Latest / The Financial Exchange Show / Market Rally, SpaceX IPO, Record Oil Draws & AI Updates

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Market Rally, SpaceX IPO, Record Oil Draws & AI Updates · The Financial Exchange Show

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Speaker 1: and Paul Lane.
1:09
Speaker 2: Chuck, Paul and Tucker with you and if you kick
1:13
Speaker 2: things off. Today investors fielded a pretty good mood here,
1:18
Speaker 2: with all the major indices rallying. The S and P
1:21
Speaker 2: five hundred up fifty three points, about three quarters of percent,
1:25
Speaker 2: Dow is up three hundred and sixty six points about
1:27
Speaker 2: three quarters of a percent, and as that can Posit
1:30
Speaker 2: up two hundred and seventy three points about one percent,
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Speaker 2: and a cute little Russell two thousand here. Boy there
1:36
Speaker 2: you go, Okay, go fetch. Yeah, you're up about forty
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Speaker 2: nine points, are almost two percent there, So all major
1:43
Speaker 2: US indices are in the green tenure. Treasury also coming
1:48
Speaker 2: back in as well. Uh it is now down seven
1:51
Speaker 2: basis points to four points six zh three. This all
1:54
Speaker 2: happening basically since about ten fifteen or so, when some
2:01
Speaker 2: headlines came out that maybe generated some optimism around a
2:06
Speaker 2: US and Iran deal reportedly, and again this is like,
2:11
Speaker 2: I don't even know the original sourcing on this, so
2:14
Speaker 2: I take it with like a lot of salt, not
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Speaker 2: just a grain. But there are like various reports out
2:22
Speaker 2: there that are saying that the Pakistani army chief may
2:25
Speaker 2: head to Iran. Tomorrow to present a final version of
2:28
Speaker 2: a deal. I don't know what to make of any
2:32
Speaker 2: of this. Again, I'm hopeful that you get something moving
2:36
Speaker 2: through the straight offore moves in large quantities to this
2:39
Speaker 2: point where we're not seeing that, even as you still
2:42
Speaker 2: get kind of this drip drab of you know, little ships,
2:46
Speaker 2: not little, a lot of them are rather quite big.
2:49
Speaker 2: This drip drab of you know ships coming out of
2:51
Speaker 2: the region. It's just not enough to actually change the
2:54
Speaker 2: calculus there. But the tenure treasury down seven basis points
2:58
Speaker 2: again around four point six percent. We've got the dollar
3:02
Speaker 2: down zero point two percent to ninety nine oh seven,
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Speaker 2: and gold up twenty six to fifteen ounced to forty
3:06
Speaker 2: five thirty seven. Crude oils, text inermedia and also selling
3:10
Speaker 2: off on that news I mentioned earlier, down three point
3:13
Speaker 2: eighty two a barrel to one hundred and thirty three
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Speaker 2: cents triple a national Averagur gas prices up two point
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Speaker 2: two cents a gallon of four fifty five and five tenths.
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Speaker 2: These are also taking up a couple tens of acent
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Speaker 2: to five sixty five and two tenths as well. So
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Speaker 2: that's what we've got moving in markets. Here, Paul, we
3:33
Speaker 2: got a piece from Barons. Why end of earning season
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Speaker 2: leaves the stock market market vulnerable? Does it.
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Speaker 3: We've had a really great earning season for the course
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Speaker 3: of the last few weeks. Here, we've got a significant
3:48
Speaker 3: percentage of the S and P five hundred companies that
3:51
Speaker 3: have presented their earnings, and we've seen an average growth
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Speaker 3: rate of about twenty eight percent, the highest since twenty
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Speaker 3: twenty one according to fact set. The reason that there
4:03
Speaker 3: is some you know, potential concerns regarding the end of
4:07
Speaker 3: earning season, not specific necessarily to anything about the company's
4:11
Speaker 3: reporting earnings, but the larger macro economic backdrop that you
4:15
Speaker 3: were just mentioning between the US and I ran war.
4:18
Speaker 3: We talked a little bit earlier in the program about
4:21
Speaker 3: the thirty year treasury has hit its highest level since
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Speaker 3: July of two thousand and seven, sitting around five point
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Speaker 3: one point five percent, and the concerns for future inflationary
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Speaker 3: impacts heading into later this year.
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Speaker 4: As we sit with.
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Speaker 3: Gas you know, still well over four dollars a gallon.
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Speaker 3: So it's these these two different paradigms going on right
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Speaker 3: now in the market. A great earning season where there
4:44
Speaker 3: continues to be a lot of momentum for these chip
4:48
Speaker 3: companies that we talked about and some good earnings growth,
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Speaker 3: and outside of the tech sector, we've seen some pretty
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Speaker 3: good earnings growth in other sectors of business. But you
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Speaker 3: do have the risk that loom out there with the
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Speaker 3: inflationary pressure that we're seeing.
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Speaker 2: So I think that when we look at, you know,
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Speaker 2: the next year or two for earnings, because again I
5:08
Speaker 2: get trying to predict like what one earnings you know
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Speaker 2: quarter is going to be, I just I don't I
5:14
Speaker 2: don't get interested in that. It's not like it's not
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Speaker 2: what matters for the market. I think that the piece
5:21
Speaker 2: that's interesting to me is you've got these crosswinds that
5:25
Speaker 2: are in markets right now where you've got a you
5:29
Speaker 2: know this this strong AI kapex cycle that's going on.
