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Do comparisons to the dot com crash have any merit? · The Financial Exchange Show

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Speaker 1: This is the Financial Exchange with Chuck Zada and Mike Armstrong.
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Speaker 2: Chuck Mike Ben with you, and as we try to
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Speaker 2: finish up the week, We've got a very volatile day,
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Speaker 2: with index prices moving half a percent in a span
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Speaker 2: of minutes multiple times over the course of the day.
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Speaker 2: As of this very instant that I'm speaking, the Dow
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Speaker 2: Jones Industrial Average is up one hundred and twenty seven points,
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Speaker 2: the S and P five hundreds down seven and the
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Speaker 2: Nasdaq is down about one hundred and fifty points, so
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Speaker 2: overall mixed markets, but the NASDAK really continuing to feel pain,
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Speaker 2: being led down by Oracle Core. We've Palenteer, AMD and
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Speaker 2: in Nvidio and Broadcom, all of which are down more
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Speaker 2: than three percent today. Google trying its best to try
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Speaker 2: to keep the puppy Afloat up about three point three
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Speaker 2: percent and Apple up one point four Those are base
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Speaker 2: the things that are keeping the wheels from falling off
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Speaker 2: as we sit here right now. When we take a
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Speaker 2: look at other markets that we are watching, the Tenuere
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Speaker 2: Treasury is down four point five basis points to four
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Speaker 2: point zero five nine percent, so interest rates moving down
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Speaker 2: a touch. We'll talk about why in just a moment.
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Speaker 2: Dollar index despite interest rates moving down. Dollar Index up
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Speaker 2: point one four percent to one hundred point two three five,
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Speaker 2: and we've got gold up nine dollars and thirty cents
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Speaker 2: nounce to four thy sixty nine and thirty cents. Crude
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Speaker 2: oil down dollar twenty eight on West Texas Intermediate to
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Speaker 2: fifty seven seventy two, so crude oil price is continuing
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Speaker 2: to slide. Triple A national averagur gas prices though still
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Speaker 2: up on the week from three zho eight to three
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Speaker 2: point three dollars and nine point four cents, and so
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Speaker 2: still no major movement when it comes to gas price
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Speaker 2: is a year ago we were at three h six,
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Speaker 2: so there's been a three cent swing in a full year. Mike,
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Speaker 2: we got a couple of things to talk about as
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Speaker 2: it relates to the December FED meeting basically going into today.
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Speaker 2: If you look at the CME FED watch tool, it
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Speaker 2: was a thirty nine percent chance of a cut and
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Speaker 2: a sixty point nine percent chance of no cut at
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Speaker 2: the December meeting this morning. Though, John Williams, who do
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Speaker 2: we have do we have his music? Or is that
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Speaker 2: just a Tucker thing? That's just a Tucker thing. It's
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Speaker 2: it's fine New York FED President John Williams came out
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Speaker 2: this morning and said, in no uncertain terms, yeah, I'm
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Speaker 2: probably a go for a cut at the December meeting.
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Speaker 2: And so just when you actually look at who you
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Speaker 2: know is voting in December, markets have now swung to
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Speaker 2: a seventy five percent chance of a rate cut at
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Speaker 2: that December meeting. This had the the impact of and
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Speaker 2: I watched this right as it happened. S and P
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Speaker 2: five hundred futures moved up about two thirds of a
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Speaker 2: percent in five minutes after Williams said this, And I
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Speaker 2: can't help Mike, and I'm again I don't like to
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Speaker 2: make the tech bubble comparison too much because like A,
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Speaker 2: I don't really know if like this thing is that
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Speaker 2: I suspect it might be in certain instances, but I
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Speaker 2: don't know that it is. And also, like when you
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Speaker 2: say tech bubble, everyone just gets like really nervous because
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Speaker 2: the tech bubble sucked. But I can't help but be
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Speaker 2: drawn to this piece from the New York Times from
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Speaker 2: January third, two thousand and one. Stock surge on FED
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Speaker 2: rate cut Nasdaq adds more than fourteen percent. And granted
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Speaker 2: this was it like it.
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Speaker 3: Happened after January of one, I can't seem to recall.
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Speaker 2: Well, it's funny that you should mention that, because I
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Speaker 2: actually I pulled this up today just because I was like, oh,
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Speaker 2: let me see exactly what happened, you know, the of
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Speaker 2: the year for two thousand and one, and in fact,
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Speaker 2: it was really really bad in the Nasdaq for the
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Speaker 2: rest of the year. So the Nasdaq, as I indicated there,
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Speaker 2: it did spike fourteen percent, you know, on that day.
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Speaker 2: It actually went on to make a new all time
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Speaker 2: high even about five percent above that a month later
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Speaker 2: and by the end of the year, really by the
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Speaker 2: end of September, remember two thousand and one, he did
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Speaker 2: have September eleventh that obviously impacted things as well. But
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Speaker 2: the Nasdaq then traded down about sixty five percent from
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Speaker 2: the end of January through mid September.
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Speaker 3: Yeah, I mean, chuck difference this time.
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Speaker 4: Invest just don't care about this, you know, perceived move
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Speaker 4: in rates, Well they did briefly, but again the dominant
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Speaker 4: narrative has taken back over here.
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Speaker 5: I think we're smarter than then.
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Speaker 3: I doubt it.
