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It is getting very difficult to keep up with Trump's tariff plans · The Financial Exchange Show

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  Speaker 1: a donation today. This is the Financial Exchange with Chuck
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  Speaker 1: Zada and Mike Armstraw.
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  Speaker 2: Friday here on the Financial Exchange Chuck, Mike and talker
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  Speaker 2: with you, and we got the jobs report for the
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  Speaker 2: month of February out at eight thirty am Eastern time today,
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  Speaker 2: and Mike my interpretation on this, and here here's the numbers.
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  Speaker 2: I'll give those first before my interpretation. Total non farm
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  Speaker 2: employment rose by one hundred and fifty one thousand in February.
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  Speaker 2: The unemployment rate ticked up a little bit from four
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  Speaker 2: percent to four point one percent prior month, saw minor revisions.
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  Speaker 2: December was revised up sixteen thousand, January down eighteen thousand,
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  Speaker 2: so net change of two thousand, so no major revisions
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  Speaker 2: or anything there. We saw average hourly earnings increase by
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  Speaker 2: a point three percent rate for the month. And overall,
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  Speaker 2: again you can kind of like the top line stuff
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  Speaker 2: and you say, yeah, this is basically I mean, you
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  Speaker 2: don't want to see the unemployment rate going up, but
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  Speaker 2: you look at it and you're like, this is basically
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  Speaker 2: what you want to see. I know that the headline
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  Speaker 2: was like here's the CNBC one. US payroll growth totals
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  Speaker 2: one hundred and fifty one thousand in February left less
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  Speaker 2: than expected. The expectation was one hundred and sixty thousand.
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  Speaker 2: So yeah, given that the average revision is like sixty
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  Speaker 2: to seventy thousand, this is basically right on the nose
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  Speaker 2: for where you would expect this to come in. So
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  Speaker 2: I'm not gonna, you know, say that this is a
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  Speaker 2: miss on that front. So the headline numbers I think
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  Speaker 2: are actually pretty good in pretty much where you want
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  Speaker 2: to be.
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  Speaker 3: Is that a fair take? Yeah, it was a just
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  Speaker 3: fine report.
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  Speaker 4: It didn't indicate anything that would be inflationary, it didn't
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  Speaker 4: indicate anything that was recessionary. It also might have nothing
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  Speaker 4: to do with the whirlwind economy that we seem to
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  Speaker 4: be living in since March first, either, So I think
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  Speaker 4: the context here is important. Yes, it was a February
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  Speaker 4: jobs report, but it's not like it was measuring anything
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  Speaker 4: on February twenty eighth. This is going back several weeks
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  Speaker 4: before investors at least were taking.
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  Speaker 3: The threat of TIFFs tariffs seriously.
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  Speaker 2: So the headline numbers again just fine. Under the surface,
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  Speaker 2: there is some stuff that gives you a little bit
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  Speaker 2: of pause when you look at it. A couple things
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  Speaker 2: that I like to pay attention to The first one
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  Speaker 2: is what we call the labor force participation rate. Basically, it's, hey,
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  Speaker 2: what percentage of the population is saying that they are
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  Speaker 2: involved in the labor force? And that doesn't mean they're employed.
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  Speaker 2: It just means, hey, like, are you looking for a job?
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  Speaker 2: Are you you know, at a job like anything like that,
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  Speaker 2: And that dropped from sixty two point six percent to
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  Speaker 2: sixty two point force. The first thing that you say,
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  Speaker 2: just immediately on that is, hey, all else being equal,
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  Speaker 2: that means that if that didn't happen, the unemployment ray
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  Speaker 2: is going from four to four point three percent.
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  Speaker 3: Actually yeap, not to four to one.
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  Speaker 2: Sure, So that's that's the first thing that you look
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  Speaker 2: at and you're like, okay, like that's that's kind of
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  Speaker 2: interesting and not necessarily great.
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  Speaker 3: Other things in here.
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  Speaker 2: Remember, the unemployment rate that we talk about is the
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  Speaker 2: headline unemployment rate, but there are a bunch of other
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  Speaker 2: ones that are included in here, and one of them
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  Speaker 2: is what they call the U six and the U
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  Speaker 2: six is commonly referred to as the Underemployment report, and basically,
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  Speaker 2: to give you an idea of it, the one that
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  Speaker 2: we report on it's called the U three it's total
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  Speaker 2: unemployed as a percentage of the civilian labor force.
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  Speaker 3: The U six.
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  Speaker 2: We talked about this a lot during the in particular
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  Speaker 2: in the aftermath of the Great Financial Crisis, because underemployment
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  Speaker 2: was a big problem there for a while too. But
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  Speaker 2: the U six includes total unemployed plus all people marginally
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  Speaker 2: attached to the labor force, plus total employed part time
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  Speaker 2: for economic reasons as a percentage of the civilian labor
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  Speaker 2: force plus people marginally attached. So it's basically, hey, someone
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  Speaker 2: who's like looking for a job but not technically in
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  Speaker 2: the labor force, and also people that are part time
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  Speaker 2: but want full time work. That jumped from seven and
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  Speaker 2: a half to eight percent, and that eight percent is
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  Speaker 2: now a cycle high for or the post pandemic period.
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  Speaker 2: So that's something that you look at and you're like, Okay,
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  Speaker 2: that's not necessarily a great sign either, that the underemployment
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  Speaker 2: number moved up by half a percent in a month.
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  Speaker 3: That's that's a little bit problematic there.
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  Speaker 4: I think when we headed into this labor market, this
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  Speaker 4: Job's Report rather chuck the way that we would describe
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  Speaker 4: this labor market. And this is not novel and it's
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  Speaker 4: not new to US. It has been a labor market
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  Speaker 4: that's been kind of frozen. No people quitting, companies not
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  Speaker 4: laying off, And nothing about this report to me really
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  Speaker 4: contradicts that in any meaningful way.
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  Speaker 2: No, I think that's fair. Other things just I'm going through.