5:34
Speaker 2: You've also got in the last couple of months, a
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Speaker 2: labor market that's showing some signs of life after kind
5:41
Speaker 2: of looking very not great for the second half of
5:44
Speaker 2: twenty twenty five, the last couple of months, we're starting
5:47
Speaker 2: to see a little bit of perking up there. And
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Speaker 2: I guess the question that is really out there in
5:53
Speaker 2: my mind is, hey, given the disruptions that we know
5:57
Speaker 2: are coming then that are already hitting in large parts
6:00
Speaker 2: of the world because of the closure of the strait
6:02
Speaker 2: of horror moves? Does this a disrupt that CAPEX cycle
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Speaker 2: in any way because a lot of those components are
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Speaker 2: imported from places that quite honestly do not produce a
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Speaker 2: whole lot of energy themselves and need to import a
6:15
Speaker 2: lot of it. And the other piece is this nascent
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Speaker 2: hiring cycle. Does it get short circuited because other input
6:22
Speaker 2: costs are going up and so companies can't hire the
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Speaker 2: number of heads they want to. Those are the pieces
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Speaker 2: that are interesting to me for the next couple of years,
6:31
Speaker 2: Like what happens to the stocks in the next month or so.
6:34
Speaker 2: It's gonna be more dependent on those things than like
6:38
Speaker 2: and anything else in my opinion. Sure, sure, So that's
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Speaker 2: kind of again just kind of broadly when I'm when
6:45
Speaker 2: I'm looking at right now, the two big things there
6:48
Speaker 2: another big one coming down the road though. Goldman Sachs
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Speaker 2: picked two lead SpaceX is IPO and you've got again,
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Speaker 2: this is not one that's just picked up by you know,
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Speaker 2: one investment bank. Given the size of it. You got
7:02
Speaker 2: Morgan Stanley signing on Bank of America City Group, JP,
7:06
Speaker 2: Morgan Chase. So all the big guys are getting their
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Speaker 2: their bite at this one. And the piece that I'll
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Speaker 2: come back to. It's not to say that SpaceX is
7:14
Speaker 2: or isn't going to be a failure. I don't know
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Speaker 2: how they're gonna do. They might do great, they might
7:19
Speaker 2: do terribly. My understanding of you know, orbital mechanics and
7:25
Speaker 2: things like that, probably better than the average person, but
7:28
Speaker 2: not nearly enough to be able to make an informed decision.
7:31
Speaker 2: Here's what I can tell you though, And it's not
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Speaker 2: even a valuation thing, like in terms of like price
7:35
Speaker 2: to earnings or this and that. People look at Tesla
7:39
Speaker 2: and they see, oh, here's like the story in Tesla.
7:42
Speaker 2: The look get how much money you could have made?
7:44
Speaker 2: And I said this the other day, but Tesla iPod
7:47
Speaker 2: at a market cap of around two billion dollars. It's
7:51
Speaker 2: trading it one point five one point five billion. No,
7:56
Speaker 2: hang on one point five trillion right now. So you
7:59
Speaker 2: do the math and you say, okay, that's a seven
8:02
Speaker 2: hundred and fifty X. You know, move if SpaceX is
8:07
Speaker 2: gonna IPO at two trillion dollars again, just you know
8:12
Speaker 2: a couple of trillion amongst friends you're talking about. In
8:16
Speaker 2: order for a similar move to happen, it's gotta be
8:18
Speaker 2: it's got to become a one point five quadrillion dollar company.
8:24
Speaker 2: We don't even talk about quadrillions because they don't exist.
8:28
Speaker 2: I mean they they do, but not in terms of dollars. Sure,
8:32
Speaker 2: so I'm not saying that SpaceX will or won't be
8:36
Speaker 2: a great stock. But in order for it to seven
8:41
Speaker 2: hundred and fifty x like Tesla did after ipoing, it
8:46
Speaker 2: has to get to a point. Remember, one point five
8:49
Speaker 2: quadrillion dollars. The world economy is anywhere around what are
8:54
Speaker 2: we talking? It's like one hundred trillion somewhere in that ballpark, Paul,
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Speaker 2: I think maybe like one ten.
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Speaker 3: Yeah, these numbers are beyond what I what have in
9:02
Speaker 3: my back pocket. I'll take your work for you.
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Speaker 2: You've got to have like in order for Tesla to
9:07
Speaker 2: become I'm sorry, SpaceX to have the same kind of
9:10
Speaker 2: move that Tesla did after going public, it has to
9:13
Speaker 2: become like fifteen times world GDP. Right, that's all I'm saying. Yeah,
9:20
Speaker 2: I think I don't think that SpaceX is going to
9:24
Speaker 2: be Tesla in terms of long term performance.