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Speaker 2: No, Like, what I mean by that is we have
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Speaker 2: that history in place where like people like me can
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Speaker 2: be like, hey, look what happened then, whereas I don't
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Speaker 2: think that you had like quite the same history in
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Speaker 2: two thousand, just because it was it was the first
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Speaker 2: time through something like that.
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Speaker 5: In a lot of cases, this is.
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Speaker 4: Not the thing that people care most about. I don't
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Speaker 4: think in terms of the rate cuts, but I will
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Speaker 4: say that if we continue to get a sell off
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Speaker 4: into December in equity markets, then that's going to be
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Speaker 4: a pretty good incentive for the FED to go and
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Speaker 4: cut rates. I know that they do not directly care
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Speaker 4: about that, but they do care about financial conditions, equity
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Speaker 4: markets being one of those conditions. And so you know,
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Speaker 4: we're barely off five percent of all time highs on
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Speaker 4: equity markets right now. But you know, imagine for a
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Speaker 4: moment that you get a continued deterioration in equity markets
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Speaker 4: and you have some voters that are FED, voters that
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Speaker 4: are on the cusp about what to do. I would
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Speaker 4: think a market selloff is enough to push them towards
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Speaker 4: another quarter point rate cuts. So I see where CMA
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Speaker 4: futures are going with this. But I land back on
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Speaker 4: if your concern is that companies participating in the AI
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Speaker 4: universe right now are grossly overvalued, borrowing too much, and
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Speaker 4: going to face issues with revenue realization of the course
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Speaker 4: the next few years. Hell, forget about twenty five basis
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Speaker 4: point rate cut. One hundred basis point radcut doesn't fix
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Speaker 4: that problem.
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Speaker 3: So you know, I'm not sure that this is what's
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Speaker 3: going to matter to equity markets at the moment.
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Speaker 5: Yeah.
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Speaker 2: I mean again, the cut that happened in January of
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Speaker 2: two thousand and one. It was a surprise inter meeting
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Speaker 2: fifty basis point rate cut, and it didn't end up
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Speaker 2: mattering because the tech bubble was already popping.
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Speaker 3: Yep.
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Speaker 2: So that like, this is why I can hold two
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Speaker 2: views in my head simultaneously, one of which is, hey,
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Speaker 2: if the FED was cutting in September and October, I
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Speaker 2: don't think we've gotten anything to this point that says
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Speaker 2: that they shouldn't be cutting in December. But I also
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Speaker 2: don't think it matters what they do in December, because
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Speaker 2: the economy either a is going to be strong enough
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Speaker 2: to pull itself out of you know, this little concern
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Speaker 2: that we're in right.
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Speaker 5: Now, or B.
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Speaker 2: It's not even close to the amount of firepower that
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Speaker 2: you need to deal with the amount of spending that's
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Speaker 2: going to be canceled, and what's going to happen to
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Speaker 2: AI related stocks in the event that this is a
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Speaker 2: bubble that's popping.
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Speaker 4: And you know, so long as we're talking about firepower, Chuck,
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Speaker 4: I don't the type of firepower you would need to
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Speaker 4: bring to bear to if we end up in that
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Speaker 4: market condition. Given where deficit spending already is right now,
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Speaker 4: is going to be a tremendous amount of money. We're
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Speaker 4: running what seven pace for seven percent deficits this year
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Speaker 4: after the same for the last several years. I recognize
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Speaker 4: that in the event of a full on recession, Congress
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Speaker 4: will not blink at printing trillions of dollars?
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Speaker 5: Where do you print it? Though?
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Speaker 2: I don't mean like, where do you physically print it?
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Speaker 2: But like, here's an interesting question. Let's let's say there
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Speaker 2: is a recession. What exactly do you do based on
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Speaker 2: where the problem is coming from?
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Speaker 5: I don't know, yeah, I mean, look, we have.
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Speaker 4: A tough time playing this one out right. Does this
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Speaker 4: lead to mass layoffs? These companies that are impacted by
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Speaker 4: this are not exactly the largest employers in this economy.
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Speaker 4: So if you've got a stock market sell off and
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Speaker 4: recession that didn't result in markeably higher inflation or sorry,
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Speaker 4: higher unemployment, then you might not do.
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Speaker 3: Much at all.
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Speaker 4: If it leads to problems in debt markets and problems
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Speaker 4: with businesses being able to find financing that have nothing
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Speaker 4: to do with tech and artificial intelligence, then yeah, you
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Speaker 4: might see the FED come into stop back backstops loans.
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Speaker 4: You might see Congress come in to provide some relief
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Speaker 4: to the housing market to see if that can kickstart
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Speaker 4: the economy. I think it depends on what sort of
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Speaker 4: recession you're talking about.
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Speaker 2: Let's take a quick break when we come back. I
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Speaker 2: want to spitball on this just I don't know. Do
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Speaker 2: you mind entertaining me on this for a little bit. Nce,
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Speaker 2: Let's take a quick break and then let's continue this
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Speaker 2: discussion when we return.
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Speaker 2: Mike, let's talk a little bit about responses in the
11:41
Speaker 2: event of a recession.
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Speaker 5: I don't know if.