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  Speaker 2: There's an index that I like to use. It's called
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  Speaker 2: aggregate payrolls. Basically, what you do is you combine the
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  Speaker 2: payroll growth and wage growth, and I kind of use
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  Speaker 2: that as a proxy for like, how much is spending
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  Speaker 2: power moving up in the US, because it's it's pretty much, hey,
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  Speaker 2: how many people have jobs and how much of their
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  Speaker 2: wages going up? And historically if you look at this,
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  Speaker 2: and again, this is one of my favorite series, so
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  Speaker 2: I look at it's the first thing that I look
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  Speaker 2: at every month after the headline numbers, just because I
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  Speaker 2: think that it's a I think it's just a great
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  Speaker 2: proxy for potential consumer spending. And if you look at
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  Speaker 2: this series in really kind of like twenty eleven through
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  Speaker 2: twenty twenty and through twenty nineteen, it basically fluctuated. The
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  Speaker 2: high that it got to was about five point four
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  Speaker 2: percent annual growth, and the low that it got to
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  Speaker 2: was around three and a half and at three and
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  Speaker 2: a half was in August of twenty sixteen, when the
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  Speaker 2: US economy had some dodgy things going on, just because
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  Speaker 2: the energy sector was in a recession because of oil
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  Speaker 2: prices plummeting. His Russia pumped a bunch of oil and
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  Speaker 2: things like that. There were, you know, a whole bunch
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  Speaker 2: of disruptions. China had devalued its currency the year before,
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  Speaker 2: and so that was kind of the low that you
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  Speaker 2: got to.
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  Speaker 3: There.
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  Speaker 2: This number, which had been floating, you know, kind of
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  Speaker 2: in that five range for the last I don't know year,
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  Speaker 2: looks like, yeah, twelve to fifteen months, drop to a
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  Speaker 2: four point six number here, which in and of itself
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  Speaker 2: is fine. It's right in the middle of the range
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  Speaker 2: that you're in that you've been in for the last
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  Speaker 2: you know year or so, or the range for you know,
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  Speaker 2: kind of the twenty tens decade. But you don't want
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  Speaker 2: to see it start, you know, tilting down further towards
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  Speaker 2: four three and a half, because that's basically saying, hey,
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  Speaker 2: your people are losing the ability to drive the economy
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  Speaker 2: through consumer spending, and given that at this point we
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  Speaker 2: still are predominantly in economy, that's sixty five to seventy
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  Speaker 2: percent driven by consumer spending. If that becomes an issue,
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  Speaker 2: it potentially creates a demand problem in the US. So
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  Speaker 2: none of this is something where you look at and
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  Speaker 2: you're like, again, earlier this week, you know, you were
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  Speaker 2: seeing all the talk of oh, like, are we already
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  Speaker 2: in recession, or like, oh, is this like the Trump session. No,
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  Speaker 2: it's it's not okay, So let's let's pump the brakes
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  Speaker 2: a little bit. But these are things where you say, hey,
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  Speaker 2: let's watch them over the next few months and see
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  Speaker 2: how they develop, because there are some conditions developing that
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  Speaker 2: potentially start to look a little bit recessionary if they
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  Speaker 2: continue for a few more months on a downward trend.
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  Speaker 4: Yeah, the piece you were making about the aggregate payrolls
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  Speaker 4: has always been interesting to me as well that you know,
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  Speaker 4: it does track fairly well, and you know, you go
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  Speaker 4: take a look at the twenty twenty two period where
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  Speaker 4: those aggriate weekly payrolls were, you know, twelve percent year
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  Speaker 4: over year, and you can see how you got to
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  Speaker 4: some pretty high inflationary levels between that and supply chain disruptions.
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  Speaker 4: The interesting piece today is how much of that spending
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  Speaker 4: that you just referred to as coming from the top
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  Speaker 4: ten percent of earners, right, And so we always talk about, Hey,
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  Speaker 4: you know, consumer spending being based on payrolls and how
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  Speaker 4: much you're taking home. A lot of it recently has
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  Speaker 4: been seemingly more based on asset prices and how the
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  Speaker 4: wealth effect that folks have been feeling recently. And you
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  Speaker 4: would expect these two things to kind of coincide, right.
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  Speaker 4: If you saw agriate weekly payrolls go down, you might
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  Speaker 4: also see stock prices go down. But if you didn't,
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  Speaker 4: I would be very It could be a weird, shocking
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  Speaker 4: experience here where yeah, people are getting laid off but
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  Speaker 4: your purchases aren't really going down because the stock market
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  Speaker 4: stays up. That that would be a wild thing to see.
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  Speaker 3: Yeah, it's there. There are a lot of.
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  Speaker 2: Balls in the air, and this is another one that
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  Speaker 2: you have to try to sort out in this environment here.
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  Speaker 3: So overall, I.
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  Speaker 2: Think that this job's report you're graded out in the
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  Speaker 2: context of Hey, headline numbers look good, there's a few
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  Speaker 2: things underlying that are starting to show some weakness. It's
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  Speaker 2: probably like a B minus like it's be Yeah, it's
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  Speaker 2: it's fine, Like it's it's not something where you look
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  Speaker 2: at it and you're like, this is inherently this huge issue,
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  Speaker 2: but hey, clean up those underlying things a little bit
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  Speaker 2: and you're you know, within signific distance of B plus
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  Speaker 2: a minus. Like it's it's it's not anything to write
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  Speaker 2: home about either way. This is one that you're gonna
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  Speaker 2: forget about, even though, like I know, in the lead
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  Speaker 2: up to it was like, this is the.
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  Speaker 3: Most important jobs reports. It's always the most important jobs report. No,
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  Speaker 3: we pooh pooh that a lot did. Yeah, and it
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  Speaker 3: was this one.
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  Speaker 2: I think you could look at and like, if this
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  Speaker 2: were a bad report, I think you could be like, oh, okay,
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  Speaker 2: this is like now we're starting to see some real
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  Speaker 2: issues here that are developing. But it's not one that
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  Speaker 2: I was like, this is, you know, some huge thing.
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  Speaker 2: There were ones last year where you know, heading into
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  Speaker 2: the fall, we're we're sitting there saying, hey, like the
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  Speaker 2: job's data has been getting bad for three or four
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  Speaker 2: months now. If it continues, there's there's some recession on
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  Speaker 2: the horizon, and you know kind of heading into like
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  Speaker 2: September October, and they bounced and you were fine, Which
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  Speaker 2: is why I don't get too excited about this here.
