks happiness and success and retirement that
26:30
Speaker 2: it has to be a focus of your overall financial planning.
26:33
Speaker 2: And if you have those questions too. Please give the
26:35
Speaker 2: folks at Armstrong Advisory Group a call the numbers eight
26:38
Speaker 2: hundred three nine three for zero zero one. You can
26:42
Speaker 2: go online to Armstrong Advisory dot com if you're driving
26:44
Speaker 2: now need a time for us to call you back,
26:47
Speaker 2: but that number again, eight hundred three nine three for
26:51
Speaker 2: zero zero one.
26:52
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
26:55
Speaker 1: registered investment advisor. Nothing in the ad or in any
26:57
Speaker 1: Armstrong guide a specific financial, legal or tax vice. Consult
27:00
Speaker 1: your own financial tax into state planning advisors before making
27:03
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
27:06
Speaker 1: advisory services.
27:08
Speaker 2: So while I acknowledged that I just got done pooh
27:11
Speaker 2: poohing anti trust cases and what the Justice Department's actually
27:15
Speaker 2: successful at breaking up, I'm going to applaud this one.
27:18
Speaker 2: As Live Nation has been found to have illegally monopolized
27:24
Speaker 2: concerts and ticketing according to a jury, paving the way
27:27
Speaker 2: for more than thirty states to seek all sorts of
27:30
Speaker 2: measures against the Live Nation. So Live Nation, owner of
27:33
Speaker 2: ticket Master, obviously chuck, but I feel as though you
27:36
Speaker 2: have more background on all of their other business arms
27:39
Speaker 2: than I do. Where is the space that Live Nation
27:42
Speaker 2: really occupies in the entertainment venue today.
27:45
Speaker 3: Before going there, I do want to say you buried
27:47
Speaker 3: the lead on this. The Justice Department settled its case
27:51
Speaker 3: a month ago. This was something that there were again
27:56
Speaker 3: these states could continue to pursue it, and they decided to,
28:00
Speaker 3: but the Justice Department said, no, we're not interested in
28:02
Speaker 3: doing this anymore. So the states went well, the states
28:06
Speaker 3: were involved, they were partners with the Justice Department on
28:10
Speaker 3: it originally. So here's the deal is. Basically what you
28:15
Speaker 3: have is back in twenty ten, Live Nation, who is
28:19
Speaker 3: a concert another event promoter merged with Ticketmaster and so
28:24
Speaker 3: basically you ended up with one entity that for large
28:30
Speaker 3: venues think you know, sports stadiums and things like that,
28:34
Speaker 3: big amphitheaters, they control in some estimates about seventy percent
28:38
Speaker 3: of the market for ticket sales, artists attending them. Venue
28:44
Speaker 3: management like the whole thing, like basically the whole act
28:47
Speaker 3: of putting these on. And so you obviously end up
28:51
Speaker 3: in a situation it's pretty anti competitive as far as
28:54
Speaker 3: what they're required to pay out to vendors because there's
28:56
Speaker 3: no competition that can come in and say hey, we
28:58
Speaker 3: have better terms. Again, they in some situations like even
29:03
Speaker 3: own certain venues. They're the ones who signed the contracts
29:06
Speaker 3: with the artists. In terms of how much they get
29:08
Speaker 3: paid out, they said ticket pricing, like the whole thing.
29:11
Speaker 3: And so they were found twice, I think, to be
29:15
Speaker 3: in violation of the terms of consent decrees that they
29:20
Speaker 3: had to sign in order to get this deal done,
29:23
Speaker 3: basically saying no, we won't do X, Y and Z
29:25
Speaker 3: because we realize that's anti competitive, and they kept violating
29:29
Speaker 3: the terms of it. So I generally am a big
29:32
Speaker 3: believer that hey, if you violate the terms of a
29:35
Speaker 3: consent decree that is in place for your merger to
29:38
Speaker 3: take place, you should have the merger unwound. The Justice Department,
29:42
Speaker 3: moving on from that, says, okay, like you're not going
29:45
Speaker 3: to have that happen here. But basically what you're going
29:49
Speaker 3: to see here is that states can effectively try to
29:55
Speaker 3: go after some of these anti competitive business is and
30:02
Speaker 3: again try to you know, recoup losses for various different
30:07
Speaker 3: groups here. So you've got a situation where, based on
30:11
Speaker 3: this jury's finding, you've got consumers that are going to
30:14
Speaker 3: be able to receive some damages. It's unclear, I mean,
30:17
Speaker 3: this is going to be appeal the exact amount's going
30:19
Speaker 3: to change in this and that, but it is something
30:23
Speaker 3: where ultimately I do think that this is a huge
30:28
Speaker 3: missed opportunity because the DJ could have had the ability
30:32
Speaker 3: to do far more than this in terms of unwinding
30:35
Speaker 3: that merger. But there's still going to be something that
30:39
Speaker 3: can happen at the state level from this at least.