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Speaker 2: We're going to go in one, and I have no clue,
11:48
Speaker 2: like exactly what it would look like. But it came up,
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Speaker 2: you know, in the last segment, Hey, like, what would
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Speaker 2: the response be, because if you look at the last
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Speaker 2: couple of times that there has been a recession, two
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Speaker 2: very different responses. The first one, if we go back
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Speaker 2: to the financial crisis, it was okay, we're going to
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Speaker 2: basically it was three pronged, in my opinion, we're going
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Speaker 2: to backstop the banks and bail them out. We're going
12:14
Speaker 2: to bail out automakers, and then we're going to pass
12:16
Speaker 2: a an infrastructure bill that hopefully stimulates the economy.
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Speaker 5: And ultimately people were unhappy about all three of those things.
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Speaker 5: You know.
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Speaker 2: The fact that banks were bailed out while individuals were not,
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Speaker 2: you could argue, was kind of a microcosm as to
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Speaker 2: how we've gotten to where we are in twenty twenty five.
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Speaker 2: You know, socialism for the big guy, free market for
12:38
Speaker 2: the little guy. Like that's kind of how it feels.
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Speaker 2: Same thing on the auto bailouts. I think people feel similarly,
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Speaker 2: you know, in that respect, and the infrastructure bill that
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Speaker 2: was passed, the American Reinvestment and Recovery Act, generated one
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Speaker 2: of the most lackluster recoveries out of a recession that
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Speaker 2: we ever seen.
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Speaker 4: So by the way, Chuck, you know, reactions to that
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Speaker 4: you point out, like the bailout for the big guy,
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Speaker 4: nothing for the little guy. I think it's also why
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Speaker 4: the reaction to the COVID crisis, while still focused on
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Speaker 4: companies by and large through things like the paycheck Protection Program,
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Speaker 4: it was more of the everybody gets money during this recession,
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Speaker 4: and I think that's a direct result of the criticisms
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Speaker 4: of a wait when they just went after employers.
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Speaker 2: Right, So then we had, you know, the COVID stuff, which, Okay,
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Speaker 2: here's you know, stimulus check for this, and paycheck protection
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Speaker 2: for that, and YadA YadA.
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Speaker 3: Your student loans for four years. Yeah, all sorts of
13:35
Speaker 3: fun stuff.
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Speaker 5: The whole thing.
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Speaker 2: Like, and I think we look back at both of
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Speaker 2: those situations and we're like, yeah, neither of them were
13:42
Speaker 2: really exactly you.
13:43
Speaker 5: Know, how we should have done things.
13:45
Speaker 2: You know, we we tried not to make the same
13:47
Speaker 2: mistakes we did coming out of eight and instead we
13:49
Speaker 2: made entirely new ones coming out of twenty twenty.
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Speaker 4: So let's go back to the one that keeps getting
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Speaker 4: compared to then, right, it's the dot com bubble. What
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Speaker 4: happened there. In April of two thousand, unemployment was three
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Speaker 4: point eight percent. The recession, according to the NBR, kicked
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Speaker 4: off in March of one. You know, by two thousand
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Speaker 4: and three. The recession was officially over by November of
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Speaker 4: two thousand and one, but by March of June of
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Speaker 4: two thousand and three, you had unemployment at six point
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Speaker 4: three percent.
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Speaker 3: I mean, to me, the reaction from the government.
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Speaker 4: What led us out of that recession is not quite
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Speaker 4: as clear as it was with you know, passage of
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Speaker 4: the Troubled Asset Relief program and bank bailouts. Maybe it's
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Speaker 4: because I was younger when it happened. But there were
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Speaker 4: some tax cuts, there were some wars. There was also
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Speaker 4: a pretty rapid I've.
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Speaker 5: Never heard it referred to quint that way. There were
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Speaker 5: some tax cuts, there were some wars.
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Speaker 4: You know, there were some wars I don't I really
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Speaker 4: point to though. You know, by the mid two thousands,
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Speaker 4: you had some major tech companies that had gotten beat
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Speaker 4: up during the doc bubble actually showing some pretty profitable businesses,
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Speaker 4: and therefore you did not have this maybe you didn't
15:07
Speaker 4: have this need.
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Speaker 3: Or impulse for additional fiscal support.
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Speaker 2: Yeah, so I think when you talk about it, so, Yeah,
15:13
Speaker 2: you had the Bush tax cuts that went into place
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Speaker 2: in the middle of two thousand and one, and that
15:18
Speaker 2: was obviously, you know, a pretty substantial fiscal response. What
15:21
Speaker 2: it ended up doing. In two thousand, there was a
15:23
Speaker 2: federal government surplus of two hundred and thirty six billion dollars.
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Speaker 2: By two thousand and three, the deficit was up to
15:28
Speaker 2: three hundred and seventy eight billion dollars for that calendar year.
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Speaker 2: There also was a two thousand and two stimulus bill
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Speaker 2: that was passed that was largely some bonus depreciation for
15:40
Speaker 2: businesses to encourage investment. It extended unemployment insurance by thirteen
15:45
Speaker 2: extra weeks UH, and then also had some additional relief
15:50
Speaker 2: because remember the tech bubble bursting overlapped with the nine
15:54
Speaker 2: to eleven attacks, and so you had some industries that
15:57
Speaker 2: were impacted negatively by them, most notably airlines and you know,
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Speaker 2: other travel related businesses, and so you had.
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Speaker 5: That go through.