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  Speaker 2: It's like, yeah, there's some stuff that you got to
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  Speaker 2: watch the next few months, but there's nothing in this
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  Speaker 2: report that's gonna get you jumping up and down saying, oh,
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  Speaker 2: here's like this huge issue, like it's it's just not
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  Speaker 2: it's it's fine. I completely poo poo these headlines of
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  Speaker 2: you know, payroll growth less than expected. If you're within
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  Speaker 2: nine thousand of the number people were expecting, you're you're
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  Speaker 2: dead on the money.
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  Speaker 3: I'm sorry, but you are agreed.
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  Speaker 2: So let's, uh, anything else you want to touch on
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  Speaker 2: with regards to the jobs report. Yeah, this is a
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  Speaker 2: pretty straightforward one, quite honestly.
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  Speaker 4: Let's move on to the Let's move on from the
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  Speaker 4: jobs report and get back to I guess tariff chaos.
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  Speaker 2: Yeah, let's uh, well we got we got some tariff
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  Speaker 2: stuff to talk about. Yeah, let's let's talk about what
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  Speaker 2: happened yesterday when we return.
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  Speaker 2: So yesterday we got a couple of different announcements. The
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  Speaker 2: first was yesterday morning when the Trump administration announced that
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  Speaker 2: they were pulling back tariffs on basically goods imported from
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  Speaker 2: Mexico that are compliant with the US MCA, the US
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  Speaker 2: Mexico Canada Agreement that was signed during President Trump's first term.
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  Speaker 2: Later in the afternoon, we got an announcement that the
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  Speaker 2: same was being done for Canada as well. And so ultimately,
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  Speaker 2: when you look at this, I'll quote here from the
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  Speaker 2: Wall Street Journal, a White House official set about half
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  Speaker 2: the imports from Mexico and thirty eight percent from Canada
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  Speaker 2: are exempt from the tariffs under the US MCA, and
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  Speaker 2: in any case, officials said that this would basically no
• 12:38
  Speaker 2: longer apply. It's predominantly automobiles and agricultural goods. So if
• 12:44
  Speaker 2: you look at this, obviously the auto industry was kind
• 12:46
  Speaker 2: of like, hey, this is kind of a problem for
• 12:50
  Speaker 2: us when it comes to, you know, being able to
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  Speaker 2: assemble vehicles. The estimates that I've seen or that if
• 12:56
  Speaker 2: these tariffs were implemented on the auto sector, it would
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  Speaker 2: at anywhere from about ten to fifteen thousand dollars per
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  Speaker 2: vehicle in cost for Americans buying cars. And likewise, we
• 13:07
  Speaker 2: also had, you know, the great avocado panic of Tuesday
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  Speaker 2: of this week, and so that you can now put
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  Speaker 2: to bed as well. Canada basically said that, hey, we
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  Speaker 2: are going to leave some tariffs that are in place,
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  Speaker 2: but the ones that they were going to levy later
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  Speaker 2: in the month, they are not going to now. But again,
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  Speaker 2: this was just a one month reprieve on this. And so, Mike,
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  Speaker 2: the thing that you're you're hearing, and this you're hearing
• 13:34
  Speaker 2: it publicly now from from business leaders. This is from
• 13:38
  Speaker 2: the CEO of Brown Foreman, who's the parent company if
• 13:41
  Speaker 2: you haven't heard of them, they're the parent company of
• 13:43
  Speaker 2: Jack Daniels and a bunch of other whiskies. And this
• 13:47
  Speaker 2: is him on CNBC yesterday. Look, I don't know any
• 13:51
  Speaker 2: more about this than all of you. That's what's so
• 13:53
  Speaker 2: difficult about it. Every day it seems like the story changes.
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  Speaker 2: And so I think this is the thing that you're
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  Speaker 2: hearing from. Ce Look, if the idea behind tariffs is
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  Speaker 2: that you want to bring manufacturing back to the United States,
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  Speaker 2: you can't have them in place for a day because
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  Speaker 2: I can't build a factory in a day, And furthermore,
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  Speaker 2: once the tariff's removed, then I've built the factory and
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  Speaker 2: now I have nothing to do with it because all
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  Speaker 2: of my competitors are gonna s buy from overseas. So
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  Speaker 2: I think the thing that you are hearing now from
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  Speaker 2: CEOs is, look, we need more certainty on this. And
• 14:26
  Speaker 2: if you want us to bring production back to the US,
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  Speaker 2: and you're gonna use tariffs as you know the means
• 14:31
  Speaker 2: to do so, then you've got to commit to it
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  Speaker 2: because otherwise I'm not gonna do it if it's just
• 14:36
  Speaker 2: gonna be this on again, off again thing.
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  Speaker 4: Yeah, And to be clear, I think most CEOs, maybe
• 14:42
  Speaker 4: they're not saying it publicly, but they're all saying we
• 14:44
  Speaker 4: don't want the tariffs. But if you're going to do them,
• 14:48
  Speaker 4: then we're not gonna respond to them after half a day, right.
• 14:53
  Speaker 4: And you can't build a factory in twelve hours, right,
• 14:55
  Speaker 4: And it would be silly of you to do so
• 14:57
  Speaker 4: at this point because to your point, Chuck, if tomorrow
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  Speaker 4: my competitor can go back to importing car parts from
• 15:04
  Speaker 4: Mexico and much cheaper than it would cost me to
• 15:07
  Speaker 4: assemble them in Detroit that I'm not going to be
• 15:09
  Speaker 4: competitive anymore, and I've got a real problem.
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  Speaker 3: And so again I come back to one. There is
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  Speaker 3: a lot of confusion.