30:41
Speaker 2: Let's take a quick break when we come back. A
30:44
Speaker 2: little bit of stackeru Lette coming up next.
30:46
Speaker 1: Follow the Financial Exchange Show on Instagram and see what's
30:50
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31:11
Speaker 4: Well tomorrow is the Moneymatter's mail Bag. Gets your chance
31:15
Speaker 4: to ask Chuck and Mike any questions you might have
31:18
Speaker 4: about the economy, markets, life, anything like that. So if
31:22
Speaker 4: you want to give the guys a call and leave
31:24
Speaker 4: a voicemail for The Moneymatter's mail Bag, all you have
31:27
Speaker 4: to do is call three three nine three nine nine
31:31
Speaker 4: four three three three Once again, Money Matters mail bag
31:35
Speaker 4: phone number is three three nine three nine nine four
31:40
Speaker 4: triple three, or if you're shy, you can email us
31:43
Speaker 4: to TFE Show at gmail dot com. Once again, that
31:47
Speaker 4: email is TFE Show at gmail dot com, and we
31:51
Speaker 4: may use your question on the show.
31:54
Speaker 2: Time for a bit of stacker let Here at Chuck,
31:56
Speaker 2: I'll kick things off with Dairy Queen, who is following
31:59
Speaker 2: the suit of several other fast food restaurants testing out
32:04
Speaker 2: some AI and the drive through lanes, which again should
32:07
Speaker 2: be some low hanging fruit, but we will see how
32:11
Speaker 2: it goes, because I think it was Wendy's or Taco
32:14
Speaker 2: Bell that tried to pull this off, and people pretty
32:18
Speaker 2: much immediately found ways to take advantage of it and
32:20
Speaker 2: screw up the system, which is probably what I would do,
32:24
Speaker 2: you know, for instance, ordering something like eleven thousand cups
32:27
Speaker 2: of water or six hundred Ketchup packets and the AI
32:31
Speaker 2: just has no idea what to do with any of
32:34
Speaker 2: that information. I ran into another I mean, it's now
32:38
Speaker 2: you know, all over the place. But I called DOCU
32:41
Speaker 2: signed yesterday because of an issue and was dealing with
32:44
Speaker 2: their Automated Customer Service BOD and they are getting better
32:50
Speaker 2: but nine times out of ten when I'm running into them,
32:53
Speaker 2: I end up, you know, thirty seconds in just saying
32:55
Speaker 2: please get me a representative, because you know, you trying
32:58
Speaker 2: to walk me through how to fix it on my
33:00
Speaker 2: own is not getting me anywhere with this. So we'll
33:03
Speaker 2: see if Dairy Queen is any more successful than some
33:07
Speaker 2: of their competitors in rolling out this new automation technology.
33:10
Speaker 2: I think certainly it's coming and in most cases it
33:14
Speaker 2: can handle these orders just fine.
33:16
Speaker 3: Jock, Oh sorry, yeah, I've got Live Golf. Tucker and
33:22
Speaker 3: I were talking about this before the show yesterday just
33:26
Speaker 3: because there were all kinds of rumors going through Twitter
33:30
Speaker 3: about hey, is you know, Live Golf about to go
33:33
Speaker 3: under or not? And it got to a point where
33:38
Speaker 3: now you have the Wall Street Journal with this piece
33:40
Speaker 3: titled Live Golf facing imminent closures, Saudi backers way pulling funding.
33:44
Speaker 3: Remember Live is the competing golf circuit to the PGA
33:48
Speaker 3: Tour that was founded back in twenty twenty two, and
33:52
Speaker 3: you know, has kind of ended up forcing some major
33:54
Speaker 3: changes to the PGA Tour in order to them to
34:00
Speaker 3: kind of improve what they're offering their players. But you
34:04
Speaker 3: ended up with the Live Golf CEO sending out an
34:07
Speaker 3: email that Yahoo's Sports ended up getting their hands on somehow.
34:12
Speaker 2: Yahoo Sports exists.
34:14
Speaker 3: Sure, oh yeah, Tucker will tell you, for the last
34:17
Speaker 3: fifteen years, until recently, Yahoo Sports actually did some of
34:20
Speaker 3: the better investigative sports journalism out of anywhere on the planet.
34:25
Speaker 2: Tackers, will you tell me that I will off air though.
34:31
Speaker 3: Today, like today, it's different, But I want to read
34:34
Speaker 3: part of this email and you tell me what this
34:35
Speaker 3: sounds like. Mike. This is from Live Golf CEO Scott
34:39
Speaker 3: O'Neil to the staff. I want to be crystal clear.
34:43
Speaker 3: Our season continues exactly as planned, uninterrupted, in at full throttle.