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Speaker 2: You also then had an acceleration of the Bush tax
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Speaker 2: cuts that was passed in two thousand and three as well.
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Speaker 2: So I think if we look at this, the way
16:15
Speaker 2: that I try to think about it is Okay, if
16:17
Speaker 2: there is a recession today, what.
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Speaker 5: Like who or what ends up being hurt the most
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Speaker 5: by it.
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Speaker 2: I don't think we're in a situation where you're gonna
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Speaker 2: see anything done to try to federally support AI companies
16:35
Speaker 2: that can't support themselves.
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Speaker 5: Is that fair?
16:38
Speaker 3: God? I hope not.
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Speaker 4: I mean it's fair. God, I hope they don't. Congress
16:43
Speaker 4: doesn't go and backstop AI.
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Speaker 2: Companies It's also tough for me to see just hey,
16:49
Speaker 2: here's a bunch of stimulus checks going out again, because
16:52
Speaker 2: as much as individuals like to receive those stimulus checks,
16:56
Speaker 2: I don't think we liked the collective. Hey, here's what
16:59
Speaker 2: happened when we just gave people a bunch of money.
17:01
Speaker 2: I'm not saying this is wrong or right. I'm just
17:03
Speaker 2: saying our last are the last battle we fought with
17:07
Speaker 2: that ended up generating a bunch of inflation.
17:12
Speaker 3: I tend to think you're right.
17:14
Speaker 4: I'm a lot less certain about that one, but I
17:17
Speaker 4: tend to think, yeah, a bunch of stimulus being pushed
17:19
Speaker 4: out is unlikely due to the inflation reaction in twenty
17:22
Speaker 4: twenty two.
17:23
Speaker 3: What i's too fresh.
17:24
Speaker 2: What I can see being done in order to kind
17:29
Speaker 2: of mesh a lot of priorities that are currently out
17:33
Speaker 2: there right now with where things are potentially impacted, is hey,
17:38
Speaker 2: let's pass you know, some bills for you know, additional
17:41
Speaker 2: funds for reshoring of American manufacturing through big investment on
17:45
Speaker 2: that side. Well, it does that to me is kind
17:48
Speaker 2: of where I feel it ends up probably landing because
17:51
Speaker 2: it deals with construction workers that might be impacted by
17:54
Speaker 2: you know, slowing data center creation. It impacts you know,
17:57
Speaker 2: the production of goods in the US, which is an
18:00
Speaker 2: obvious priority at this point, and potentially gets people back
18:04
Speaker 2: to work in that fashion.
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Speaker 4: I would bet something specific on housing. Maybe that's the
18:09
Speaker 4: COSP that pushes the fifty year mortgage over the finish line,
18:12
Speaker 4: but other support for housing, because if there's another common
18:16
Speaker 4: theme right now, it's all about housing affordability.
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Speaker 2: So that's kind of where I think we may go
18:23
Speaker 2: if we get to that point. We're obviously nowhere near
18:27
Speaker 2: that right now. I think that, you know, this is
18:30
Speaker 2: something that may or may not develop over the next
18:33
Speaker 2: six to twelve months, but it's stuff that I think
18:37
Speaker 2: about just to try to figure out, okay, like what
18:39
Speaker 2: are the possible responses and possible beneficiaries, because you want
18:44
Speaker 2: to be thinking about this stuff in advance. Taking a
18:48
Speaker 2: look at markets as we head towards the bottom of
18:50
Speaker 2: the hour, the S and P is now back into
18:52
Speaker 2: the green, up twenty six points, mostly like the last
18:56
Speaker 2: three minutes while we've been discussing this. The Nasdaq also
18:58
Speaker 2: back in the green, up ten point points, and so
19:01
Speaker 2: again just a very choppy day with a lot of
19:05
Speaker 2: minute to minute volatility that ultimately hasn't really taken us
19:08
Speaker 2: too far at this point.
19:11
Speaker 5: Quick break. When we return, we get the trivia answer
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19:30
Speaker 1: Time now for.
19:31
Speaker 3: Wall Street Watch.
19:33
Speaker 1: A complete look at what's moving market so far today
19:36
Speaker 1: right here on the Financial Exchange Radio Network.
19:42
Speaker 6: A lot can change in the span of an hour. Currently,
19:46
Speaker 6: the Dow Jones is up over eight tenths of a percent,
19:48
Speaker 6: the S and P five hundred is up over half percent,
19:51
Speaker 6: and the Nasdaq has flipped back to positive and now
19:53
Speaker 6: it's up over three tenths of a percent. The inverse,
19:56
Speaker 6: the vis flipped negative and it's down over four percent.
20:01
Speaker 6: Eli Lilly earlier this morning reached the one trillion market
20:05
Speaker 6: capitalization club. It's the first healthcare company in the world
20:08
Speaker 6: to join that exclusive club, usually dominated by tech firms.