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  Speaker 4: I mean, you know, the estimates that we had seen
• 15:19
  Speaker 4: previously were that with these new tariffs in place, the
• 15:22
  Speaker 4: average effective import tariff rate on the goods that we
• 15:26
  Speaker 4: consumed in twenty twenty three, if those were to continue
• 15:29
  Speaker 4: in twenty twenty five, would have bumped up to like
• 15:31
  Speaker 4: ten point seven percent, the highest rate of tariffs that
• 15:33
  Speaker 4: we had seen since the nineteen forties. With this USMCA waiver,
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  Speaker 4: I have no idea where that is. I don't think
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  Speaker 4: anyone has any real idea in terms of what the
• 15:42
  Speaker 4: average effective tariff rate would be.
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  Speaker 3: So there's a lot of confusion there.
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  Speaker 4: USMCA, and it's in and of itself, is a complex
• 15:51
  Speaker 4: type of trade deal here where a lot of companies,
• 15:54
  Speaker 4: because of the sourcing requirements and all of the details
• 15:57
  Speaker 4: in there of you know, cataloging and under standing where
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  Speaker 4: these products came from, many companies in the first place
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  Speaker 4: just said I'll pay the tariff rather than you know,
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  Speaker 4: come up with the compliance to make sure that I'm
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  Speaker 4: complying with USMCA. The the amount of confusion, to your point,
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  Speaker 4: that is bubbling to the surface here, and I think
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  Speaker 4: probably starting to disrupt businesses is getting substantial. And I
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  Speaker 4: think goes back to something that we have talked about
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  Speaker 4: at length, which is I don't understand what the actual
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  Speaker 4: goal of a lot of these things is. Like we've
• 16:32
  Speaker 4: talked about bringing manufacturing back to the United States. We've
• 16:34
  Speaker 4: talked about countering China's influence in places like Mexico. We've
• 16:38
  Speaker 4: talked about making sure that legal fensanol doesn't come across.
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  Speaker 3: The borders anymore.
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  Speaker 4: And if those are your you know, if those are
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  Speaker 4: your three priorities, understanding which one is the real biggest
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  Speaker 4: priority helps you understand how long these things might be
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  Speaker 4: in place for. But to your point, to bring manufacturing
• 16:57
  Speaker 4: back to the United States, it doesn't work to have
• 16:59
  Speaker 4: it in place for three days or three months, or
• 17:01
  Speaker 4: frankly even three years. You need a firm commitment from
• 17:04
  Speaker 4: an administration that this is going to be in place
• 17:06
  Speaker 4: long term so I can compete.
• 17:08
  Speaker 2: And just to give you an example the complexities of
• 17:10
  Speaker 2: us MCA, I'm again gonna quote from the Wall Street
• 17:14
  Speaker 2: Journal here. For example, a passenger vehicle only complies with
• 17:17
  Speaker 2: the USMCA if the majority of the components, including the
• 17:20
  Speaker 2: steel and aluminum, originate in North America. In addition, forty
• 17:24
  Speaker 2: to forty five percent of the vehicle's value must come
• 17:26
  Speaker 2: from factories where the workers earn at least sixteen dollars
• 17:29
  Speaker 2: per hour. And so this is just something where again
• 17:34
  Speaker 2: that's just.
• 17:34
  Speaker 3: Like one little piece here of of the deal.
• 17:38
  Speaker 2: I have no like the first thing that I did
• 17:41
  Speaker 2: yesterday when I saw this, I'm like, okay, like, what
• 17:44
  Speaker 2: goods are us MCA complying And there's no easy list
• 17:47
  Speaker 2: of anything, because it's not even all of one.
• 17:49
  Speaker 3: Type of good.
• 17:50
  Speaker 2: It might be well, the cars produced at this factory are,
• 17:54
  Speaker 2: but the ones that this are like, it's it's really complex,
• 17:58
  Speaker 2: and I'll be the first to admit I have no
• 18:00
  Speaker 2: handle on.
• 18:00
  Speaker 3: Exactly what it means.
• 18:03
  Speaker 2: And I think this is part of the reason why
• 18:05
  Speaker 2: despite the multiple announcements he had two of them yesterday
• 18:08
  Speaker 2: that you were, you know, having some of these tariffs relieved.
• 18:14
  Speaker 3: The market couldn't rally.
• 18:15
  Speaker 2: I mean, like again, you had a spot day pretty
• 18:18
  Speaker 2: much where the SMP was down almost two percent, the
• 18:21
  Speaker 2: NASDAC down two and three quarters percent. And so I
• 18:25
  Speaker 2: think this is the landscape that we're trying to sort
• 18:28
  Speaker 2: through now, which is, hey, can can we get some
• 18:30
  Speaker 2: certainty about what's what what the implementation is going to be,
• 18:34
  Speaker 2: and then from there we can move forward.
• 18:36
  Speaker 1: You know.
• 18:36
  Speaker 5: It's look, I've said since since the beginning of this
• 18:43
  Speaker 5: term here for for President Trump, hey, if if you
• 18:46
  Speaker 5: want to move forward with tariffs and the stuff, let's
• 18:48
  Speaker 5: let's see how it goes.
• 18:49
  Speaker 3: Then, like I have an open mind to being.
• 18:51
  Speaker 2: Able to say, all right, like let's let's let's let's
• 18:54
  Speaker 2: make these big changes because we know what's going on
• 18:57
  Speaker 2: in America has not been working for a large group
• 19:01
  Speaker 2: of people, and so I'm willing to say, okay, like,
• 19:04
  Speaker 2: if this is what we want to try, let's let's
• 19:06
  Speaker 2: go ahead and let's do it. But the back and forth,
• 19:10
  Speaker 2: you know, within the week here and even within the
• 19:12
  Speaker 2: last you know, few weeks, it just makes it challenging
• 19:15
  Speaker 2: to see where, like how this is going to play
• 19:18
  Speaker 2: out strategically, and it's it's impacting markets. I think at
• 19:23
  Speaker 2: this point, let's take a quick break here. When we
• 19:26
  Speaker 2: come back, We've got Wall Street watch right after this.
• 19:40
  Speaker 1: Like us on Facebook and follow us on Twitter at
• 19:43
  Speaker 1: TFE show Breaking Business News is always first right here
• 19:47
  Speaker 1: on the Financial Exchange Radio Network. Time now for Wall Street.
• 19:52
  Speaker 1: Watch a complete look and what's moving market so far
• 19:55
  Speaker 1: today right here on the Financial Exchange Radio Network.