9:27
Speaker 3: Yeah, I think the other way to cut at this
9:29
Speaker 3: subject is this company has stayed private for it was
9:32
Speaker 3: founded before Facebook. You know, most listeners may not even
9:35
Speaker 3: believe in two thousand and two, it's been in the
9:37
Speaker 3: private markets for almost twenty five years. And some of
9:42
Speaker 3: the growth that you've seen from a compound basis on
9:45
Speaker 3: the valuation to reach the two trillion that they're seeking,
9:49
Speaker 3: you're talking about over a period of time. I listened
9:51
Speaker 3: to something on the way and you know, thirty percent
9:53
Speaker 3: annualized growth for a period of time. I forget what
9:56
Speaker 3: time frame it is. But to your point, Chuck, a
9:58
Speaker 3: lot of the valuation gains have come in the back
10:02
Speaker 3: half of these last you know, five six years, as
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Speaker 3: there's been just a tremendous amount of demand and enthusiasm
10:08
Speaker 3: regarding space travel. So I think all of those things
10:10
Speaker 3: are just important context for listeners to have. There's going
10:14
Speaker 3: to be just substantial demand for this IPO, I think
10:17
Speaker 3: from a buzz standpoint, Chuck. We was talking about this
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Speaker 3: with Mike yesterday. Probably the biggest in Facebook in terms
10:23
Speaker 3: of just you know, general retail investor interests out there. Numerically,
10:27
Speaker 3: it's absolutely the biggest, you know, since Saudi a ramco
10:30
Speaker 3: in terms of the amount of money that they're raising.
10:32
Speaker 3: But all of these things regarding how long they've stayed private,
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Speaker 3: their valuation, and what you just alluded to in terms
10:38
Speaker 3: of projected future growth comparing that to Tessa.
10:41
Speaker 4: All these things are just to be aware of, not to.
10:44
Speaker 3: Say that they couldn't have tremendous performance, but it is
10:48
Speaker 3: something that investors should research before June twelfth, I think,
10:53
Speaker 3: is what they're targeting for that IPO date.
10:55
Speaker 2: Let's take a quick break. When we come back, I
10:57
Speaker 2: do want to talk about some of the weekly oil
10:59
Speaker 2: days that we got this morning, and then also we've
11:03
Speaker 2: got some trivia next.
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Speaker 5: Time for trivia here in the Financial Exchange, And on
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13:14
Speaker 2: It's a great question, one of my Uh. Yeah, I
13:18
Speaker 2: really want to text in like three times, but I won't, Uh, Paul,
13:22
Speaker 2: I want to talk a little bit about what we
13:24
Speaker 2: got from the US Energy Information Administration this morning. Every
13:27
Speaker 2: week every Wednesday at ten thirty, they come out with
13:32
Speaker 2: what they call their Weekly Petroleum Status Report, and it shows,
13:38
Speaker 2: you know, basically how oil and crude oil and refined
13:41
Speaker 2: products have moved around the country and near different levels
13:44
Speaker 2: and this and that, and here's what we saw is, uh,
13:47
Speaker 2: the commercial commercial crude oil stocks dropped by seven point
13:52
Speaker 2: nine million barrels for the week ending five point fifteen.
13:56
Speaker 2: These strategic petroleum reserve dropped by nine point nine You
13:58
Speaker 2: combine those two, it makes seven team point eight million
14:02
Speaker 2: barrels as the draw for the week. That is the
14:08
Speaker 2: largest ever weekly draw on record. The previous high was
14:12
Speaker 2: around seventeen million barrels, and that was after a hurricane
14:16
Speaker 2: back in twenty twenty three. I believe, and I've been saying,
14:20
Speaker 2: you know, for the last two three weeks that this
14:22
Speaker 2: is coming, and now it's showing up in force where
14:26
Speaker 2: you're seeing these significant draws. The place that you are
14:30
Speaker 2: today is that if draws continue at the pace they
14:34
Speaker 2: have for the last few weeks, commercial crude oil stocks
14:38
Speaker 2: are going to get to the point where you're at
14:40
Speaker 2: minimum operational inventory levels, probably sometime as we get closer,
14:45
Speaker 2: like you can hone in on this a little bit more,
14:48
Speaker 2: it's looking sometime in late July to mid August. At
14:53
Speaker 2: this pace here, the strategic reserve probably gets to minimum
14:58
Speaker 2: operational levels some where in the ballpark of late August
15:05
Speaker 2: to mid September, so maybe a month or so longer
15:09
Speaker 2: than that. But I've been saying for a while there's
15:12
Speaker 2: there's basically nothing that you can do to change this.
15:15
Speaker 2: It's something where because the oil that is, you know,
15:19
Speaker 2: in the Middle East is at a reduced flow out
15:21
Speaker 2: of the ground, you've got a twelve point five million
15:24
Speaker 2: barrel per day gap that you're trying to fill, and
15:28
Speaker 2: this is you know, one of the ways that that
15:30
Speaker 2: flow is being replaced is through drawing down on shore inventories,
15:36
Speaker 2: and there's not really anything that you can do about
15:39
Speaker 2: this outside of California. In the United States, I really
15:43
Speaker 2: doubt you're gonna see any kind of shortages. But even
15:46
Speaker 2: if you get some kind of announcement that initially drives
15:51
Speaker 2: the price of crude down, as you know, there's some
15:54
Speaker 2: excitement about you know, a Horrmon's reopening. If we get that,
15:58
Speaker 2: you know, happening, the cake is kind of baked on
16:01
Speaker 2: this in that there's basically no way to avoid these
16:05
Speaker 2: minimum operational inventory levels because of the transit times required
16:09
Speaker 2: to actually get stuff from point A to point B.