20:12
Speaker 6: The company's stock has climbed more than thirty six percent
20:15
Speaker 6: this year. The Indianapolis based drug maker stock has been
20:18
Speaker 6: riding the skyrocketing popularity of its weight loss injection zep
20:21
Speaker 6: bound and diabetes treatment Munjaro. Eli Lilly is up over
20:26
Speaker 6: seven tenths of a percent. Apparel retailer Gap is up
20:30
Speaker 6: over eight percent after topping expectations for same store sales
20:33
Speaker 6: with five percent growth in the latest quarter thanks to
20:36
Speaker 6: its viral better in Denim campaign with Katsey. Excluding the pandemic,
20:41
Speaker 6: same store sales growth was the fastest since its fiscal
20:44
Speaker 6: twenty seventeen holiday quarter. Cloud solutions provider Viva Systems is
20:49
Speaker 6: off by over twelve percent after saying it expects fewer
20:51
Speaker 6: top biopharmaceutical companies to select its Vault CRM. Viva posted
20:57
Speaker 6: third quarter earnings of two dollars and four cents per
20:59
Speaker 6: share exclude one time items, on eight hundred and eleven
21:02
Speaker 6: point two million dollars in revenue. Analysts predicted a dollar
21:06
Speaker 6: ninety five per share on seven hundred and ninety two
21:09
Speaker 6: point eight million in revenue. Ross Stores reported better than
21:12
Speaker 6: expected revenue of five point six billion compared to analyst
21:15
Speaker 6: estimate of five point four to two billion, pushing its
21:18
Speaker 6: shares up over seven percent. Ross also raised its fourth
21:22
Speaker 6: quarter earnings guidance, saying we now expect terror related costs
21:25
Speaker 6: to be negligible. Finally, data analytics company Elastic is down
21:29
Speaker 6: over fourteen percent after reporting fiscal second quarter results that
21:33
Speaker 6: saw a deceleration in cloud growth. However, elastic suggusted earnings
21:37
Speaker 6: and revenue topped Wall Street expectations. I am Ben Kitchen
21:41
Speaker 6: and that was Wall Street Watch. Going back to a
21:44
Speaker 6: trivia question earlier, the question was what day does Hanuka
21:47
Speaker 6: begin this year? That'd be December fourteenth. Maureen and killing Lee,
21:51
Speaker 6: Connecticut is our winner. She's going to be taking home
21:53
Speaker 6: a Financial Exchange Show t shirt. We play trivia every
21:56
Speaker 6: day here on the Financial Exchange. See the complete contest rules.
21:59
Speaker 6: Ifinanciel Exchange Show, dot Com.
22:02
Speaker 2: Piece and Bloomberg Mike Bitcoin heading for worst month since
22:05
Speaker 2: crypto collapse of twenty twenty two, was that the one
22:07
Speaker 2: they referred to as crypto Winter.
22:09
Speaker 4: I don't know, Chuck Eprockly so many I've seen so
22:15
Speaker 4: much about crypto, especially before this most recent collapse, about
22:18
Speaker 4: you know, oh, had you only invested one hundred dollars
22:21
Speaker 4: in bitcoin, you know, fifteen years ago, look at how
22:24
Speaker 4: much you'd be worth it, And it fails to mention
22:26
Speaker 4: that you would have had to ride out like several
22:29
Speaker 4: ninety percent collapses in the price of bitcoin in.
22:32
Speaker 3: Order to get where you are. Sure, But this most
22:35
Speaker 3: reason one is significant.
22:36
Speaker 4: We're talking about a thirty percent sell off in bitcoin
22:39
Speaker 4: as well as other cryptocurrencies. I guess where it crosses
22:43
Speaker 4: my mind. A client asked me about this just yesterday
22:47
Speaker 4: in fact, is hey, is there any relation to the
22:51
Speaker 4: sell off we're seeing in the NASDAC and other equity
22:54
Speaker 4: markets and the you know, more steep cell off we're
22:57
Speaker 4: seeing in crypto And I don't know which one might
23:01
Speaker 4: be leading the other, but it made me think of leverage, right,
23:05
Speaker 4: and it made me think of, Okay, if an investor
23:08
Speaker 4: is levered in the crypto market, which we know there's
23:12
Speaker 4: plenty of leverage in the crypto market, and the underlying
23:16
Speaker 4: collateral for that loan starts behaving badly like bitcoin has,
23:21
Speaker 4: you might need to cover your loan and how might
23:23
Speaker 4: you go about doing that?
23:24
Speaker 3: Well, you might go sell your other holdings.
23:26
Speaker 4: And we don't have any data in terms of what
23:29
Speaker 4: the overlap is between crypto investors and AI high flying
23:35
Speaker 4: trades like that, but I would imagine that there is
23:38
Speaker 4: some and I'm just kind of openly wondering if that
23:41
Speaker 4: could be a contributing factor to some of the pressure
23:43
Speaker 4: we're seeing on.
23:45
Speaker 3: The AI trade as well.
23:46
Speaker 5: I think it's absolutely a contributing factor.
23:48
Speaker 2: I mean we quite honestly, for the last week or
23:51
Speaker 2: so in particular, you've seen that as crypto, in particular
23:55
Speaker 2: Bitcoin makes new legs down, it has tended to lead
23:59
Speaker 2: and coincide with what's going on in the broader market.