• 20:02
  Speaker 6: Well, markets were flat as a couple minutes ago, but
• 20:05
  Speaker 6: now not so much. Wall Street continues to navigate through
• 20:09
  Speaker 6: tariff developments, and investors are also digesting the February jobs
• 20:14
  Speaker 6: report unveiled this morning, where one hundred and fifty one
• 20:17
  Speaker 6: thousand jobs were added last month, slightly less than estimates
• 20:21
  Speaker 6: of one hundred and sixty thousand. At the moment, the
• 20:24
  Speaker 6: Dow is now down by over a quarter of a percent,
• 20:26
  Speaker 6: or one hundred and eighteen points, SMP five hundred now
• 20:30
  Speaker 6: down by over half a percent or thirty points, and
• 20:33
  Speaker 6: the Nasdaq down over two thirds of a percent or
• 20:36
  Speaker 6: one hundred and twenty two points. RUSTED two thousand, dipping
• 20:39
  Speaker 6: into negative territory by two tenths of a percent. Tenure
• 20:42
  Speaker 6: Treasure reeled down by four basis points at four point
• 20:45
  Speaker 6: two four percent, and crude oil up two and a
• 20:48
  Speaker 6: half percent higher on the day, trading at right about
• 20:52
  Speaker 6: sixty eight dollars a barrel. Broadcom shares are up by
• 20:56
  Speaker 6: nearly three percent after the chip maker reported a surge
• 20:59
  Speaker 6: in AI REVW for the previous quarter and issued optimistic
• 21:02
  Speaker 6: guidance for the current quarter of the trip. Stocks including
• 21:05
  Speaker 6: Nvidia and Arm are also seeing minor gains on the
• 21:08
  Speaker 6: day in reaction to those earnings. Meanwhile, Gap reported an
• 21:11
  Speaker 6: earnings in revenue beat for the holiday quarter. The retail giant,
• 21:15
  Speaker 6: who also owns brands such as Old Navy and Banana Republic,
• 21:19
  Speaker 6: also saw its same store sales climb three percent, better
• 21:22
  Speaker 6: than street forecast of one percent. Gap is up by
• 21:25
  Speaker 6: fourteen percent. Elsewhere, Hewlett Packard Enterprise down by fifteen percent
• 21:30
  Speaker 6: after the software company said it would cut about five
• 21:33
  Speaker 6: percent of its global workforce. The company also warned tariffs
• 21:37
  Speaker 6: would weigh on its annual profit. Walgreens struck a deal
• 21:41
  Speaker 6: to be taken private by Sycamore Partners for about ten
• 21:44
  Speaker 6: billion dollars. Walgreens up by seven percent. Costco's quarterly revenue
• 21:49
  Speaker 6: missed expectations, but growth in same store sales was higher
• 21:53
  Speaker 6: than expected. That saw, however, retreating by six percent, and
• 21:57
  Speaker 6: more volatility could ensue later today, with FED Chairman Jerome
• 22:01
  Speaker 6: Pile slated to speak at twelve thirty this afternoon from
• 22:05
  Speaker 6: the US monetary policy form in New York City. I'm
• 22:09
  Speaker 6: Tucker Silvan. That's Wall Street Watch.
• 22:11
  Speaker 2: Mike, just want to touch on a couple of the
• 22:14
  Speaker 2: items from that, if that's cool with you. One of
• 22:17
  Speaker 2: the things that is really interesting to me, and not
• 22:20
  Speaker 2: in a good way, is when companies report good earnings
• 22:25
  Speaker 2: and then end up getting punished by them or can't
• 22:27
  Speaker 2: hold on to gains in those earnings. Again, think about
• 22:31
  Speaker 2: what we've seen the last couple of years from companies,
• 22:33
  Speaker 2: like in video in video reports, blowout earnings, better than expected,
• 22:39
  Speaker 2: the stock rallies, and that kind of propelled things forward.
• 22:41
  Speaker 3: Yep.
• 22:42
  Speaker 2: A couple of weeks ago in video reports earnings, they
• 22:44
  Speaker 2: were good earning, Like they beat meaningfully on earnings, better
• 22:47
  Speaker 2: than expected, Like the guidance was good. Look where they
• 22:51
  Speaker 2: are now relative to when they report earnings. They've just
• 22:53
  Speaker 2: gotten beaten up.
• 22:54
  Speaker 3: They're getting punished.
• 22:55
  Speaker 2: Broadcom reported great earnings. That the first thing that I
• 22:58
  Speaker 2: heard from someone last night after to Broadcom reported earnings
• 23:01
  Speaker 2: was well, maybe we shouldn't have lumped them in with
• 23:04
  Speaker 2: Marvel Technologies, you know, which got hammered yesterday. You know, hey,
• 23:07
  Speaker 2: this is like way better, Like, look at these earnings
• 23:09
  Speaker 2: they're great. Stock was up sixteen percent after hours yesterday.
• 23:14
  Speaker 2: It's up two now. M Costco talk again like you
• 23:18
  Speaker 2: go through the numbers, it's like, hey, that the same
• 23:20
  Speaker 2: store comps are good, Like the numbers look really good.
• 23:24
  Speaker 2: Can't catch a bid? And part of this, get it.
• 23:26
  Speaker 2: There's two things at play here. The first is okay,
• 23:29
  Speaker 2: like just overall market sentiment and things like that, and
• 23:32
  Speaker 2: the second, which we've talked about. We touched on this
• 23:34
  Speaker 2: with Costco the other day. I can't remember if I
• 23:35
  Speaker 2: was talking about it.
• 23:36
  Speaker 3: With you or Paul.
• 23:37
  Speaker 2: But Costco right now is trading for I'm sorry, fifty
• 23:41
  Speaker 2: three times forward earnings. It's trading at twice the valuation
• 23:46
  Speaker 2: on it and a relative basis to Nvidia. Now, look,
• 23:51
  Speaker 2: I love big palettes of meat as much as anyone else.
• 23:54
  Speaker 2: Oh yeah, okay, my life is made eating big palettes
• 23:59
  Speaker 2: of meat. But fifty six times forward earnings for big
• 24:03
  Speaker 2: palettes of meat pretty wild.