16:12
Speaker 2: And we've passed the point of no return on it.
16:15
Speaker 2: I had highlighted Cinco Demayo, as you know, kind of
16:18
Speaker 2: that line in the sand, and it was crossed two
16:21
Speaker 2: weeks ago. So we're again we just saw here this
16:24
Speaker 2: is data from the EIA and the US government saying, yep,
16:29
Speaker 2: we just had the single largest weekly draw on US
16:33
Speaker 2: crewed inventories ever. And you're probably gonna be seeing, you know,
16:37
Speaker 2: several weeks of draws in this fashion before they probably
16:42
Speaker 2: start to slow down a little bit just because you're
16:45
Speaker 2: not actually going to get to minimum operational inventory levels.
16:48
Speaker 2: The key is to like stop just up of that.
16:51
Speaker 2: And so this is probably the place that we're you know,
16:54
Speaker 2: operating in for the next three to four weeks, and
16:57
Speaker 2: then in late June you start to see a little
17:00
Speaker 2: bit of a tapering in terms of that flow most likely.
17:04
Speaker 2: But this is this is where we're heading. The cakes baked.
17:07
Speaker 2: The only question is how long do we spend at
17:10
Speaker 2: those minimum levels. And that's a function of Hey, when
17:13
Speaker 2: does horn Mos reopen with adequate you know, volume of
17:17
Speaker 2: ships going through? I do know. According this was just
17:21
Speaker 2: now according to a Pool report, President Trump did indicate
17:26
Speaker 2: that he believed that negotiations with Iran were entering the
17:30
Speaker 2: final stages. What that means, and you know, what we
17:35
Speaker 2: actually get is an open question. Again. We've had a
17:39
Speaker 2: number of false starts over the last month or so
17:43
Speaker 2: as it relates to these negotiations, and so I don't
17:48
Speaker 2: know what we're actually going to be, you know, getting
17:50
Speaker 2: out of this, if anything tangible comes of it, or
17:52
Speaker 2: if not. But we'll continue to watch the situation and
17:55
Speaker 2: see how it evolves here.
17:56
Speaker 4: And continues to reinforce this idea that obviously on headline
17:59
Speaker 4: inflation numbers that will get on the back to the
18:02
Speaker 4: information that you just relayed that we're looking at some
18:05
Speaker 4: pretty high prints throughout the course of the second half
18:08
Speaker 4: of the year here with energy prices at the levels
18:11
Speaker 4: that we're discussing.
18:12
Speaker 1: Yeah.
18:13
Speaker 2: So this also, by the way, is now taking crude
18:16
Speaker 2: oil down West Text Intermediate down another three dollars per
18:19
Speaker 2: barrel to ninety seven fifty one. So I have gotten
18:24
Speaker 2: some questions from people like, hey, like if if stuff's
18:27
Speaker 2: actually that bad, like why does why is crewede you know,
18:31
Speaker 2: trading the way that it is. And part of my
18:33
Speaker 2: answer is, look, do you want to step in front
18:35
Speaker 2: of that volatility every time there's a headline? M hmm,
18:39
Speaker 2: Like the the easy money to be made was when
18:42
Speaker 2: crude went from fifty five to one hundred and ten
18:48
Speaker 2: at this point, Like, do you want to be like
18:50
Speaker 2: playing in these choppy markets where things are swinging you know,
18:53
Speaker 2: five six percent on a daily basis potentially that that's
18:57
Speaker 2: not really a whole lot of fun. The fun was, Hey,
19:00
Speaker 2: if you can buy crude oil or energy stocks in
19:02
Speaker 2: January and sell them in April, Okay, Like great, that's
19:07
Speaker 2: that's the fun part. Like none of this is fun
19:10
Speaker 2: when you're dealing with you know, a conflict like this,
19:12
Speaker 2: but from an investment perspective, that's a much cleaner situation
19:16
Speaker 2: to enter than one where you have no idea what's
19:19
Speaker 2: actually happening day to day, and negotiations and headlines are
19:23
Speaker 2: moving things, you know, five percent in either direction, depending
19:27
Speaker 2: on which way the wind's blowing. Let's take a quick
19:29
Speaker 2: break here when we return Trivia, Answer Wall Street Watch,
19:34
Speaker 2: and we're talking mortgages.
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Speaker 5: Markets are now seeing a broad base rally as traders
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Speaker 5: praised for a significant earnings report from Nvidia due out
20:08
Speaker 5: after today's close FED Meetium mintings FED Meeting. Minutes from
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Speaker 5: jerme Pile's final meeting as FED Chairman will also be
20:15
Speaker 5: posted at two o'clock. Right now, the Dow is up
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Speaker 5: nearly nine tenths of a percent, SMP five hundred, up
20:22
Speaker 5: sixty three points, also about nine cents.
20:24
Speaker 1: Of a percent.
20:25
Speaker 5: NASDAC up one in a quarter percent, or three hundred
20:28
Speaker 5: and twenty six points, russed two thousand and now up
20:31
Speaker 5: two point three percent. Tenure Treasur reel down eight basis
20:35
Speaker 5: points at four point five eight percent. In Oil down
20:39
Speaker 5: five percent, now trading right around ninety nine dollars a barrel.