24:04
Speaker 2: And I think the problem here that the broader market
24:09
Speaker 2: has is that there's just you know, a much more
24:12
Speaker 2: direct conduit in there with all these bitcoin ETFs out
24:15
Speaker 2: there that have billions of dollars now where look, you
24:19
Speaker 2: can be getting margin called on something like that, and
24:21
Speaker 2: it ends up liquidating something else that you then have,
24:24
Speaker 2: you know, in a standard portfolio, and now it's cascading
24:27
Speaker 2: into other markets in ways that it didn't necessarily do
24:33
Speaker 2: so in the past. And so I think ultimately I
24:38
Speaker 2: look at just what we've seen in the action on
24:40
Speaker 2: you know, some of these ETFs and stuff in the
24:42
Speaker 2: last week, and then what's been reflected in equity markets,
24:47
Speaker 2: and it's hard to look at it and say that
24:50
Speaker 2: they are not tied in any way, shape or form.
24:53
Speaker 3: Now, yeah, I tend to see that link more and
24:56
Speaker 3: more clearly.
24:57
Speaker 4: And we've talked for years about the seeming relation between
25:02
Speaker 4: the Nasdaq especially and cryptocurrency moves.
25:05
Speaker 3: But it does look, I mean, the last five.
25:08
Speaker 4: Years in equity markets as well as crypto markets have
25:10
Speaker 4: been defined by by the dip mentality, and we will
25:15
Speaker 4: just kind of have to see if that mentality returns
25:18
Speaker 4: to this moment in time or if we're in some
25:20
Speaker 4: different type of cycle.
25:22
Speaker 3: But I think where I drive this one home is.
25:26
Speaker 4: A lot of investors have made a boatload of money
25:29
Speaker 4: over the course of the last three years, even well
25:31
Speaker 4: diversified investors who are not trying to play crypto markets,
25:35
Speaker 4: or just the NASDAK investors across the board, if they've
25:38
Speaker 4: stayed invested, have made tremendous amounts of money over the
25:41
Speaker 4: last three years. And we are sitting here now with
25:43
Speaker 4: some renewed concerns about what has driven most of that
25:47
Speaker 4: leg up where which said which has been artificial intelligence?
25:51
Speaker 4: Equity markets at this stage, what do we say, chuck
25:53
Speaker 4: five percent off their all time highs.
25:56
Speaker 3: If you are.
25:57
Speaker 4: Finding yourself in a position where you're in that boat,
26:00
Speaker 4: you have made a tremendous amount of money over the
26:02
Speaker 4: last three years, and you're trying to figure out ways
26:04
Speaker 4: to diversify and protect that from a potential downturn. I'm
26:08
Speaker 4: not saying that that's where we are headed, but clearly
26:11
Speaker 4: that's the concern that is making its way through media outlets.
26:15
Speaker 4: It's the only thing that anybody is talking about right
26:17
Speaker 4: now in financial media is the possibility of this being
26:20
Speaker 4: a bubble. Have someone take a look, get a second
26:22
Speaker 4: opinion on what it is you're doing and how it
26:24
Speaker 4: might impact your future, because that's I mean. I know
26:28
Speaker 4: that there are people that just get enjoyment from placing
26:30
Speaker 4: trades on stock trading platforms, but for most of us,
26:35
Speaker 4: the reason we do any of this is to fund
26:37
Speaker 4: our future and use those future investments to fund things
26:40
Speaker 4: like our retirement or our kids college education. And if
26:43
Speaker 4: you're wondering how you are positioned for a potential shift
26:47
Speaker 4: in that narrative, give the Armstrong Advisory Group a call
26:50
Speaker 4: and let us give you an opinion. We work every
26:52
Speaker 4: day with our clients to formulate the portfolio that's right
26:54
Speaker 4: for their financial situation. We'd love to help you too.
26:57
Speaker 4: We offer free consultations the public all across the New
27:01
Speaker 4: England area in person.
27:03
Speaker 3: We do these via zoom, via phone, whatever works best
27:05
Speaker 3: for you.
27:06
Speaker 4: Offices though scattered from Portland, Maine, down to Wallingford, Connecticut
27:11
Speaker 4: and everywhere in between, and we'd love to meet you too.
27:14
Speaker 3: Numbers eight hundred three nine three for zero zero one.
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Speaker 4: If you're driving right now, can't call go to Armstrong
27:20
Speaker 4: Advisory dot Com. When you get where you're going. You
27:22
Speaker 4: can request a callback right on our website. But that
27:25
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27:27
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27:31
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27:33
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:36
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:38
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
27:41
Speaker 1: your own financial, tax into state planning advisors before making
27:44
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
27:47
Speaker 1: advisory services.
27:49
Speaker 2: Mike, do we want to cover another piece on the
27:51
Speaker 2: demise of the middle class? Do we want to talk
27:53
Speaker 2: about Black Friday being behind us despite the fact that
27:56
Speaker 2: it's next Friday? Or do we want to talk about
27:59
Speaker 2: people ditching booze for cannabis at Thanksgiving?
28:03
Speaker 3: UHH.
28:05
Speaker 4: I'm confused by this idea of Black Friday being behind
28:08
Speaker 4: us because I just got like four emails from companies
28:12
Speaker 4: that I do business with telling me that they're going
28:14
Speaker 4: to be opening at midnight on Friday. So I don't
28:17
Speaker 4: know that the tradition is behind us at this point,
28:20
Speaker 4: do you well it?
28:23
Speaker 5: I don't think it's behind us.
28:26
Speaker 4: But if I go to an outlet mall on Friday
28:28
Speaker 4: after Thanksgiving, I bet they're going to be open and busy.