• 24:05
  Speaker 3: It's kind of wild.
• 24:06
  Speaker 2: And so it's a combination of you know, overall market
• 24:08
  Speaker 2: sentiment right now and still the frothiness that's out there
• 24:11
  Speaker 2: in these markets. And so until one of those things
• 24:15
  Speaker 2: turns for the better, you've got some risk that that
• 24:20
  Speaker 2: is present on this and so I think that's kind
• 24:23
  Speaker 2: of what we're seeing right now when we look at
• 24:25
  Speaker 2: how these stocks that are reporting again good earnings and
• 24:31
  Speaker 2: they're getting beaten up. You know, it's it's kind of
• 24:34
  Speaker 2: happening across the board right now, and it won't happen forever,
• 24:37
  Speaker 2: Like this is the thing. It doesn't happen forever. You know,
• 24:41
  Speaker 2: Eventually you get to a point where it's like, okay,
• 24:43
  Speaker 2: like we've washed that out of the system and we're
• 24:45
  Speaker 2: good to go.
• 24:46
  Speaker 3: But it's it's.
• 24:47
  Speaker 2: Pretty clear that today at least it's not out of
• 24:49
  Speaker 2: the system yet.
• 24:50
  Speaker 4: Well, and this whole week has been defined by very
• 24:53
  Speaker 4: volatile swings, at least at least relative to you know,
• 24:57
  Speaker 4: what we've been used to over the course of the
• 24:59
  Speaker 4: last few years. But yeah, to your point, like as
• 25:01
  Speaker 4: we went into the last break, which was now eleven
• 25:05
  Speaker 4: minutes ago, full one, exactly flat. Now we are yeah,
• 25:10
  Speaker 4: down substantially here. And this is also on what I
• 25:15
  Speaker 4: think by most would be perceived as positive economy, positive
• 25:21
  Speaker 4: trade news for markets and investors, at least of a
• 25:24
  Speaker 4: suspension of tariffs. Again, we remember what happened to equities
• 25:28
  Speaker 4: in February when these things got suspended and delayed. And
• 25:31
  Speaker 4: I think this is a very different market reaction to
• 25:35
  Speaker 4: that pretty much same news, right This news that we
• 25:38
  Speaker 4: are getting now is not all that much different from
• 25:40
  Speaker 4: the way things played out in early February, where announcement
• 25:43
  Speaker 4: of tariffs, waiver of tariffs suspension for thirty days. We
• 25:47
  Speaker 4: got almost the same exact thing here. If you talk
• 25:50
  Speaker 4: about the goods that actually affect average Americans and the
• 25:53
  Speaker 4: goods that actually affect big publicly traded companies, and markets
• 25:57
  Speaker 4: just aren't buying it for whatever reason. And yeah, I
• 26:02
  Speaker 4: don't know that that has much to do with the
• 26:03
  Speaker 4: facts on the ground, might have more to do a sentiment.
• 26:07
  Speaker 2: Let's I want to move and talk a little bit
• 26:09
  Speaker 2: more about tariffs. There's a piece from Bloomberg talking about
• 26:12
  Speaker 2: Mexico and specifically some of the things that they are
• 26:16
  Speaker 2: doing now, And one of the things that I find
• 26:18
  Speaker 2: interesting in this is the difference in how things are
• 26:22
  Speaker 2: being handled between the United States and Mexico and the
• 26:25
  Speaker 2: United States and Canada. Mike, is it fair to say
• 26:30
  Speaker 2: that things between the US and Canada right now publicly
• 26:34
  Speaker 2: are pretty doe ugly?
• 26:37
  Speaker 4: Yeah, we didn't cover it, but for instance, you know,
• 26:39
  Speaker 4: we talked about Canada dropping a bunch of those proposed tariffs,
• 26:42
  Speaker 4: but province by province, Canada can also impose tariffs, and
• 26:47
  Speaker 4: for instance, in Ontario they have stuck with their proposed
• 26:51
  Speaker 4: tariffs on energy that goes to New York, Michigan and
• 26:57
  Speaker 4: one other state I believe, and they specifically cited like, no,
• 27:01
  Speaker 4: we are keeping this stuff in place in regards to
• 27:03
  Speaker 4: energy prices anything going to the United States until all
• 27:07
  Speaker 4: threat of tariffs are dropped. You had commentary from Scott
• 27:10
  Speaker 4: Bessened yesterday about Trudeau that was pretty ugly. Yeah, things
• 27:13
  Speaker 4: are I think rocky right now in that relationship.
• 27:17
  Speaker 3: Really ugly.
• 27:17
  Speaker 2: They're like publicly ugly in terms of what you're seeing
• 27:20
  Speaker 2: at this point. I can trast this with Mexico, where
• 27:25
  Speaker 2: I don't exactly know what is going on in like
• 27:29
  Speaker 2: none of us are in these negotiations, right so, like
• 27:31
  Speaker 2: all of this is kind of best guess and best
• 27:33
  Speaker 2: effort based on what we can figure out. But both
• 27:38
  Speaker 2: a month ago and in the last few days, the
• 27:42
  Speaker 2: tenor of negotiations between Claudia Scheinbaum who's the Mexican president,
• 27:46
  Speaker 2: and President Trump seems to be like pretty dark constructive.
• 27:51
  Speaker 2: I gotta say, I don't really know again what's going
• 27:54
  Speaker 2: on behind closed doors, but for whatever reason, the two
• 27:58
  Speaker 2: of them seem to kind of get along LEAs from
• 28:00
  Speaker 2: what we can gather publicly, to the point where in
• 28:03
  Speaker 2: a press conference yesterday Sean Baum announced, Hey, we're going
• 28:06
  Speaker 2: to be reviewing the tariffs that we have in place
• 28:10
  Speaker 2: with China to see if we need to be making
• 28:13
  Speaker 2: any changes there. And this, to me, I do have
• 28:16
  Speaker 2: to say, like music, music to my ears. Because as
• 28:20
  Speaker 2: much as we can say that like the on again
• 28:22
  Speaker 2: off again stuff with with Mexico and Canada is challenging
• 28:26
  Speaker 2: from a business perspective, one place that I have, you know,
• 28:30
  Speaker 2: continue to kind of be in alignment is, Yeah, there
• 28:34
  Speaker 2: really is a problem with trade with China, and the
• 28:39
  Speaker 2: stuff that we've done historically to try to deal with
• 28:42
  Speaker 2: it has simply not worked because the Chinese government has
• 28:44
  Speaker 2: not kept up its end of the bargain in many cases.