20:44
Speaker 5: Target b first quarter Street forecast, where the retailers net
20:47
Speaker 5: sales grew more than six percent year over year in
20:49
Speaker 5: its turnaround effort. Target same store sales also climbed five
20:53
Speaker 5: point six percent, its first positive same store sales number
20:57
Speaker 5: in five quarters. However, the stock is pulling back over
21:00
Speaker 5: four percent. Low's also beat earning expectations for the first quarter,
21:05
Speaker 5: driven by a strong spring execution, online sales and strength
21:09
Speaker 5: and appliances and home services. Lowe's CEO did, however, acknowledge
21:14
Speaker 5: a challenging housing environment. Low's is down slightly and Facebook
21:18
Speaker 5: parent Meta began laying off thousands of employees this morning
21:22
Speaker 5: and reassigning thousands of others to AI focused roles.
21:26
Speaker 2: Last month, the.
21:27
Speaker 5: Company informed its staff that layoffs would impact about eight
21:30
Speaker 5: thousand employees, or about ten percent of its workforce. Meta
21:34
Speaker 5: shares are up by about half a percent. I'm Tucker Silvan.
21:39
Speaker 5: That is Wall Street Watch. On the previous segment, we
21:41
Speaker 5: asked you the trivia question, what was the name of
21:44
Speaker 5: the plane Charles Limberg flew in the first solo flight
21:48
Speaker 5: across the Atlantic. That would be the Spirit of Saint
21:52
Speaker 5: Louis and Joe and Sandwich Mass is our winner today,
21:55
Speaker 5: taking home a Financial Exchange Show T shirt. Congrats to
21:58
Speaker 5: Joe and we played trivia every day here on the
22:01
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22:06
Speaker 5: dot com.
22:07
Speaker 2: By the way, if anyone is ever looking for a
22:11
Speaker 2: great book to read, Bill Bryson's One Summer America nineteen
22:15
Speaker 2: twenty seven is right up there with one of my favorites.
22:19
Speaker 2: It covers again because all this was going out in
22:22
Speaker 2: nineteen twenty seven. It's got Lindberg's flight, the Great Mississippi
22:26
Speaker 2: Flood of nineteen twenty seven, the nineteen twenty seven New
22:30
Speaker 2: York Yankees Forward moving from the Model T to the
22:34
Speaker 2: Model A, the Jess Willer Jack Dempsey boxing match, and
22:41
Speaker 2: so just a fantastic look at kind of pre depression
22:45
Speaker 2: America and some really cool things that you can read
22:49
Speaker 2: about if you're interested in that kind of thing. US
22:52
Speaker 2: mortgage rates rose last week to an almost two month high.
22:56
Speaker 2: Paul what are we seeing here.
22:58
Speaker 3: We are seeing that the most recent data from Mortgage
23:01
Speaker 3: Daily News that were at six point seven five percent
23:04
Speaker 3: on the thirty year fixed mortgage. This is off the
23:07
Speaker 3: backs of the US ten year treasury spike that we've
23:10
Speaker 3: seen over the course of the last month, you know,
23:13
Speaker 3: thirty eight to forty days or so. Though the tenure
23:16
Speaker 3: is down a pretty significant amount today, down about eight
23:20
Speaker 3: or nine base points at close to four point five
23:22
Speaker 3: to eight percent, Yet yields of spiked with some of
23:25
Speaker 3: the concerns regarding inflation, and that has impacted what we've
23:29
Speaker 3: seen on the mortgage side of things in what has
23:32
Speaker 3: been another pretty tepid year in terms of housing market activity.
23:37
Speaker 3: And there was some hope heading into this spring housing
23:39
Speaker 3: season that we'd be sitting with mortgages in the fives. Obviously,
23:43
Speaker 3: since late February that has not been in the picture
23:47
Speaker 3: at all. So it'll be interesting to see what we
23:50
Speaker 3: get out of the housing market for this year with
23:53
Speaker 3: mortgages at these rates.
23:55
Speaker 2: The interesting thing is that pending sales have actually been
23:57
Speaker 2: ticking up the last couple weeks in terms of some
24:00
Speaker 2: of the data that we're we're seeing on that side.
24:02
Speaker 2: So I'm trying to reconcile. Yeah, again, like you you
24:07
Speaker 2: hear all this stuff, and again it's it's not saying
24:10
Speaker 2: that like this is inherently good or bad, but like
24:12
Speaker 2: you get all the stuff about you know, hey, Americans
24:14
Speaker 2: are concerned about you know, higher gas prices. They're concerned
24:16
Speaker 2: about losing jobs to AI, They're concerned about you know this,
24:20
Speaker 2: that and whatever. And then I look at you know,
24:23
Speaker 2: the pending home sales data for the last few weeks,
24:25
Speaker 2: and I'm like, oh, like it's it's it's it's moving up.