28:33
Speaker 2: Yeah, I guess I'm just kind of with that to
28:37
Speaker 2: press you. I don't enjoy Black Friday. Look, I'm not
28:42
Speaker 2: a mall person. The idea of having to in some
28:48
Speaker 2: cases literally fight with other people to try to say
28:53
Speaker 2: five dollars on a Christmas gift feels wrong to me.
29:00
Speaker 4: What I'm particularly excited about chuck on Black Friday. Unfortunately
29:03
Speaker 4: I can't attend because I won't be local for Black Friday.
29:06
Speaker 4: But the local store where I do most of my
29:09
Speaker 4: hockey shopping for myself and my kids played against Sports,
29:14
Speaker 4: they're having a Black Friday sale. And I mean, talk
29:18
Speaker 4: about a good place for a bunch of fist fights
29:20
Speaker 4: over discounts.
29:21
Speaker 2: Yeah, I mean, you got gloves and helmets, like right,
29:24
Speaker 2: pop them on. Let's let's do it.
29:26
Speaker 5: You want it all? Right? Here we go, you know,
29:29
Speaker 5: get in the room.
29:30
Speaker 4: I'm gonna get that stick for forty five dollars.
29:33
Speaker 3: Come hell or high water.
29:35
Speaker 5: Let's take a quick break here.
29:36
Speaker 2: When we return, we're gonna be joined by Paul Monica
29:39
Speaker 2: from Barons. We're talking John Deere right after this.
29:43
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30:21
Speaker 3: Ladies and gentlemen the weekend.
30:27
Speaker 6: The Financial Exchange is a proud partner of the Disabled
30:29
Speaker 6: American Veterans Department of Massachusetts. This year's race was a
30:33
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30:53
Speaker 2: As promised, We're now joined by Paul Monica from Baron's
30:56
Speaker 2: here to talk a little bit about Dear Paul, how
30:59
Speaker 2: are you doing today?
31:01
Speaker 3: Good?
31:01
Speaker 8: Thanks?
31:02
Speaker 3: How you guys doing.
31:03
Speaker 5: We're doing pretty well.
31:04
Speaker 2: So when we take a look at Deer overall, you know,
31:08
Speaker 2: again just you know, kind of taking a look at
31:09
Speaker 2: year to date, since we're almost.
31:12
Speaker 5: At the end of the year, now almost at the end.
31:13
Speaker 2: Yeah, up about thirteen percent, pretty much the same as
31:16
Speaker 2: what we've seen from the S and p give or take,
31:18
Speaker 2: you know, a couple percentage points on any day, but
31:21
Speaker 2: the path has been different with Deer struggling a little
31:23
Speaker 2: bit since the end of Q two.
31:26
Speaker 5: What's going on here?
31:28
Speaker 8: Yeah, I think there are you know, some concerns about
31:33
Speaker 8: the broader economy that you know, might be weighing on
31:39
Speaker 8: Deer stock. But when you look at you know, this
31:43
Speaker 8: company and you know the potential for you know, earnings
31:47
Speaker 8: to you really begin rebounding over the next couple of years,
31:50
Speaker 8: there are a couple of factors at play, you know,
31:53
Speaker 8: that that could really help. I know it's going to
31:55
Speaker 8: sound a little bit of strange, you know when when
31:59
Speaker 8: you think of g deer, you think of you know,
32:01
Speaker 8: big tractors. But there is a bit of an AI element,
32:05
Speaker 8: smart technology, you know, in some of their agricultural equipment
32:11
Speaker 8: that could help farmers wind up knowing where exactly in
32:16
Speaker 8: a more precise way to be spraying fertilizer for example.
32:21
Speaker 8: That's potentially a boost for deer. And you know, I
32:25
Speaker 8: think there's the hope that you know, you know, China
32:29
Speaker 8: US trade relations will stabilize after some of the tough
32:33
Speaker 8: talk between Trump and She and that you know, China
32:37
Speaker 8: obviously could be a very big purchaser of deer equipment,
32:42
Speaker 8: you know, given soybeans.
32:45
Speaker 2: When we look at deer and the construction side of things,
32:50
Speaker 2: you know, what exactly does that side of their business
32:53
Speaker 2: look like and can it offset some of the farming side.
32:56
Speaker 8: Yeah, I mean, Caterpillar has obviously been a nominal stock,
33:01
Speaker 8: so deer does compete to some extent, not as much,
33:06
Speaker 8: but you know, there is the construction element as well
33:09
Speaker 8: that can help offset some potential weakness in agriculture. You know,
33:15
Speaker 8: So I think that is you're right, a potential bowl
33:19
Speaker 8: case for deer stock as well, even if the agricultural
33:23
Speaker 8: law market doesn't redound as quickly as some analysts would hope.
33:28
Speaker 2: And in terms of Deer and you know, kind of
33:31
Speaker 2: looking at where they may expand into. Obviously, look there's
33:35
Speaker 2: been there's a company that is, you know, a mainstay
33:39
Speaker 2: in you know, any any you know, you go through,
33:42
Speaker 2: you know, any kind of community. You've got deer tractors,
33:45
Speaker 2: you know out there. They're you know big obviously in construction.
33:48
Speaker 2: But is there anything that they're trying to do that's
33:50
Speaker 2: new as far as new business lines they may be
33:52
Speaker 2: trying to break into.