• 28:47
  Speaker 2: And so if you want to try to bring them
• 28:50
  Speaker 2: to the table or just try to you know, equalize
• 28:53
  Speaker 2: things or make things more challenging, you know, just for
• 28:56
  Speaker 2: them to continue to abuse that the free trade system
• 28:59
  Speaker 2: the way they have of yeah, like implementing tariffs not
• 29:03
  Speaker 2: just on your own, but getting a coalition of countries
• 29:07
  Speaker 2: that buy stuff from China to do so. Man Like,
• 29:11
  Speaker 2: doesn't that feel like exactly like this? This feels like
• 29:15
  Speaker 2: this is I'm looking at this. I'm like, oh, okay, now,
• 29:18
  Speaker 2: like now we've got something here like this is this
• 29:20
  Speaker 2: is what I would like to to see in order
• 29:24
  Speaker 2: to try to remedy some of this stuff. And again,
• 29:27
  Speaker 2: I don't know how Shinebomb operates. I'll be the first
• 29:30
  Speaker 2: to admit I know nothing about it. I don't know
• 29:32
  Speaker 2: where she falls on the political spectrum. I know nothing
• 29:35
  Speaker 2: about her, which is probably my fault. It is my fault.
• 29:39
  Speaker 2: But she seems.
• 29:43
  Speaker 3: Not you not you. Uh.
• 29:45
  Speaker 2: It seems to me that she gets Trump in a
• 29:49
  Speaker 2: way that other world leaders might not, and somehow is
• 29:53
  Speaker 2: able to make that relationship work in a way that
• 29:56
  Speaker 2: our neighbors to the north like that. It's just very different,
• 29:59
  Speaker 2: you know. And I don't know if there's a right
• 30:02
  Speaker 2: or wrong approach. I don't know how this all ends
• 30:05
  Speaker 2: up playing out in the long run. I'm just saying, Hey,
• 30:09
  Speaker 2: whatever she's doing is getting her the results that she
• 30:12
  Speaker 2: wants for her country, and also seems to be accomplishing
• 30:16
  Speaker 2: some things that seem to be meaningful for the US
• 30:19
  Speaker 2: as well, and that to me seems positive.
• 30:22
  Speaker 4: Where I'm landing on some of this stuff is that
• 30:24
  Speaker 4: the mere threat of tariffs may be able to get
• 30:27
  Speaker 4: you some meaningful accomplishments such as crackdown on the border, fentanyl,
• 30:33
  Speaker 4: attitude towards China, and action towards China. It may not
• 30:36
  Speaker 4: be able to get you manufacturing jobs back in the
• 30:38
  Speaker 4: United States right just the threat of terroriffs, because Ford
• 30:41
  Speaker 4: is not going to relocate a manufacturing facility based on
• 30:44
  Speaker 4: the potential threat of tariffs. But if you can get
• 30:48
  Speaker 4: some meaningful action on the other items, that is, in
• 30:51
  Speaker 4: my view, a significant progress. The question that I can't
• 30:55
  Speaker 4: answer is does the Trump administration see it as significant
• 30:58
  Speaker 4: progress and will they Will they build on that part
• 31:02
  Speaker 4: of it rather than the pure renaissance and manufacturer in
• 31:06
  Speaker 4: the United States. It's just tough to know what the
• 31:08
  Speaker 4: real priority is.
• 31:10
  Speaker 3: Take a quick break.
• 31:11
  Speaker 2: When we come back, Mike, you want to talk eggs
• 31:14
  Speaker 2: always which came first, the chicken or the egg. We
• 31:19
  Speaker 2: won't answer that question next segment, but we will be
• 31:21
  Speaker 2: talking eggs.
• 31:24
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• 31:28
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• 31:32
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• 31:40
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• 31:45
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• 31:57
  Speaker 3: All right, Mike.
• 31:57
  Speaker 2: So the price of eggs continues to be, well, it's high.
• 32:03
  Speaker 2: I believe we're still at the highest egg prices that
• 32:05
  Speaker 2: we have ever seen, and so, according to a report
• 32:09
  Speaker 2: from Bloomberg, US officials are searching across oceans to find
• 32:14
  Speaker 2: enough eggs to ease a shortage that sent prices soaring,
• 32:17
  Speaker 2: forcing grocery stores to limit customer purchases and restaurants to
• 32:19
  Speaker 2: add search charges. Poultry trade groups and countries like Poland
• 32:23
  Speaker 2: and smaller players like France and Indonesia say they're fielding
• 32:25
  Speaker 2: inquiries from American embassies in the US Department of Agriculture
• 32:29
  Speaker 2: about eggs for export.
• 32:31
  Speaker 4: So we've all become kind of egg experts over the
• 32:34
  Speaker 4: last few months here. The part of the big challenge
• 32:38
  Speaker 4: here is there is no real international market infrastructure for eggs.
• 32:46
  Speaker 2: No, there are no egg trains from Canada there's no
• 32:48
  Speaker 2: egg pipelines.
• 32:50
  Speaker 4: And it kind of makes sense. They're pretty delicate item
• 32:52
  Speaker 4: to ship around the world. But eggs are a very
• 32:57
  Speaker 4: locally local market. They typically don't cross oceans very often,
• 33:06
  Speaker 4: they barely cross I'm sure they cross borders in Europe,
• 33:09
  Speaker 4: for example, but there is not a lot of global
• 33:12
  Speaker 4: trade of eggs, and so importers are finding like, yeah,
• 33:17
  Speaker 4: there's some countries that might be willing to sell this
• 33:19
  Speaker 4: to us, but they don't have the great infrastructure to
• 33:21
  Speaker 4: how to ship it, and they're kind of making this
• 33:23
  Speaker 4: stuff up seemingly on the fly.