24:27
Speaker 2: It's moving ahead of where we were last year. And
24:32
Speaker 2: I keep coming back to stop paying attention to what
24:34
Speaker 2: Americans tell you about the economy, yes, start paying attention
24:38
Speaker 2: to what they do and and what they are doing
24:41
Speaker 2: is continuing to spend money that may or may not
24:44
Speaker 2: change at some point, like we might get to a
24:46
Speaker 2: point with gas prices or this and that where hey,
24:49
Speaker 2: we finally run into you know that, that problem. But
24:53
Speaker 2: I gotta tell you if if all you do is
24:57
Speaker 2: look at all the sentiment surveys and they're like, well,
25:00
Speaker 2: Americans feel bad about this. And I'm not telling you
25:01
Speaker 2: that you should or shouldn't feel bad about this, Like
25:03
Speaker 2: you you can feel however you want to about the economy.
25:07
Speaker 2: What I'm telling you is when you look at how
25:09
Speaker 2: Americans are spending, there is a big divergence between what
25:14
Speaker 2: they're saying and what they're doing.
25:15
Speaker 3: No question that the last and really has rung true
25:18
Speaker 3: for the last couple of years. Chuck that there's been
25:21
Speaker 3: all sorts of global macroeconomic potential concerns, but people have
25:26
Speaker 3: kept chugging along.
25:27
Speaker 2: I've talked about I think these sentiment surveys are broken. Yes,
25:31
Speaker 2: it's yeah. When you're getting right, when you're getting people
25:36
Speaker 2: saying that the economy is worse now than two thousand
25:39
Speaker 2: and eight, I'm telling you, like, if you took a
25:43
Speaker 2: gen Zer right now, who was born in two thousand
25:45
Speaker 2: and eight. By the way, if you took a gen
25:47
Speaker 2: Zer and Tucker, can you get the time machine fired up?
25:50
Speaker 4: Stand by?
25:51
Speaker 2: I need I need eighteen years of power if you could.
25:56
Speaker 2: If you took a gen Zer and took him back
25:59
Speaker 2: to two thousand and eight and had him watch the
26:01
Speaker 2: financial crisis and then like the two year aftermath where
26:05
Speaker 2: unemployment was still near ten percent, you know, for a
26:08
Speaker 2: couple of years they would be crying to come back
26:11
Speaker 2: to twenty twenty six, they would be crying to So
26:17
Speaker 2: it's not to say that this economy is perfect right now.
26:19
Speaker 2: It is not like there's some very real problems. But
26:24
Speaker 2: to be like, oh, it's like, you know, Americans are
26:26
Speaker 2: saying the economy is worse than oh eight, guys, I
26:30
Speaker 2: gotta tell you, I lived through both of them. Oh wait,
26:33
Speaker 2: was worse, and it's it's it's not even close. It's
26:36
Speaker 2: it's not even close. Two thousand and eight, you had
26:40
Speaker 2: companies like companies were just like trying to figure out
26:42
Speaker 2: like can I sell anything to anyone?
26:45
Speaker 1: Yeah?
26:45
Speaker 2: Like, is there anyone who can buy my product that
26:48
Speaker 2: still has money?
26:49
Speaker 4: To flationary pressures out there? Yeah?
26:51
Speaker 1: It was.
26:52
Speaker 2: It was. It was really really gnarly. And this is
26:58
Speaker 2: not that down it seems like, I look, it's I'm
27:05
Speaker 2: not saying that things are easy for families right now,
27:09
Speaker 2: but the fact that you know, people are saying in
27:11
Speaker 2: the aggregate, hey, this is worse than No. Eight, It's
27:15
Speaker 2: not objectively it's not. Uh So that's that's what's going on, folks.
27:21
Speaker 2: If you are a person, and I hope you are,
27:26
Speaker 2: and if you have you know a bunch of investment
27:29
Speaker 2: accounts or bank accounts out there and you're like, hey,
27:31
Speaker 2: what do I do with all these things? Arm Strong
27:34
Speaker 2: Advisory Group has a new guide on this very topic.
27:36
Speaker 2: It's titled Consolidating Investment Accounts, and specifically it goes through
27:42
Speaker 2: when it makes sense to consolidate, but also when it
27:45
Speaker 2: makes sense to not. Because yes, consolidation is great in
27:49
Speaker 2: that it streamlines, it makes it easier to manage. You
27:53
Speaker 2: don't have to worry about losing you know, different tax
27:56
Speaker 2: reports each year, or you know, losing track of where
27:58
Speaker 2: your funds are. Sometimes certain accounts that you have might
28:03
Speaker 2: have either investments in them that you can't access in
28:06
Speaker 2: other places. They might have services that are significantly discounted.
28:10
Speaker 2: They might have things that make you want to keep
28:13
Speaker 2: them and not necessarily consolidate. So you have to actually
28:17
Speaker 2: think through the process and figure out, hey, which of
28:20
Speaker 2: these can I consolidate and which do I need to
28:23
Speaker 2: keep where they are. The guide is titled Consolidating Investment Accounts,
28:27
Speaker 2: and there are two ways that you can request it.
28:29
Speaker 2: The first is by calling eight hundred three nine three
28:33
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28:37
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28:41
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28:45
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28:50
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28:52
Speaker 2: hundred three nine three four zero zero one and the
28:56
Speaker 2: guide is consolidating investment accounts.