33:55
Speaker 8: Yeah, I don't know if necessarily Deer is the type
33:58
Speaker 8: of company that you're you're going to say, would really
34:03
Speaker 8: you know, benefit from from new business lines per se.
34:08
Speaker 8: I think it's really more about modernization of the equipment.
34:13
Speaker 8: They are going to be spending a lot to upgrade
34:17
Speaker 8: manufacturing and assembly line so that the equipment is better.
34:23
Speaker 3: And I think.
34:23
Speaker 5: That's you know, really the case with a.
34:27
Speaker 8: Company and industrial company like Deer that you're hoping that
34:30
Speaker 8: through technology they are able to more efficiently produce the
34:35
Speaker 8: equipment as opposed to say Deer looking to enter a
34:39
Speaker 8: brand new market per se market segment.
34:43
Speaker 2: Very good, Paul, appreciate you joining us today. Thank you
34:46
Speaker 2: so much for the time, and we will catch up
34:49
Speaker 2: with you soon.
34:51
Speaker 8: Yeah, definitely have a good Thanksgiving everyone, And yeah, I
34:53
Speaker 8: guess we'll talk in December.
34:54
Speaker 2: Absolutely, you too, Paul, and yeah, we will definitely catch
34:57
Speaker 2: up in December. That is paul A Monica from Barons
35:02
Speaker 2: talking about Dear Mike. What else do we have that
35:05
Speaker 2: we haven't gotten through today?
35:07
Speaker 4: This is a few weeks old now, but the alligator
35:11
Speaker 4: rescued from the Charles River in Boston has made national
35:15
Speaker 4: news because thank god, alligators don't belong in the city
35:20
Speaker 4: of Boston. Two things that I will just say about this. One,
35:25
Speaker 4: if our environment is changing enough for alligators to survive
35:28
Speaker 4: in Boston, then I'm moving to either Alaska or Canada.
35:32
Speaker 3: Two.
35:33
Speaker 4: An alligator was discovered in Chicago back in twenty nineteen
35:37
Speaker 4: and they gave it the excellent name Chance the Snapper.
35:42
Speaker 4: That is good, And I'm just really disappointed that we
35:45
Speaker 4: haven't come up with a good nickname for this gator
35:49
Speaker 4: that we discovered in Boston. There's got to be some
35:52
Speaker 4: good dropkick Murphy's Aerosmith Carr's nickname that we can come
35:58
Speaker 4: up with here, because thus far I've I'm up with
36:00
Speaker 4: nothing and nobody else has either, and I find that
36:02
Speaker 4: genuinely disappointing. But I live very close to the Charles River,
36:07
Speaker 4: and when I initially read this story, not knowing that, yeah,
36:10
Speaker 4: some duf has probably let a pet out.
36:13
Speaker 3: I had some moments of fear.
36:17
Speaker 4: Then I saw it and it's it's tiny, It's like
36:18
Speaker 4: the size of a water bottle, and it's really cute.
36:21
Speaker 2: So I wasn't I'm trying to I'm trying to think,
36:25
Speaker 2: like what you would I.
36:27
Speaker 4: Was tossing into AI and I'll tell you they came
36:30
Speaker 4: Gemini came up with nothing good for me?
36:32
Speaker 5: What can you give me some of the bad examples?
36:36
Speaker 4: We had Arrow Snapper as a play on Arrowsmith Charles Krock.
36:44
Speaker 3: There was one, Yeah, just really nothing, nothing all that solid.
36:50
Speaker 2: Yeah, I'm trying to think if there's anything that you
36:54
Speaker 2: could that you could do there, But.
36:55
Speaker 5: I'm kind of drawing a blank. Yeah, is there anything really?
37:00
Speaker 2: Like for some reason, I don't know, Like Matt Damon
37:03
Speaker 2: kind of gives me alligator vibes, Mmm, Like, is there anything.
37:06
Speaker 6: That you can do there Altho. I know we have
37:09
Speaker 6: to explore that. Why Why does Matt Damon give you
37:11
Speaker 6: alligator VI?
37:12
Speaker 2: I don't know, like I just feel like something like
37:14
Speaker 2: does his face kind of like alligatory sometimes?
37:17
Speaker 3: No?
37:18
Speaker 4: No, no, yeah, I mean Marky Mark ben Affleck. If
37:22
Speaker 4: anybody has any good gator nicknames based on famous Bostonians,
37:27
Speaker 4: we would really know.
37:27
Speaker 5: There's there's no good names that like rhyme with.
37:30
Speaker 2: There's nothing good that rhymes with gator, like I'm going through, Yeah,
37:32
Speaker 2: like Damon, a fleck, bill Burra.
37:35
Speaker 4: Could be based on its sharp teeth or the fact
37:38
Speaker 4: that they bite. You know, there's other things about gators
37:41
Speaker 4: that we can feature here, but Chance the Snapper is
37:44
Speaker 4: definitely coming up with the wins.
37:45
Speaker 3: So good job, Chicago, you have us peace.
37:47
Speaker 2: Markets have taken a meaningful term positive. The Dow is
37:50
Speaker 2: now up more than five hundred points, SMP's up more
37:52
Speaker 2: than one percent, NASDAC up about one hundred and seventy.
37:55
Speaker 5: Hope you all have a great weekend.
37:57
Speaker 2: We'll see you back here on Monday.