• 33:26
  Speaker 2: Do you know the three states in the US to
• 33:27
  Speaker 2: produce the most eggs? Iowa, yep I was number one
• 33:31
  Speaker 2: billion eggs a year. Nebraska, Uh, no, Nebraska is not
• 33:36
  Speaker 2: in the top ten. It looks like it's I was
• 33:40
  Speaker 2: my only guess. Nebraska is like fifteen, give me. Indiana
• 33:44
  Speaker 2: is number two, yeah.
• 33:48
  Speaker 3: And number three Delaware. No, Delaware not a thing. It's
• 33:54
  Speaker 3: not a thing. The Great State of Ohio.
• 33:58
  Speaker 2: Yeah, Ohio produces ish Hio in Indiana both produced about
• 34:01
  Speaker 2: nine hundred million eggs a year.
• 34:02
  Speaker 3: Yeah, and so probably not.
• 34:07
  Speaker 2: But so there is you know, interstate egg commerce, Like
• 34:10
  Speaker 2: we're the New England region doesn't.
• 34:12
  Speaker 3: Really produce eggs.
• 34:13
  Speaker 2: It's just not not our thing, you know, aside from
• 34:16
  Speaker 2: you know, backyard coops and stuff like that. But big
• 34:19
  Speaker 2: egg production basically stops at Pennsylvania. Other big egg producers Michigan, Georgia, Texas, Missouri,
• 34:26
  Speaker 2: and Arkansas.
• 34:28
  Speaker 3: So there you go. That is egg production in the US.
• 34:30
  Speaker 2: But yeah, as we're trying to get eggs from overseas,
• 34:33
  Speaker 2: we're finding like, you don't have you don't have like
• 34:37
  Speaker 2: specialized transportation for you know, getting eggs on planes and
• 34:40
  Speaker 2: mass And this is kind of a problem because hey,
• 34:43
  Speaker 2: if you get a little bit of turbulence, Mike, what
• 34:45
  Speaker 2: happens to eggs scramble? Yep, you might as well just
• 34:49
  Speaker 2: you know, turn on the turn on the broiler and
• 34:51
  Speaker 2: call to day right a.
• 34:53
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• 34:57
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• 35:14
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• 35:17
  Speaker 6: but also helps you avoid probate and potentially eliminates estate taxes.
• 35:22
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  Speaker 6: That's eight sixty six eight four eight five six nine nine,
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• 35:55
  Speaker 1: The proceeding was paid for and the views expressed are
• 35:57
  Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
• 35:59
  Speaker 1: or Armstrong Advisory may contact you offering legal or investment services.
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  Speaker 1: Cushing and Armstrong did not endorse each other and are
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  Speaker 1: not affiliated.
• 36:06
  Speaker 3: Check this market is.
• 36:08
  Speaker 4: I don't know how closely you've been following it, but
• 36:10
  Speaker 4: just in the last five minutes, we just went from
• 36:13
  Speaker 4: like down seven tens of a percent to basically flat
• 36:17
  Speaker 4: again to now once again down about a third of
• 36:19
  Speaker 4: a percent on the S and P five hundred.
• 36:21
  Speaker 3: This is a market that has no idea what it's
• 36:25
  Speaker 3: trying to accomplish.
• 36:26
  Speaker 2: Let's talk about this a little bit because this is
• 36:29
  Speaker 2: a dangerous type of market for individuals, and the potential
• 36:34
  Speaker 2: for and overreaction on your part because of emotion is significant.
• 36:40
  Speaker 2: And this could go both ways, either in terms of like, hey,
• 36:43
  Speaker 2: I'm gonna buy the dip, or oh, it's time for
• 36:45
  Speaker 2: me to sell this, like I can't deal with this anymore.
• 36:48
  Speaker 2: There's been so much chop. I mean last week into
• 36:51
  Speaker 2: the early part of this week. Remember we had three
• 36:53
  Speaker 2: straight days where it was down ninety points, up ninety points, down,
• 36:57
  Speaker 2: ninety points on the S and P. We got basically
• 37:00
  Speaker 2: like nowhere during that time. You know, when you factor
• 37:03
  Speaker 2: in like all the chop that we saw this week,
• 37:05
  Speaker 2: it's been you know, a continued to slide. It's still
• 37:07
  Speaker 2: very choppy within within days. I mean, when you're moving
• 37:11
  Speaker 2: you know, one percent in a span of twenty minutes.
• 37:14
  Speaker 2: There's just no certainty as to where this market wants
• 37:18
  Speaker 2: to be. And so I think this is this is
• 37:20
  Speaker 2: one where hey, like, unless you actually have some kind
• 37:27
  Speaker 2: of you know.
• 37:28
  Speaker 3: Trading strategy that you use.
• 37:32
  Speaker 2: Trying to time this market based on again the fact
• 37:36
  Speaker 2: that we have you know, intra day news flows where
• 37:38
  Speaker 2: the situation is evolving rapidly. It's you're just gonna end
• 37:43
  Speaker 2: up getting chewed up most of the time. And so
• 37:45
  Speaker 2: this is not to say like invest in stocks or
• 37:47
  Speaker 2: don't invest in stocks, but much more. Hey, unless you
• 37:50
  Speaker 2: think that you can beat the guys that are paid
• 37:52
  Speaker 2: to do this all day, every day and have way
• 37:54
  Speaker 2: more information than you and the one trade that you
• 37:56
  Speaker 2: make a year, come up with what you're you know,
• 38:00
  Speaker 2: your plan is for the long term, whatever that works
• 38:03
  Speaker 2: out to be for you, and don't try to manage
• 38:07
  Speaker 2: this day to day because you're gonna get absolutely chewed
• 38:10
  Speaker 2: up and spit out trying to deal with this kind
• 38:11
  Speaker 2: of whipsaw.
• 38:12
  Speaker 3: It's just very, very volatile.
• 38:15
  Speaker 2: Right now, and I don't know many people that can
• 38:19
  Speaker 2: succeed in these kinds of markets.
• 38:21
  Speaker 3: Quick break, we've got hour two coming up.