28:59
Speaker 1: The proceeding list paid for by Armstrong Advisory Group, a
29:01
Speaker 1: registered investment advisor. Nothing in the ad or in any
29:04
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
29:07
Speaker 1: your own financial tax into state planning advisors before making
29:10
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
29:13
Speaker 1: advisory services.
29:15
Speaker 2: Paul, one of the things that we're seeing as a
29:18
Speaker 2: result of you know, higher housing costs and higher mortgage rates,
29:22
Speaker 2: the rise of non conforming mortgages coming back. Non conforming
29:27
Speaker 2: does not necessarily mean that things are going to fall
29:30
Speaker 2: apart or that they are necessarily riskier, but it simply
29:34
Speaker 2: means that, hey, when you look at mortgages that can
29:38
Speaker 2: be packaged up and securitized into you know, different bundles
29:42
Speaker 2: to be sold out to different buyers, non conforming loans
29:46
Speaker 2: they don't conform to what those you know standards are,
29:50
Speaker 2: and so they can't be packaged and sold as easily,
29:53
Speaker 2: which you can make a case in some cases might
29:56
Speaker 2: make them safer if the lender is actually willing to
29:58
Speaker 2: hold on to the risk.
30:00
Speaker 3: Yeah, just to understand for listeners out there, the non
30:03
Speaker 3: conforming loans typically will allow for a greater ability for
30:08
Speaker 3: people to borrow who have sort of unconventional income situations
30:12
Speaker 3: where they might not be the traditional W two employee.
30:15
Speaker 3: They may be self employed or hold a lot of
30:17
Speaker 3: their wealth in real estate, and their tax return doesn't
30:21
Speaker 3: really indicate the income that they generate. And so to
30:25
Speaker 3: take on this risk, the lenders will assign a higher
30:28
Speaker 3: interest rate on the mortgage and also will be a
30:31
Speaker 3: little bit more flexible than your typical conforming loans, which
30:34
Speaker 3: the government will back and guarantee, Like you mentioned, the
30:37
Speaker 3: non conforming ones, they're not going to again. This is
30:40
Speaker 3: six percent of home loan origin nations in twenty twenty five,
30:44
Speaker 3: so you're not talking about a big piece of the pie.
30:46
Speaker 3: But what's happened with these mortgage companies from a lending
30:49
Speaker 3: perspective is appetite has been much slower than it was
30:52
Speaker 3: in the refinancing boom of twenty twenty and twenty twenty one,
30:55
Speaker 3: so they have to find new ways to build in
30:57
Speaker 3: growth and this is one of the ways that they've explored.
31:01
Speaker 2: Just take a quick break. When we come back, it
31:03
Speaker 2: is time for stack roulets.
31:06
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31:10
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31:35
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31:57
Speaker 2: Paul, what do you got for me for stack Relax?
32:00
Speaker 3: How Google is starting to win the AI races is
32:03
Speaker 3: a piece here from The New York Times. About two
32:06
Speaker 3: years ago, it really looked like that Google was in trouble.
32:10
Speaker 3: Chatchipt had exploded in terms of its popularity by producer
32:16
Speaker 3: created by open Ai, and it felt as if Google,
32:19
Speaker 3: who had really been at the forefront of AI development
32:22
Speaker 3: dating back, you know, ten or fifteen years in terms
32:24
Speaker 3: of the research and the deep mindleft that they had,
32:27
Speaker 3: was kind of caught flat footed with not the ability
32:30
Speaker 3: to respond to this looming threat on the search side
32:34
Speaker 3: of things with a chatbop. Here we sit two years
32:36
Speaker 3: later and Google had its investor conference on Tuesday. They
32:41
Speaker 3: now have more than nine hundred million users of Gemini,
32:45
Speaker 3: which is right around where OpenAI's self reported number of
32:48
Speaker 3: active users for chat Gipt is, and it's thirty times
32:52
Speaker 3: where Anthropics Claude sits, and they've been able to weave
32:56
Speaker 3: in that business into Gmail Gemini that is, into Gmail
33:00
Speaker 3: and some of its other products. Come January, the iPhone
33:05
Speaker 3: is going to be using Gemini to power its future
33:08
Speaker 3: version of Siri. So just an amazing sort of I
33:11
Speaker 3: won't call it a strategic pivot, that's probably the wrong phrasing,
33:15
Speaker 3: but catch up effort that has been made by Google
33:18
Speaker 3: to fend off something that would have been quite detrimental
33:23
Speaker 3: and a existential risk to its business model. It appears
33:28
Speaker 3: it's really taken that and made it a strength of
33:31
Speaker 3: their business. So it's just been continually interesting to follow.
33:35
Speaker 3: We've seen how technology evolves over time. Microsoft is a
33:38
Speaker 3: good example of somebody a company that missed the ball
33:41
Speaker 3: with mobile back fifteen years ago, and Google was sitting
33:45
Speaker 3: at a similar precipice, but clearly has fought back quite
33:48
Speaker 3: nicely here over the last few years.