34:46
Speaker 3: While the media landscape is often filled with speculation, our
34:49
Speaker 3: reality is defined by the work we do on the grass,
34:51
Speaker 3: and we are heading into the heart of our twenty
34:53
Speaker 3: twenty six schedule with full energy of an organization's that's bigger, louder,
34:56
Speaker 3: and more influential than ever before. The life of a
34:59
Speaker 3: startup movement is defined by these moments of pressure. We
35:02
Speaker 3: signed up for this because we believe in disrupting the
35:04
Speaker 3: status quo, and we faced headwinds since the jump, and
35:07
Speaker 3: we've answered every time with resilience. In grace. And now
35:09
Speaker 3: we answer by doing what we do best, putting on
35:11
Speaker 3: the most compelling show in sports. Lean into this moment.
35:15
Speaker 3: The noise you hear is simply the sound of a
35:17
Speaker 3: movement that is working. Embrace it. We are pioneers and
35:19
Speaker 3: while the road isn't always smooth, the destination is worth
35:22
Speaker 3: every mile.
35:23
Speaker 2: And this was before or after or during the Saudi announcement.
35:28
Speaker 2: It sounds like a panic email trying to retain staff
35:30
Speaker 2: that are probably.
35:32
Speaker 1: And animal house.
35:33
Speaker 2: Yes, this came.
35:34
Speaker 3: Out yesterday, that's it's that. Yes, Yeah, you know at
35:39
Speaker 3: any time that you hear like you know, the noise
35:42
Speaker 3: you hear is the sound of a movement that is working.
35:45
Speaker 3: Oh I didn't even read the best part. Actually this
35:48
Speaker 3: is the the ending. Let's go out and show the
35:51
Speaker 3: world where I live. Golf is the future of the game.
35:53
Speaker 3: It matters, you mattered. Why would you say you mattered
35:58
Speaker 3: in past tense?
36:00
Speaker 2: I mean it's a typo, but yeah, that's uh, it's
36:02
Speaker 2: not great.
36:04
Speaker 3: So if that's the kind of email that you put
36:08
Speaker 3: out when you're trying to get your staff not to
36:10
Speaker 3: quit because you're about to just close up shop.
36:12
Speaker 4: Yeah, and I'll say this Chuck did you happen to
36:16
Speaker 4: see Sergio Garcia's temper tantrum at Augusta at the Masters
36:19
Speaker 4: over the weekend?
36:20
Speaker 3: I did? He he broke his driver head right.
36:23
Speaker 4: Yes, so he he hit a drive which actually didn't
36:26
Speaker 4: look terrible, and then he smashed the ground a couple
36:29
Speaker 4: of times out of frustration. Then he took his driver
36:32
Speaker 4: to a bench. Again, this is at Augusta, where you're
36:35
Speaker 4: not supposed to act like that whatsoever. Broke his driver
36:39
Speaker 4: and then he proceeded to carry John Rom's golf bag
36:42
Speaker 4: with him. Have you ever seen Sergio Garcia act like that?
36:47
Speaker 3: No?
36:48
Speaker 4: No, so this has been I think the players knew
36:52
Speaker 4: about this happening yet.
36:53
Speaker 2: To be fair, I couldn't pick Sergio Garcia out of
36:55
Speaker 2: the lineup.
36:56
Speaker 3: So there's rumors that like players haven't been paid in
36:59
Speaker 3: the last several weeks and stuff.
37:01
Speaker 4: And Bryson looked distracted. John Brohm looked distracted. They didn't
37:05
Speaker 4: look very much into it. Yeah, thanks, pretty telling.
37:09
Speaker 2: It's shocking. Everybody always says trust the Saudis.
37:13
Speaker 3: Tucker correct me if I'm wrong that he broke his
37:16
Speaker 3: driver was on the second hole, right, I think it was? Yeah,
37:19
Speaker 3: it was really which means. Remember, by the rules of golf,
37:22
Speaker 3: if you break a club due to like non playing actions,
37:27
Speaker 3: you're not allowed to replace it. So we had to
37:29
Speaker 3: play the rest of that round without a driver.
37:30
Speaker 4: Yeah, it's like ting Cup, right, And then that happened
37:33
Speaker 4: in tin Cup. He had to play with the seven
37:34
Speaker 4: iron or something in the rest of the round.
37:36
Speaker 3: Yeah. So it's uh, yeah, there's.
37:40
Speaker 2: There's that top notch stuff. As we close out the show,
37:42
Speaker 2: President Trump claims that Israel and Lebanon have agreed to
37:45
Speaker 2: a ten day ceasefire. Markets moving up as we close
37:49
Speaker 2: in on the noon hour with a NASDAC up four
37:51
Speaker 2: tenths percent, SMP up three tens of percent, Dow Jones
37:54
Speaker 2: Industrial Average up eighty two points, or closing in on
37:58
Speaker 2: two tenths of one percent. Here, that's all the time
38:01
Speaker 2: we have for the financial exchange today. But don't worry,
38:04
Speaker 2: be right back tomorrow. Have a great risk of day folks,
38:07
Speaker 2: stay tuned.