33:50
Speaker 2: Let's see, I want to discuss not really enthused by
33:58
Speaker 2: this story about Jeep, but I guess that makes a
34:01
Speaker 2: bunch of people because here's the deal. Jeep sales have
34:04
Speaker 2: been sliding for the last six years. They've gone from
34:08
Speaker 2: selling around nine hundred and seventy three thousand vehicles in
34:12
Speaker 2: the US back in twenty eighteen down to around five
34:19
Speaker 2: hundred and ninety three thousand today. And this is not great, Like,
34:25
Speaker 2: you don't want to see your sales declined by forty
34:27
Speaker 2: percent over a six year period, and you know that
34:32
Speaker 2: the parent company for them, Stillantis, is trying to figure
34:37
Speaker 2: out can we you know, make anything out of the
34:41
Speaker 2: Jeep brand right now? And I just think it's a
34:45
Speaker 2: very crowded space that they operate in, Like everyone is
34:49
Speaker 2: trying to make SUVs now because that is the dominant
34:53
Speaker 2: body type in North America, and so everyone is competing
34:58
Speaker 2: in the same space. And it's just one where it's
35:03
Speaker 2: unclear that they have anything that they deliver that meets,
35:09
Speaker 2: you know, kind of what the mass market appeal is
35:11
Speaker 2: asking for right now. It's not to say that they
35:14
Speaker 2: don't have good products. I'm not saying that, But what
35:18
Speaker 2: I am saying is that the Jeep brand has traditionally
35:20
Speaker 2: been hey, you know, we've got you know, solid you know,
35:24
Speaker 2: off road prowess and something you know in a body
35:26
Speaker 2: style that still works you know, for on road driving.
35:29
Speaker 2: And it's just unclear that that is selling right now
35:33
Speaker 2: in any unique way relative to all the other products
35:37
Speaker 2: that are on the market.
35:38
Speaker 3: Yeah, the dealer's feedback is that the Jeep Cherokee is
35:41
Speaker 3: priced too high and that silansis needs to be a
35:43
Speaker 3: little bit more generous with incentives in order to meet
35:47
Speaker 3: some of the growth targets. From this Bloomberg piece here
35:49
Speaker 3: that's cited as one of the issues. Like you said,
35:52
Speaker 3: to have a six year sales decline is just really
35:56
Speaker 3: dismal from a car company perspective. There are so many
35:59
Speaker 3: other people auto manufacturers at the table here trying to.
36:02
Speaker 4: Compete with them.
36:03
Speaker 3: They still have a great brand, I think to your
36:07
Speaker 3: point where a lot of people who drive jeeps love
36:09
Speaker 3: the car and will continue to buy them, But it
36:12
Speaker 3: just doesn't seem like they're able to do nearly as
36:16
Speaker 3: well as some of the competitors that they're up against
36:19
Speaker 3: in this SUV space, which is so competitive, and they're
36:22
Speaker 3: trying to come out with a hybrid, which I don't
36:26
Speaker 3: know how successful that is going to be in terms
36:29
Speaker 3: of that effort there.
36:31
Speaker 2: We'll just have to see where things go. What else
36:33
Speaker 2: you got for me?
36:34
Speaker 3: Paul A Texas man was arrested after intentionally driving his
36:38
Speaker 3: cybertruck into the lake to test quote unquote wade mode.
36:43
Speaker 3: So this reminds me very reminiscent of Well, I guess
36:47
Speaker 3: Michael Scott wasn't trying to test wade mode. The GPS
36:50
Speaker 3: betrayed him in that office episode where he drove directly
36:53
Speaker 3: into the lake. But the officers in Grapevine, Texas not
36:58
Speaker 3: as sensitive to Tesla's cyber truck wade mode for this
37:03
Speaker 3: individual here, as he was put into cuffs after trying
37:07
Speaker 3: to see how this wade mo fared out, which doesn't
37:11
Speaker 3: look too well by the picture that I'm seeing here
37:13
Speaker 3: of this subject. These are expensive cars man to run.
37:16
Speaker 3: That's like one.
37:18
Speaker 4: Hundred grand that you just drow what happens the water there?
37:23
Speaker 2: What could go wrong?
37:24
Speaker 3: You imagine that there might have to be some substances
37:26
Speaker 3: consumed to take on that type of endeavor, or he's
37:31
Speaker 3: just got a lot of money that he's willing to
37:33
Speaker 3: literally throw into the water.
37:35
Speaker 2: I would imagine you can't file an insurance claim for this, correct.
37:39
Speaker 1: I don't think so.
37:40
Speaker 3: This seems to be negligent driving, right, Oh yeah, yeah,
37:45
Speaker 3: it's I yeah, I don't I guess how is in
37:48
Speaker 3: the owner's manual. According to Tesla's cyber Truck Manual, the
37:52
Speaker 3: feature allows cyber trucks to enter and drive through bodies
37:55
Speaker 3: of water, such as rivers or creeks.
37:57
Speaker 2: Not that deep I'm looking at It says you can
37:59
Speaker 2: go up to thirty two inches in this thing. The
38:01
Speaker 2: whole back is underwater.
38:03
Speaker 4: You can go through rain puddles. Details, details, you know.
38:08
Speaker 2: It's like, oh, like if I could jump, I can fly, right, No,
38:10
Speaker 2: like jumping is different from flying. We're gonna take a
38:14
Speaker 2: break for the rest of the day, but we're gonna
38:17
Speaker 2: have another show tomorrow and we'll discuss inn Vidia earnings
38:21
Speaker 2: and what we learned about the AI industry. Then